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MasterCard to open up network to cryptocurrencies

• PragmaticPulp 6y ago
  These stories usually spur more enthusiasm for buying cryptocurrency, but ironically those buyers aren’t interested in spending cryptocurrency using their MasterCard. They’re hoping other people will buy cryptocurrency from these announcements, driving the price up. Or, more likely, they’re just hoping other people will buy cryptocurrency and not use it in these spending systems. Spending cryptocurrency would result in selling that cryptocurrency, which would drive the price down. That’s not what cryptocurrency investors actually want. Should also note that MasterCard crypto transactions almost certainly won’t be settled on the blockchain. Not with $8 Bitcoin transaction fees. They’ll just be denominated in cryptocurrency and people can deposit/withdraw in certain cryptocurrencies. MasterCard only needs to buy and sell on the blockchain as needed to provide an FX window. The actual transactions would be stored in traditional database systems (aside from customer deposits/withdrawals, just like Coinbase) Why? Because MasterCard would get to act as an exchange and collect exchange fees. Exchange fees are a great way to charge consumers for spending their own money in 2021, when normal credit cards actually pay people 1-2% to use them. Cryptocurrency’s inefficiency is their financial upside.
  • PretzelPirate 6y ago
    I’m in the minority in that I’d like to be able to spend my cryptocurrency in a way that: 1. The card handles also selling some off for taxes every transaction and put that in an interest-accruing account. 2. The card tracked my capital gains for each transaction for easy reporting on taxes. 3. The card provider will help manage fees - I’d rather bulk deposit funds to a layer2 and have fee-less payments over having to wonder what the current network fee is. I’d prefer if it wasn’t MasterCard since I use Visa cards, but I can’t complain too much. The reason I want this is that I have a lot of money in cryptocurrencies and I’d rather not sell them into other assets at the moment.
    • ValentineC 6y ago
      > I’d prefer if it wasn’t MasterCard since I use Visa cards, but I can’t complain too much. I'm curious: is this because your preferred bank mainly issues Visa cards, or are there things about MasterCard that you don't like?
      • PretzelPirate 6y ago
        My bank mainly issues Visa cards. I’ve had multiple cards throughout my life, and I’ve never had a master card before. I’d like to just add this feature to my existing cards that I already have set up for payments. Completely off topic: What I really want in life is: 1. If I could have a virtual credit card that could act as a proxy card and would let me use different cards based on the items I was purchasing (ex: if I’m getting gas, one of my credit cards may give better rewards) 2. A virtual mailing address that would resolve to my current address when used with any shipping provider. I move every few years and hate mail forwarding and updating my address everywhere.
        • throwaway1777 6y ago
          Settle down and have kids. Your problems will be solved.
          • jkepler 6y ago
            Not necessarily if one works for a firm that moves you every few years. My family and I have lived in 5 cities in the past six years, due to changing work assignments.
            • stolsvik 6y ago
              I hope they pay you well. Moving is the worst.
    • Slartie 6y ago
      > 1. The card handles also selling some off for taxes every transaction and put that in an interest-accruing account. > 2. The card tracked my capital gains for each transaction for easy reporting on taxes. How should it ever do that? It would basically have to limit you to spend Bitcoin that you acquired over that exact same card (like when you buy Bitcoin via PayPal) and that you hold in a virtual wallet provided by that card network operator. Otherwise they'd be unable to tell how many $ you paid to acquire the Bitcoin you just spent. As a related question: how comfortable would you be with a cryptocurrency-backed electronic payment card that would require you to keep your Bitcoin in the wallet of Visa/MasterCard/whatever (or their associated banks or crypto custodians) in order to spend them?
  • tehlike 6y ago
    A friend of mine basically put it this way: bitcoin can't become medium of exchange before it becomes medium of value. You can read this as: if you are holding btc, it's in your best interest to hold more without selling.
