5 ms·

Why do you need banks, when you can just transfer Bitcoin?

by nnd 11y ago

drcode 11y ago
The payments will need the appearance of being inexpensive/free, so Apple needs to first use network effects to capture a chunk of the market, then they will strong-arm Banks into paying fees to Apple (They need to earn their 3% or whatever on every payment somehow) which the banks will then indirectly forward to customers.
unfunco 11y ago
If Apple introduces this, it will likely require scalability higher than that of the current blockchain, which allows for roughly seven transactions per second. Peer-to-peer is definitely the way forward, but for now, banks have the infrastructure, and the customers.
- drcode 11y ago
  There are cryptocurrencies now with more scalable architectures... I'm just counting my blessings that Apple is foolish enough to build another centralized system that is sure to be hobbled by AML requirements and misguided fraud-prevention measures. Having a centrally-mediated, proprietary cryptocurrency endorsed by Apple/Google/Amazon/Facebook is the worst thing that could happen to the cryptocurrency community right now, so I'm glad none of these companies are pursuing this opportunity yet.
- kristianp 11y ago
  This will be fixed when it's needed. To deviate from the discussion, I don't know why Bitcoin doesn't move to a faster block time. Less time to confirm a transaction, more blocks per minute, more transactions per second.
  - drcode 11y ago
    It is very, very unlikely any major architectural tweak will happen with Bitcoin ever again. The only thing that will ever happen is maybe a few additional opcodes (to enable lightning networks perhaps) but even that will take many years. (This isn't necessarily a bad thing... although I'm certainly not a fan of this approach)
  - bduerst 11y ago
    There have already been four different proposals made to fix this (BIP 100, 101, 102, 103) and the miners shot them down. Remember that the miners profit from increased competition and tx fees on small block sizes, and they control the block size. It's more probable that banks will use some other system than ACH before bitcoin block size is ever increased.
- alwillis 11y ago
  Payment channels combined with the lightning network (https://www.youtube.com/watch?v=8zVzw912wPo https://www.youtube.com/watch?v=8zVzw912wPo) would allow Apple to create create off-chain transactions and aggregate micropayments into individual bitcoin transactions. However, unless Apple has had a secret bitcoin project going on for the past few years, it's too early to deploy something like this. Their first person-to-person product certainly wouldn't use a cryptocurrency.
  - bduerst 11y ago
    That's still not competitive to ACH or viable. If 10 million people today used off-chain, their transactions wouldn't complete until 16 days later. If 10 million people then used off chain tomorrow, their transactions wouldn't go through until 32 days later. t+22 days and you're already waiting a year to get paid in some instances.
    - alwillis 11y ago
      That's not how it works; if you checkout the presentation, you'll see it's possible for the lightning network to enable transactions that don't ever need to be broadcast to the blockchain. We're not there yet; this would require additional op codes to be added to get the full capabilities.
      - bduerst 11y ago
        Side chain transactions aren't fulfilled until they're broadcast through the blockchain. Most people and merchants do not want to be paid in arbitrary I.O.U.s that take weeks or sometimes months, which is essentially what side chain is.
        alwillis 11y ago
        Payment channels and the lightning network aren’t side chains. And there are no IOUs; not sure where that came from. Good podcast about payment channels: https://letstalkbitcoin.com/blog/post/lets-talk-bitcoin-219 https://letstalkbitcoin.com/blog/post/lets-talk-bitcoin-219 And on the lightning network: https://letstalkbitcoin.com/blog/post/lets-talk-bitcoin-242-meet-the-lightning-network https://letstalkbitcoin.com/blog/post/lets-talk-bitcoin-242-... Lightning Network info site: http://lightning.network http://lightning.network
vectorpush 11y ago
Bitcoin is not a very practical option for the general public because there are various scenarios where the user can permanently lose their money without the possibility of recovery. There are many techniques for keeping bitcoin secure, but even something as simple as sending money to the wrong address can cause a permanent loss of funds which is a serious problem in the context of social engineering attacks and technical issues related to preventing one's wallet from being stolen/lost/deleted/corrupted. Another problem is that the plethora of online wallet services and mobile clients means that the user has to take responsibility for vetting the software or service they use to participate in the bitcoin economy. This ends up being very risky because developers are not legally responsible for loss of funds due to software errors, poor security or something more sinister. On the other hand, the relatively strict and standardized operating procedures of the banks keeps customer money safe in practice and a trusted brand like Apple is held to a higher standard with regard to the trustworthiness of their software.

