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It’s easier and cheaper to use bank wires than Bitcoin

206 points by sonkol 10y ago

d33 10y ago
Excuse me, but how much is it a Bitcoin problem as opposed to being a Bitcoin ecosystem problem? You can't blame Bitcoin for every problem with each exchange.
- eriknstr 10y ago
  What good is Bitcoin if the ecosystem is bad?
  - jknoepfler 10y ago
    It's pretty handy for money laundering and buying/selling illegal goods.
  - nicky0 10y ago
    If everybody used bitcoin for everything, then there would be no need for exchanges, payment gateways and the like. This stuff is added cruft.
    - M_Grey 10y ago
      Any statement that begins with, "if everyone..." is a fantasy.
    - tarancato 10y ago
      If my granny had wheels, she'd be a bicycle.
      - nicky0 10y ago
        You could add some ham and it would be a sort of British carbonara.
    - hueving 10y ago
      People can't use bitcoin for everything, the network can't support enough transactions per second for even a small city of people to use it for everything.
  - deleted 10y ago
    [deleted]
nicky0 10y ago
Interesting article. But none of the problems described are actually with bitcoin. I see criticisms of CoinBase, WB21, TradeZero, Bitpay. All the problems were due to issues with exchanges & intermediaries and with handling USD. It seems the actual bitcoin part worked fine.
- zajd 10y ago
  Interesting article. But none of the problems described are actually with fiat currency. I see criticisms of the Fed, Banks, Credit Card Companies, Credit Unions. All the problems were due to issues with exchanges and intermediaries and with handling USD. It seems the actual fiat currency part worked fine.
  - nicky0 10y ago
    The point you have missed is that we don't need these intermediaries if fiat currency is taken out of the mix.
    - zajd 10y ago
      As the essay posted so clearly demonstrates.
  - jstanley 10y ago
    The difference is it's perfectly possible to use Bitcoin on your own without dealing with intermediaries. But you can't send cash over the internet.
    - zajd 10y ago
      I find it amusing that you consider the internet "on your own" like there isn't a gigantic investment being made into that infrastructure that even enables bitcoin in the first place. Do people who are in to Bitcoin think intermediaries solely exist to extract value from transactions? There's actually a service being provided.
compil3r 10y ago
Bitcoin was never intended to reduce the cost of Banks, but rather supply an alternative.
- dragontamer 10y ago
  The number of people saying BTC is cheaper than Paypal continues to be huge.
  - NoNotTheDuo 10y ago
    If you are able to receive BTC and pay for your costs with BTC, it's cheaper by quite a bit. The last transaction I sent using BTC cost me $.09. If you have to exchange BTC to USD to pay for your costs, then sure, it's going to cost more than PayPal.
    - dragontamer 10y ago
      > The last transaction I sent using BTC cost me $.09. And you denominated that in $$ instead of BTC why? Because the value of BTC fluctuates so much that its worthless to denominate goods in terms of BTC. Only USD is stable enough to actually denominate the value of goods with. And its not like USD is rock solid: we've got an inflation-based government pushing the value of USD down ~2% each year. But that's a lot more stable than BTC. As long as BTC remains more volatile than my freaking stock portfolio, it is worthless to trade goods with it directly. Everything will need to be converted to and from USD if I'm actually to run a business. BTC could double in price (or half in price) in the next year and no one would be surprised.
      - coryfklein 10y ago
        Another plausible reason why he used the USD amount instead of 0.15 mBits, is because the Hacker News readership has had years to associate an internal "feeling" for what $0.09 is worth. The Swiss Franc is also very stable and has similar qualities to USD. Would you not have complained if he cited the figure in Swiss Francs?
- 10y ago
adgasf 10y ago
This article doesn't have any real discussion of Bitcoin itself, only the services that currently exist around it.
- andrewmcwatters 10y ago
  Bitcoin does not exist in a vacuum.
- zajd 10y ago
  This article doesn't have any real discussion of Banks itself, only the services that currently exist around it.
- deleted 10y ago
  [deleted]
stephanheijl 10y ago
While I agree that those fees are extravagant and the underlying process should have been much easier, it probably would have been prudent to investigate the process first, before starting it. I can't imagine being unaware of fees associated with using Coinbase before perusing their services.
- juliangoldsmith 10y ago
  His overall loss, including the drop in BTC price, is 4%. I wouldn't call that extravagant.
  - stephanheijl 10y ago
    Specifically in the context of the usage (that is, transferring USD), the fees were about 6 times what they would have been if he were to use a bank account. In the big picture I do agree with you, though. 1% fees on individual services are not a lot, even when they stack across different services.
uobytx 10y ago
I don't think USD -> Bitcoin -> USD is really the way to go on this. If you are trading in USD, why would you move it into bitcoin and back again? You already had it in USD. If you need to buy some groceries in the US, you wouldn't trade your USD for CAD (Canada money), then bring CAD to a grocery store that also accepts USD. You would only bring CAD if you already had CAD.
- zajd 10y ago
  Because one of the espoused values of Bitcoin is the ease of transferring it across international borders.
  - deleted 10y ago
    [deleted]
  - kozak 10y ago
    Where "it" is Bitcoin and not USD.
    - dlp211 10y ago
      But bitcoin needs to be transformed back into a currency at some point to use it. There is no point in a wire transfer if the person at the other end isn't going to use it. Yes, some retailers accept bitcoin, most don't.
      - mywittyname 10y ago
        Even those that do price in their local currency.
        hx87 10y ago
        Looks like Bitcoin still hasn't achieved unit-of-account status yet, even among those who use it as a medium of exchange.
      - isfield 10y ago
exstudent2 10y ago
There seems to be a trend in articles claiming some technology is bad/a disaster/dead when really it's just someone uneducated in the platform trying to use it incorrectly or with misinformed assumptions. Bitcoin is still an emerging technology. You can do things with it you can do with _anything_ else. You can create 100 wallets right now and start receiving bitcoin to them. Please show me how to do that without interacting with anyone with traditional bank accounts. Bitcoin is here to stay and we're going to continue to discover interesting use cases for it. Sorry this guy is bailing before he learns what it's all about.
zitterbewegung 10y ago
The article illustrates a number of issues with services on bitcoin. One issue with doing things with any cryptocurrency is that it takes awhile for a transaction to occur. I had the preconcieved notion it would be as fast as sending an email but it really takes 30-40 minutes sometimes. Also, it seems the author is treating bitcoin as cash when its really more like you buying gold with cash and then transferring it back into cash to the other account that you want to transfer.
davidw 10y ago
I used TransferWise last time I had to move some money internationally, and had a good experience. Significantly faster and cheaper than wiring the money.
- deleted 10y ago
  [deleted]
- zzleeper 10y ago
  +1 for TransferWise, a simple solution for wires and it worked quite well for me
iblaine 10y ago
What an ignorant article. It's unrealistic to expect cryptocurrencies to behave as flawlessly as wire transfers. The technologies need to mature. But for those with patience, they're pretty awesome.
- dragontamer 10y ago
  > It's unrealistic to expect cryptocurrencies to behave as flawlessly as wire transfers. Wire transfers are $35. You'd think that BTC would be able to be cheaper than that.
  - alexmat 10y ago
    To be fair, BTC transfers cost a couple cents at most. If we're going to compare apples to apples. If you do an international wire and change currencies you'll pay much more than $35.
pixelbath 10y ago
This article should be titled "The Disaster That Ensued When I Forgot to Look Up Fee Schedules." And this is from a self-professed day trader? I'm guessing this also makes me a "Bitcoin defender."
aresant 10y ago
