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In short credit cards do not move value at all. You authorize payment instructions. Which in turn leads to balances being adjusted. It's basically a debt transa

by noxer 7y ago

In short credit cards do not move value at all. You authorize payment instructions. Which in turn leads to balances being adjusted. It's basically a debt transaction instead of a value transaction. It has several advantages like that banks can adjust balances for a specific time with many parties and then calculate the effective difference (a lot will cancel each other out) and only settle the real differences. There is more of course but that's the basics. For the consumer, streaming value doesn't need any kind of subscription. It doesn't even require a contract. You do not need to stream from netflix because that's what you already have an pay for monthly. You pay whoever gives you what you want. It's kinda like if you could use cash without the obvious downsides of physically moving coins and with the ability to split it in whatever fraction you'd like. Please watch the youtube video. He explains this way better than I could. It goes down to the level of IP data packages. Something similar could be made (is being made) with value. >If I understand correctly, the current situation is that there are free services where you can upload/insert data, free services where you can download/consume—and there are paid services for both too. Most of the content people access on the internet is "free" as in no need to pay for it other than pay for the internet access. Same is also true for "inserting" as in upload it somewhere. However physically inserting it (hosting) isn't free even if you find a free host it's just paid by someone else. Hence hosting (inserting) costs while pulling is mostly free. Every other market works exactly the opposite way. You can't get an apple for free at any store. There is no way someone else is gonna pay the apple for you if you just look at some ads. If the internet would work more like a store, some people would insert data and other people would access/download and they would pay for that directly not let someone else pay in exchange for horrible userexperiences, horrible privacy, huge additional traffic waste etc. All of that could really only turn successful because data started moving freely over the internet and it grew exponentially while moving value basically has not changed at all.

fwip 7y ago
Why do I care whether it's a "debt transaction" or a "value transaction?"
- noxer 7y ago
  If you get that transaction you probably prefer the value rather than the debt. Value is free to move, debt is an agreement between 2 parties. If you get paid with debt it means you get nothing but someone owes you something now. This someone is usually your bank. You can cash out that debt at any time and that gives the feeling that there is value stored at the bank. But that's not really the case everyone knows that it would not work if a lot people would want their debt payed back. Instead of cashing the debt out you can just send that debt to someone else. This is called transaction but as you already know there is nothing to move. It just adjust balances of debt. You tell the bank that a part of what they owe you should now be owed by someone else. If its someone is using the same bank then this is super simple. If he is form another bank the 2 Banks must work together to update the balances over 2 systems. If the 2 Banks do not have any relationship with each-other then they need to find corresponding banks and create a chain of trusted relationships to move that debt around. This is why Tx from account to account of the same banks is super simple fast and cheap/free but the further you go the longer it takes and the more Banks in between want some kind of fee for the service. It comes to the point where you simply can't make a transaction anymore because either the fees are way to high or there just isn't a bank to bank to bank chain that could move the debt. Or of course there are billions of people who do not have a bank. There are payment companies who fill in that gap where you can input a bank transaction (debt) and they deliver cash etc. It's sill expensive and slow in most cases and it absolutely does not work with small value(debt) Tx. There is no way to send 1USD from USA to Mexico for an acceptable fee and in an acceptable time. If you could send value instead you could avoid literally all these problems. Value is value everywhere it doesn't matter where you send it from and where you send it to. There is no need for cooperating banks. It's like if you could pay cash but globally (without the different currencies of course because value is currency independent). Imagine if value would be represented by gold. I buy gold worth 1 USD and send it anywhere in the world and the person who gets it sells it for his local currency. Now replace the gold with crypto because gold can not be send over the internet but cryptos can. Everywhere, very fast/cheap (not with BTC) and without any chain of trusted entities in between the endpoints. It's also final unlike debt Tx which can be reversed by the banks and payment provider in between. Which is bad for the endpoints but also for the corresponding bank chains since they all have to take the risk of reversed Tx which leads to higher fees.
ivalm 7y ago
First, loans create deposits. It is a (short-term) loan for the purchaser but it creates a real deposit for the seller. In as much as you equate "value" with exchange medium (money/crypto) then credit cards create value out of thin air (the purchaser still has his deposit AND the seller gains a deposit, all the while their deposits enable the loans by the bank). The fact that we have more than one bank and real settling between banks doesn't reflect the minutia of actual transaction is irrelevant. In terms of "who pays," well, I doubt people who currently don't pay will somehow decide to pay while free services remain available (even if at the cost of getting targeted ads/loss of privacy). If anything, right to be targeted is the real "value" that is being (and presumably will continue to be) exchanged.

by noxer 7y ago

fwip 7y ago

Why do I care whether it's a "debt transaction" or a "value transaction?"

noxer 7y ago
If you get that transaction you probably prefer the value rather than the debt. Value is free to move, debt is an agreement between 2 parties. If you get paid with debt it means you get nothing but someone owes you something now. This someone is usually your bank. You can cash out that debt at any time and that gives the feeling that there is value stored at the bank. But that's not really the case everyone knows that it would not work if a lot people would want their debt payed back. Instead of cashing the debt out you can just send that debt to someone else. This is called transaction but as you already know there is nothing to move. It just adjust balances of debt. You tell the bank that a part of what they owe you should now be owed by someone else. If its someone is using the same bank then this is super simple. If he is form another bank the 2 Banks must work together to update the balances over 2 systems. If the 2 Banks do not have any relationship with each-other then they need to find corresponding banks and create a chain of trusted relationships to move that debt around. This is why Tx from account to account of the same banks is super simple fast and cheap/free but the further you go the longer it takes and the more Banks in between want some kind of fee for the service. It comes to the point where you simply can't make a transaction anymore because either the fees are way to high or there just isn't a bank to bank to bank chain that could move the debt. Or of course there are billions of people who do not have a bank. There are payment companies who fill in that gap where you can input a bank transaction (debt) and they deliver cash etc. It's sill expensive and slow in most cases and it absolutely does not work with small value(debt) Tx. There is no way to send 1USD from USA to Mexico for an acceptable fee and in an acceptable time. If you could send value instead you could avoid literally all these problems. Value is value everywhere it doesn't matter where you send it from and where you send it to. There is no need for cooperating banks. It's like if you could pay cash but globally (without the different currencies of course because value is currency independent). Imagine if value would be represented by gold. I buy gold worth 1 USD and send it anywhere in the world and the person who gets it sells it for his local currency. Now replace the gold with crypto because gold can not be send over the internet but cryptos can. Everywhere, very fast/cheap (not with BTC) and without any chain of trusted entities in between the endpoints. It's also final unlike debt Tx which can be reversed by the banks and payment provider in between. Which is bad for the endpoints but also for the corresponding bank chains since they all have to take the risk of reversed Tx which leads to higher fees.

ivalm 7y ago

First, loans create deposits. It is a (short-term) loan for the purchaser but it creates a real deposit for the seller. In as much as you equate "value" with exchange medium (money/crypto) then credit cards create value out of thin air (the purchaser still has his deposit AND the seller gains a deposit, all the while their deposits enable the loans by the bank). The fact that we have more than one bank and real settling between banks doesn't reflect the minutia of actual transaction is irrelevant. In terms of "who pays," well, I doubt people who currently don't pay will somehow decide to pay while free services remain available (even if at the cost of getting targeted ads/loss of privacy). If anything, right to be targeted is the real "value" that is being (and presumably will continue to be) exchanged.