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"When was the last time you made an international payment?" I love that you asked this question! The very reason it doesn't happen often is because of friction

by mrb 9y ago

"When was the last time you made an international payment?" I love that you asked this question! The very reason it doesn't happen often is because of friction inherent to legacy payment systems. Cryptocurrencies remove this friction in cross-border trade, hence are making such transactions more commonplace. It's like you saying in 1890 "Why buy cars? People don't travel that much." But the invention of cars is precisely what increased the desire to travel. "You have the right to a bank account in the EU" What about the rest of the world? 6.6B humans? "Currently Bitcoin is more expensive" Not for transactions above approximately $100.

coldtea 9y ago
>I love that you asked this question! The very reason it doesn't happen often is because of friction inherent to legacy payment systems. Cryptocurrencies remove this friction in cross-border trade, hence are making such transactions more commonplace. It's like you saying in 1890 "Why buy cars? People don't travel that much." But the invention of cars is precisely what increased the desire to travel. This argument presupposes what it tries to prove: the utility of cryptocurrencies. There's no argument in there on why, if it was trivially possible due to cryptocurrency, the desire/need for international payments would increase.
bshimmin 9y ago
I love that you asked this question! The very reason it doesn't happen often is because of friction inherent to legacy payment systems. Perhaps I'm misunderstanding what is meant by "international payment", but surely for a majority of people this is just an irrelevance? I can't imagine my parents have ever needed to make an international payment, for instance. I have an employee in Iran and my goodness was it hard to work out how to pay him (Iranian banks don't have SWIFT and IBAN and helpful things like that), and Bitcoin did actually seem like a legitimate option at one point, until we realised that between business banking and accounting, it was also going to be really hard to do - so I would love for this new wave of currencies to make international payments easier. But I just don't think it's of very much significance to many people in the grand scheme of things. 54% of Americans apparently don't have a passport; are these people really going to be making regular international payments, more than about once a lifetime? (The significant number of "digital nomads" on HN who work from a beach in Thailand are really not representative!) However, if we're taking "international payment" to mean "an easy way to take out/spend money when you're on holiday without getting stung by exchange rates and assorted complexities" then I will certainly grant you that this would be broadly regarded as a mainstream benefit (though, again, I guess those 54% of Americans would probably disagree).
- mclehman 9y ago
  At least personally, I make recurring payments in euros rather than US dollars and it can be a hassle to see what the actual exchange rate used will be. I also have the option to pay with Bitcoin (and even receive a small discount for it) and it's very easy to see the USD value of the payment in that case. And while I am now in the passport holding minority, that's a recent development and I was previously part of that small overlap with no passport and frequent international payments. My parents are also moving abroad in the next few months and I'll be very surprised if we don't end up struggling to move money around at some point, even if it's only a minor issue.
davidgerard 9y ago
> What about the rest of the world? 6.6B humans? “Banking the unbanked” is much discussed in international development circles. Around 2013, Bitcoin advocates started claiming that Bitcoin could help with this problem. Unfortunately: * The actual problems that leave people unbanked are the bank being too far away, or bureaucratic barriers to setting up an account when you get there. * Unless they use an exchange (which would functionally be a bank), they’d need an expensive computer and a reliable Internet connection to hold and update 120 gigabytes of blockchain. * Bitcoin is way too volatile to be a reliable store of value. * How do they convert it into local money they can spend? Pretty much nobody accepts bitcoin. * 7 transactions per second worldwide total means Bitcoin couldn’t cope with just the banked, let alone the unbanked as well. * A centralised service similar to M-Pesa (a very popular Kenyan money transfer and finance service for mobile phones) might work, but M-Pesa exists, works and is trusted by its users – and goes a long way toward solving the problems with access to banking that Bitcoin claims to. Advocates will nevertheless say “but what about the unbanked?” as if Bitcoin is an obvious slam-dunk answer to the problem and nothing else needs to be said. But no viable mechanism to achieve this has ever been put forward.
- flashdance 9y ago
  > Unless they use an exchange (which would functionally be a bank), they’d need an expensive computer and a reliable Internet connection to hold and update 120 gigabytes of blockchain. Some of your points are well thought out, but I couldn't leave this one alone. The vast majority of bitcoin users don't use a bitcoin exchange to store their coins. They also don't download the entire blockchain. SPV wallets exist (like electrum or the android bitcoin wallet) that give the user complete control over their private keys without needing a copy of the blockchain or using substantial bandwith. https://en.bitcoin.it/wiki/Electrum https://en.bitcoin.it/wiki/Electrum https://en.wikipedia.org/wiki/Bitcoin_network#Payment_verification https://en.wikipedia.org/wiki/Bitcoin_network#Payment_verifi...
  - davidgerard 9y ago
    > The vast majority of bitcoin users don't use a bitcoin exchange to store their coins. They also don't download the entire blockchain. I couldn't find numbers on this when I went looking, but that's a numerical claim. Do you have numbers on this?
PhasmaFelis 9y ago
> I love that you asked this question! The very reason it doesn't happen often is because of friction inherent to legacy payment systems. I think the reason it doesn't happen often is that most people have no need to send money internationally when all the things they might want to buy are readily available locally or online. Of course there are people who do it all the time, but it's not "mainstream" and I don't see it becoming so.

