3 ms·

Do you know about visa/mastercard transaction fees? Someone has to do the work of performing the transaction and bitcoin achieves this with a functioning market

by reedf1 6y ago

Do you know about visa/mastercard transaction fees? Someone has to do the work of performing the transaction and bitcoin achieves this with a functioning market - high fees -> high mining rewards -> more miners -> lower fees -> less miners -> loop back

arcticbull 6y ago
I recommend learning more about the payments space before trying to reinvent it. US interchange is about 1.8% and that’s largely returned to buyers in the form of reward programs. The remainder is split between profit and the cost to originate and service loans. This isn’t a bad deal, at all, as studies show merchants enjoy 20% larger ticket sizes and don’t have to fear theft of cash or scammers taking their crypto - while customers enjoy protections and rewards. In Europe interchange is capped at 0.3% for credit and 0.2% for debit, so of course they Don’t have reward programs. A Bitcoin transaction costs $10 in fees and $80 in electricity so you’d need an average ticket size of $30000 in Europe ($5000 in the US net of reward) to make BTC more efficient.
- octocop 6y ago
  > This isn’t a bad deal In what context? I've read some of the posts that you've made in this thread and at this point i'm almost certain that you either work for a bank or for a credit card provider. You are glowing.
  - arcticbull 6y ago
    Nope, I worked in fintech for years though, so have a solid understanding of the space It’s not bad in the sense that merchants get larger average ticket sizes and avoid a lot of risks, customers get insurances and protections including chargebacks, the ability to defer and consolidate their cash flow via 1 month no interest loan.
- nmlnn 6y ago
  I recommend learning more about the bitcoin payments space before trying to criticise it. A bitcoin transaction does not cost $10 (https://mempool.space/graphs#1w https://mempool.space/graphs#1w). If you are going to add in your (completely made up?) estimate of mining costs to a bitcoin transaction you would need to include the costs of the entire fiat payments and settlement infrastructure to the costs of credit card transactions. From gold mined and stored by central banks all the way through to the energy used by the back offices of commercial banks all over the world.
  - arcticbull 6y ago
    > A bitcoin transaction does not cost $10 (https://mempool.space/graphs#1w https://mempool.space/graphs#1w). At the time I posted this, the average fee was hovering between $8 and $14 per transaction, and so I picked a fairly generous, low average. > If you are going to add in your (completely made up?) estimate of mining costs to a bitcoin transaction... It's not made up, it's available for you to review and criticize here [1], with all the linked studies available to you. I specifically did not include the 700 kWh at a global average $0.14/kWh ($98) so as to avoid inviting this criticism. > ...you would need to include the costs of the entire fiat payments and settlement infrastructure to the costs of credit card transactions. From gold mined and stored by central banks all the way through to the energy used by the back offices of commercial banks all over the world. Without going through the process of estimating what it is, I can tell you what it isn't -- even close to the same order of magnitude as BTC. I know that because if I scaled up linearly the energy consumption and e-waste generation of BTC vs. just Visa it would require several times more energy than the entire world generates today, and would generate more e-waste than the entire world generates today. It's wasteful, and it's shameful for people to defend it like this. Its energy usage is not comparable, at all, no matter what externalities you tried to bundle in. Now there might be a case to be made that the energy usage is worth it, but deflecting the energy usage criticism with hand-waving about including the calories exerted by gold miners swinging pick-axes under the earth is at best disingenuous. [1] https://digiconomist.net/bitcoin-energy-consumption https://digiconomist.net/bitcoin-energy-consumption
wcoenen 6y ago
More miners does not lower fees. Bitcoin users are competing with each other when bidding for the limited space in each bitcoin block. And the frequency at which blocks are generated is roughly constant by design.

by reedf1 6y ago

arcticbull 6y ago

I recommend learning more about the payments space before trying to reinvent it. US interchange is about 1.8% and that’s largely returned to buyers in the form of reward programs. The remainder is split between profit and the cost to originate and service loans. This isn’t a bad deal, at all, as studies show merchants enjoy 20% larger ticket sizes and don’t have to fear theft of cash or scammers taking their crypto - while customers enjoy protections and rewards. In Europe interchange is capped at 0.3% for credit and 0.2% for debit, so of course they Don’t have reward programs. A Bitcoin transaction costs $10 in fees and $80 in electricity so you’d need an average ticket size of $30000 in Europe ($5000 in the US net of reward) to make BTC more efficient.

octocop 6y ago
> This isn’t a bad deal In what context? I've read some of the posts that you've made in this thread and at this point i'm almost certain that you either work for a bank or for a credit card provider. You are glowing.
- arcticbull 6y ago
  Nope, I worked in fintech for years though, so have a solid understanding of the space It’s not bad in the sense that merchants get larger average ticket sizes and avoid a lot of risks, customers get insurances and protections including chargebacks, the ability to defer and consolidate their cash flow via 1 month no interest loan.
nmlnn 6y ago
I recommend learning more about the bitcoin payments space before trying to criticise it. A bitcoin transaction does not cost $10 (https://mempool.space/graphs#1w https://mempool.space/graphs#1w). If you are going to add in your (completely made up?) estimate of mining costs to a bitcoin transaction you would need to include the costs of the entire fiat payments and settlement infrastructure to the costs of credit card transactions. From gold mined and stored by central banks all the way through to the energy used by the back offices of commercial banks all over the world.
- arcticbull 6y ago
  > A bitcoin transaction does not cost $10 (https://mempool.space/graphs#1w https://mempool.space/graphs#1w). At the time I posted this, the average fee was hovering between $8 and $14 per transaction, and so I picked a fairly generous, low average. > If you are going to add in your (completely made up?) estimate of mining costs to a bitcoin transaction... It's not made up, it's available for you to review and criticize here [1], with all the linked studies available to you. I specifically did not include the 700 kWh at a global average $0.14/kWh ($98) so as to avoid inviting this criticism. > ...you would need to include the costs of the entire fiat payments and settlement infrastructure to the costs of credit card transactions. From gold mined and stored by central banks all the way through to the energy used by the back offices of commercial banks all over the world. Without going through the process of estimating what it is, I can tell you what it isn't -- even close to the same order of magnitude as BTC. I know that because if I scaled up linearly the energy consumption and e-waste generation of BTC vs. just Visa it would require several times more energy than the entire world generates today, and would generate more e-waste than the entire world generates today. It's wasteful, and it's shameful for people to defend it like this. Its energy usage is not comparable, at all, no matter what externalities you tried to bundle in. Now there might be a case to be made that the energy usage is worth it, but deflecting the energy usage criticism with hand-waving about including the calories exerted by gold miners swinging pick-axes under the earth is at best disingenuous. [1] https://digiconomist.net/bitcoin-energy-consumption https://digiconomist.net/bitcoin-energy-consumption

wcoenen 6y ago

More miners does not lower fees. Bitcoin users are competing with each other when bidding for the limited space in each bitcoin block. And the frequency at which blocks are generated is roughly constant by design.