3 ms·

I don't think real issue here are the currency exchange fees, but the transfer fees charged by banks and the logistics related to doing bank-to-bank cross-borde

I don't think real issue here are the currency exchange fees, but the transfer fees charged by banks and the logistics related to doing bank-to-bank cross-border payments. When transferring via Bitcoin, you only to get the recipients Bitcoin address and that is. Do a bank transfer to another side of the world and you need to find out bunch of information for the recipient (their bank details, probably address etc). There's also a chance you will get some of this wrong and then there will be a manual hassle to sort things out.

joosters 8y ago
How are they avoiding these charges? The customer isn't requesting bitcoin, so you still need to transfer the money from the recipient exchange into their 'fiat' account...
- speedplane 8y ago
  This is obvious... once you establish trust from Bank A to Bank B (and correspondingly Bitcoin account A and B), you can transfer the money very quickly with 100% assurance it was transferred to A and B. The older way of doing this would be based on expensive contracts, legal regulation, and potentially intermediaries, who will happily take their own cut.
  - joosters 8y ago
    The only intermediaries being added are the bitcoin exchanges. The loan originator has to initiate a bank transfer from their account into bitcoin exchange 1, and from bitcoin exchange 2 into the customer's account. That's now two 'legacy banking transfers' instead of the normal 1. More intermediaries, more transfers, more costs (and more risk of money loss unless there is a similar amount of regulation & contracts in both cases).
    - speedplane 8y ago
      Not quite right. The old way of doing it actually worked like this: Bank A in country X transfers money mega-bank B in country X. Mega-bank B transfers money to mega-bank C in country Y. Mega-bank C in country Y then transfers it regional bank D in country Y. Bitcoin will allow smaller banks to transfer money without the help of the giant banks who have built up relationships (and binding legal agreements) over the years. Honestly, even though some large banks bullish on bitcoin, the real benefit will accrue to the smaller institutions.
- jpalomaki 8y ago
  Bitbond seems to be dealing just with Bitcoins, at least that's how their terms of use put it: "We broker bitcoin loans between marketplace participants ('users'), who want to use bitcoins for a specific time period and pay interest ('borrowers') and marketplace participants who want to lend bitcoins to other people for interest ('lenders')"[1] So then it is up to the recipient to do the exchange for fiat - if they require that. Based on the website Bitbond seems to be targeting for example people selling stuff online so it might be some of their customers can directly pay for their suppliers in bitcoins. Even if there would be full fiat-bitcoin-fiat cycle involved, that may be easier and cheaper than doing a cross-border payment via traditional banks. The cross-border payment thing via banks is complicated and has multiple steps. Small banks don't usually have direct relationships between each other, instead there are larger banks involved in the middle to facilitate the payments. With fiat-bitcoin-fiat you might be dealing with local players on both ends, which makes things easier. [1] https://www.bitbond.com/terms_of_use https://www.bitbond.com/terms_of_use
spookthesunset 8y ago
> There's also a chance you will get some of this wrong and then there will be a manual hassle to sort things out. Good thing for bitcoin if you fuck up the address your transaction and all its money goes right off into the ether.
- icebraining 8y ago
  That's why Bitcoin addresses have a checksum.

joosters 8y ago

How are they avoiding these charges? The customer isn't requesting bitcoin, so you still need to transfer the money from the recipient exchange into their 'fiat' account...

speedplane 8y ago
This is obvious... once you establish trust from Bank A to Bank B (and correspondingly Bitcoin account A and B), you can transfer the money very quickly with 100% assurance it was transferred to A and B. The older way of doing this would be based on expensive contracts, legal regulation, and potentially intermediaries, who will happily take their own cut.
- joosters 8y ago
  The only intermediaries being added are the bitcoin exchanges. The loan originator has to initiate a bank transfer from their account into bitcoin exchange 1, and from bitcoin exchange 2 into the customer's account. That's now two 'legacy banking transfers' instead of the normal 1. More intermediaries, more transfers, more costs (and more risk of money loss unless there is a similar amount of regulation & contracts in both cases).
  - speedplane 8y ago
    Not quite right. The old way of doing it actually worked like this: Bank A in country X transfers money mega-bank B in country X. Mega-bank B transfers money to mega-bank C in country Y. Mega-bank C in country Y then transfers it regional bank D in country Y. Bitcoin will allow smaller banks to transfer money without the help of the giant banks who have built up relationships (and binding legal agreements) over the years. Honestly, even though some large banks bullish on bitcoin, the real benefit will accrue to the smaller institutions.
jpalomaki 8y ago
Bitbond seems to be dealing just with Bitcoins, at least that's how their terms of use put it: "We broker bitcoin loans between marketplace participants ('users'), who want to use bitcoins for a specific time period and pay interest ('borrowers') and marketplace participants who want to lend bitcoins to other people for interest ('lenders')"[1] So then it is up to the recipient to do the exchange for fiat - if they require that. Based on the website Bitbond seems to be targeting for example people selling stuff online so it might be some of their customers can directly pay for their suppliers in bitcoins. Even if there would be full fiat-bitcoin-fiat cycle involved, that may be easier and cheaper than doing a cross-border payment via traditional banks. The cross-border payment thing via banks is complicated and has multiple steps. Small banks don't usually have direct relationships between each other, instead there are larger banks involved in the middle to facilitate the payments. With fiat-bitcoin-fiat you might be dealing with local players on both ends, which makes things easier. [1] https://www.bitbond.com/terms_of_use https://www.bitbond.com/terms_of_use

spookthesunset 8y ago

> There's also a chance you will get some of this wrong and then there will be a manual hassle to sort things out. Good thing for bitcoin if you fuck up the address your transaction and all its money goes right off into the ether.

icebraining 8y ago
That's why Bitcoin addresses have a checksum.