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> There is not a single alternative service in the world that would have made this possible. Apart from any "send money to your relatives back home" service, s

by noja 6y ago

> There is not a single alternative service in the world that would have made this possible. Apart from any "send money to your relatives back home" service, sms banking in entire continents, or Hawala. https://en.wikipedia.org/wiki/Hawala https://en.wikipedia.org/wiki/Hawala

kseistrup 6y ago
I agree. I regularly send money from Denmark to unbanked friends in shanty towns in Zambia through World Remit — it works 24/7 as fast as an sms. https://www.worldremit.com/en https://www.worldremit.com/en
- uberswe 6y ago
  I didn't know about these services and it's great that they exist. What makes bitcoin different is that it eliminates the need to trust a third party such as a bank to handle the transaction.
  - the-dude 6y ago
    You just need a Bitcoin ATM in every shanty town. Easy.
    - notahacker 6y ago
      Even then, you'd have to trust the third party that maintains the ATMs...
      - the-dude 6y ago
        Whoosh?
        notahacker 6y ago
        I wasn't sure whether the snark was for the size of the logistical hurdles the much-hyped "trustless solutions for the unbanked" face or the proposed solutions invariably involving some sort of bank, but it's always worth underlining the latter part...
  - Shacklz 6y ago
    Except that it doesn't. You still need someone to put up and maintain ATMs, apps, exchange-sites etc. that allow for quick and easy transfer and exchange of bitcoin. People think this is all easy until things go wrong: Who do you appeal to if you get scammed? What do you do if you pay someone online with bitcoin who then just doesn't deliver what you've ordered? Who do you call if someone attached some kind of skimmer to a bitcoin ATM? Don't get me wrong, there's so much wrong with the current banking system, and I really hope someone or something manages to disrupt it, but Bitcoin is no solution to that.
    - maclured 6y ago
      > What do you do if you pay someone online with bitcoin who then just doesn't deliver what you've ordered? This is the big problem with crypto. Trust moves around. But there is one solution: escrow backed by smart contracts - see here for one implementation [1] Personally I think what we'll see in future is people being offered the option of going through existing institutions as a form of insurance for the reasons you mention, but an alternative on offer for people who just want to minimize fees or who don't think they'll need those conflict resolution services. [1] https://particl.wiki/learn/marketplace/mad-escrow/ https://particl.wiki/learn/marketplace/mad-escrow/
      - tonyjstark 6y ago
        what if the "smart" contract has a bug? Also now I have to trust the smart contract developer
        maclured 6y ago
        TBH I imagine developing smart contracts is clunky right now, like developing using AWS Lambda frameworks was a few years ago. But the tooling will improve. Perhaps it could be possible to digitally sign a smart contract's version, linking it to some proof of automated test coverage, or some other open way of verifying that it works as intended - e.g. attach the test suite and test results to the contract somehow and sign them. If you weren't happy with the quality of tests or their coverage, etc, you could decide not to use the smart contract.
  - kseistrup 6y ago
    That's right. But… Ten+ years ago we were all told that the decentralised cryptocurrency would enable the unbanked masses to make micropayments to one another — and indeed, we could do that in the first few years. However, the mining fees are so exorbitant these days that micropayments end up being very expensive, at least percentage-wise. I didn't have any expectations about the bitcoin exchange rate ten years ago, but the “cheap micropayments” expectations were blown to pieces a long time ago. Bitcoin Lightning, is that so simple that even my mother could use it without my help? For me that's the acid test.
    - fthbv 6y ago
      Bitcoin Cash (BCH) works like original Bitcoin. It has no artificial blocksize limit, and has less than $0.01 transaction fees (1 sat/byte). She could use BCH. Just open Bitcoin.com app on phone, tap "SEND", "Scan a QR code" (or enter email, or phone number, or BCH address), and slide. Video: https://twitter.com/rogerkver/status/1179037602499837954 https://twitter.com/rogerkver/status/1179037602499837954
  - opportune 6y ago
    How do you buy Bitcoin without going through a trusted third party? How do you cash out? Do you read the source code of your wallet software and scour the bitcoin source code for security breaking bugs?
  - dragontamer 6y ago
    How do we know that the Bitcoin ATM actually spit out cash? We can prove that A transferred BTC to B thanks to cryptographic signatures. But what if the ATM machine (turning BTC into USD or whatever) on the other side fails? You still have to trust 3rd parties whenever you do an "off chain" transaction. ------ As long as BTC has huge volatility, it fails as a store of value. Swings up, or down, will incentivize "games" to be played with regards to any BTC / USD exchange.
qqii 6y ago
Thank you for sharing, I never knew that was a thing. If you don't take the comment at face value there's obviously differences between the two systems: Bitcoin is well known globally whereas Hawala in a subset of countries. In OP's example he has to trust the Bitcoin ATM whereas for Hawala you'd have to trust the honour system (thus at least 2 parties). Bitcoin is digital whereas Hawala requires exchange of money in person. In OP's example this gives him the flexibility of not having to prearrange a transaction.
mrb 6y ago
«send money to your relatives back home» → I suggested to the recipient we use Western Union, but he had been banned from WU. Thus demonstrating the censorship-resistant value of Bitcoin. Other services we briefly considered seemed like I would have to first go through a verification step which would have taken ~24 hours, so not a solution. Remember our transaction was made in under 1 hour. «SMS banking» → Non existent in our situation (US recipient) «Hawala» → Maybe, but unworkable in our situation. None of use have used Hawala, we wouldn't even have known WHERE to look for Hawala providers... Thank you for demonstrating my point. Nothing could have beaten Bitcoin/crypto in this instance.