    • PragmaticPulp 6y ago
      If it’s in your best interest to buy and never sell, why would anyone want to use it for exchange? Bitcoin’s deflationary nature discourages spending and selling, by definition. The high transaction costs discourage it even further.
      • T0Bi 6y ago
        How is bitcoin deflationary when it (currently) has a fixed inflation?
        • edm0nd 6y ago
          got em
        • PragmaticPulp 6y ago
          Contrary to the pop-culture definition, inflation isn’t purely driven by fiscal policy or money supply. Supply and demand (aka cost-push inflation and demand-pull inflation) are the main drivers. Fiscal policy modulates these factors, but inflation existed long before fiscal intervention. Bitcoin adoption is a deflationary process because an increasing number of people are competing over a fixed (ultimately) supply of Bitcoin. If more people want Bitcoin, the price goes up. Why do more people want Bitcoin? Because the price goes up. The cycle reverses when the price starts going down.
        • koboll 6y ago
          If bitcoin is a currency, then the prices of things in bitcoin have fallen over time. What cost 40,000 BTC a decade ago now costs 1 BTC. But bitcoin is more of an asset than a currency, so speaking of it in terms of inflation / deflation leads to oddities, like this.
  • teekert 6y ago
    Yeah, that is basically what all the exchanges do. The blockchain does not support that use case at all.
    • liquidify 6y ago
      Some blockchains don't support that use case. Others do.
  • soheil 6y ago
    > Spending cryptocurrency would result in selling that cryptocurrency, which would drive the price down. That’s not what cryptocurrency investors actually want. Is this necessarily true? If you have a merchant that accepts cryptocurrency why would that drive down the price? (e.g. Tesla [1]) [1] https://www.cnbc.com/2021/02/08/tesla-buys-1point5-billion-in-bitcoin.html https://www.cnbc.com/2021/02/08/tesla-buys-1point5-billion-i...
    • PragmaticPulp 6y ago
      What do you vendors do with any of the money you pay them? They spend it on paying employees and buying raw materials. It’s getting spent (sold) one way or another. Tesla is no exception.
      • soheil 6y ago
        It requires a network-effect for it to work, if more and more vendors accept crypto then how is that fundamentally different that fiat currency to buy raw materials and pay employees with?
        • PragmaticPulp 6y ago
          In a hypothetically pure Bitcoin economy, that could work. But If we all switched to Bitcoin, the speculative upside would be exhausted and we’d be stuck with all of Bitcoin’s flaws and limitations. If you think $8 transaction fees are high now, how bad do you think it will be if every transaction was suddenly a Bitcoin transaction? Trick question, because Bitcoin has hard used block size limitations and it literally cannot support transactions at scale. By design. With the speculative upside removed, why would anyone choose to use Bitcoin? Why Bitcoin over any other cryptocurrency with significantly better technology?
          • soheil 6y ago
            I don't understand why you're assuming we need a pure Bitcoin economy for there to be a network effect. If sufficient number of vendors accept Bitcoin that will be enough to create a network effect. Once you have a network effect with a size less than the size of the entire economy there will always be upside to own Bitcoin since that size can continue to grow.
  • runeks 6y ago
    > Should also note that MasterCard crypto transactions almost certainly won’t be settled on the blockchain. Not with $8 Bitcoin transaction fees. They could easily settle merchant balances on the blockchain. An $8 fee is nothing compared to the revenue of a merchant. Assuming e.g. a 1.5% credit card fee, a merchant pays $8 in fees when receiving ~$500 in payments.
    • Consultant32452 6y ago
      It won't take long before Visa/MasterCard either adopt the Lightning network or create their own layer-2 service to alleviate transaction fees.
      • PragmaticPulp 6y ago
        Why would they use any blockchain when they could get the same job done with a database and legal agreements, like they have been doing for decades?
