8 ms·

"What is cryptocurrency going to help these people do that they can't do already today?" International payments confirmed and spendable in minutes not days. Es

by mrb 9y ago

"What is cryptocurrency going to help these people do that they can't do already today?" International payments confirmed and spendable in minutes not days. Escaping inflation in Venezuela/Argentina/whoeverisnext. Sending remittance to family overseas without 10% wasted in fees. Receiving monetary donations for organizations that might be victim of oppressive censorship. Participating in modern e-commerce for the unbanked/underbanked. Allowing merchants to save 2% in credit card fees (which doubles their profit margin if it was 2% to begin with). Allowing merchants to sell in industries prone to credit card fraud. Etc. Gosh it's so easy to find many benefits in cryptocurrencies.

WoodenChair 9y ago
There are transaction fees with some cryptocurrencies (for example Bitcoin) – for a small purchase they can be much more than 2%.
- mrb 9y ago
  Fees are always optional. Right now $0.25 will make a tx confirm in under 70 minutes (typical 225-byte tx, 40 sat/B: https://bitcoinfees.21.co https://bitcoinfees.21.co). Solutions are being developed left & right to further reduce this: alts, segwit, block size increases (segwit2x, BCH 8MB blocks), payment channels, etc. (Answer edited. Yes merchants care indirectly about fees.)
  - irishasaurus 9y ago
    How will the average user be able to avoid these fees considering they'll probably be using some 3rd party app? Appealing to the common person is going to involve larger exchanges how will digital coin grow and still keep digital currencies decentralized? I apologize for my ignorance in advance. I'm really just trying to learn more about this, and can't find any consensus, even within blogs/articles authored by the same people.
    - mrb 9y ago
      Most Bitcoin wallets give users some control on how much they want to pay in fees.
  - saurik 9y ago
    > Merchants don't care as fees are paid by the sender. As a merchant I absolutely disagree: the cost of my product is how much it costs the user, which includes the complete costs to the user, not just my price.
deepGem 9y ago
I am rooting for cryptocurrencies just for cross border payments. What we have today is abysmal and pathetic. We pay a lot of overhead sometimes 3% + 2.5%. I think circle or some startup is about to offer near zero cost cross border payments. We might never need a payment gateway !, per my understanding of the protocol at least.
legulere 9y ago
> International payments When was the last time you made an international payment? I never made a payment outside of the EU and inside the EU I already have free wire transfers. For most people this is not interesting. > unbanked/underbanked You have the right to a bank account in the EU. > Allowing merchants to save 2% in credit card fees Currently Bitcoin is more expensive for typical transactions. And there's direct debit which is practically free at least here in Germany.
- sowbug 9y ago
  You're indirectly making international payments when you buy imported goods from local shops. When a single global currency is commonplace, you'll likely start doing it directly. The markets already exist in eBay, Alibaba, and Taobao.
- alexandersingh 9y ago
  According to Wikipedia, remittances were in excess of $560 billion last year, faciliated by 250 million migrant workers[1]. You and I are not the user demographic ;) 1: https://en.wikipedia.org/wiki/Remittance https://en.wikipedia.org/wiki/Remittance
  - jogjayr 9y ago
    To be fair that demographic has been traditionally served by the hawala system[1]. It's not obvious to me right now that they'd switch to BTC so easily; of course I could be wrong. 1: https://en.wikipedia.org/wiki/Hawala https://en.wikipedia.org/wiki/Hawala
  - 0x006A 9y ago
    That's his point though, the early internet had many useful applications that where appealing to the mainstream. International money transfers are not a mainstream activity.
    - alexandersingh 9y ago
      250 million people isn't mainstream? These are people sending money to their families on a monthly basis, and where current transfer fees can take the equivalent of a half day of work. That strikes me as an appealing use case.
piyush_soni 9y ago
When Cryptocurrency goes mainstream, how do we know that the Governments won't introduce regulations (/taxes?) on them ?
- benashford 9y ago