Bitcoin transactions are not easy enough for general consumption. I think in the Bitcoin lifecycle a number of these early services exist at the pleasure of serving pioneering Bitcoin users / miners who have a lot of digital currency already.
wyldfire 10y ago
> Look, it’s the whole ecosystem that is fucked. All these fees, complicated steps — it just doesn’t work for the normal Joe. Yeah, cooperative/reversible financial fund transfer systems that interoperate with bitcoin are at enormous risk during these transactions, so they charge large fees and create red tape to avoid/mitigate fraud. It's probably been bitcoin's biggest stumbling point since forever. I don't think that it's a disaster though. > The Bitpay invoice has a 15 minute timer. So I wait and wait ... last few minutes on that timer so I start to get a bit nervous. This problem could've actually been one to blame on bitcoin. It might be due to bitcoin's low transaction throughput. I haven't followed the blocksize debate but IIRC there have been lots of talk about slow transactions.
adrusi 10y ago
Transferring bitcoin when all relevant parties are using bitcoin is more efficient than transferring USD when all relevant parties are using USD. If people are presenting bitcoin as a good alternative to wire transfers then they are being misleading.
- aidenn0 10y ago
  If bitcoins can't compete with wire transfers, then how will bitcoin ever become mainstream? The world isn't going to switch to bitcoin overnight, so there will be a period of time in which bitcoin will need to be converted to other currency at one or both ends.
  - coryfklein 10y ago
    > how will bitcoin ever become mainstream? I doubt it ever will become mainstream, but one path to "mainstream" is when merchants, banks, companies, and payment providers just accept Bitcoin rather than: 1) Pretend to accept bitcoin 2) Pay a sub-par service with high fees to convert any received BTC into USD immediately 3) Encourage customers that don't already hold BTC to pay in BTC, adding another conversion step from USD -> BTC If 90% of the people I give money to just accept Bitcoin as payment, then it makes sense for me to have a "Bitcoin account", as payment fees could be lower.
    - aidenn0 10y ago
      > when merchants, banks, companies, and payment providers just accept Bitcoin.. That's not a path to becoming mainstream, that is mainstream.
brhsiao 10y ago
Incidentally, if you're like me, and know nothing about stocks, but still want to get rich off companies you believe will succeed, I highly recommend Robinhood. It's like stock trading for chimpanzees. Install an app, fill out a brief profile, click a big shiny button to deposit money, select your stock, and click another big shiny button to buy. I don't have any affiliation with them. I just always thought trading stocks was schleppily difficult, and was delighted to discover it was not so. I believe some company will do well; I'm not interested in understanding spreadsheets or hiring anyone; here's my money; how do I buy shares? What is the Uber-like, magic-button product here? Robinhood, it turns out. https://www.robinhood.com/ https://www.robinhood.com/
- dom96 10y ago
  I would love to use it. Unfortunately it's only available in the US (and Australia?). If there are any alternatives that work in the UK and/or Switzerland then please let me know.
- loeg 10y ago
  And if you love the simplicity and lack of informed investment Robinhood represents, you'll love slot machines too. Put money in, pull lever, boom. If you don't know enough to stock pick, buy the index.
  - brhsiao 10y ago
    By simplicity I was talking about the fact that I don't need to fill out paperwork. Filling out paperwork is unrelated to the forecasting which companies will succeed. The point is, if it were 2005 and I wanted to buy Apple stock, without Robinhood I probably wouldn't have bothered.
    - loeg 10y ago
      Open a brokerage account, click BUY, enter AAPL. That's about it. :-) Fun fact: brokerage accounts were easier to open in 2005 before the recent more stringent money laundering regulation.
shawnb576 10y ago
You can't separate the currency from the ecosystem for anything but academic purposes. The ecosystem is a mess. A commonly cited benefit of crypto-currencies is that they'll eliminate friction and fees in the system, and I think this is only because the systems don't exist. People want security, verifiability, and reversibility when dealing with money. There has to exist companies to do this whether they are Citibank or Coinbase, and they're going to charge money. So you can take the Gov't control out of the equation, but I still have yet to hear a scenario that crypto-currrency itself makes better than fiat - it's always about the cost, complexity, and regulation of the services on top. Eventually, those will reappear because people and business want them.
- smokeyj 10y ago
  https://en.wikipedia.org/wiki/Hyperinflation#Notable_hyperinflationary_episodes https://en.wikipedia.org/wiki/Hyperinflation#Notable_hyperin... It's a big world out there, most of which has no easy way of integrating with modern systems of credit, lending and other financial instruments. I see blockchain technology as a promising way for distributed groups to organize, create operating agreements, and execute contracts for market rate on a global setting.
  - dragontamer 10y ago
    http://pricedingold.com/charts/BTC-2013.png http://pricedingold.com/charts/BTC-2013.png Erm... BTC is less stable than USD by every conceivable measure. http://www.orchardplatform.com/wp-content/uploads/2015/05/btc-usd-price.png http://www.orchardplatform.com/wp-content/uploads/2015/05/bt... Tell me: would you be surprised if BTC changed in price by 50% by the end of this month? I wouldn't be, I simply don't trust BTC to retain its value in any way. BTC goes up or down, and that's bad for "currencies"
    - smokeyj 10y ago
      Is currency ever a good store of value? If you're a billionaire you're certainly not storing it in fiat. Bitcoin being a globally distributed ledger has the ability to represent shares of commodities and equities. It's why Delaware is considering incorporating blockchain tech. You could imagine merchants pricing in shares of Apple - and customers paying in shares of oil and Google - to be settled at PoS. Check out shapeshift.io to see how fluid crypto-to-crypto trades can be. http://www.wsj.com/articles/delaware-considers-using-blockchain-technology-1462145802 http://www.wsj.com/articles/delaware-considers-using-blockch...
alex-yo 10y ago
Or rather "The Disaster That Is Bitcoin Services Around Bitcoin". I'm wondering if there would be the same kind of article that dollars is very bad, because bank wants some money for wireing them e.g. to Europe, and the exchange rate between dollar and euro could change overnight.
- imron 10y ago
  It's right there in the same article. He mentions bank transfers are bad so he went with Bitcoin - only to find Bitcoin was even worse.
tommynicholas 10y ago
The things that will determine whether Bitcoin "wins" or not will not be the use cases where Bitcoin is supplementing existing infrastructure, but rather whether or not it can sustain and grow use cases where it replaces it. Even if those are fringe or even sketchy, that is what matters. "Blockchain" initiatives at banks are just about implementing cryptography as part of solving larger technical challenges they have. Using Bitcoin as "rails" isn't there yet. Using Bitcoin in places where only Bitcoin makes sense will make it a cockroach, and open protocols that survive tend to become important.
youdontknowtho 10y ago
Sounds like someone hasn't tried to buy a pound of meth with a bank wire! No seriously, though. Who knew that the libertarian cyberpunk dystopian future would be full of people trying to scam a nickel off you every couple of seconds...oh wait, everyone ever. That's the market, man. Don't taunt the market. Don't even look at it funny. It's sentient and can hear your insults.
sonkol 10y ago
I found this article after the author argued against my post How to Pay Freelancers in Upwork with Bitcoin, Ethereum, or any other Altcoin [1]. The problem with his argument is that it is based on his very tiny vision of the world based on the country where he lives. This is not the "user experience" the rest of the world currently have and that's why cryptocurrencies offer an alternative, even with a lot of limitations. [1] https://medium.com/@sondre.kolaautomat/how-to-pay-freelancers-in-upwork-with-bitcoins-or-any-other-altcoin-8f5b39ca9745 https://medium.com/@sondre.kolaautomat/how-to-pay-freelancer...
joefourier 10y ago
