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Comment by ryandvm | Hacker News Reader

What you're seeing is merchants relying on the expertise of 3rd party payment processors. This is a good thing. Having them all reinvent the wheel would be a security nightmare. You'd be hearing about enormous Bitcoin heists daily.

At the end of the day, these are still Bitcoin transactions and if Coinbase et al started engaging in onerous practices you could very easily switch to another Bitcoin processor without much friction.

Now if you start seeing things like Coinbase only accepting payment from other Coinbase users...

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It seems there are obvious parallels between Bitcoin:Coinbase :: SMTP:GMail

XMPP:GChat

~OAuth:Facebook

These analogies are only so accurate, but the centralized service seems to try to lock-in users whereas decentralization forces the opposite way.

It is way easier to "be your own bank", using free software like electrum or the reference Bitcoin client, than trying to "be you own email" by setting up your own email service and whatnot.

Coinbase or Bitpay are optional facilitators, for people who want to buy or accept bitcins. That is not centralisation, that is just providing a service. Lots of people use Coinbase to buy their coins and then withdraw them to their offline-decentralised cold wallts created in electrum.

Is it? If I want to be my own bank I also have to coordinate to sell all income coins on a market rapidly to avoid fluctuations in price. That's a full time job in itself.

Also the risk of failure for a mistake in being my own email service is that some of the mail I send lands in a spam folder. The risk of failure in being my own bank is that I lose all my money.

Coinbase or Bitpay are optional facilitators, for people who want to buy or accept bitcins

Yes, they're optional for merchants, but for average consumers who want to buy the same goods and services they can buy with fiat, it becomes an unavoidable potential point of failure. If these services go down, the consumer cannot spend their coins, they rely on 3rd parties to turn bitcoins into something that businesses actually want to accept in exchange for their products.

Except that the situation with email is very much a result of a longer development. It certainly wasn't always difficult to do your own email - in fact, it once was relatively normal.

Having them all reinvent the wheel would be a security nightmare.

I agree, it absolutely makes sense from a business and security perspective, but at the end of the day what you end up with are a few key players who represent a centralized point of failure for spending your bitcoins on mainstream goods and services. More and more, the community is moving away from decentralization, relying instead on these centralized services to facilitate bitcoin purchases and off-chain transactions. The more companies that jump on board with bitpay and similar services, the bigger the disruption will become when one of these companies inevitably hiccups, fails, or gets hacked.

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