  They absolutely would do both of those things. A world where Bitcoin was the default currency would rob nations of control over their own monetary policy, which is one of the most important tools for controlling the economy. Not to mention we'd be living in a world of persistent deflation (due to the ceiling on the maximum number of Bitcoins) which would have interesting consequences on the economy too. The only cryptocurrencies that would be allowed to gain widespread usage would be those controlled by the central banks.
  - DennisP 9y ago
    It would only be a deflationary world if Bitcoin were the only currency. Since there are lots of digital currencies, we actually have something like the privately-issued competing currencies advocated by Hayek in The Denationalization of Money.
coldtea 9y ago
>International payments confirmed and spendable in minutes not days. Escaping inflation Venezuela/Argentina/whoeverisnext. So cryptocurrency is a niche app for crashing economies in the developing world and those needing to do international payments through unofficial channels?
- bitreality 9y ago
  Crypto simply levels the playing field for people in all types of economies. Many countries force you into using the national currency. Often they create artificial exchange rates which do not match up with market rates (Argentina, Venezuela). Other countries impose capital controls which force their populations to hold devaluing currencies or restrict how they can spend their money. Think India, China. No surprise that China is one of the world leaders in Crypto right now. Currency is used as a form of control by governments. It is never in control of the people. Look at what happened in Cyprus, and what almost spread across Europe. Banks went bankrupt, people's hard earned money was taken away, simply due to mismanagement at the highest levels. Properly used cryptocurrency cannot just be taken away. You are in control of your money. Your government does not control its value. Bitcoin as an entity cannot take out loans which its holders are on the hook to repay. Governments can't freeze your wallet with the flick of a switch. Money is power, and when people are in complete control of their own money, they take back some of the power that has been consistently taken away from them.
  - coldtea 9y ago
    >Crypto simply levels the playing field for people in all types of economies. Many countries force you into using the national currency. And how would you bypass that with cryprocurrency, except by breaking your country's law? Just because it's a grey area now doesn't mean it will be forever.
- mrb 9y ago
  Except, you know, the other use cases I listed that you conveniently left out :)
- deleted 9y ago
  [deleted]
jonreem 9y ago
If you live in a high inflation country you still have to pay taxes in that country's currency. In many of these countries the exchange rate is pinned far away from its real value and it would be difficult to sell a large quantity of cryptocurrency without missing out and theoretically you could also be subject to punitive taxation.
vmarsy 9y ago
To add to the list of how many of those problems are already solved in the EU : > Allowing merchants to save 2% in credit card fees (which doubles their profit margin if it was 2% to begin with). In the EU those fees are capped at 0.2% for debit cards, 0.3% for credit cards [1]. It'll be helpful if the crypto currency fees gets even lower than those, but 0.2% starts to get pretty low. [1] http://www.consilium.europa.eu/en/press/press-releases/2015/04/20-capping-fees-card-based-payments/ http://www.consilium.europa.eu/en/press/press-releases/2015/...
- mrb 9y ago
  Interesting. In the US average fees are 2%!
davidgerard 9y ago
>International payments confirmed and spendable in minutes not days. Unless bitcoin transactions are clogged this week, and ignoring its extreme volatility and difficulties in conversion at both ends. > Escaping inflation in Venezuela/Argentina/whoeverisnext. The Venezuela case is made-up BS, and the same for slotting in some other country. Worked example: https://news.ycombinator.com/item?id=14552819 https://news.ycombinator.com/item?id=14552819 > Sending remittance to family overseas without 10% wasted in fees. Instead, they lose it in volatility and delays, and the difficulties cashing out at the other end - the latter was so bad for rebit.ph that they literally had to start an exchange just to have enough pesos on hand. You're reciting cut'n'paste talking points that are largely refuted, like a Gish gallop in a single paragraph. This is not good argumentation.
- mrb 9y ago
