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As someone who lives my life in two currencies, my main hope for Bitcoin circa 2014 was that it would make for simpler and cheaper international transactions an
by skohan 6y ago
As someone who lives my life in two currencies, my main hope for Bitcoin circa 2014 was that it would make for simpler and cheaper international transactions and currency conversions. I don't know if the situation has gotten any better, but around 2015/2016 this seemed untenable due to high transaction costs, and volatility.
I'm not sure I understand what would be the value of using cryptocurrency under the hood for something like Strike. If they are settling the payments themselves, why not just use a simple database to reconcile their transactions?
- wcoenen 6y ago> I'm not sure I understand what would be the value of using cryptocurrency under the hood for something like Strike. If they are settling the payments themselves, why not just use a simple database to reconcile their transactions? A multi-country payment service can indeed just update their database. But If there is a net flow of value between countries, then they will still have to move that value over slower and more expensive traditional systems. If they implement fast transfers for their users on top of those slow systems, then that means they need idle capital waiting in each destination country so that they can front the money to the receiver. This adds cost and complexity: interface with traditional systems, capital opportunity cost, need to forecast demand, need to do currency hedging, ... Transfering via bitcoin and converting via exchanges on both ends eliminates that problem. It also makes it easy to partner with other payment services that do the same, while minimizing the need for trust.