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Good for Walmart! I was one of the hopeful for a Bitcoin, or another blockchain-based currency, to cut out the middleman, all the while maintaining the conveni

by eggy 10y ago

Good for Walmart! I was one of the hopeful for a Bitcoin, or another blockchain-based currency, to cut out the middleman, all the while maintaining the convenience of spending my money as I see fit. The middleman are the 5 to 7 companies that touch a credit card transaction from POS to the bank, each taking a small cut. I am confident most HNers probably already know. Unfortunately the door didn't shut on big credit/transaction processing/bank asses fast enough, so all them have developed blockchain-based instruments to ensure they get a cut of any future transaction that flows. Short of a sudden worldwide adoption of Bitcoin by merchants and consumers overnight, this does not appear to be happening (fingers crossed), I am not sure how the market will take care of the fee situation; I'm not fond of government regulation via caps, since it will hinder other creative efforts to change the system; the disparity is what will drive an innovation (I hope). I think a player willing to take less would start a price war and gain more volume. The passivity of acceptance of these fees by the majority of consumers without any noise, is similar to how regular paycheck income tax withdrawals are like bleeding people drop by drop; they don't seem to care too much. As opposed to saying, 'Hey we'll take that 28%' all in one chunk on April 15th. People would revolt, or get very angry ;) So I think it is cool that a big player is shaking up the sleeping giant of VISA and company. I will follow this to see how quickly VISA cuts a deal. I think the Walmart letter paints them against VISA in a good light. In any case, it has brought scrutiny and public awareness to the issue.

germanier 10y ago
Bitcoin still has a middleman – namely the miners that are getting paid directly through transaction fees and indirectly through inflation. Sure, it might be cheaper overall (which is not a given when you would dramatically increase transaction volume) but don't delude yourself thinking it cuts the middleman out completely.
- imglorp 10y ago
  Right. It's around us$0.05/transaction. First of all, it's lower, and second, it's a flat charge instead of a percent, which is probably more fair for users.
  - ufo 10y ago
    Bitcoin is heavily subsidized via newly minted bitcoins that are awarded to miners. The real cost per transaction is closer to $10.00 https://blockchain.info/charts/cost-per-transaction https://blockchain.info/charts/cost-per-transaction http://bitcoin.stackexchange.com/questions/32923 http://bitcoin.stackexchange.com/questions/32923
- eggy 10y ago
  Yes, but that is only one middleman, not 5 to 7, and my point had to do with the banks playing catch up to consolidate them as one middleman taking the collective cut of the 5 to 7 others. I took the equivalent of $250 USD out of a Malaysian ATM with my Bank of America debit card. I was charged a $3.50 ATM fee by the Malaysian bank. BoA charged me $5.00 ATM fee, AND an $11.00 foreign transaction fee based upon the amount. I know they hedge exchange rates, but they already took the $5.00, and $11.00 is a lot more than my Bank of China account charges me 3x less to take money out in the US on my BoC debit card. My credit card is not too bad, but the merchants are paying fees too on top of the 5 to 7 middlemen. Bitcoin or other would only be an improvement. People make the claim they want a bank to call or email with issues. Well, you cannot even email most issues to BoA. I have tried. You need to call them. They can send you secure messages in online banking that you can reply to, but you cannot initiate an issue. I'll take the lower, single fee, that although not fully anonymous via tracking, is better than high fees with no real benefits. Trust me, I'm not delusional on this, only wishing for the better deal for me.

by eggy 10y ago

germanier 10y ago

Bitcoin still has a middleman – namely the miners that are getting paid directly through transaction fees and indirectly through inflation. Sure, it might be cheaper overall (which is not a given when you would dramatically increase transaction volume) but don't delude yourself thinking it cuts the middleman out completely.

imglorp 10y ago
Right. It's around us$0.05/transaction. First of all, it's lower, and second, it's a flat charge instead of a percent, which is probably more fair for users.
- ufo 10y ago
  Bitcoin is heavily subsidized via newly minted bitcoins that are awarded to miners. The real cost per transaction is closer to $10.00 https://blockchain.info/charts/cost-per-transaction https://blockchain.info/charts/cost-per-transaction http://bitcoin.stackexchange.com/questions/32923 http://bitcoin.stackexchange.com/questions/32923
eggy 10y ago
Yes, but that is only one middleman, not 5 to 7, and my point had to do with the banks playing catch up to consolidate them as one middleman taking the collective cut of the 5 to 7 others. I took the equivalent of $250 USD out of a Malaysian ATM with my Bank of America debit card. I was charged a $3.50 ATM fee by the Malaysian bank. BoA charged me $5.00 ATM fee, AND an $11.00 foreign transaction fee based upon the amount. I know they hedge exchange rates, but they already took the $5.00, and $11.00 is a lot more than my Bank of China account charges me 3x less to take money out in the US on my BoC debit card. My credit card is not too bad, but the merchants are paying fees too on top of the 5 to 7 middlemen. Bitcoin or other would only be an improvement. People make the claim they want a bank to call or email with issues. Well, you cannot even email most issues to BoA. I have tried. You need to call them. They can send you secure messages in online banking that you can reply to, but you cannot initiate an issue. I'll take the lower, single fee, that although not fully anonymous via tracking, is better than high fees with no real benefits. Trust me, I'm not delusional on this, only wishing for the better deal for me.