        • Consultant32452 6y ago
          If you send me bitcoin in exchange for a widget, I'm eventually going to want to spend that bitcoin and I may not be doing that on the Visa network. At some point they have to offload those transactions back to the blockchain so the coins can actually get to my wallet. If they go the DB route as you suggest, they would basically be creating Visa Bucks, backed by bitcoin (which they'd have to buy), that can only be spent on the Visa network.
          • PragmaticPulp 6y ago
            > At some point they have to offload those transactions back to the blockchain so the coins can actually get to my wallet. The vast majority of Bitcoin exchange participants choose to keep their coins in the exchange, not their own personal wallet. > If they go the DB route as you suggest, they would basically be creating Visa Bucks, backed by bitcoin (which they'd have to buy), that can only be spent on the Visa network. Every exchange uses a DB backend. They only engage with the blockchain when someone performs a withdrawal to another institution that they don't have an agreement with, such as when you withdraw to your wallet. And you will pay the transaction fees for that blockchain interaction ($8+ currently). If you're not paying transaction fees for other operations on their platform, it's clearly not touching the blockchain. Every exchange operates this way. It isn't a new concept.
  • deleted 6y ago
    [deleted]
  • whatshisface 6y ago
    >Spending cryptocurrency would result in selling that cryptocurrency, which would drive the price down. That’s not what cryptocurrency investors actually want. That's a misunderstanding of how these things work. If selling drove the price down, then the price would never go up! Why? Because nobody can buy without a sale on the other side of the transaction. The common belief that selling lowers the price comes from the fact that if you put out a big sell-now order on a market, it will eat through the asks sitting there already. However in the slightly longer term others will put up new asks, up to the equilibrium where the price is close enough to the perceived value that there's no money to be made, after tax, by going in to move it closer. The phrase "Sell! Sell! Sell!" is based on the idea of selling at any price because you want to get rid of it so badly, but that's not a normal sale. That only happens when a party suddenly realizes that they have too much of something, not when they are doing everything as expected.
    • PragmaticPulp 6y ago
      A system for spending Bitcoin would inherently put sell orders in at market price (directly or indirectly). This consumes the highest priced bids and moves the price down. It’s the same story with any currency. Basic foreign exchange concepts.
      • whatshisface 6y ago
        Smart sellers don't sell everything at the market price as soon as they can, because that would cut through the crust of fair asks into the mantle of waiting opportunists. Instead they spread it out, at a rate the ongoing volume can bear.
        • ivalm 6y ago
          If you sell Bitcoin every time you buy bread then you just sell whenever. It will be a large flow of market orders even if there aren’t enough asks.
          • whatshisface 6y ago
  • bouncycastle 6y ago
    I think MasterCard will use a different type of cryptocurrency than you are familiar with, called "stablecoins", like the USDC and/or DAI. These are pegged to the USD and never go up or down. Most likely, they will use things like a "state channels" for the actual transactions. State channels are like pre-paid cards, where the channel gets settled after the entire card is spent. But why? Well, cryptocurrency makes sense over traditional currency, because it's programmable, auditable & composable with many other dapps that exist on the blockchain.
  • systemvoltage 6y ago
    What's the point of an unstable, volatile, frantically manipulated currency that is susceptible to social media pump and dump schemes (Elon + Doge)? Currency and its exchange rate needs to be relatively stable for the world to put trust into it. Saying that BTC is stable, but the rest of the world's fiat currency is fluctuating makes no sense. US dollar provides stability and security, I feel confident that a cappuccino will cost me $4. Crypto's volatility deters me from using it, simply put. There is no buffer that you would have with a Treasury. Converting from BTC to coffee makes BTC exchange rate go down.
    • scsilver 6y ago
      These currencies will inflate in value as their network grows wider. Each new user adds value like a telephone network. Eventually, there will be a point where everyone who wants to be connected is connected, they have bought the bitcoin they want and bitcoin prices reach an steady state. At that point, it should be stable enough to use as a currency.