Using Bitcoin strictly as an intermediate to transfer between two US dollar accounts is not the most typical usecase. The fees and waiting times are due to the US dollar transfers and the companies involved. There is however, valid criticism of the various middlemen that have propped up to take advantage of the hype surrounding Bitcoin.
smokeyj 10y ago
With a title like "The Disaster that is Bitcoin" we really shouldn't feed the trolls. It's true bitcoin doesn't compete with traditional fiat for many purposes. Calling bitcoin a disaster for it is trolling people who see potential in the technology. The disaster that is clickbait.
- oelmekki 10y ago
  > The disaster that is clickbait. Or sponsored articles. I would love the author to mention where he works, and if that article was sponsored.
- kosievdmerwe 10y ago
  What you are doing isn't much better. You calling them trolls (in other words asking that people completely discount their opinions and views because they weren't made "seriously") and I suspect you're largely doing because you disagree with the message.
  - smokeyj 10y ago
    I should be more open minded. If you enjoy articles about baseless arguments, you'll love "The Disaster that is Bitcoin" by RogomonZ. It's highly uninformative and irrelevant to just about everyone in the ecosystem. If you enjoy the refined writing style of an angsty teenager with summaries like "Fuck Bitcoin and all the fee earning services around it" - this one's for you!
andrewvijay 10y ago
"Look, it’s the whole ecosystem that is fucked." Should have been the title. This post actually makes me replan a bit of my investment plans. The future is now but it is expensive.
justinzollars 10y ago
Turning anything to cash is an expensive proposition. Try selling a house.
- dragontamer 10y ago
  > Turning anything to cash is an expensive proposition. It costs me $7 to change my stocks into cash and vice versa. Frankly, turning BTC -> USD -> BTC is harder than turning Apple stock -> USD -> Apple stock.
KyoChunho 10y ago
Comparing with Bitcoin is easy. I'd want to see a comparison between FIAT and an advanced cryptocurrency, something like Monero, DASH or Ethereum.
brassic 10y ago
He is missing 55 cents because WB21 appear to be miscalculating the fee. They add 1% to the transfer amount ($5500) to get a total ($5555), and then take 1% from that ($55.55) as their fee. In other words, their fee is really 1.01%. If the author can be bothered he should explain this to them and ask for his 55 cents back.
- daveloyall 10y ago
  Superman 3
- mikeash 10y ago
  Sounds like one programmer implemented it as "take 1% of the total, pay out 99%" and then another programmer incorrectly computed the total as "add 1% to the desired amount to pay."
daveloyall 10y ago
I'm interested in seeing a step-by-step explanation of how he should have done it.
- coryfklein 10y ago
  If he's trying to deposit USD into an account, he should have just wired it rather than converting USD -> BTC -> USD. If, on the other hand, he already had $5-6k worth of Bitcoin somewhere, he could have eliminated one of those conversions and it would have cost about the same. Alternatively, he may have been able to find an exchange that accepts Bitcoin directly rather than through some intermediary with a conversion fee, in which case his total deposit fee would have been < $1.
  - daveloyall 10y ago
    Which one? I don't know what these service providers do. I have a GNU/Linux server. Which service providers can I eliminate? Using my own server, suppose my neighbor has a bunch of BTC and I have a bunch of cash. If I want to buy BTC from her (by physically handing over the cash), what service providers do we need to use? Suppose my neighbor uses the same providers (or some subset) the author of this article uses.
    - coryfklein 10y ago
      > If I want to buy BTC from her (by physically handing over the cash), what service providers do we need to use? This is the easiest to answer so I'll start here. You don't need any service providers beyond: 1) Any one of the many free bitcoin clients out there to a) create a wallet for you, and b) send the bitcoin to that wallet In the article, the author wanted to trade stocks on TradeZero and he wanted to send TradeZero $5-6k to open a new account. TradeZero provided two options to send that cash: 1) Wire it from the bank 2) Convert your dollars to bitcoin, send that bitcoin to BitPay, which will send it to WB1, which will send it to TradeZero. Oh, and everyone will take a fee out in the process. My suggested alternative, is that if the author already has bitcoin, is to find a stock-trading company that will just let him fund the account with bitcoin. Then the options would be: 1) Wire cash from the bank 2) Send some bitcoin to the company's bitcoin wallet In that case, the fees incurred from 1 would be $25-50, and the fees incurred from 2 would be approximately 5 cents. Given all that, I have no idea if there exists even a single stock brokerage that just accepts bitcoin directly, so that likely isn't a real option.
chejazi 10y ago
> $85 + $95 +$55 +$0.55 +$0.45 (still in WB21) = $236 in fees Bitcoin has been around for 8 years, and general awareness has really only kicked in over the last 4. These Bitcoin companies are the first generation. I think it's reasonable that in the next 10 years the tasks you performed will be more seamlessly orchestrated, and greater competition will drive the price down. It would take an order-of-magnitude improvement to undercut the wire fee ($35) which may well happen.
Animats 10y ago
All this to open a day trading account in the Bahamas with a company so flaky that they can't offer accounts to US persons or even to Bahamas persons. It's one of those "trade offshore with high leverage" companies. "High leverage" means high interest charges, which means the return on investment drops. (Their site is vague about interest charges. Not a good sign.) For day trading, the "house edge" is improved. This racket is more commonly seen in foreign exchange and in "binary options" (which are a total scam).
- ascorbic 10y ago
  FATCA means plenty of legitimate financial institutions want nothing to do with US persons.
  - Animats 10y ago
    That doesn't mean that financial institutions that won't deal with US persons are legitimate. They don't deal with Bahama persons either, even though they are licensed to do so. That might get them in trouble with local regulators.
    - ascorbic 10y ago
      Of course it doesn't mean they're legitimate, but it's also not even a hint that they're dodgy. Likewise a lot of tax havens treat companies that trade locally differently, which is why many refuse to do business with citizens of their domicile. So once again, they may be dodgy but this isn't any indication about that.
  - GFK_of_xmaspast 10y ago
    US-based financial institutions are often willing to deal with US citizens.
delegate 10y ago
$236 is small change compared to how much bitcoin I've personally lost in the various hacks - MtGox and others. Even so, I still think bitcoin is a brilliant tech and valuable experiment. It is wrong to think of bitcoin as a direct competitor to fiat. Just like mp3 / bittorent did not destroy the music / movie industry, bitcoin isn't going to replace fiat currency. Not now and not in it's current form. But it's going to be around as an alternative to the centralised banking system and as a very interesting social experiment and self-governance technology. In time, both techs are going to merge - meaning that banks will implement all kinds of 'blockchain technologies', while virtual currencies will implement all kinds of services which the banks currently provide.
- Jtsummers 10y ago
  Serious question. MtGox, as I recall, was the first major Bitcoin-losing hack. So I'll (kinda) excuse people for participating in that one. But why would you, especially after that, keep large amounts of BTC in these sorts of exchanges?
- Mickydtron 10y ago
  In order for it to be a legitimate alternative, as opposed to only being of interest to ideologues and academics, shouldn't it actually be competitive with existing technologies in areas like fees, user experience, or speed? If it was better at some and worse at others, it would provide a legitimate alternative with a different set of trade-offs, but for it to lose in every category doesn't really make it seem like it can be an alternative to the centralized banking system in a real and useful way.
  - coryfklein 10y ago
    It is competitive in fees. Sending $1M of bitcoin can be done for less than a dollar. Try doing that with USD. Of course, fees for converting USD -> BTC -> USD are not that cheap, but neither are the fees for converting USD -> YEN -> USD.
