Why E-currency exists?

Joseff · #1 05-24-2011, 12:04 PM

Guys, it's possible to pay everywhere with credit card... afraid to pay with card, you have PayPal and MoneyBookers.

Why to convert USD to e-currency ... why not to pay with USD.

Feel free to share your opinion!!!

**mrGSH** · #2 05-24-2011, 05:27 PM

More choices are for those who want to have a choice. If you do not like it, you can always stay with the mainstream, charge-backs and somebody tracking your usage.

Quote:

Originally Posted by Joseff

Guys, it's possible to pay everywhere with credit card... afraid to pay with card, you have PayPal and MoneyBookers.

Why to convert USD to e-currency ... why not to pay with USD.

Feel free to share your opinion!!!

daddy1947 · #3 05-24-2011, 08:27 PM

as mrGSH said, most do it to avoid the hassle of charge-backs. Liberty Reserve(LR) and Webmoney(WMZ) seem to be the two most favored ones.

**nanaimogold** · #4 05-24-2011, 09:43 PM

Credit card or Paypal is only a promise, not a payment. You might accept a promise to pay from a friend or neighbour, but you would be foolish to accept that from a far away stranger.

Some gamblers will renege on payment if they can. A whole industry exists to collect on debts created by failed promises to pay. Consider the bookie who trusts the people he knows to take their bet by telephone. He is able to offer a better deal to those who bring cash to place bets because he never has the expense of collecting from deadbeats.

Digital currency is cash - a final settlement. You don't need to know or trust the payer. You just need to accept the spend to know you have been paid.

Would I accept your promise to pay me later? Not a chance. I don't want to spend the time and effort to get to know you, run a credit check, and make sure I can reach you if you default. All that is too expensive. You can pay cash.

Understand that different types of trade carry different levels of risk. In the case of the gambler, that's very high risk because it's a cash for chance of win trade. Cash for cash trade is very high risk. Expensive liquidatable devices, the laptop computer by mail is classic example, are also high risk. Lower risk is non-liquidatable items, stuff that can't be easily resold, and low priced items that are not worth the thieves time to steal. That's why Paypal works well for subscription services, such as web hosting or paid newsletters. If the promiser reneges, the merchant can just shut off the service and is not out any of his capital.

Shane

Joseff · #5 05-25-2011, 08:10 AM

Quote:

Originally Posted by nanaimogold

Credit card or Paypal is only a promise, not a payment. You might accept a promise to pay from a friend or neighbour, but you would be foolish to accept that from a far away stranger.

Some gamblers will renege on payment if they can. A whole industry exists to collect on debts created by failed promises to pay. Consider the bookie who trusts the people he knows to take their bet by telephone. He is able to offer a better deal to those who bring cash to place bets because he never has the expense of collecting from deadbeats.

Digital currency is cash - a final settlement. You don't need to know or trust the payer. You just need to accept the spend to know you have been paid.

Would I accept your promise to pay me later? Not a chance. I don't want to spend the time and effort to get to know you, run a credit check, and make sure I can reach you if you default. All that is too expensive. You can pay cash.

Understand that different types of trade carry different levels of risk. In the case of the gambler, that's very high risk because it's a cash for chance of win trade. Cash for cash trade is very high risk. Expensive liquidatable devices, the laptop computer by mail is classic example, are also high risk. Lower risk is non-liquidatable items, stuff that can't be easily resold, and low priced items that are not worth the thieves time to steal. That's why Paypal works well for subscription services, such as web hosting or paid newsletters. If the promiser reneges, the merchant can just shut off the service and is not out any of his capital.

Shane

Nanaimogold, thank you so much for interesting post. Good point about trust and bets. I was thinking only as a customer. I'm honest person, so my promises are valuable.