      • PragmaticPulp 6y ago
        It’s fascinating to watch MLM logic sweep the tech world. Get in on the ground floor of this opportunity, then convince all of your friends to buy in, then they convince all of their friends... Once the speculation upside is gone, why would anyone want to buy Bitcoin? That’s the real question.
        • centimeter 6y ago
          MLM dynamics actually do apply to monetized assets in some cases. Cf. “Bubble Theory Of Money”, Gresham’s Law. Once the speculation upside is gone, you would use Bitcoin because it’s the best available reserve and settlement asset. What are your other options? Inflationary USD or Yuan? Few rational actors would prefer to hold those.
          • ForHackernews 6y ago
            > Inflationary USD lolz https://www.macrotrends.net/countries/USA/united-states/inflation-rate-cpi https://www.macrotrends.net/countries/USA/united-states/infl...
  • olalonde 6y ago
    Bitcoin is used as a speculative investment today only because it is so underpriced. Once its value stabilizes, its use in day to day transactions will grow. > Should also note that MasterCard crypto transactions almost certainly won’t be settled on the blockchain. And neither are USD transactions. In fact, USD doesn't even have a blockchain! The great thing with Bitcoin is once you want to cash out your Bitcoin, you can take it with you "on chain" without any intermediary (and it's a bit more convenient than carrying bags of cash).
    • steeve 6y ago
      How can it stabilize when it has a fixed amount of BTC?
      • anm89 6y ago
        No currencies are "stable" inflationary, deflationary or neutral. Stabilize means that volatility reduces, not ceases to exist.
        • arcticbull 6y ago
          Yes there are, thanks to positive control from central banks. That's the point of central banks. Provide and maintain stability through the active expansion and contraction of supply against an index.
          • anm89 6y ago
            Show me a currency that has the exact same inflation figures every month for a single year and I'll send you a bitcoin. Or alternately, just view a currency index like the DXY to see very closely that nothing comes close to this. Here is what some real inflation data looks like (as viewedin terms of CPI). It can't even decide if it wants to stay positive or negative on a monthly basis. https://tradingeconomics.com/euro-area/inflation-rate-mom https://tradingeconomics.com/euro-area/inflation-rate-mom
            • 6y ago
  • beaner 6y ago
    I'm a cryptocurrency holder and I would love it if it were easier to spend.
  • simonebrunozzi 6y ago
    > They’re hoping other people will buy cryptocurrency from these announcements, driving the price up. Mostly right.
  • agumonkey 6y ago
    I wonder what kind of subtle systemic effect will twist the whole crypto thing on its head to the point people will forget what it was in the first place.
  • anm89 6y ago
    And the people buying it even though they don't want to spend via mastercard are smart to do so. They understand that it's building up the network effects, creating onramps, and improving the ecosystem. Over the long run I highly doubt mastercard will be a meaningful player in the crypto space but they definitely have the ability to hasten its adoption.
  • X6S1x6Okd1st 6y ago
    There's many ways to value cryptocurrency. One of them is largely driven by network effect, except it's directed edges of accepts and pays in. This is a huge addition to the network with a giant amount of accepts edges.
  • devname 6y ago
    I want people to earn and spend Bitcoin Cash. Almost all bitcoiners want this.
    • cheaprentalyeti 6y ago
      If all bitcoiners wanted that Bitcoin Cash would be worth more than Bitcoin.
  • pmontra 6y ago
    > Spending cryptocurrency would result in selling that cryptocurrency Not necessarily. I could give you the address of 0.001 BTC over the MasterCard network and you give me something I can eat (I don't know if this is how it will work, but why not?) No BTC is converted in fiat currency. You can hoard you BTCs for years or change them in dollars as soon as you receive them. Your choice. Edit: I must give you the private key too.
    • PragmaticPulp 6y ago
      Doesn't work. You can't guarantee that you haven't memorized the private key. You can't guarantee you haven't traded the same key multiple times. The only way the receiver can truly guarantee ownership of the BTC is to put it in a transaction, which costs money.