  "Unless bitcoin transactions are clogged this week" You can always choose to have a tx confirmed in 10 minutes if you choose to pay the appropriate fee. "difficulties in conversion at both ends." You are really stuck in the mindset that one "must" convert to spend coins. But as Bitcoin adoption increases there is less and less a need to convert it. Example: my brother in France sent me BTC and I spent it instantly in the US at NewEgg, a retailer who accepts BTC. "The Venezuela case is made-up BS" It's real. Yes journalists exaggerate on how much Bitcoin is used. But it is growing, and quickly: https://coin.dance/volume/localbitcoins/VEF https://coin.dance/volume/localbitcoins/VEF "Instead, they lose it in volatility" Statistically, volatility (which has been greatly decreasing by the way: https://mobile.twitter.com/lsukernik/status/864920873718951937 https://mobile.twitter.com/lsukernik/status/8649208737189519...) causes users to lose money half the time and win half the time. So, meh, not a real problem. It averages to zero. On the other hand traditional remittance companies screw you over every single time with a fee averaging 7% worldwide (https://remittanceprices.worldbank.org/en https://remittanceprices.worldbank.org/en). Clearly I prefer my brother sending me BTC than using Western Union.
slice_of_life 9y ago
I love cryptocurrency Goolybib Founder Voice But could you expound on this part here > Participating in modern e-commerce for the unbanked/underbanked From my experience, the unbanked hardly have a chance to own cryptocurrency because they don't even have internet. In my country, MPesa is pretty much ubiquitous and that is because it doesn't need the internet to work. Are there any ideas on how to overly SMS functionality over cryptocurrency in order to truly bank the unbanked? One idea that is bouncing in my head is a sort of agency model where agents can actually have the internet set up in physical premises and they can be the ones to set up crypto-wallets and withdraw/deposit fiat. The unbanked users can simply continue to use SMS based systems to operate their crypto-wallets. Only problem is that they wouldn't necessarily truly own their coins - most users on HN may care about that but these folks wouldn't. If it works, it works and that's all they'd care about. I just thought about the idea now when I read your comment so it isn't necessarily refined.
Eridrus 9y ago
> Sending remittance to family overseas without 10% wasted in fees. I just looked at TransferWise, and it seems like the rate is about 0.7-2.5% depending on the pair of currencies. I found this post of transferring 1000 USD -> EUR via BTC which claimed to have done so for $14: https://bitcoin.stackexchange.com/questions/25583/does-it-make-sense-to-use-bitcoin-to-transfer-money-to-yourself-internationally https://bitcoin.stackexchange.com/questions/25583/does-it-ma... TransferWise asks $10 for this. So in the same ballpark, but not necessarily any better. > Escaping inflation in Venezuela/Argentina/whoeverisnext. Who is going to sell you Bitcoins for Venezuelan Bolivars? The only people who want Bolivars are those who need it to purchase goods in Venezuela, and are only going to buy enough Bolivar for their spending in the next week tops because keeping any more in Bolivar would be crazy. It also assumes that the people with capital (eg Bitcoin) haven't already just fled the country, e.g. https://www.economist.com/news/americas/21721944-latin-america-wakes-up-its-biggest-headache-venezuelas-crisis-spills-over https://www.economist.com/news/americas/21721944-latin-ameri... And how do they get Bitcoin anyway? I mean, you could use your subsidised electricity to mine it, but then you get arrested because it's sort of obvious: http://reason.com/blog/2017/02/03/venezuela-surbitcoin-arrests-mining http://reason.com/blog/2017/02/03/venezuela-surbitcoin-arres... > Allowing merchants to save 2% in credit card fees (which doubles their profit margin if it was 2% to begin with). Well that would be cool, but Bitcoin has it's own fees, and an unacceptably long delay for any IRL purchases and inherent currency risk on every transaction. >> Allowing merchants to sell in industries prone to credit card fraud. Etc. WRT fraud, merchants certainly want transactions to be irreversible, but since we're all terrible at security, being able to reverse transactions is quite useful for dealing with criminals who would try and steal your money.
- marcosdumay 9y ago
  > WRT fraud, merchants certainly want transactions to be irreversible, but since we're all terrible at security, being able to reverse transactions is quite useful for dealing with criminals who would try and steal your money. It's more a point about how the horrible service from the current transfer processors is opening a niche for different kinds of transfers to prosper. Somehow, that niche hasn't attracted good quality processors (I blame it on widespread corruption), so it's left open for unofficial money. That's an opportunity, yes. But I am nor sure it can be fully taken before official processors close it.

