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Visa May Add Cryptocurrencies to Its Payments Network, Says CEO
- kneel 6y agoDon't trust, verify. It makes sense to Visa since they are in the business of verifying trust. Proof of transaction history (ie credit) is public and inherent to blockchain, apparently this is taking some time to realize.
- warent 6y agoIsn't the saying "Trust, but verify"
- meowkit 6y agoYes and its a play on that phrase. You don't need to trust people on a blockchain, you have to trust the protocol, and then verify the results.
- curation 6y agosame
- acwan93 6y agoYep, the old Russian proverb that’s falsely attributed to Ronald Reagan [1]. Getting back on topic, that’s entirely Visa’s business in being a payments network. When I first heard about Bitcoin and cryptocurrencies, I wondered why Visa/MC/Amex/Discover and even (newer) real estate companies like Redfin weren’t looking at this seriously, since it could hypothetically be used to verify contracts and transactions in a decentralized way. [1]: https://en.wikipedia.org/wiki/Trust,_but_verify https://en.wikipedia.org/wiki/Trust,_but_verify
- eruleman 6y ago"Don't trust, verify" is crypto's slogan. "Trust, but verify" is Reagan's slogan.
- arcticbull 6y agoThe crypto slogan is “In Tether We Trust For Some Reason”
- z0xz0xz0x 6y agoThe average person with a Visa credit card has no idea how blockchain works, just like they don't know how traditional payment processors work. Unfortunately, with the amount of bad press constantly generated by media companies that are inherently linked with existing financial systems, people's ideas of crypto are probably overwhelmingly negative. This a great step towards building trust with the public, IMO.
- toomuchtodo 6y agoVisa is in the payments business. The US Federal Reserve ("The Fed") is going live with an instant payments service in 2023-2024 [1] [2]. What does that leave Visa with? Hence, the existential crisis (first, trying to buy Plaid, and now "Crypto!"). [1] https://www.frbservices.org/financial-services/fednow/index.html https://www.frbservices.org/financial-services/fednow/index.... [2] https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federal-reserves-planned-instant-payments-service/ https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federa...
- lotsofpulp 6y agoVisa is left with a valuable rewards game system where people get cash back or points or whatever. Plus the liability protections that credit cards come with. People can already use debit cards with no effort, and merchants can accept that at very minimal costs. But still, most merchants are hesitant to offer lower prices to purchases with debit card because they are betting people spend more with credit cards. I don’t expect this to change when the Fed’s system comes into play. I would actually expect the Fed’s system to replace cash transactions more than credit cards.
- nowherebeen 6y agoI don't think their rewards system is as valuable on you might think. When the cost of visa transactions are ultimately pushed to the consumer (~3%), they will eventually realize, those rewards are not worth the cost. Off course, this will probably take some time. But in my opinion, Visa's moat is thin and mostly reliant on the behavior of their users. For US, I expect Visa to still be dominant, but not so much in other countries in Europe and Asia where people are much more savvy with their money habits.
- lotsofpulp 6y ago> they will eventually realize, those rewards are not worth the cost. Debit cards in the US have been available and basically free to use for all merchants and purchasers for many decades. Yet, merchants willingly do not give people that buy with a debit card a discount. That seems like proof to me that merchants are betting that they earn more money from the use of credit cards, even after the fees associated with them, so I don’t see why another no or low fee purchase mechanism would change the situation.
- pjc50 6y agoHowever, not with a central counterparty doing off chain transactions and settlement. It makes sense, really: the speed and energy consumption of bitcoin is far too bad for mass adoption of direct transactions, and there's no fraud prevention or recovery of accidental loss, so Visa can replace the inefficient blockchain parts with a nice central database that the few remaining people wanting to do purchases rather than speculation can use.
- dc2k08 6y agoDon't trust visa/mastercard as they've used their muscle to censor views they dislike.
- lovetocode 6y agoCryptocurrency continues to gain more ground but I still have my reservations about it being the currency of the future. If by design, cryptocurrency has a finite volume of transferrable currency, do early adopters have an unfair advantage that could potentially make the currency unusable? I don’t see how it could possibly be fair when earlier mining yielded currency more quickly.
- La1n 6y agoIsn't this kinda inherent in all currencies in a way? Those born in rich families "yielded currency much more quickly".
- Nursie 6y agoIn currencies which are not subject to maximum limits, no. Managed currencies tend to devalue over time. Rich families must invest and risk capital to keep growing their fortune, not just sit on it.
- foxrider 6y agoAnd in the early days the cost of 1 Bitcoin was abysmal. The idea is that the harder it gets to mine the more expensive it becomes.