  - aianus 10y ago
    It doesn't lose in every category, OP just chose a specific situation in which it was very expensive and then wrote a blog post showcasing his poor planning. As a counter-anecdote I saved hundreds of dollars transferring USD10,000 in the US to THB cash in Thailand via Bitcoin.
Uptrenda 10y ago
It's falling apart even more than anyone cares to admit: * Blocks are now so full that transactions have stopped flowing and there's no solutions that will address any of this without forcing any of the thousands of systems already built on top of Bitcoin to migrate = slow confirmations = massively higher fees * Slow confirmations for every day payments = credit card use-case somewhat ruled out * Double-spending is now a feature of Bitcoin = 0 confirms are now less secure (I understand the logic but its black and white. Instant payments should be possible but obviously zero confirms aren’t the way to do it.) * Horrible black and white thinking for seemingly everything in Bitcoin -- especially security -- whereby nobody can imagine a fail-safe system and the community blames anyone who loses their coins even though the Bitcoin protocol is inherently unsuitable for building fail-safe wallets. * Terrible user-experience on the protocol, infrastructure, and application levels. So much so that Bitcoin will likely never experience mainstream adoption for this reason. * Community has become a toxic circle jerk of investors who ignore any of Bitcoin's problems in favor of its myopic benefits in the hope that they can still ride the blockchain to the bank (somewhat literally.) * A hostile dev community that is so utterly clueless when it comes to real world business that their choices have managed to cripple the entire system. * Community is an echo chamber of ignorance that blindly believes that all advances outside of Bitcoin are traitorous, incorrect, and not worth knowing about; Outright hostile towards new users with an air of technology snobbery that makes the Linux community seem like a welcoming party at an Apple store. * The technology is inherently unscalable -- in fact, the only currently good plans for scaling Bitcoin involve not using it (No, I'm really not joking, that's literally what “off-chain” means) But the real problem here is really the fact that the development team have refused to increase the block size even though this was always intended in the design of Bitcoin by Satoashi and even though there are plenty of resources to do it. * Bitcoin is now more centralized than any dictatorship -- the development team have become controlled largely by a single corporation (meaning a single CEO -- we all know who) and mining pools have become so large that at any time the miners can collude to reverse recent transactions. Bitcoin has failed at every goal that it set for itself and the biggest issue out of all of this is the fact that the system can be so easily controlled by standard social engineering. If a decentralized system can be circumvented through moronic human and political means then it loses any advantage that it might have had by being decentralized. So philosophically and practically – Bitcoin has failed as both a consensus system and as an idea. In fact -- probably the biggest advance that Bitcoin made was in the use of smart contracts to enforce agreements which actually already existed prior to Bitcoin. So I think going forward banks will end up using Bitcoin-inspired technology but they will ignore its consensus system completely (which frankly sucks) and instead use what is now being referred to as "smart signatures" (or programmable signatures) as a way of enforcing complex agreements between institutions. Tl; dr; Bitcoin was an experiment that proved that certain things could be done better but it failed at a lot of things. It turns out that Bitcoin probably won't be the next Internet but it did make for quite an interesting ARPANET ...
akhatri_aus 10y ago
Some countries have real time transfers for free.
jboggan 10y ago
Bitpay and other payment processors exist to buy and hold Bitcoin in the event of mainstream adoption and price explosion; that is their entire investment thesis. They also happen to spend a little time performing activities that purport to make Bitcoin useful and appear like they are building a real product and business.
jwildeboer 10y ago
Duh.
imagist 10y ago
The new title is worse than the first. Sure, it's easier and cheaper to wire USD to another country than it is to exchange USD for BTC, send BTC, and then exchange BTC to USD. Just like it's cheaper to wire USD to another country than it is to exchange USD for literally anything, send that literally anything, and then exchange that literally anything to USD. If you insist on using BTC as a transfer mechanism for USD, you're going to incur most of the fees and risk you would if you used GBP, CAD, AUD, Yen, or any other currency as a transfer mechanism for USD. I'm not sure why anyone would expect anything different. However, if you compare apples to apples, transferring BTC which is denominated in BTC throughout the transaction is much easier and cheaper than transferring USD which started is denominated in USD throughout the transaction.
- 3pt14159 10y ago
  My question is why aren't there transfer companies that just use Bitcoin as an alternative to Swift? Like, you want to send $50 USD to me. You give person A $50, he sends person B $50 worth of Bitcoin, and person B gives me $50 worth of USD. Why do you even need to know about Bitcoin at all? Why isn't it just a cheap(ish) financial resolution layer?
  - quirkafleeg 10y ago
    AIUI, it's because the expensive part is not basically updating an internal database when money changes hands (no sending of BTC required), the expensive part is, to take WU as an example, operating half a million brick and mortar locations in 200+ countries.
    - 3pt14159 10y ago
      Well what I'm saying is that it doesn't have to be the internal database. It can be a completely decentralised system. I send you $50 and you open an app and just walk up to the first money guy that you see on the street. Why do we need physical banks?
      - 10y ago
deleted 10y ago
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znpy 10y ago
I am quite sure that if you want to buy and so stuff with currencies other than the one you usually use, you are going to pay some conversion fees.
homakov 10y ago
Bitcoin is useful when you already have it. There's no point to go and buy it solely for purpose of transferring it (via some weird wb21). Neither you nor tradezero use it properly.
Mendenhall 10y ago
Misleading title. Its easier and cheaper to use bank wires when sending USD. What he did just seems foolish to me. I have had people from across the globe send me BTC in minutes with a few button clicks and no additional parties involved.
arisAlexis 10y ago
Easy money transfer is not bitcoin's value proposition though
bsder 10y ago
The only people really interested in BitCoin are only interested in the "untraceability" of it. Consequently, nobody really cares about the fees as it's all about the ability to move your money around while avoiding government scrutiny. And these fees are what they are willing to pay to accomplish that.
- CalRobert 10y ago
  People in places without functioning banking systems may also appreciate it.
  - bsder 10y ago
    Okay, that's a fair point that I hadn't considered.
throw2016 10y ago
On one hand there is a global focus is on reducing energy waste. On the other we have hundreds of thousands of people merrily wasting electricity mining bitcoin and other assorted crypto currencies. This is a bit of a dissonance. To make matters worse crypto currencies like bitcoin appear to incentivize early adopters to act in bad faith like a pyramid scheme. That they are open to monopolization by those who have disproportionate access to cheap electricty and resources can't help build trust. So the early adopters have every incentive to spin it and on cue they talk it up deceptively on decentralization, anonymity and control as if the protocol develops itself and is not under the control of an inner cotorie. Aren't governments and financial systems supposed to work for us and if they aren't is the solution to make sure they do, or a flawed technology workaround that benefits early adopters and concentrates power and influence in the hands of a few? The cure seems worse than the disease.
arisAlexis 10y ago
Astonished by the amount of downvotes of many comments itt. Some people are really passionate here

