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Bitcoin for Merchants

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My name is David Orban. I am the CEO of Dotsub, which is the company that we will be using as an example after I give my brief presentation. I'm also on the faculty and an advisor to Singularity University in California. And I want to talk to you about why Bitcoin is the trust engine for people who don't trust each other, rather than being forced into relationships that we are uncomfortable with. And, you know, before we heard that 6.5 billion people are not perfectly fine with the current financial system. I think it's more like 7 billion people. Who is not comfortable with the current financial system over here? Right? So I will talk to you about what are the advantages. We will see a scenario, and then we will make the announcement that I was supposed to be making at the end, but now you know that Dotsub is accepting bitcoins as a payment. All of you walked around the stock exchange coming here, and it was fascinating to see them caged in, hiding and just closing their eyes and wishing the future away and totally failing to do so. It is absolutely—you know—so symbolic to see that, because the future is already here. We are living it, you are living it; you are aware of that. You know, if you were around in 1994, when Netscape was being born and the Internet became something that went beyond the research institutions and educational institutions. This is that moment, but for something that we have been using for thousands of years but then is something that we became familiar with only for a few decades because—that is money. That is what we are talking about. Who knows what this is? Anybody? This is a merit badge, a nerd merit badge representing the Bitcoin. And I have two. Each of them cost 1 Bitcoin. And I bought them—I think it was $8. Okay? That's my street cred. What is funny is that they still cost 1 bitcoin. Do you want one? You can't buy one. And in the future, 1 Bitcoin is going to be worth thousands of dollars or tens of thousands or hundreds of thousands of dollars each. Now you will be able to tell my story and earn your street cred, too. I am not going to talk to you about Bitcoin as an investment or for mining or trading—those are interesting things. But I'm going to concentrate on why, in a peer-to-peer network, where everybody is the same, anybody and everybody can be a merchant and should be, actually, a merchant. Who has an e-commerce website—here, in the room? Okay. A few of you. Who ever bought something on an e-commerce website? Everybody. Who is familiar with Square, the little dongle that goes into the iPhone that allows you to accept credit cards? Well, all of those processes today require trust. Bitcoin does not require trust. When you sign up as a merchant, you go through a process of verification, credit checks, authorization. You can become a Bitcoin merchant instantaneously with no authorization by anybody ever. We already heard there is no intermediary. When you sell something using Bitcoin, you're in a direct relationship with your customer. There's no business in space and in time in the transaction. The transaction is not repudiable. This means that the client that made the purchase— that purchase is final. But as a merchant, you cannot say, "Oh, you didn't send me the money." Neither of the two parties can say the transaction did not occur because the transaction, as we heard, becomes part of a public ledger, and it's there. It is pseudononymous, because your identity is not attached to the transaction itself, but only the addresses that send and receive the amounts are publicly known. However, in any dispute one of the parties will point to the line in the ledger and will say, "Oh, that's my transaction. "See? You sent me a widget and it's bad; I paid you good money for it. Give my money back." Or you can say, "Well, the service that was delivered is not good." The non-repudiability of the transaction is a fundamental new component that was very, very hard. Escrow services, all these sophisticated services were needed before for sure. For a lot of services and a lot of trades, margins are an issue. Whether we are talking about gross margins, whether we are talking about net margins, in the retail industry, in a restaurant business— in New York restaurants go out of business all the time. All of them have great food— except a few— but when they go out of business, it's because they cannot make it. If they live on margins of, let's say, 10%, they pay 3% of commissions to the credit card industry. That means that a third of their margin goes away for something that with Bitcoin they have to pay zero fees. I already said that anybody can become a merchant. If you have a phone, you can be a merchant. If you have a website, you can be a merchant. And what used to be very complicated— to set up an e-commerce website— you can do in literally minutes. It can be used anywhere. You don't need to say: "Okay, is that guy accepting credit cards?" Today, Bitcoin is not universally known; it's not universally accepted. But you can be sure that it will be no question anymore in a few years. Anywhere there is a phone, anywhere there is an Internet access, you will be able to buy and sell in Bitcoin. And, of course, anytime. And some of you might have heard that the banking system is tightening down on merchants that are accepting Bitcoin. Who has heard stories—horror stories— of people saying, "Oh my god, my bank account was closed because I was doing Bitcoin." So you will be very apt to see this. I just received this email from my bank. I alerted them I will be accepting Bitcoin as payment. And