- z0xz0xz0x 6y agoNot all cryptocurrencies have finite volumes by design. Ethereum, for example, currently doesn't have one. It also uses a proof-of-stake instead of proof-of-work for consensus, so even early owners of hardware don't maintain an advantage.
- Nursie 6y agoHas ethereum actually switched to PoS? It was still in the pipeline last I heard.
- JacobSuperslav 6y ago
- bootyfarm 6y agoGreat, let’s all accelerate climate change even faster.
- shanecoin 6y agoI hear this argument a lot and have a genuine question. How does Bitcoin electricity usage compare to something that achieves a similar goal? A good example is gold—many people compare Bitcoin to gold. What are the relative electricity costs of the two, and does that justify the cost of either asset? This would take into account the electricity costs of mining, labor, supply chain, storage, etc.
- z0xz0xz0x 6y agoIt's easy to quantify with Bitcoin, less so than gold. Transportation, security, all those things lead to gold being an inefficient store of value. At least with cryptocurrencies, many are being actively worked on that contribute much less to energy expenditure.
- xirbeosbwo1234 6y agoBitcoin is in the same league as all datacenters in the world combined. Datacenters use about 205 TWh/year. https://www.networkworld.com/article/3531316/data-center-power-consumption-holds-steady.html https://www.networkworld.com/article/3531316/data-center-pow... Bitcoin uses about 75 TWh/year. https://digiconomist.net/bitcoin-energy-consumption https://digiconomist.net/bitcoin-energy-consumption Visa operates out of just two datacenters. They are famously secretive about their operations so I don't know how much power they use. The most I've found is that they have 'multi-megawatt' datacenters, which means they probably use more than three megawatts and less than 100. https://youtu.be/fpmS0JYyCGs?t=66 https://youtu.be/fpmS0JYyCGs?t=66 Bitcoin uses about 8.5 gigawatts. Clearly it uses at least a few orders of magnitude more electricity than Visa. It can process four transactions per second compared to about 25,000 for Visa, so the energy per transaction is even worse by a few more orders of magnitude. The inefficiency of Bitcoin is truly mind-boggling. If I were trying to write a hit piece, I wouldn't have the guts to make up numbers as bad as the reality.
- bravoetch 6y agoThis is an innovation other payment procerrors are steadily adopting. Square and paypal are already there. Visa doesn't want to miss out and have to acquire these companies just to survive some paradigm shift.
- andrewmcwatters 6y agoI wonder if this is one of these dot-com bubble-esque articles that we'll look back on and think, "What an interesting time."
- briefcomment 6y agoWe may look back on this as more of a "Netflix expands online business instead of DVDs" moment.
- tal8d 6y agoPeople have been expressing that sentiment for nearly 10 years. At what point do you accept that you were shortsighted? 20 years?
- freeone3000 6y agoHonestly, ten years ago was a better time for cryptocurrency as a currency. You could use it to pay for pizzas, there were online casinos, even some businesses selling actual hosting accepted it as a matter of course. Right now, it's this weird speculative asset that lots of people are interested in trading on, because it's a well-traded asset, but there seems to be zero interest in any of the fundamental principles of decentralization or divergence from fiat. Even longstanding businesses accepting it as a currency have stopped. It's closer to digital beanie babies than any sort of serious currency.
- tal8d 6y ago> It's closer to digital beanie babies than any sort of serious currency. And then he flushed any possibility for a good faith argument away. What, are keeping your powder dry on the tulip mania line? I'm long past the evangelical phase on bitcoin, but back when I was doing that (when it was trading in the double digits) - I heard the exact same thing. Merchants would adopt and then quickly abandon, money transmitters would welcome and then ban... and banks would just ban. I was de-banked before it was cool. I mourn the opening of crypto trade desks at the likes of Goldman Sachs more than most, because my first exposure to bitcoin was on the cypherpunks mailing list, but that doesn't mean that bitcoin failed. The comparison to beanie babies is laughably moronic.
- alextheparrot 6y agoAre there any crypto projects that allow chargebacks? I religiously avoid using my debit card except at bank ATMs to avoid that once every few years when someone skims my credit card. That and rewards are the main value-add of a traditional payment flow at the moment.
- MattGaiser 6y agoThis to me is the barrier that prevents the adoption of crypto everywhere. There are substantial advantages to centralized control.
- icelancer 6y agoYou can centralize on top of BTC if you want that. Nothing is stopping you from offering a chargeback solution on the blockchain network (though this is much more likely to exist on top of Ethereum's network). There are no chargebacks for cash, for example, yet it underpins the Visa/MC network.
- deleted 6y ago[deleted]
- londons_explore 6y agoBitcoin allows transactions in the future. Thats effectively the same as a chargeback, since the sender of the money can decide at any point up to the time of the actual transfer to send the money elsewhere. You could theoretically design a hardware wallet (like a credit card) to only sign transactions three days into the future. That would give you three days to 'charge back' anything you don't like. Not sure merchants would be happy to accept that though...
