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Bitcoin

New Starbucks Partnership With Microsoft Allows Customers To Pay For Frappuccinos With Bitcoin (cnbc.com) 80

Posted by msmash from the how-about-that dept.
Earlier this week, Nestle said it was jumping on the blockchain bandwagon, today, Starbucks said it is ready to top that. From a report: The Seattle-based coffee giant is working with Microsoft and a leading global exchange on a new digital platform that will allow consumers to use bitcoin and other cryptocurrencies at Starbucks. Starbucks along with Intercontinental Exchange, Microsoft and BCG, among others, is working to launch a new company called Bakkt that will enable consumers and institutions to buy, sell, store and spend cryptocurrencies on the global network by November. The platform with convert bitcoin and other cryptocoins into U.S. dollars that can be used to buy a Cold Foam Cascara Cold Brew, Matcha Lemonade or anything else at Starbucks. Starbucks has consistently been at the forefront of embracing new technologies. For instance, it added support for mobile payments in 2011. In May, it was estimated that Starbucks' mobile payment solution is more popular than those of Apple and Google.

In a statement, Maria Smith, vice president of partnerships and payments for Starbucks, "As the flagship retailer, Starbucks will play a pivotal role in developing practical, trusted and regulated applications for consumers to convert their digital assets into US dollars for use at Starbucks. As a leader in Mobile Pay to our more than 15 million Starbucks Rewards members, Starbucks is committed to innovation for expanding payment options for our customers."

According to Starbucks spokespeople, Motherboard reports, Starbucks doesn't want bitcoins, but it's willing to help people spend them -- the venture is an exchange that will allow people to convert their cryptocurrency into US dollars, which they can then spend at Starbucks locations.
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New Starbucks Partnership With Microsoft Allows Customers To Pay For Frappuccinos With Bitcoin More

New Starbucks Partnership With Microsoft Allows Customers To Pay For Frappuccinos With Bitcoin

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  • That sounds like a bad buisness plan. (Score:5, Insightful)

    by jellomizer ( 103300 ) on Friday August 03, 2018 @12:39PM (#57064414)

    The problem with bitcoins is that they are too volatile. That $5.00 Coffee you bought today could have a opportunity cost of $15.00 next year. Vs using the Dollar where that $5.00 would have an opportunity cost of $5.15 the next year.

    • I was thinking the opposite could be true, too: you pay with bitcoin, and before COB for the day it manages to tank and what was $5.00 worth of bitcoin is now $0.05 worth.

    • Re:That sounds like a bad buisness plan. (Score:5, Insightful)

      by Joce640k ( 829181 ) on Friday August 03, 2018 @12:55PM (#57064504) Homepage

      The problem with bitcoins is that they are too volatile.

      I'm sure Microsoft can manage a sufficiently fast price update rate using DirectX 12.0.

      That's not the problem. The problem is that there can only be half a dozen Bitcoin transactions per second IN THE ENTIRE WORLD.

      This means the Bitcoin transaction fee will cost more than three times what the coffee is worth.

      Serious question: I wonder if anybody at Starbucks or Microsoft actually knows how Bitcoin works?

      • The problem with bitcoins is that they are too volatile.

        I'm sure Microsoft can manage a sufficiently fast price update rate using DirectX 12.0.

        That's not the problem. The problem is that there can only be half a dozen Bitcoin transactions per second IN THE ENTIRE WORLD.

        This means the Bitcoin transaction fee will cost more than three times what the coffee is worth.

        Serious question: I wonder if anybody at Starbucks or Microsoft actually knows how Bitcoin works?

        I imagine most people who buy a coffee with bitcoin using this method will do it for the novelty of it- and only a few times- so it's not likely to stress out bitcoin's infrastructure. People don't buy bitcoin so they can buy coffee... that's not bitcoin's main purpose. Bitcoin is more practical when used for large exchanges of wealth and goods.

        • People don't buy bitcoin so they can buy coffee... that's not bitcoin's main purpose. Bitcoin is more practical when used for large exchanges of wealth and goods.

          And paying for torrent and Usenet indexer membership

      • Re:That sounds like a bad buisness plan. (Score:4, Informative)

        by xtal ( 49134 ) on Friday August 03, 2018 @01:31PM (#57064720)

        Serious question: Do you know why the Lightning Network was developed and how it works?