206 points by sonkol 10y ago

d33 10y ago

Excuse me, but how much is it a Bitcoin problem as opposed to being a Bitcoin ecosystem problem? You can't blame Bitcoin for every problem with each exchange.

eriknstr 10y ago
What good is Bitcoin if the ecosystem is bad?
- jknoepfler 10y ago
  It's pretty handy for money laundering and buying/selling illegal goods.
- nicky0 10y ago
  If everybody used bitcoin for everything, then there would be no need for exchanges, payment gateways and the like. This stuff is added cruft.
  - M_Grey 10y ago
    Any statement that begins with, "if everyone..." is a fantasy.
  - tarancato 10y ago
    If my granny had wheels, she'd be a bicycle.
    - nicky0 10y ago
      You could add some ham and it would be a sort of British carbonara.
  - hueving 10y ago
    People can't use bitcoin for everything, the network can't support enough transactions per second for even a small city of people to use it for everything.
- deleted 10y ago
  [deleted]

nicky0 10y ago

Interesting article. But none of the problems described are actually with bitcoin. I see criticisms of CoinBase, WB21, TradeZero, Bitpay. All the problems were due to issues with exchanges & intermediaries and with handling USD. It seems the actual bitcoin part worked fine.

zajd 10y ago
Interesting article. But none of the problems described are actually with fiat currency. I see criticisms of the Fed, Banks, Credit Card Companies, Credit Unions. All the problems were due to issues with exchanges and intermediaries and with handling USD. It seems the actual fiat currency part worked fine.
- nicky0 10y ago
  The point you have missed is that we don't need these intermediaries if fiat currency is taken out of the mix.
  - zajd 10y ago
    As the essay posted so clearly demonstrates.
- jstanley 10y ago
  The difference is it's perfectly possible to use Bitcoin on your own without dealing with intermediaries. But you can't send cash over the internet.
  - zajd 10y ago
    I find it amusing that you consider the internet "on your own" like there isn't a gigantic investment being made into that infrastructure that even enables bitcoin in the first place. Do people who are in to Bitcoin think intermediaries solely exist to extract value from transactions? There's actually a service being provided.

compil3r 10y ago

Bitcoin was never intended to reduce the cost of Banks, but rather supply an alternative.

dragontamer 10y ago
The number of people saying BTC is cheaper than Paypal continues to be huge.
- NoNotTheDuo 10y ago
  If you are able to receive BTC and pay for your costs with BTC, it's cheaper by quite a bit. The last transaction I sent using BTC cost me $.09. If you have to exchange BTC to USD to pay for your costs, then sure, it's going to cost more than PayPal.
  - dragontamer 10y ago
    > The last transaction I sent using BTC cost me $.09. And you denominated that in $$ instead of BTC why? Because the value of BTC fluctuates so much that its worthless to denominate goods in terms of BTC. Only USD is stable enough to actually denominate the value of goods with. And its not like USD is rock solid: we've got an inflation-based government pushing the value of USD down ~2% each year. But that's a lot more stable than BTC. As long as BTC remains more volatile than my freaking stock portfolio, it is worthless to trade goods with it directly. Everything will need to be converted to and from USD if I'm actually to run a business. BTC could double in price (or half in price) in the next year and no one would be surprised.
    - coryfklein 10y ago
      Another plausible reason why he used the USD amount instead of 0.15 mBits, is because the Hacker News readership has had years to associate an internal "feeling" for what $0.09 is worth. The Swiss Franc is also very stable and has similar qualities to USD. Would you not have complained if he cited the figure in Swiss Francs?
10y ago

adgasf 10y ago

This article doesn't have any real discussion of Bitcoin itself, only the services that currently exist around it.

andrewmcwatters 10y ago
Bitcoin does not exist in a vacuum.
zajd 10y ago
This article doesn't have any real discussion of Banks itself, only the services that currently exist around it.
deleted 10y ago
[deleted]

stephanheijl 10y ago

While I agree that those fees are extravagant and the underlying process should have been much easier, it probably would have been prudent to investigate the process first, before starting it. I can't imagine being unaware of fees associated with using Coinbase before perusing their services.

juliangoldsmith 10y ago
His overall loss, including the drop in BTC price, is 4%. I wouldn't call that extravagant.
- stephanheijl 10y ago
  Specifically in the context of the usage (that is, transferring USD), the fees were about 6 times what they would have been if he were to use a bank account. In the big picture I do agree with you, though. 1% fees on individual services are not a lot, even when they stack across different services.

uobytx 10y ago

I don't think USD -> Bitcoin -> USD is really the way to go on this. If you are trading in USD, why would you move it into bitcoin and back again? You already had it in USD. If you need to buy some groceries in the US, you wouldn't trade your USD for CAD (Canada money), then bring CAD to a grocery store that also accepts USD. You would only bring CAD if you already had CAD.

zajd 10y ago
Because one of the espoused values of Bitcoin is the ease of transferring it across international borders.
- deleted 10y ago
  [deleted]
- kozak 10y ago
  Where "it" is Bitcoin and not USD.
  - dlp211 10y ago
    But bitcoin needs to be transformed back into a currency at some point to use it. There is no point in a wire transfer if the person at the other end isn't going to use it. Yes, some retailers accept bitcoin, most don't.
    - mywittyname 10y ago
      Even those that do price in their local currency.
      - hx87 10y ago
        Looks like Bitcoin still hasn't achieved unit-of-account status yet, even among those who use it as a medium of exchange.
    - isfield 10y ago

exstudent2 10y ago

There seems to be a trend in articles claiming some technology is bad/a disaster/dead when really it's just someone uneducated in the platform trying to use it incorrectly or with misinformed assumptions. Bitcoin is still an emerging technology. You can do things with it you can do with _anything_ else. You can create 100 wallets right now and start receiving bitcoin to them. Please show me how to do that without interacting with anyone with traditional bank accounts. Bitcoin is here to stay and we're going to continue to discover interesting use cases for it. Sorry this guy is bailing before he learns what it's all about.

zitterbewegung 10y ago

The article illustrates a number of issues with services on bitcoin. One issue with doing things with any cryptocurrency is that it takes awhile for a transaction to occur. I had the preconcieved notion it would be as fast as sending an email but it really takes 30-40 minutes sometimes. Also, it seems the author is treating bitcoin as cash when its really more like you buying gold with cash and then transferring it back into cash to the other account that you want to transfer.

davidw 10y ago

I used TransferWise last time I had to move some money internationally, and had a good experience. Significantly faster and cheaper than wiring the money.

deleted 10y ago
[deleted]
zzleeper 10y ago
+1 for TransferWise, a simple solution for wires and it worked quite well for me

iblaine 10y ago

What an ignorant article. It's unrealistic to expect cryptocurrencies to behave as flawlessly as wire transfers. The technologies need to mature. But for those with patience, they're pretty awesome.

dragontamer 10y ago
> It's unrealistic to expect cryptocurrencies to behave as flawlessly as wire transfers. Wire transfers are $35. You'd think that BTC would be able to be cheaper than that.
- alexmat 10y ago
  To be fair, BTC transfers cost a couple cents at most. If we're going to compare apples to apples. If you do an international wire and change currencies you'll pay much more than $35.