by noja 6y ago

kseistrup 6y ago

I agree. I regularly send money from Denmark to unbanked friends in shanty towns in Zambia through World Remit — it works 24/7 as fast as an sms. https://www.worldremit.com/en https://www.worldremit.com/en

uberswe 6y ago
I didn't know about these services and it's great that they exist. What makes bitcoin different is that it eliminates the need to trust a third party such as a bank to handle the transaction.
- the-dude 6y ago
  You just need a Bitcoin ATM in every shanty town. Easy.
  - notahacker 6y ago
    Even then, you'd have to trust the third party that maintains the ATMs...
    - the-dude 6y ago
      Whoosh?
      - notahacker 6y ago
        I wasn't sure whether the snark was for the size of the logistical hurdles the much-hyped "trustless solutions for the unbanked" face or the proposed solutions invariably involving some sort of bank, but it's always worth underlining the latter part...
- Shacklz 6y ago
  Except that it doesn't. You still need someone to put up and maintain ATMs, apps, exchange-sites etc. that allow for quick and easy transfer and exchange of bitcoin. People think this is all easy until things go wrong: Who do you appeal to if you get scammed? What do you do if you pay someone online with bitcoin who then just doesn't deliver what you've ordered? Who do you call if someone attached some kind of skimmer to a bitcoin ATM? Don't get me wrong, there's so much wrong with the current banking system, and I really hope someone or something manages to disrupt it, but Bitcoin is no solution to that.
  - maclured 6y ago
    > What do you do if you pay someone online with bitcoin who then just doesn't deliver what you've ordered? This is the big problem with crypto. Trust moves around. But there is one solution: escrow backed by smart contracts - see here for one implementation [1] Personally I think what we'll see in future is people being offered the option of going through existing institutions as a form of insurance for the reasons you mention, but an alternative on offer for people who just want to minimize fees or who don't think they'll need those conflict resolution services. [1] https://particl.wiki/learn/marketplace/mad-escrow/ https://particl.wiki/learn/marketplace/mad-escrow/
    - tonyjstark 6y ago
      what if the "smart" contract has a bug? Also now I have to trust the smart contract developer
      - maclured 6y ago
        TBH I imagine developing smart contracts is clunky right now, like developing using AWS Lambda frameworks was a few years ago. But the tooling will improve. Perhaps it could be possible to digitally sign a smart contract's version, linking it to some proof of automated test coverage, or some other open way of verifying that it works as intended - e.g. attach the test suite and test results to the contract somehow and sign them. If you weren't happy with the quality of tests or their coverage, etc, you could decide not to use the smart contract.
- kseistrup 6y ago
  That's right. But… Ten+ years ago we were all told that the decentralised cryptocurrency would enable the unbanked masses to make micropayments to one another — and indeed, we could do that in the first few years. However, the mining fees are so exorbitant these days that micropayments end up being very expensive, at least percentage-wise. I didn't have any expectations about the bitcoin exchange rate ten years ago, but the “cheap micropayments” expectations were blown to pieces a long time ago. Bitcoin Lightning, is that so simple that even my mother could use it without my help? For me that's the acid test.
  - fthbv 6y ago
    Bitcoin Cash (BCH) works like original Bitcoin. It has no artificial blocksize limit, and has less than $0.01 transaction fees (1 sat/byte). She could use BCH. Just open Bitcoin.com app on phone, tap "SEND", "Scan a QR code" (or enter email, or phone number, or BCH address), and slide. Video: https://twitter.com/rogerkver/status/1179037602499837954 https://twitter.com/rogerkver/status/1179037602499837954
- opportune 6y ago
  How do you buy Bitcoin without going through a trusted third party? How do you cash out? Do you read the source code of your wallet software and scour the bitcoin source code for security breaking bugs?
- dragontamer 6y ago
  How do we know that the Bitcoin ATM actually spit out cash? We can prove that A transferred BTC to B thanks to cryptographic signatures. But what if the ATM machine (turning BTC into USD or whatever) on the other side fails? You still have to trust 3rd parties whenever you do an "off chain" transaction. ------ As long as BTC has huge volatility, it fails as a store of value. Swings up, or down, will incentivize "games" to be played with regards to any BTC / USD exchange.

qqii 6y ago

Thank you for sharing, I never knew that was a thing. If you don't take the comment at face value there's obviously differences between the two systems: Bitcoin is well known globally whereas Hawala in a subset of countries. In OP's example he has to trust the Bitcoin ATM whereas for Hawala you'd have to trust the honour system (thus at least 2 parties). Bitcoin is digital whereas Hawala requires exchange of money in person. In OP's example this gives him the flexibility of not having to prearrange a transaction.

mrb 6y ago

«send money to your relatives back home» → I suggested to the recipient we use Western Union, but he had been banned from WU. Thus demonstrating the censorship-resistant value of Bitcoin. Other services we briefly considered seemed like I would have to first go through a verification step which would have taken ~24 hours, so not a solution. Remember our transaction was made in under 1 hour. «SMS banking» → Non existent in our situation (US recipient) «Hawala» → Maybe, but unworkable in our situation. None of use have used Hawala, we wouldn't even have known WHERE to look for Hawala providers... Thank you for demonstrating my point. Nothing could have beaten Bitcoin/crypto in this instance.