      • pmontra 6y ago
        They downvoted you but technically you are right. And yet MasterCard could make it work because double spending those coins would be a fraud and they'll go after their double spending customers. They can guarantee the coins with the weight of their legal department.
        • PragmaticPulp 6y ago
          Regardless, "spending" Bitcoin in an economy where Bitcoin isn't the dominant currency will, on average, result in downward price pressure. Unless you restrict the transactions to only be among Bitcoin users, which isn't going to happen because the providers make their money from exchange fees. It's strange that so many commenters are going through mental gymnastics to pretend that the only rational thing to do with Bitcoin is to buy or trade it, but never sell it.
  • 3np 6y ago
    I'm not so sure. A move like this can increase the confidence that the Bitcoin price won't go down in the long-term - that is, someone do wants to spend their bitcoin in the future, and signals of greater market confidence increase the perceived likelihood of that. The more I believe bitcoin is here to stay, the more comfortable I feel allocating savings in it. This time is also a bit different; 2017 was almost entirely retail, this time it's a lot more businesses and institutions driving the BTC market.
  • koonsolo 6y ago
    Mastercard just tries to be relevant in an environment where they will not be relevant anymore. Just look at the Nano cryptocurrency for example: 0 fees and <1 second transactions. You can send 0.00001 dollar or 9 billion to anyone in the world at any time. All you need is a phone. Crypto is going to disrupt a lot of things. If it's not clear by now, you will be in for a surprise.
    • Sargos 6y ago
      Mastercard is a payment support platform. They take the burden off of the business owners and let them focus on their business instead of the minutia of interfacing with the financial system. That doesn't go away with cryptocurrencies. In fact it might be more needed than ever as there are now multiple payment networks with lots of intricacies such as coin storage, keeping track of transactions for taxes, etc. Visa and Mastercard are likely still going to be important in the future just for the sheer fact that business owners will take at least a decade to update their backend stack to be sophisticated enough to handle the various payment APIs, UX problems, etc that crypto brings. With Visa and Mastercard your existing PoS terminals still work (now with crypto) and you can continue focusing on selling books or groceries or whatever else you do instead of being a financial systems engineer.
      • koonsolo 6y ago
        People can pay with their phone using a simple QR code. Merchants can check on any computer with a web browser. How complex does Mastercard make it right now? Like I said, it's a dinosaur ready to go extinct.
        • Sargos 6y ago
          That's from an end users perspective. From a merchant's perspective if they provide that QR code they now have the additional burden of custody of a bunch of crypto assets which means learning about, installing, making a specific bank account to sell the coins, dealing with tax burdens, etc which is a lot of work and risk for someone already overworked and stressed by their primary business. Or they can just use a payment network like Visa or Mastercard and not have to worry about any of that. You pay with BTC or ETH and the merchant receives USD. Everyone's happy. The merchant doesn't have to hire an additional crypto-specialized IT person or spend 6 months diving down the rabbit hole like we did. They just run their business.
  • vmception 6y ago
    > Spending cryptocurrency would result in selling that cryptocurrency, which would drive the price down. That’s not what cryptocurrency investors actually want that’s really assuming a lot a closed loop cryptocurrency transaction does not result in selling mastercard may or may not be offering that capability mastercard offering that capability makes the cryptocurrency proponents vision a reality
    • PragmaticPulp 6y ago
      They're not interested in making the vision of cryptocurrency a reality any more than it enhances their bottom line. Mastercard is offering exchange services. They will collect exchange fees on transactions, just like PayPal and other providers. They won't even bring blockchain into this any more than necessary. They'll handle it in databases like everyone else, only engaging with the blockchain as necessary for deposits and withdrawals.
    • tshaddox 6y ago
      In fact, for every transaction where a unit of cryptocurrency is bought, that same unit is also sold.