pixelbath 10y ago

This article should be titled "The Disaster That Ensued When I Forgot to Look Up Fee Schedules." And this is from a self-professed day trader? I'm guessing this also makes me a "Bitcoin defender."

aresant 10y ago

Bitcoin transactions are not easy enough for general consumption. I think in the Bitcoin lifecycle a number of these early services exist at the pleasure of serving pioneering Bitcoin users / miners who have a lot of digital currency already.

wyldfire 10y ago

> Look, it’s the whole ecosystem that is fucked. All these fees, complicated steps — it just doesn’t work for the normal Joe. Yeah, cooperative/reversible financial fund transfer systems that interoperate with bitcoin are at enormous risk during these transactions, so they charge large fees and create red tape to avoid/mitigate fraud. It's probably been bitcoin's biggest stumbling point since forever. I don't think that it's a disaster though. > The Bitpay invoice has a 15 minute timer. So I wait and wait ... last few minutes on that timer so I start to get a bit nervous. This problem could've actually been one to blame on bitcoin. It might be due to bitcoin's low transaction throughput. I haven't followed the blocksize debate but IIRC there have been lots of talk about slow transactions.

adrusi 10y ago

Transferring bitcoin when all relevant parties are using bitcoin is more efficient than transferring USD when all relevant parties are using USD. If people are presenting bitcoin as a good alternative to wire transfers then they are being misleading.

aidenn0 10y ago
If bitcoins can't compete with wire transfers, then how will bitcoin ever become mainstream? The world isn't going to switch to bitcoin overnight, so there will be a period of time in which bitcoin will need to be converted to other currency at one or both ends.
- coryfklein 10y ago
  > how will bitcoin ever become mainstream? I doubt it ever will become mainstream, but one path to "mainstream" is when merchants, banks, companies, and payment providers just accept Bitcoin rather than: 1) Pretend to accept bitcoin 2) Pay a sub-par service with high fees to convert any received BTC into USD immediately 3) Encourage customers that don't already hold BTC to pay in BTC, adding another conversion step from USD -> BTC If 90% of the people I give money to just accept Bitcoin as payment, then it makes sense for me to have a "Bitcoin account", as payment fees could be lower.
  - aidenn0 10y ago
    > when merchants, banks, companies, and payment providers just accept Bitcoin.. That's not a path to becoming mainstream, that is mainstream.

brhsiao 10y ago

Incidentally, if you're like me, and know nothing about stocks, but still want to get rich off companies you believe will succeed, I highly recommend Robinhood. It's like stock trading for chimpanzees. Install an app, fill out a brief profile, click a big shiny button to deposit money, select your stock, and click another big shiny button to buy. I don't have any affiliation with them. I just always thought trading stocks was schleppily difficult, and was delighted to discover it was not so. I believe some company will do well; I'm not interested in understanding spreadsheets or hiring anyone; here's my money; how do I buy shares? What is the Uber-like, magic-button product here? Robinhood, it turns out. https://www.robinhood.com/ https://www.robinhood.com/

dom96 10y ago
I would love to use it. Unfortunately it's only available in the US (and Australia?). If there are any alternatives that work in the UK and/or Switzerland then please let me know.
loeg 10y ago
And if you love the simplicity and lack of informed investment Robinhood represents, you'll love slot machines too. Put money in, pull lever, boom. If you don't know enough to stock pick, buy the index.
- brhsiao 10y ago
  By simplicity I was talking about the fact that I don't need to fill out paperwork. Filling out paperwork is unrelated to the forecasting which companies will succeed. The point is, if it were 2005 and I wanted to buy Apple stock, without Robinhood I probably wouldn't have bothered.
  - loeg 10y ago
    Open a brokerage account, click BUY, enter AAPL. That's about it. :-) Fun fact: brokerage accounts were easier to open in 2005 before the recent more stringent money laundering regulation.

shawnb576 10y ago

You can't separate the currency from the ecosystem for anything but academic purposes. The ecosystem is a mess. A commonly cited benefit of crypto-currencies is that they'll eliminate friction and fees in the system, and I think this is only because the systems don't exist. People want security, verifiability, and reversibility when dealing with money. There has to exist companies to do this whether they are Citibank or Coinbase, and they're going to charge money. So you can take the Gov't control out of the equation, but I still have yet to hear a scenario that crypto-currrency itself makes better than fiat - it's always about the cost, complexity, and regulation of the services on top. Eventually, those will reappear because people and business want them.

smokeyj 10y ago
https://en.wikipedia.org/wiki/Hyperinflation#Notable_hyperinflationary_episodes https://en.wikipedia.org/wiki/Hyperinflation#Notable_hyperin... It's a big world out there, most of which has no easy way of integrating with modern systems of credit, lending and other financial instruments. I see blockchain technology as a promising way for distributed groups to organize, create operating agreements, and execute contracts for market rate on a global setting.
- dragontamer 10y ago
  http://pricedingold.com/charts/BTC-2013.png http://pricedingold.com/charts/BTC-2013.png Erm... BTC is less stable than USD by every conceivable measure. http://www.orchardplatform.com/wp-content/uploads/2015/05/btc-usd-price.png http://www.orchardplatform.com/wp-content/uploads/2015/05/bt... Tell me: would you be surprised if BTC changed in price by 50% by the end of this month? I wouldn't be, I simply don't trust BTC to retain its value in any way. BTC goes up or down, and that's bad for "currencies"
  - smokeyj 10y ago
    Is currency ever a good store of value? If you're a billionaire you're certainly not storing it in fiat. Bitcoin being a globally distributed ledger has the ability to represent shares of commodities and equities. It's why Delaware is considering incorporating blockchain tech. You could imagine merchants pricing in shares of Apple - and customers paying in shares of oil and Google - to be settled at PoS. Check out shapeshift.io to see how fluid crypto-to-crypto trades can be. http://www.wsj.com/articles/delaware-considers-using-blockchain-technology-1462145802 http://www.wsj.com/articles/delaware-considers-using-blockch...

alex-yo 10y ago

Or rather "The Disaster That Is Bitcoin Services Around Bitcoin". I'm wondering if there would be the same kind of article that dollars is very bad, because bank wants some money for wireing them e.g. to Europe, and the exchange rate between dollar and euro could change overnight.

imron 10y ago
It's right there in the same article. He mentions bank transfers are bad so he went with Bitcoin - only to find Bitcoin was even worse.

tommynicholas 10y ago

The things that will determine whether Bitcoin "wins" or not will not be the use cases where Bitcoin is supplementing existing infrastructure, but rather whether or not it can sustain and grow use cases where it replaces it. Even if those are fringe or even sketchy, that is what matters. "Blockchain" initiatives at banks are just about implementing cryptography as part of solving larger technical challenges they have. Using Bitcoin as "rails" isn't there yet. Using Bitcoin in places where only Bitcoin makes sense will make it a cockroach, and open protocols that survive tend to become important.

youdontknowtho 10y ago

Sounds like someone hasn't tried to buy a pound of meth with a bank wire! No seriously, though. Who knew that the libertarian cyberpunk dystopian future would be full of people trying to scam a nickel off you every couple of seconds...oh wait, everyone ever. That's the market, man. Don't taunt the market. Don't even look at it funny. It's sentient and can hear your insults.