by mrb 9y ago

WoodenChair 9y ago

There are transaction fees with some cryptocurrencies (for example Bitcoin) – for a small purchase they can be much more than 2%.

mrb 9y ago
Fees are always optional. Right now $0.25 will make a tx confirm in under 70 minutes (typical 225-byte tx, 40 sat/B: https://bitcoinfees.21.co https://bitcoinfees.21.co). Solutions are being developed left & right to further reduce this: alts, segwit, block size increases (segwit2x, BCH 8MB blocks), payment channels, etc. (Answer edited. Yes merchants care indirectly about fees.)
- irishasaurus 9y ago
  How will the average user be able to avoid these fees considering they'll probably be using some 3rd party app? Appealing to the common person is going to involve larger exchanges how will digital coin grow and still keep digital currencies decentralized? I apologize for my ignorance in advance. I'm really just trying to learn more about this, and can't find any consensus, even within blogs/articles authored by the same people.
  - mrb 9y ago
    Most Bitcoin wallets give users some control on how much they want to pay in fees.
- saurik 9y ago
  > Merchants don't care as fees are paid by the sender. As a merchant I absolutely disagree: the cost of my product is how much it costs the user, which includes the complete costs to the user, not just my price.

deepGem 9y ago

I am rooting for cryptocurrencies just for cross border payments. What we have today is abysmal and pathetic. We pay a lot of overhead sometimes 3% + 2.5%. I think circle or some startup is about to offer near zero cost cross border payments. We might never need a payment gateway !, per my understanding of the protocol at least.

legulere 9y ago

> International payments When was the last time you made an international payment? I never made a payment outside of the EU and inside the EU I already have free wire transfers. For most people this is not interesting. > unbanked/underbanked You have the right to a bank account in the EU. > Allowing merchants to save 2% in credit card fees Currently Bitcoin is more expensive for typical transactions. And there's direct debit which is practically free at least here in Germany.

sowbug 9y ago
You're indirectly making international payments when you buy imported goods from local shops. When a single global currency is commonplace, you'll likely start doing it directly. The markets already exist in eBay, Alibaba, and Taobao.
alexandersingh 9y ago
According to Wikipedia, remittances were in excess of $560 billion last year, faciliated by 250 million migrant workers[1]. You and I are not the user demographic ;) 1: https://en.wikipedia.org/wiki/Remittance https://en.wikipedia.org/wiki/Remittance
- jogjayr 9y ago
  To be fair that demographic has been traditionally served by the hawala system[1]. It's not obvious to me right now that they'd switch to BTC so easily; of course I could be wrong. 1: https://en.wikipedia.org/wiki/Hawala https://en.wikipedia.org/wiki/Hawala
- 0x006A 9y ago
  That's his point though, the early internet had many useful applications that where appealing to the mainstream. International money transfers are not a mainstream activity.
  - alexandersingh 9y ago
    250 million people isn't mainstream? These are people sending money to their families on a monthly basis, and where current transfer fees can take the equivalent of a half day of work. That strikes me as an appealing use case.

piyush_soni 9y ago

When Cryptocurrency goes mainstream, how do we know that the Governments won't introduce regulations (/taxes?) on them ?

benashford 9y ago
They absolutely would do both of those things. A world where Bitcoin was the default currency would rob nations of control over their own monetary policy, which is one of the most important tools for controlling the economy. Not to mention we'd be living in a world of persistent deflation (due to the ceiling on the maximum number of Bitcoins) which would have interesting consequences on the economy too. The only cryptocurrencies that would be allowed to gain widespread usage would be those controlled by the central banks.
- DennisP 9y ago
  It would only be a deflationary world if Bitcoin were the only currency. Since there are lots of digital currencies, we actually have something like the privately-issued competing currencies advocated by Hayek in The Denationalization of Money.