        If they're going to use LN, this is a perfect application to demonstrate mass scaling.

        • Re: (Score:1)

          by Anonymous Coward

          Seriously, go read up on the Lightning network. It will not help scale BTC the way the general public believes it will. It is a contract that you must open and fund. Once funded, you can send BTC back and forth super fast, but at the end of the day when you "need" the BTC in your account, you must close the contract, put it on BTC mainnet and be hashed just like any other BTC transaction. The Lightning Network does not help scale single, one-time transfers, like paying for coffee or paying your buddy for la

          • Re: (Score:3)

            by Kaenneth ( 82978 )

            Except you are missing the 'network' part; with modern routing techniques.

            Just like you connect to your ISP, you'll open a lightning channel to a payment provider; who has open channel to as many other payment providers as they can (like ISP peering); who in turn, will have a channel to the wallet you are sending to. (the other 'last mile')

            The payment providers advertise their routes with the fee rates, and the cheapest path is automatically selected.

            Automatic, cryptographically secure bidding for the lowes

      • and they're doing something screwy to hide the actual backend exchange and eating the fees. On a $5 coffee there's probably enough margin there to get away with it in exchange for the advertising bump they're getting and if the exchange rate results in losses more than the advert is worth they'll quietly stop taking bitcoin like Valve did.
    • Service like BitPay can make it converted to USD instantly, or a part of it. For instance if you want to sell TShirt for Bitcoin you could keep 20% in BTC and 80% in your local currency.
    • I would think it would run afoul of consumer protection / bait and switch laws depending on how the timing of the transaction changed value at time of execution versus purchase. The USD is our currently legally accepted metric for such things.

    • $5 worth of bitcoin will be worth about zero next year. That $5 cash would be worth $4.98 next year due to inflation. The cup of coffee will keep your productive which is worth $100+ depending on your level of income.

      If you had invested in NVIDIA 5 or 6 years ago, you'd have a 10x return on your money.

      Turns out the shovels are a lot more valuable than the dirt being mined

    • The problem with bitcoins is that they are too volatile. That $5.00 Coffee you bought today could have a opportunity cost of $15.00 next year. Vs using the Dollar where that $5.00 would have an opportunity cost of $5.15 the next year.

      Well, as you can buy bitcoins with the $5.00 it makes no difference.

    • Also the blockchain makes this too cumbersome if it becomes popular. A few cryptohipsters here or there is fine, but a million of them trying to get through that pipeline to get a cup of coffee each morning would suffocate the system.

    • No, the problem is having to wait 20 minutes for the transaction to verify. My Frappuccino is cold now! Wait, maybe it's supposed to be cold. In which case it's warm now.

  • ... mouth-to-mouth to try and create a market nobody asked for.

    You know, like Air Pods.

    • Re:So Crypto is getting ... (Score:5, Insightful)

      by El Cubano ( 631386 ) on Friday August 03, 2018 @12:53PM (#57064492)

      ... mouth-to-mouth to try and create a market nobody asked for.

      It is actually worse than that.

      Every time that I read something about BitCoin or any other crypto-currency it is clear that the "currency" part of it (technically described as "proof of work") is nothing more than "proof I was able to most efficiently turn a quantity of electricity into waste heat."

      Given that how far we yet have to go to achieve worldwide sustainable energy production, I find it odd (hypocritical, even?) that so many socially conscious companies and organizations now effectively encourage people to waste electricity.

      I get that not every occupation makes the same contribution to society, but generating crypto-currency has to rank near the bottom by producing effectively zero net benefit. Even a grave digger at the end of the day has performed a service for someone else.

      • I agree, and we've seen this before.

        Think of Pet Rocks and Mood Rings.

        Prior to the advertising push, you didn't know you wanted those.

      • Admitted the same can be said about daytraders. But all that being said IMO I think they really killed good oprotunites, would it be possible to make proof of work... actually tie to something we need cycles for? Aren't there like hundreds of programs that need cpu cycles to go into folding proteins or even searching for aliens etc.... would it be possible for us to actually make or redirect a crypto currency into actually helping with real world things?
      • "proof I was able to most efficiently turn a quantity of electricity into waste heat."
        But that isn't the reason for the calculations. The calculations are done to verify transactions are legitimate so nobody can post fake transactions (double spend) to the blockchain. We can argue about how efficient that process is or isn't but it is incorrect to say the proof is only turning electricity into heat. It's purpose is more than that.