sonkol 10y ago

I found this article after the author argued against my post How to Pay Freelancers in Upwork with Bitcoin, Ethereum, or any other Altcoin [1]. The problem with his argument is that it is based on his very tiny vision of the world based on the country where he lives. This is not the "user experience" the rest of the world currently have and that's why cryptocurrencies offer an alternative, even with a lot of limitations. [1] https://medium.com/@sondre.kolaautomat/how-to-pay-freelancers-in-upwork-with-bitcoins-or-any-other-altcoin-8f5b39ca9745 https://medium.com/@sondre.kolaautomat/how-to-pay-freelancer...

joefourier 10y ago

Using Bitcoin strictly as an intermediate to transfer between two US dollar accounts is not the most typical usecase. The fees and waiting times are due to the US dollar transfers and the companies involved. There is however, valid criticism of the various middlemen that have propped up to take advantage of the hype surrounding Bitcoin.

smokeyj 10y ago

With a title like "The Disaster that is Bitcoin" we really shouldn't feed the trolls. It's true bitcoin doesn't compete with traditional fiat for many purposes. Calling bitcoin a disaster for it is trolling people who see potential in the technology. The disaster that is clickbait.

oelmekki 10y ago
> The disaster that is clickbait. Or sponsored articles. I would love the author to mention where he works, and if that article was sponsored.
kosievdmerwe 10y ago
What you are doing isn't much better. You calling them trolls (in other words asking that people completely discount their opinions and views because they weren't made "seriously") and I suspect you're largely doing because you disagree with the message.
- smokeyj 10y ago
  I should be more open minded. If you enjoy articles about baseless arguments, you'll love "The Disaster that is Bitcoin" by RogomonZ. It's highly uninformative and irrelevant to just about everyone in the ecosystem. If you enjoy the refined writing style of an angsty teenager with summaries like "Fuck Bitcoin and all the fee earning services around it" - this one's for you!

andrewvijay 10y ago

"Look, it’s the whole ecosystem that is fucked." Should have been the title. This post actually makes me replan a bit of my investment plans. The future is now but it is expensive.

justinzollars 10y ago

Turning anything to cash is an expensive proposition. Try selling a house.

dragontamer 10y ago
> Turning anything to cash is an expensive proposition. It costs me $7 to change my stocks into cash and vice versa. Frankly, turning BTC -> USD -> BTC is harder than turning Apple stock -> USD -> Apple stock.

KyoChunho 10y ago

Comparing with Bitcoin is easy. I'd want to see a comparison between FIAT and an advanced cryptocurrency, something like Monero, DASH or Ethereum.

brassic 10y ago

He is missing 55 cents because WB21 appear to be miscalculating the fee. They add 1% to the transfer amount ($5500) to get a total ($5555), and then take 1% from that ($55.55) as their fee. In other words, their fee is really 1.01%. If the author can be bothered he should explain this to them and ask for his 55 cents back.

daveloyall 10y ago
Superman 3
mikeash 10y ago
Sounds like one programmer implemented it as "take 1% of the total, pay out 99%" and then another programmer incorrectly computed the total as "add 1% to the desired amount to pay."

daveloyall 10y ago

I'm interested in seeing a step-by-step explanation of how he should have done it.

coryfklein 10y ago
If he's trying to deposit USD into an account, he should have just wired it rather than converting USD -> BTC -> USD. If, on the other hand, he already had $5-6k worth of Bitcoin somewhere, he could have eliminated one of those conversions and it would have cost about the same. Alternatively, he may have been able to find an exchange that accepts Bitcoin directly rather than through some intermediary with a conversion fee, in which case his total deposit fee would have been < $1.
- daveloyall 10y ago
  Which one? I don't know what these service providers do. I have a GNU/Linux server. Which service providers can I eliminate? Using my own server, suppose my neighbor has a bunch of BTC and I have a bunch of cash. If I want to buy BTC from her (by physically handing over the cash), what service providers do we need to use? Suppose my neighbor uses the same providers (or some subset) the author of this article uses.
  - coryfklein 10y ago
    > If I want to buy BTC from her (by physically handing over the cash), what service providers do we need to use? This is the easiest to answer so I'll start here. You don't need any service providers beyond: 1) Any one of the many free bitcoin clients out there to a) create a wallet for you, and b) send the bitcoin to that wallet In the article, the author wanted to trade stocks on TradeZero and he wanted to send TradeZero $5-6k to open a new account. TradeZero provided two options to send that cash: 1) Wire it from the bank 2) Convert your dollars to bitcoin, send that bitcoin to BitPay, which will send it to WB1, which will send it to TradeZero. Oh, and everyone will take a fee out in the process. My suggested alternative, is that if the author already has bitcoin, is to find a stock-trading company that will just let him fund the account with bitcoin. Then the options would be: 1) Wire cash from the bank 2) Send some bitcoin to the company's bitcoin wallet In that case, the fees incurred from 1 would be $25-50, and the fees incurred from 2 would be approximately 5 cents. Given all that, I have no idea if there exists even a single stock brokerage that just accepts bitcoin directly, so that likely isn't a real option.

chejazi 10y ago

> $85 + $95 +$55 +$0.55 +$0.45 (still in WB21) = $236 in fees Bitcoin has been around for 8 years, and general awareness has really only kicked in over the last 4. These Bitcoin companies are the first generation. I think it's reasonable that in the next 10 years the tasks you performed will be more seamlessly orchestrated, and greater competition will drive the price down. It would take an order-of-magnitude improvement to undercut the wire fee ($35) which may well happen.

Animats 10y ago

All this to open a day trading account in the Bahamas with a company so flaky that they can't offer accounts to US persons or even to Bahamas persons. It's one of those "trade offshore with high leverage" companies. "High leverage" means high interest charges, which means the return on investment drops. (Their site is vague about interest charges. Not a good sign.) For day trading, the "house edge" is improved. This racket is more commonly seen in foreign exchange and in "binary options" (which are a total scam).

ascorbic 10y ago
FATCA means plenty of legitimate financial institutions want nothing to do with US persons.
- Animats 10y ago
  That doesn't mean that financial institutions that won't deal with US persons are legitimate. They don't deal with Bahama persons either, even though they are licensed to do so. That might get them in trouble with local regulators.
  - ascorbic 10y ago
    Of course it doesn't mean they're legitimate, but it's also not even a hint that they're dodgy. Likewise a lot of tax havens treat companies that trade locally differently, which is why many refuse to do business with citizens of their domicile. So once again, they may be dodgy but this isn't any indication about that.
- GFK_of_xmaspast 10y ago
  US-based financial institutions are often willing to deal with US citizens.

delegate 10y ago

$236 is small change compared to how much bitcoin I've personally lost in the various hacks - MtGox and others. Even so, I still think bitcoin is a brilliant tech and valuable experiment. It is wrong to think of bitcoin as a direct competitor to fiat. Just like mp3 / bittorent did not destroy the music / movie industry, bitcoin isn't going to replace fiat currency. Not now and not in it's current form. But it's going to be around as an alternative to the centralised banking system and as a very interesting social experiment and self-governance technology. In time, both techs are going to merge - meaning that banks will implement all kinds of 'blockchain technologies', while virtual currencies will implement all kinds of services which the banks currently provide.