coldtea 9y ago

>International payments confirmed and spendable in minutes not days. Escaping inflation Venezuela/Argentina/whoeverisnext. So cryptocurrency is a niche app for crashing economies in the developing world and those needing to do international payments through unofficial channels?

bitreality 9y ago
Crypto simply levels the playing field for people in all types of economies. Many countries force you into using the national currency. Often they create artificial exchange rates which do not match up with market rates (Argentina, Venezuela). Other countries impose capital controls which force their populations to hold devaluing currencies or restrict how they can spend their money. Think India, China. No surprise that China is one of the world leaders in Crypto right now. Currency is used as a form of control by governments. It is never in control of the people. Look at what happened in Cyprus, and what almost spread across Europe. Banks went bankrupt, people's hard earned money was taken away, simply due to mismanagement at the highest levels. Properly used cryptocurrency cannot just be taken away. You are in control of your money. Your government does not control its value. Bitcoin as an entity cannot take out loans which its holders are on the hook to repay. Governments can't freeze your wallet with the flick of a switch. Money is power, and when people are in complete control of their own money, they take back some of the power that has been consistently taken away from them.
- coldtea 9y ago
  >Crypto simply levels the playing field for people in all types of economies. Many countries force you into using the national currency. And how would you bypass that with cryprocurrency, except by breaking your country's law? Just because it's a grey area now doesn't mean it will be forever.
mrb 9y ago
Except, you know, the other use cases I listed that you conveniently left out :)
deleted 9y ago
[deleted]

jonreem 9y ago

If you live in a high inflation country you still have to pay taxes in that country's currency. In many of these countries the exchange rate is pinned far away from its real value and it would be difficult to sell a large quantity of cryptocurrency without missing out and theoretically you could also be subject to punitive taxation.

vmarsy 9y ago

To add to the list of how many of those problems are already solved in the EU : > Allowing merchants to save 2% in credit card fees (which doubles their profit margin if it was 2% to begin with). In the EU those fees are capped at 0.2% for debit cards, 0.3% for credit cards [1]. It'll be helpful if the crypto currency fees gets even lower than those, but 0.2% starts to get pretty low. [1] http://www.consilium.europa.eu/en/press/press-releases/2015/04/20-capping-fees-card-based-payments/ http://www.consilium.europa.eu/en/press/press-releases/2015/...

mrb 9y ago
Interesting. In the US average fees are 2%!

davidgerard 9y ago

>International payments confirmed and spendable in minutes not days. Unless bitcoin transactions are clogged this week, and ignoring its extreme volatility and difficulties in conversion at both ends. > Escaping inflation in Venezuela/Argentina/whoeverisnext. The Venezuela case is made-up BS, and the same for slotting in some other country. Worked example: https://news.ycombinator.com/item?id=14552819 https://news.ycombinator.com/item?id=14552819 > Sending remittance to family overseas without 10% wasted in fees. Instead, they lose it in volatility and delays, and the difficulties cashing out at the other end - the latter was so bad for rebit.ph that they literally had to start an exchange just to have enough pesos on hand. You're reciting cut'n'paste talking points that are largely refuted, like a Gish gallop in a single paragraph. This is not good argumentation.