Why do you need banks, when you can just transfer Bitcoin?

by nnd 11y ago

Why do you need banks, when you can just transfer Bitcoin?

The payments will need the appearance of being inexpensive/free, so Apple needs to first use network effects to capture a chunk of the market, then they will strong-arm Banks into paying fees to Apple (They need to earn their 3% or whatever on every payment somehow) which the banks will then indirectly forward to customers.

unfunco 11y ago

If Apple introduces this, it will likely require scalability higher than that of the current blockchain, which allows for roughly seven transactions per second. Peer-to-peer is definitely the way forward, but for now, banks have the infrastructure, and the customers.

drcode 11y ago
There are cryptocurrencies now with more scalable architectures... I'm just counting my blessings that Apple is foolish enough to build another centralized system that is sure to be hobbled by AML requirements and misguided fraud-prevention measures. Having a centrally-mediated, proprietary cryptocurrency endorsed by Apple/Google/Amazon/Facebook is the worst thing that could happen to the cryptocurrency community right now, so I'm glad none of these companies are pursuing this opportunity yet.
kristianp 11y ago
This will be fixed when it's needed. To deviate from the discussion, I don't know why Bitcoin doesn't move to a faster block time. Less time to confirm a transaction, more blocks per minute, more transactions per second.
- drcode 11y ago
  It is very, very unlikely any major architectural tweak will happen with Bitcoin ever again. The only thing that will ever happen is maybe a few additional opcodes (to enable lightning networks perhaps) but even that will take many years. (This isn't necessarily a bad thing... although I'm certainly not a fan of this approach)
- bduerst 11y ago
  There have already been four different proposals made to fix this (BIP 100, 101, 102, 103) and the miners shot them down. Remember that the miners profit from increased competition and tx fees on small block sizes, and they control the block size. It's more probable that banks will use some other system than ACH before bitcoin block size is ever increased.
alwillis 11y ago
Payment channels combined with the lightning network (https://www.youtube.com/watch?v=8zVzw912wPo https://www.youtube.com/watch?v=8zVzw912wPo) would allow Apple to create create off-chain transactions and aggregate micropayments into individual bitcoin transactions. However, unless Apple has had a secret bitcoin project going on for the past few years, it's too early to deploy something like this. Their first person-to-person product certainly wouldn't use a cryptocurrency.
- bduerst 11y ago
  That's still not competitive to ACH or viable. If 10 million people today used off-chain, their transactions wouldn't complete until 16 days later. If 10 million people then used off chain tomorrow, their transactions wouldn't go through until 32 days later. t+22 days and you're already waiting a year to get paid in some instances.
  - alwillis 11y ago
    That's not how it works; if you checkout the presentation, you'll see it's possible for the lightning network to enable transactions that don't ever need to be broadcast to the blockchain. We're not there yet; this would require additional op codes to be added to get the full capabilities.
    - bduerst 11y ago
      Side chain transactions aren't fulfilled until they're broadcast through the blockchain. Most people and merchants do not want to be paid in arbitrary I.O.U.s that take weeks or sometimes months, which is essentially what side chain is.
      - alwillis 11y ago
        Payment channels and the lightning network aren’t side chains. And there are no IOUs; not sure where that came from. Good podcast about payment channels: https://letstalkbitcoin.com/blog/post/lets-talk-bitcoin-219 https://letstalkbitcoin.com/blog/post/lets-talk-bitcoin-219 And on the lightning network: https://letstalkbitcoin.com/blog/post/lets-talk-bitcoin-242-meet-the-lightning-network https://letstalkbitcoin.com/blog/post/lets-talk-bitcoin-242-... Lightning Network info site: http://lightning.network http://lightning.network

vectorpush 11y ago

Bitcoin is not a very practical option for the general public because there are various scenarios where the user can permanently lose their money without the possibility of recovery. There are many techniques for keeping bitcoin secure, but even something as simple as sending money to the wrong address can cause a permanent loss of funds which is a serious problem in the context of social engineering attacks and technical issues related to preventing one's wallet from being stolen/lost/deleted/corrupted. Another problem is that the plethora of online wallet services and mobile clients means that the user has to take responsibility for vetting the software or service they use to participate in the bitcoin economy. This ends up being very risky because developers are not legally responsible for loss of funds due to software errors, poor security or something more sinister. On the other hand, the relatively strict and standardized operating procedures of the banks keeps customer money safe in practice and a trusted brand like Apple is held to a higher standard with regard to the trustworthiness of their software.