they replied very happily: "I appreciate the heads up. "I see no issue with you accepting Bitcoins "to be processed by an outside partner at this time. Best regards, [omitted] Vice President, Bank of America." This is an official confirmation by a major American bank that you have no problems going in and out of the fee accounting system of the official banking system while using Bitcoin. And, of course, it is important because if you sell something for Bitcoin, it still means that you need to buy bread, pay electricity bills, pay the rent, and for the moment you cannot do that using Bitcoin. You can use it online. You can use it offline. And you create, basically, a network society if you are smart. If you think about other things, not only mining, not only trading, not only Bitcoin as an investment. Think about all the possibilities when solar energy is going to be distributed rather than centralized with all residents today. When plant labs, as they are called, will allow you to grow your food, to print your meat. When manufacturing is going to be distributed at peer-to-peer-like, like it is becoming with 3D printing. Learning is being transformed by YouTube and massive online open course ware. Quantified self in the healthcare system is becoming personal, personalized, and peer-to-peer, as well. That is what Bitcoin is part of. You know what is happening in China? Who heard about China clamping down on Bitcoin? Well, what is happening in China is extremely interesting and extremely important. They have a long-term view. What they are doing is saying, okay. Our banks do not need to experiment. Our banks do not need to be tainted by whatever is going on with Bitcoin. Our currency—we will try to decide when it should become convertible rather than forcing it to become convertible by the sneaky nature of Bitcoin making it so without our control. However, you can be sure that regardless of the Chinese government the Chinese people are going to be thinking very, very hard how to be in this game, how to make incredibly important applications a part of the Bitcoin protocol, as I am sure is going to be the New York community of startups, the New York community of financial people in order to create very, very interesting and wonderful scenarios. Let's look at one. Dotsub lives in an exponential time. We are about online video, which according to Cisco is going to be over 90% of the global Internet traffic in just a couple of years. We allow online video discovery through captions and subtitles that make search engines understand what is inside the video rather than just their titles. So that everything—every message, every independent film maker, every talk, that I am now recording and I will be uploading, can be reaching its full potential like this 2-hour-long documentary that originally was shot in English has only 14% of its views in English. And 86% of the views are in languages other than English— very common ones or very exotic ones. And this is available to all kinds of devices, on phones and tablets, connected televisions and so on. So, our announcement is that after WordPress and reddit and Zynga and other online and offline merchants Dotsub is also accepting, starting today— our system is online already— payments with Bitcoin on our website. And how it works is very, very easy. What you do with Dotsub is you upload your video, and then you order captioning and translation of the video files. So you select your transcription. You select the languages that you want to have it translated into. And then the checkout button— rather than being a normal button, it becomes a drop-down menu where you can choose if you want to do good old credit cards or you want to do super-cool new Bitcoins. If you choose Bitcoin, an address will appear. And you can copy and paste if you want to use the web browser, where maybe on another tab you have Coinbase or other wallets, online wallets already open. Or if you want to use your phone, you can just point it at the QR code. So, let me do that. Here we are; I tell my Blockchain wallet to scan the code. There it is. It's too far for you to see. I'm not going to come and show you closer. It immediately scanned it, and it gives me the amount that I see here of 0.06 Bitcoin, and with just another button I will be sending the payment, and the website will immediately know that the payment has been made. And this type of extremely easy interaction is available to all of you in order to become a Bitcoin merchant whether you sell widgets, whether you sell services, whether you sell labor. Your relationships of employment are going to fundamentally change through Bitcoin transactions as well. Who is a member of the media here? Do we have bloggers? We define bloggers as media as well. We have a press release that we are very happy to hand out to you and answer your questions. And, of course, if you want to support Dotsub supporting the Bitcoin economy, we also accept donations that you are very welcome to send us. You can experiment sending Bitcoin just through that. I am happy to answer your questions regarding what you just heard from me in these few minutes. Thank you.

Video Details

Duration: 14 minutes and 29 seconds
Country: United States
Language: English
Views: 128
Posted by: open on Jan 11, 2014

The Trust Engine Of New Commerce. What are the advantages of bitcoin from the point of view of merchants, and how can it be set up to sell products and services online? Recording of a talk delivered at Bitcoin Center New York on Jan 8, 2014. Part of the talk was the announcement by Dotsub of supporting bitcoin for the payment of its services on http://dotsub.com

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