        • We can argue about how efficient that process is or isn't but it is incorrect to say the proof is only turning electricity into heat. It's purpose is more than that.

          As long as there are viable alternatives to proof-of-work (there are) and the processing behind BTC has no point other than proof-of-work (it doesn't) then its effective purpose is only turning electricity into heat. If it were at least one of the forms of cryptocurrency which does useful work, then the work wouldn't simply be a waste, and BTC wouldn't be a waste. But it isn't, so it is, and it is.

  • Pay For Frappuccinos With Bitcoin (Score:1)

    by Anonymous Coward

    Pay For Frappuccinos With Bitcoin

    Nope. First you'll transfer bitcoins to them (ie. give away control of your bitcoins, hello hacker target). Then you'll pay with your totally-not-a-bank balance.

  • Starbucks' mobile payment solution is more popular

    Not with people like me. Stuck behind someone trying to reload an account. Or doing the iPhone shake, trying to get the reader to recognize a screen barcode.

    I've got cash. I'll just be a moment. Please.

    • I know what you mean.

      I know it is technically less secure but I still use a mag-swipe card and cash and they are both about as fast. Which is to say that they are both faster than the chip+pin cards and a lot faster than phone payments.... though, to be fair, the speed of phone payments do vary greatly depending on the method used (NFC, QR, BC, whatever), the premise equipment/system being used and the preparedness of the payer.

      Every time I try to use a phone method it ends up taking me three to four times

  • We just need Dominos to start accepting Bitcoin for pizza and we will have come full circle. I imagine they will cost significantly less than 10,000 BTC each though.

  • BTC seems to depend a lot on its brand/image as a cool counterculture for affluent technoanarchists and people who want the aesthetic of being one.. I can not imagine a joint venture with Microsoft and Starbucks will help that image.

  • If a Starbucks manager is under pressure to increase monthly sales. (And who isn't these days. See Wells Fargo) It won't take him long to capture your Latte order and, say, triple it.

    More generally, is anyone tracking BitCoin's attack surface?

  • So how many bitcoins do I need to buy a frap?

  • Ok, an honest question about the sustainability of bitcoin.

    Two features of bitcoin seem to be unsustainable:
    1) The complicated processing necessary to make bitcoin work is rewarded by "mining" new coins. People use their computers to work for money.
    2) The ultimate number of bitcoins is limited and "mining" will get harder and harder until there are no more coins.

    So, what happens when that last coin is mined? What incentive will there be then for people to volunteer computer power to make the exponentially m

    • Re: (Score:1)

      by Kaenneth ( 82978 )

      1) Proof of work is a real problem, other options, like proof of stake are less wasteful

      2) Mining a block gets the block reward (which halves periodically, until around the year 2140) PLUS the transaction fees.

    • Re: (Score:2)

      by Memnos ( 937795 )
      These features make it closely analogous to the mining of gold or other precious metal on Earth. 1) It requires effort to get new coinage. 2) There is an upper limit to the amount available, and it becomes probabilistically more difficult to acquire each increment. But even when there are effectively no more bitcoins, or when there is no more gold to be found (for simplicity, let's ignore the gold content of the rest of the universe for now) the gold and bitcoins will still have value -- provided primaril

      • The analogy breaks down when you reach the limits of the supply. For gold to be traded, it doesn't need a massive volunteer computational network expending thousands, if not millions, of dollars of processing power running 24/7. Bitcoin does. When the last bitcoin is mined, then there will be no incentive to volunteer your data center to process the transactions.

  • Hmm, so my coffee will cost £1 tomorrow and then £15 the day after, then maybe 30 pence?
  • Can they also add an option to transfer my portfolio to their brokerage and buy frappuccinos with my Philip Morris equity and Greek 10Ys, because that’s precisely what they are doing here. It makes no sense on so many levels, although I’m certain some Bitcoiner somewhere will be excited about this and use it in the most inconvenient way imaginable.

  • This was inevitable for them (Score:4, Funny)

    by Memnos ( 937795 ) on Friday August 03, 2018 @10:28PM (#57066962) Journal
    Starbucks was going to get involved with blockchain technology eventually. Starbucks is a chain, and there's one on every block. Synergy.

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