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> The true power of the blockchain is its ability to bring trust to places where it's currently inaccessible. Where is that? Because trust seems accessible to

by moxious 10y ago

> The true power of the blockchain is its ability to bring trust to places where it's currently inaccessible. Where is that? Because trust seems accessible to me everywhere there is a reasonably open democracy and rule of law. And why does this trust cost so much? Take payment cards like VISA. Max, they cost 1-1.5%. There's not much to save there. Sure, it would be cheaper if I paid 0.01%, but the cost is already low enough that it's not really preventing any transactions. And of course bitcoin is not going in the direction of enabling micro payments because of transaction costs and volumes.

Taek 10y ago
Ask any merchant who as ever received a chargeback for legitimate goods that they shipped for a credit card payment. Bitcoin has no chargebacks, which is great for merchants who are shipping to somebody they've never met on the other side of the world. VISA costs ~2.7% if you never have any customers who issue chargebacks. But if you're an online retailer, you've probably got an entire fraud department beyond just what VISA charges. And some services (namely adult services and gambling services) can't get any access to digital payments at all. VISA, Paypal, etc. all block them, despite the fact that these services are entirely legal. Bitcoin makes it possible to use these types of services without some central party deciding that supporting an adult cam site is bad for business. This is also great for the unbanked. If you are in Africa with no local bank, no government id, etc, something like Bitcoin can enable you where no bank would ever trust you. And Bitcoin is in fact going in the direction of enabling micropayments. There is a huge upgrade to Bitcoin in the works called the lightning network, which means you basically have to make 1-6 starter transactions on-chain, but after that you can make an unlimited number of micropayments around the network for essentially free.
- moxious 10y ago
  Not having charge backs doesn't make bitcoin less expensive, it just shifts costs. Good for retailers, bad for customers who can't dispute, or who had their money taken by fraud. Bitcoin has been around for a number of years now, what do you think is the thing that's preventing it from catching on?
  - Taek 10y ago
    It has been catching on. The ecosystem has been growing substatially and consistently, even if the price is not keeping up. http://www.coindesk.com/data/bitcoin-daily-transactions/ http://www.coindesk.com/data/bitcoin-daily-transactions/
  - Natanael_L 10y ago
    Bitcoin does support using arbitrators via multisignature transactions
krrrh 10y ago
> And why does this trust cost so much? Take payment cards like VISA. Max, they cost 1-1.5%. There's not much to save there. Sure, it would be cheaper if I paid 0.01%, but the cost is already low enough that it's not really preventing any transactions. This is an important point that very few in the bitcoin community have bothered to investigate. Credit card fees are even lower than the 1-1.5% you speculate. As credit companies increased their efficiency with technology they didn't lower the fees, but spent the extra profit on marketing in the form of rewards cards and cashback, which shifts money from retailers to card holders. Since vendors compensate by raising prices, that actually means that they redistribute money from people who pay cash or debit to those who use reward cards. There have been class action lawsuits in Canada and the US over this recently. In Australia they took an administrative approach and capped interchange fees at 0.5% in 2003 and the result was that rewards cards went away.[1] The credit card companies still made profits. Meanwhile, real transaction costs in Bitcoin are enormous, but instead of being transparent are currently handled via seigniorage through the currently relatively high inflation of the bitcoin supply (rewards to miners). As that is reduced and finally dries up Bitcoin transactions will require large fees. Either that or miners will exit the business and the whole system will collapse since it isn't designed to handle reductions in difficulty. 50% attacks will be easy to carry out, or trust of central authority will be even more important than it is now with the already tiny number of professional miners controlling the network. [1] https://en.wikipedia.org/wiki/Interchange_fee#Australia_and_New_Zealand https://en.wikipedia.org/wiki/Interchange_fee#Australia_and_...
- Natanael_L 10y ago
  In Bitcoin, when the coinbase reward falls, miners will approximately spend as much on mining as the users spend in fees. So the users collectively decides how much hash power they want to pay for, while miners decide what transactions to prioritize.

by moxious 10y ago

Taek 10y ago

Ask any merchant who as ever received a chargeback for legitimate goods that they shipped for a credit card payment. Bitcoin has no chargebacks, which is great for merchants who are shipping to somebody they've never met on the other side of the world. VISA costs ~2.7% if you never have any customers who issue chargebacks. But if you're an online retailer, you've probably got an entire fraud department beyond just what VISA charges. And some services (namely adult services and gambling services) can't get any access to digital payments at all. VISA, Paypal, etc. all block them, despite the fact that these services are entirely legal. Bitcoin makes it possible to use these types of services without some central party deciding that supporting an adult cam site is bad for business. This is also great for the unbanked. If you are in Africa with no local bank, no government id, etc, something like Bitcoin can enable you where no bank would ever trust you. And Bitcoin is in fact going in the direction of enabling micropayments. There is a huge upgrade to Bitcoin in the works called the lightning network, which means you basically have to make 1-6 starter transactions on-chain, but after that you can make an unlimited number of micropayments around the network for essentially free.

moxious 10y ago
Not having charge backs doesn't make bitcoin less expensive, it just shifts costs. Good for retailers, bad for customers who can't dispute, or who had their money taken by fraud. Bitcoin has been around for a number of years now, what do you think is the thing that's preventing it from catching on?
- Taek 10y ago
  It has been catching on. The ecosystem has been growing substatially and consistently, even if the price is not keeping up. http://www.coindesk.com/data/bitcoin-daily-transactions/ http://www.coindesk.com/data/bitcoin-daily-transactions/
- Natanael_L 10y ago
  Bitcoin does support using arbitrators via multisignature transactions

krrrh 10y ago

> And why does this trust cost so much? Take payment cards like VISA. Max, they cost 1-1.5%. There's not much to save there. Sure, it would be cheaper if I paid 0.01%, but the cost is already low enough that it's not really preventing any transactions. This is an important point that very few in the bitcoin community have bothered to investigate. Credit card fees are even lower than the 1-1.5% you speculate. As credit companies increased their efficiency with technology they didn't lower the fees, but spent the extra profit on marketing in the form of rewards cards and cashback, which shifts money from retailers to card holders. Since vendors compensate by raising prices, that actually means that they redistribute money from people who pay cash or debit to those who use reward cards. There have been class action lawsuits in Canada and the US over this recently. In Australia they took an administrative approach and capped interchange fees at 0.5% in 2003 and the result was that rewards cards went away.[1] The credit card companies still made profits. Meanwhile, real transaction costs in Bitcoin are enormous, but instead of being transparent are currently handled via seigniorage through the currently relatively high inflation of the bitcoin supply (rewards to miners). As that is reduced and finally dries up Bitcoin transactions will require large fees. Either that or miners will exit the business and the whole system will collapse since it isn't designed to handle reductions in difficulty. 50% attacks will be easy to carry out, or trust of central authority will be even more important than it is now with the already tiny number of professional miners controlling the network. [1] https://en.wikipedia.org/wiki/Interchange_fee#Australia_and_New_Zealand https://en.wikipedia.org/wiki/Interchange_fee#Australia_and_...

Natanael_L 10y ago
In Bitcoin, when the coinbase reward falls, miners will approximately spend as much on mining as the users spend in fees. So the users collectively decides how much hash power they want to pay for, while miners decide what transactions to prioritize.