Jtsummers 10y ago
Serious question. MtGox, as I recall, was the first major Bitcoin-losing hack. So I'll (kinda) excuse people for participating in that one. But why would you, especially after that, keep large amounts of BTC in these sorts of exchanges?
Mickydtron 10y ago
In order for it to be a legitimate alternative, as opposed to only being of interest to ideologues and academics, shouldn't it actually be competitive with existing technologies in areas like fees, user experience, or speed? If it was better at some and worse at others, it would provide a legitimate alternative with a different set of trade-offs, but for it to lose in every category doesn't really make it seem like it can be an alternative to the centralized banking system in a real and useful way.
- coryfklein 10y ago
  It is competitive in fees. Sending $1M of bitcoin can be done for less than a dollar. Try doing that with USD. Of course, fees for converting USD -> BTC -> USD are not that cheap, but neither are the fees for converting USD -> YEN -> USD.
- aianus 10y ago
  It doesn't lose in every category, OP just chose a specific situation in which it was very expensive and then wrote a blog post showcasing his poor planning. As a counter-anecdote I saved hundreds of dollars transferring USD10,000 in the US to THB cash in Thailand via Bitcoin.

Uptrenda 10y ago

It's falling apart even more than anyone cares to admit: * Blocks are now so full that transactions have stopped flowing and there's no solutions that will address any of this without forcing any of the thousands of systems already built on top of Bitcoin to migrate = slow confirmations = massively higher fees * Slow confirmations for every day payments = credit card use-case somewhat ruled out * Double-spending is now a feature of Bitcoin = 0 confirms are now less secure (I understand the logic but its black and white. Instant payments should be possible but obviously zero confirms aren’t the way to do it.) * Horrible black and white thinking for seemingly everything in Bitcoin -- especially security -- whereby nobody can imagine a fail-safe system and the community blames anyone who loses their coins even though the Bitcoin protocol is inherently unsuitable for building fail-safe wallets. * Terrible user-experience on the protocol, infrastructure, and application levels. So much so that Bitcoin will likely never experience mainstream adoption for this reason. * Community has become a toxic circle jerk of investors who ignore any of Bitcoin's problems in favor of its myopic benefits in the hope that they can still ride the blockchain to the bank (somewhat literally.) * A hostile dev community that is so utterly clueless when it comes to real world business that their choices have managed to cripple the entire system. * Community is an echo chamber of ignorance that blindly believes that all advances outside of Bitcoin are traitorous, incorrect, and not worth knowing about; Outright hostile towards new users with an air of technology snobbery that makes the Linux community seem like a welcoming party at an Apple store. * The technology is inherently unscalable -- in fact, the only currently good plans for scaling Bitcoin involve not using it (No, I'm really not joking, that's literally what “off-chain” means) But the real problem here is really the fact that the development team have refused to increase the block size even though this was always intended in the design of Bitcoin by Satoashi and even though there are plenty of resources to do it. * Bitcoin is now more centralized than any dictatorship -- the development team have become controlled largely by a single corporation (meaning a single CEO -- we all know who) and mining pools have become so large that at any time the miners can collude to reverse recent transactions. Bitcoin has failed at every goal that it set for itself and the biggest issue out of all of this is the fact that the system can be so easily controlled by standard social engineering. If a decentralized system can be circumvented through moronic human and political means then it loses any advantage that it might have had by being decentralized. So philosophically and practically – Bitcoin has failed as both a consensus system and as an idea. In fact -- probably the biggest advance that Bitcoin made was in the use of smart contracts to enforce agreements which actually already existed prior to Bitcoin. So I think going forward banks will end up using Bitcoin-inspired technology but they will ignore its consensus system completely (which frankly sucks) and instead use what is now being referred to as "smart signatures" (or programmable signatures) as a way of enforcing complex agreements between institutions. Tl; dr; Bitcoin was an experiment that proved that certain things could be done better but it failed at a lot of things. It turns out that Bitcoin probably won't be the next Internet but it did make for quite an interesting ARPANET ...

akhatri_aus 10y ago

Some countries have real time transfers for free.

jboggan 10y ago

Bitpay and other payment processors exist to buy and hold Bitcoin in the event of mainstream adoption and price explosion; that is their entire investment thesis. They also happen to spend a little time performing activities that purport to make Bitcoin useful and appear like they are building a real product and business.

jwildeboer 10y ago

Duh.

imagist 10y ago

The new title is worse than the first. Sure, it's easier and cheaper to wire USD to another country than it is to exchange USD for BTC, send BTC, and then exchange BTC to USD. Just like it's cheaper to wire USD to another country than it is to exchange USD for literally anything, send that literally anything, and then exchange that literally anything to USD. If you insist on using BTC as a transfer mechanism for USD, you're going to incur most of the fees and risk you would if you used GBP, CAD, AUD, Yen, or any other currency as a transfer mechanism for USD. I'm not sure why anyone would expect anything different. However, if you compare apples to apples, transferring BTC which is denominated in BTC throughout the transaction is much easier and cheaper than transferring USD which started is denominated in USD throughout the transaction.

3pt14159 10y ago
My question is why aren't there transfer companies that just use Bitcoin as an alternative to Swift? Like, you want to send $50 USD to me. You give person A $50, he sends person B $50 worth of Bitcoin, and person B gives me $50 worth of USD. Why do you even need to know about Bitcoin at all? Why isn't it just a cheap(ish) financial resolution layer?
- quirkafleeg 10y ago
  AIUI, it's because the expensive part is not basically updating an internal database when money changes hands (no sending of BTC required), the expensive part is, to take WU as an example, operating half a million brick and mortar locations in 200+ countries.
  - 3pt14159 10y ago
    Well what I'm saying is that it doesn't have to be the internal database. It can be a completely decentralised system. I send you $50 and you open an app and just walk up to the first money guy that you see on the street. Why do we need physical banks?
    - 10y ago

deleted 10y ago

[deleted]

znpy 10y ago

I am quite sure that if you want to buy and so stuff with currencies other than the one you usually use, you are going to pay some conversion fees.

homakov 10y ago

Bitcoin is useful when you already have it. There's no point to go and buy it solely for purpose of transferring it (via some weird wb21). Neither you nor tradezero use it properly.

Mendenhall 10y ago

Misleading title. Its easier and cheaper to use bank wires when sending USD. What he did just seems foolish to me. I have had people from across the globe send me BTC in minutes with a few button clicks and no additional parties involved.

arisAlexis 10y ago

Easy money transfer is not bitcoin's value proposition though

bsder 10y ago

The only people really interested in BitCoin are only interested in the "untraceability" of it. Consequently, nobody really cares about the fees as it's all about the ability to move your money around while avoiding government scrutiny. And these fees are what they are willing to pay to accomplish that.

CalRobert 10y ago
People in places without functioning banking systems may also appreciate it.
- bsder 10y ago
  Okay, that's a fair point that I hadn't considered.

throw2016 10y ago

On one hand there is a global focus is on reducing energy waste. On the other we have hundreds of thousands of people merrily wasting electricity mining bitcoin and other assorted crypto currencies. This is a bit of a dissonance. To make matters worse crypto currencies like bitcoin appear to incentivize early adopters to act in bad faith like a pyramid scheme. That they are open to monopolization by those who have disproportionate access to cheap electricty and resources can't help build trust. So the early adopters have every incentive to spin it and on cue they talk it up deceptively on decentralization, anonymity and control as if the protocol develops itself and is not under the control of an inner cotorie. Aren't governments and financial systems supposed to work for us and if they aren't is the solution to make sure they do, or a flawed technology workaround that benefits early adopters and concentrates power and influence in the hands of a few? The cure seems worse than the disease.

arisAlexis 10y ago

Astonished by the amount of downvotes of many comments itt. Some people are really passionate here