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> (1) Fees are irrelevant in the face of overwhelming volatility. Who cares if the fee is a couple of cents on your million dollar transaction when BTC regularl

by mopsi 6y ago

> (1) Fees are irrelevant in the face of overwhelming volatility. Who cares if the fee is a couple of cents on your million dollar transaction when BTC regularly flings up and down 10%, or more? How could you willingly risk $100,000 on a million dollar transaction when your bank would charge you between $25 and $0 depending on your account size for the same transfer? The same thing is an issue with traditional international transactions, but settlement systems like Ripple offer very fast transaction times (seconds instead of days) and reduce exposure to exchange rates, which makes them much cheaper to use. > (2) Fees only appear low because nobody's using it. The minute people start using it, as we've seen, the fees absolutely skyrocket. BTC transaction fees hit $35 last time around. BTC throughput is artifically capped by its developers to 7 transactions per second (globally), which causes ridiculous bidding wars for transactions. This is not an issue with most cryptocurrencies that have large throughput as one of their main design goals. > (3) Fees only appear low because they're being socialized through inflation/dilution. A single BTC transaction consumes 700kWh of power -- enough to drive a Tesla from SF to New York. That's currently being absorbed by the system in the form of inflation/dilution ("block rewards"). But make no mistake, each transaction actually costs about $0.08/kWh in China = $56. Cryptocurrencies do not have to rely on Bitcoin's way of doing things. There are energy-efficient ways. A single Bitcoin transaction may consume 700 kWh, but a Visa transaction consumes 0.006490 kWh and a Ripple transaction consumes 0.0000113 kWh (http://papers.netrogenic.com/sid/eco-friendly-money.pdf http://papers.netrogenic.com/sid/eco-friendly-money.pdf). > (5) Before you start on international transactions, those are really really cheap too. The cheapest option for small transactions is TransferWise, charging 0% on the USD-INR corridor up to 0.85% or so. Most credit cards charge nothing on forex. These are not actual transactions. TransferWise can offer cheap rates only on well-balanced corridors because then real money doesn't have to move. If USD->INR payments have a volume of 1M per day and INR->USD also has 1M, then they don't have to move any money and can bypass the whole international transactions side of things and associated fees and locally pay out the same money that was deposited into their accounts. If international transactions were cheap, there would be no need for middle-men like TransferWise.

arcticbull 6y ago
> The same thing is an issue with traditional international transactions, but settlement systems like Ripple offer very fast transaction times (seconds instead of days) and reduce exposure to exchange rates, which makes them much cheaper to use. Ripple is not decentralized, which is why it's cheap. That also just makes it a direct replacement for SWIFT. You can do that without blockchain. You can stand that up in a single RDS instance in about 5 minutes flat, and hash the previously appended rows in a Merkle tree like we've done for eons. > BTC throughput is artifically capped by its developers to 7 transactions per second (globally), which causes ridiculous bidding wars for transactions. This is not an issue with most cryptocurrencies that have large throughput as one of their main design goals. There's no truly decentralized cryptocurrency that even comes close to satisfying simultaneously having anywhere close to the transaction throughput of Visa (just one of many processors) while also satisfying the verifiability goals of being able to download the blockchain onto your computer. Because they're competing goals. > Cryptocurrencies do not have to rely on Bitcoin's way of doing things. There are energy-efficient ways. A single Bitcoin transaction may consume 700 kWh, but a Visa transaction consumes 0.006490 kWh and a Ripple transaction consumes 0.0000113 kWh (http://papers.netrogenic.com/sid/eco-friendly-money.pdf http://papers.netrogenic.com/sid/eco-friendly-money.pdf). Ripple is not decentralized which is why it's efficient. There are no decentralized, efficient coins. It's also not even close to a fair comparison. They're only counting the electricity consumption of a few validator nodes in that link of yours, and they cap out at 1500TPS, Visa supports 50000TPS. Further XRP is just a distributed inter-bank ledger. Visa isn't a comparison for that, something like SWIFT is. > These are not actual transactions. TransferWise can offer cheap rates only on well-balanced corridors because then real money doesn't have to move. If USD->INR payments have a volume of 1M per day and INR->USD also has 1M, then they don't have to move any money and can bypass the whole international transactions side of things and associated fees and locally pay out the same money that was deposited into their accounts. I have no idea what this means. You do know bags of money don't make their way onto boats every time you make a forex transaction right? The exchange rate is determined by the price that requires no physical currency to leave one country and move to another. Which makes it incredibly efficient. And very real. > If international transactions were cheap, there would be no need for middle-men like TransferWise. They're a provider of cheap international transactions. International transactions are cheap.

by mopsi 6y ago

arcticbull 6y ago

> The same thing is an issue with traditional international transactions, but settlement systems like Ripple offer very fast transaction times (seconds instead of days) and reduce exposure to exchange rates, which makes them much cheaper to use. Ripple is not decentralized, which is why it's cheap. That also just makes it a direct replacement for SWIFT. You can do that without blockchain. You can stand that up in a single RDS instance in about 5 minutes flat, and hash the previously appended rows in a Merkle tree like we've done for eons. > BTC throughput is artifically capped by its developers to 7 transactions per second (globally), which causes ridiculous bidding wars for transactions. This is not an issue with most cryptocurrencies that have large throughput as one of their main design goals. There's no truly decentralized cryptocurrency that even comes close to satisfying simultaneously having anywhere close to the transaction throughput of Visa (just one of many processors) while also satisfying the verifiability goals of being able to download the blockchain onto your computer. Because they're competing goals. > Cryptocurrencies do not have to rely on Bitcoin's way of doing things. There are energy-efficient ways. A single Bitcoin transaction may consume 700 kWh, but a Visa transaction consumes 0.006490 kWh and a Ripple transaction consumes 0.0000113 kWh (http://papers.netrogenic.com/sid/eco-friendly-money.pdf http://papers.netrogenic.com/sid/eco-friendly-money.pdf). Ripple is not decentralized which is why it's efficient. There are no decentralized, efficient coins. It's also not even close to a fair comparison. They're only counting the electricity consumption of a few validator nodes in that link of yours, and they cap out at 1500TPS, Visa supports 50000TPS. Further XRP is just a distributed inter-bank ledger. Visa isn't a comparison for that, something like SWIFT is. > These are not actual transactions. TransferWise can offer cheap rates only on well-balanced corridors because then real money doesn't have to move. If USD->INR payments have a volume of 1M per day and INR->USD also has 1M, then they don't have to move any money and can bypass the whole international transactions side of things and associated fees and locally pay out the same money that was deposited into their accounts. I have no idea what this means. You do know bags of money don't make their way onto boats every time you make a forex transaction right? The exchange rate is determined by the price that requires no physical currency to leave one country and move to another. Which makes it incredibly efficient. And very real. > If international transactions were cheap, there would be no need for middle-men like TransferWise. They're a provider of cheap international transactions. International transactions are cheap.