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Someone always takes the hit. Bitcoin allows you to guarantee that you won't take a hit. Other services can be set up to protect other people as well. I might b

by syrrim 8y ago

Someone always takes the hit. Bitcoin allows you to guarantee that you won't take a hit. Other services can be set up to protect other people as well. I might buy bitcoin with my creditcard, such that if someone fraudulently buys bitcoin on my card, either the cc company or the exchange will reimburse me. As the seller, you don't want to be on the line for such things.

simias 8y ago
That's the thing though, I posit that most people (myself included) want some level of guarantee and insurance on their money. That means that in a bitcoin world I wager that most people would actually use third party services to manage their assets. In order to offer a guarantee these services will ask to take over the assets to secure them in their digital vaults. And just like that you've reinvented the banking system. Note that I've seen a few instances of people on HN claiming that they were actually using cryptocurrencies for day-to-day purchases, only to admit that they actually use some kind of off-chain payment method like a coinbase credit card or similar[1]. Congrats, you've got a bank with extra steps. Furthermore I want to point out that this "no refund" policy of cryptocurrencies is by design, there's no way to change that without effectively turning it into a "regular" centralized and "trustful" currency. It's not a feature, it is a technical limitation of the algorithm, the question is just whether it's a problematic one or not. Meanwhile Visa and friends, if threatened, could relatively easily launch a competing product with the same characteristics (no chargeback, buyer pays the fees instead of the seller, etc...). I suspect that the main problem with starting something like that is that it would run afoul of existing regulation. So basically the reason that we're not using Bitcoin-like currency right now is not because we couldn't do it before, it's because we actually realized that we didn't want it. The market has spoken! [1] https://support.coinbase.com/customer/en/portal/articles/2228646-the-shift-card https://support.coinbase.com/customer/en/portal/articles/222...

by syrrim 8y ago

simias 8y ago

That's the thing though, I posit that most people (myself included) want some level of guarantee and insurance on their money. That means that in a bitcoin world I wager that most people would actually use third party services to manage their assets. In order to offer a guarantee these services will ask to take over the assets to secure them in their digital vaults. And just like that you've reinvented the banking system. Note that I've seen a few instances of people on HN claiming that they were actually using cryptocurrencies for day-to-day purchases, only to admit that they actually use some kind of off-chain payment method like a coinbase credit card or similar[1]. Congrats, you've got a bank with extra steps. Furthermore I want to point out that this "no refund" policy of cryptocurrencies is by design, there's no way to change that without effectively turning it into a "regular" centralized and "trustful" currency. It's not a feature, it is a technical limitation of the algorithm, the question is just whether it's a problematic one or not. Meanwhile Visa and friends, if threatened, could relatively easily launch a competing product with the same characteristics (no chargeback, buyer pays the fees instead of the seller, etc...). I suspect that the main problem with starting something like that is that it would run afoul of existing regulation. So basically the reason that we're not using Bitcoin-like currency right now is not because we couldn't do it before, it's because we actually realized that we didn't want it. The market has spoken! [1] https://support.coinbase.com/customer/en/portal/articles/2228646-the-shift-card https://support.coinbase.com/customer/en/portal/articles/222...