- sneak 6y agoThat's not really the same thing. A chargeback is mediated by a trusted third party, and the merchant knows that if they are reputable and do what they're supposed to, they'll get (usually) paid. Future (possibly reversible) payments don't really give the merchant the same risk cap that a credit card authorization does.
- sigzero 6y agoI actually do not want VISA involved. That smacks as they thinking they can control it in the future.
- f430 6y agoSo this is how they are going to regulate it now.
- CyberDildonics 6y agoCan you explain exactly what you mean by that?
- ffggvv 6y agovisa is likely trying to get a meme stock bump because of the crypto hype
- k__ 6y agoAbout the volatility of cryptocurrency. Shouldn't this even out when mining becomes too expensive and enough people adopted a cryptocurrency? Like, aren't we simply too early for making sense of it all?
- UShouldBWorking 6y ago1) It's been around for 12 years Bitcoin and cryptocurrency is old technology at this point. 2) what does the phrase mining becomes too expensive mean? Satoshi always envisioned that mining would be taken up by big firms and specialty miners not individuals. 3) price volatility has nothing to do with the size of adoption every single person on Earth could be using Bitcoin and it wouldn't make it any less volatile. Maybe if major retailers decided to price things in terms of Bitcoin that could help but that will probably never happen.
- PaulDavisThe1st 6y agoI didn't want blockchain. I didn't want anonymity. I just wanted a way to instantly move money (the same money anyone might use to buy bread with) between myself and another person, without banking fees or delays or even legislative limitations. And instead I got cryptocurrency.
- ivarv 6y agohttps://global.strike.me https://global.strike.me looks to address that use case. See https://jimmymow.medium.com/announcing-strike-global-2392b908f611 https://jimmymow.medium.com/announcing-strike-global-2392b90... for more context / backstory. p.s. thanks for your work on Ardour
- PaulDavisThe1st 6y agoYou're welcome.
- flatline 6y agoYou don’t pay for things from your brokerage fund by cashing out your QQQ shares. You don’t pay for things with the gold in your home safe. You don’t keep funds in a foreign currency in your home country for everyday purchases. There is no use of bitcoin for which this seems well-suited.
- arcticbull 6y agoFor what it’s worth you could (read: not should lol) thanks to an InteractiveBrokers debit card which borrows against your margin :) then settle by selling at the end of the month to cover your debt.
- eMGm4D0zgUAVXc7 6y ago> There is no use of bitcoin for which this seems well-suited. All the things you listed are not identical to the new, very different asset class that is Bitcoin, so how can you deduce facts about Bitcoin from them? E.g. they can't be transferred as easily as scanning a QR code with your smartphone, you can't store them in your brain, they can be de-valuated by governments, and so on.
- flatline 6y ago> how can you deduce facts about Bitcoin from them? The first thing is a speculative asset. The second is a store of value. The third is a currency. I did not mention that bitcoin is taxed as a commodity in the US. Bitcoin is easy to transfer - but you still need to wait for a transaction to get stored in a block and processed by miners, and wait for the odds of a double spend reducing to near zero. Venmo is just as easy, with different risks. Note that I am not entirely bearish about bitcoin. It’s cool tech! But it has some real limitations and there seems to be no upside to paying with it through Visa of all things.
- lxe 6y agoHave you used cryptocurrency for payments lately? Unless you want to pay $25 to wait 6 hours while your transaction is confirming, stick to venmo/zelle/paypal/etc... Unless, of course, you use places like Coinbase that pool transactions or bypass the network altogether, but then... what's the point of cryptocurrency?
- FDSGSG 6y ago>Unless you want to pay $25 to wait 6 hours while your transaction is confirming, stick to venmo/zelle/paypal/etc Those take much longer than 6 hours to "confirm", no? The sender can chargeback these transactions months after the money shows up in your account. You don't even need to wait for confirmations unless the sum is huge. It's quite safe to accept most 0conf transactions.
- whimsicalism 6y agoEthereum definitely doesn't cost that much and take that long as of late.
- colecut 6y agoI paid multiple $30 ethereum gas fees yesterday. I've seen them over $60
- brianobush 6y agoThis will be addressed by EIP 1559 in the next year or so.
- rglullis 6y agoThe point still stands. Any ERC20 transfer is going to cost a substantial amount of ETH if you want to confirm quickly and even after mined should only be considered confirmed after 10 blocks at least. It is not practical for payments. Layer-2 does alleviate some of the issues though, and all those talking about Lightning Network should look into Raiden.
- haskaalo 6y ago
- LatteLazy 6y ago"May" means the same as "May not"