by mrb 9y ago

coldtea 9y ago

>I love that you asked this question! The very reason it doesn't happen often is because of friction inherent to legacy payment systems. Cryptocurrencies remove this friction in cross-border trade, hence are making such transactions more commonplace. It's like you saying in 1890 "Why buy cars? People don't travel that much." But the invention of cars is precisely what increased the desire to travel. This argument presupposes what it tries to prove: the utility of cryptocurrencies. There's no argument in there on why, if it was trivially possible due to cryptocurrency, the desire/need for international payments would increase.

bshimmin 9y ago

I love that you asked this question! The very reason it doesn't happen often is because of friction inherent to legacy payment systems. Perhaps I'm misunderstanding what is meant by "international payment", but surely for a majority of people this is just an irrelevance? I can't imagine my parents have ever needed to make an international payment, for instance. I have an employee in Iran and my goodness was it hard to work out how to pay him (Iranian banks don't have SWIFT and IBAN and helpful things like that), and Bitcoin did actually seem like a legitimate option at one point, until we realised that between business banking and accounting, it was also going to be really hard to do - so I would love for this new wave of currencies to make international payments easier. But I just don't think it's of very much significance to many people in the grand scheme of things. 54% of Americans apparently don't have a passport; are these people really going to be making regular international payments, more than about once a lifetime? (The significant number of "digital nomads" on HN who work from a beach in Thailand are really not representative!) However, if we're taking "international payment" to mean "an easy way to take out/spend money when you're on holiday without getting stung by exchange rates and assorted complexities" then I will certainly grant you that this would be broadly regarded as a mainstream benefit (though, again, I guess those 54% of Americans would probably disagree).

mclehman 9y ago
At least personally, I make recurring payments in euros rather than US dollars and it can be a hassle to see what the actual exchange rate used will be. I also have the option to pay with Bitcoin (and even receive a small discount for it) and it's very easy to see the USD value of the payment in that case. And while I am now in the passport holding minority, that's a recent development and I was previously part of that small overlap with no passport and frequent international payments. My parents are also moving abroad in the next few months and I'll be very surprised if we don't end up struggling to move money around at some point, even if it's only a minor issue.

davidgerard 9y ago

> What about the rest of the world? 6.6B humans? “Banking the unbanked” is much discussed in international development circles. Around 2013, Bitcoin advocates started claiming that Bitcoin could help with this problem. Unfortunately: * The actual problems that leave people unbanked are the bank being too far away, or bureaucratic barriers to setting up an account when you get there. * Unless they use an exchange (which would functionally be a bank), they’d need an expensive computer and a reliable Internet connection to hold and update 120 gigabytes of blockchain. * Bitcoin is way too volatile to be a reliable store of value. * How do they convert it into local money they can spend? Pretty much nobody accepts bitcoin. * 7 transactions per second worldwide total means Bitcoin couldn’t cope with just the banked, let alone the unbanked as well. * A centralised service similar to M-Pesa (a very popular Kenyan money transfer and finance service for mobile phones) might work, but M-Pesa exists, works and is trusted by its users – and goes a long way toward solving the problems with access to banking that Bitcoin claims to. Advocates will nevertheless say “but what about the unbanked?” as if Bitcoin is an obvious slam-dunk answer to the problem and nothing else needs to be said. But no viable mechanism to achieve this has ever been put forward.

flashdance 9y ago
> Unless they use an exchange (which would functionally be a bank), they’d need an expensive computer and a reliable Internet connection to hold and update 120 gigabytes of blockchain. Some of your points are well thought out, but I couldn't leave this one alone. The vast majority of bitcoin users don't use a bitcoin exchange to store their coins. They also don't download the entire blockchain. SPV wallets exist (like electrum or the android bitcoin wallet) that give the user complete control over their private keys without needing a copy of the blockchain or using substantial bandwith. https://en.bitcoin.it/wiki/Electrum https://en.bitcoin.it/wiki/Electrum https://en.wikipedia.org/wiki/Bitcoin_network#Payment_verification https://en.wikipedia.org/wiki/Bitcoin_network#Payment_verifi...
- davidgerard 9y ago
  > The vast majority of bitcoin users don't use a bitcoin exchange to store their coins. They also don't download the entire blockchain. I couldn't find numbers on this when I went looking, but that's a numerical claim. Do you have numbers on this?

PhasmaFelis 9y ago

> I love that you asked this question! The very reason it doesn't happen often is because of friction inherent to legacy payment systems. I think the reason it doesn't happen often is that most people have no need to send money internationally when all the things they might want to buy are readily available locally or online. Of course there are people who do it all the time, but it's not "mainstream" and I don't see it becoming so.