mrb 9y ago
"Unless bitcoin transactions are clogged this week" You can always choose to have a tx confirmed in 10 minutes if you choose to pay the appropriate fee. "difficulties in conversion at both ends." You are really stuck in the mindset that one "must" convert to spend coins. But as Bitcoin adoption increases there is less and less a need to convert it. Example: my brother in France sent me BTC and I spent it instantly in the US at NewEgg, a retailer who accepts BTC. "The Venezuela case is made-up BS" It's real. Yes journalists exaggerate on how much Bitcoin is used. But it is growing, and quickly: https://coin.dance/volume/localbitcoins/VEF https://coin.dance/volume/localbitcoins/VEF "Instead, they lose it in volatility" Statistically, volatility (which has been greatly decreasing by the way: https://mobile.twitter.com/lsukernik/status/864920873718951937 https://mobile.twitter.com/lsukernik/status/8649208737189519...) causes users to lose money half the time and win half the time. So, meh, not a real problem. It averages to zero. On the other hand traditional remittance companies screw you over every single time with a fee averaging 7% worldwide (https://remittanceprices.worldbank.org/en https://remittanceprices.worldbank.org/en). Clearly I prefer my brother sending me BTC than using Western Union.

slice_of_life 9y ago

I love cryptocurrency Goolybib Founder Voice But could you expound on this part here > Participating in modern e-commerce for the unbanked/underbanked From my experience, the unbanked hardly have a chance to own cryptocurrency because they don't even have internet. In my country, MPesa is pretty much ubiquitous and that is because it doesn't need the internet to work. Are there any ideas on how to overly SMS functionality over cryptocurrency in order to truly bank the unbanked? One idea that is bouncing in my head is a sort of agency model where agents can actually have the internet set up in physical premises and they can be the ones to set up crypto-wallets and withdraw/deposit fiat. The unbanked users can simply continue to use SMS based systems to operate their crypto-wallets. Only problem is that they wouldn't necessarily truly own their coins - most users on HN may care about that but these folks wouldn't. If it works, it works and that's all they'd care about. I just thought about the idea now when I read your comment so it isn't necessarily refined.

Eridrus 9y ago

> Sending remittance to family overseas without 10% wasted in fees. I just looked at TransferWise, and it seems like the rate is about 0.7-2.5% depending on the pair of currencies. I found this post of transferring 1000 USD -> EUR via BTC which claimed to have done so for $14: https://bitcoin.stackexchange.com/questions/25583/does-it-make-sense-to-use-bitcoin-to-transfer-money-to-yourself-internationally https://bitcoin.stackexchange.com/questions/25583/does-it-ma... TransferWise asks $10 for this. So in the same ballpark, but not necessarily any better. > Escaping inflation in Venezuela/Argentina/whoeverisnext. Who is going to sell you Bitcoins for Venezuelan Bolivars? The only people who want Bolivars are those who need it to purchase goods in Venezuela, and are only going to buy enough Bolivar for their spending in the next week tops because keeping any more in Bolivar would be crazy. It also assumes that the people with capital (eg Bitcoin) haven't already just fled the country, e.g. https://www.economist.com/news/americas/21721944-latin-america-wakes-up-its-biggest-headache-venezuelas-crisis-spills-over https://www.economist.com/news/americas/21721944-latin-ameri... And how do they get Bitcoin anyway? I mean, you could use your subsidised electricity to mine it, but then you get arrested because it's sort of obvious: http://reason.com/blog/2017/02/03/venezuela-surbitcoin-arrests-mining http://reason.com/blog/2017/02/03/venezuela-surbitcoin-arres... > Allowing merchants to save 2% in credit card fees (which doubles their profit margin if it was 2% to begin with). Well that would be cool, but Bitcoin has it's own fees, and an unacceptably long delay for any IRL purchases and inherent currency risk on every transaction. >> Allowing merchants to sell in industries prone to credit card fraud. Etc. WRT fraud, merchants certainly want transactions to be irreversible, but since we're all terrible at security, being able to reverse transactions is quite useful for dealing with criminals who would try and steal your money.

marcosdumay 9y ago
> WRT fraud, merchants certainly want transactions to be irreversible, but since we're all terrible at security, being able to reverse transactions is quite useful for dealing with criminals who would try and steal your money. It's more a point about how the horrible service from the current transfer processors is opening a niche for different kinds of transfers to prosper. Somehow, that niche hasn't attracted good quality processors (I blame it on widespread corruption), so it's left open for unofficial money. That's an opportunity, yes. But I am nor sure it can be fully taken before official processors close it.