      • vmception 6y ago
        yeah sold for a candy bar and the merchant still has the cryptocurrency and pays their overhead costs in the same cryptocurrency who buy their own candy bars from a different merchant in cryotocurrency Payment networks like mastercard integrating cryptocurrency make this more practical instead of handwaiving a gradual organic adoption idea
  • bmurphy1976 6y ago
    Four or five years ago I mined Dogecoin on a lark using a laptop for a month. I converted that to BTC at some point and it's worth more than I ever anticipated. It won't change my life but I could have some fun with the money. I'm not inclined to transfer it to USD, but I'd happily spend some of it were it easy to do so. Maybe buy some stocks, upgrade my PC, or get a PS5 and some games? Sure, why not! I'm only sitting on it because it's a hassle to use it, not because I believe it's going to suddenly grow 100x in size. If I really cared about the growth I'd immediately move it to some index funds.
    • PragmaticPulp 6y ago
      > I'm not inclined to transfer it to USD, but I'd happily spend some of it were it easy to do so. Spending it is effectively the same thing as converting it to USD. Why are you hesitant to convert it to USD to buy something, yet you'd be happy to have a 3rd party service handle the BTC-USD conversion in the background and collect their profit on the exchange? There's no free lunch. Mastercard isn't doing this out of a desire to offer free services to the people. They're collecting profit by offering worse exchange rates than you can get on an exchange by yourself. Same story for PayPal and other providers.
      • bmurphy1976 6y ago
        There's a big difference. Having to find an exchange and hook everything up to my bank account is a hassle (especially when I have no need to do it). Sending BTC to somebody using an Android app isn't and is something I have done frequently (e.g. donating BTC to parties who have helped me or offer something I enjoy). I don't want a world where I have to transfer the BTC to USD to use it, I want a world where I can just use it. MasterCard acting an an intermediary is fine with me, somebody has to bootstrap this.
    • argvargc 6y ago
      200% YoY average return, and you'd move it to index funds? https://www.casebitcoin.com/images/stories/charliebilello_returns_btc.png https://www.casebitcoin.com/images/stories/charliebilello_re...
  • scotty79 6y ago
    When Visa and MasterCard will warm up to bitcoin they will have ideal product for all the bitcoin millionaires. When you are long on bitcoin you almost don't care about volatility. Because you can't predict the future the only good time to buy bitcoin is when you have too much dollars and the only good time when to sell bitcoins is when you have not enough dollars. Sure, now you have 10 mln dollars in BTC at all tine high, and 2 mln after price drops but in day to day purchases it doesn't matter. MasterCard could offer joint dollar-bitcoin account that works as follows: You have some amount of dollars on that account, whenever you pay for something price is deducted from dollar balance. If dollar balance is insufficient then some portion of bitcoin is sold automatically from your bitcoin balance to give you some multiples of thousands of dollars. You could also have manual trading available if you want to gamble a bit and buy some bitcoins if it dropped to 20% of last ATH or sell some ... I don't know when... when you are drunk and think you can predict the end of the bull run.. Not sure how much bitcoins would someone entrust MasterCard with current bankruptcy law but if it was significant enough amount then all bitcoin millionaires would get to use their fortunes totally hassle free.
    • rawtxapp 6y ago
      This is very similar to what I'm currently doing, just borrowing against my Bitcoin holdings using MakerDAO, I have good liquidity on a day to day basis and my Bitcoin is still appreciating.
      • oillio 6y ago
        Is this a long term solution? Or do you plan on selling Bitcoin to pay back the loan when you think we are near the top?
        • rawtxapp 6y ago
          As long as there's no bugs in the smart contract, I don't plan on ever paying down that debt, since I expect the value of BTC to rise much faster than the value of my debt. My liquidation price is very low and if it were to reach that, it would mean a catastrophe anyways.
  • deleted 6y ago
    [deleted]
  • cableshaft 6y ago
    > ...ironically those buyers aren’t interested in spending cryptocurrency using their MasterCard. > They’re hoping other people will buy cryptocurrency from these announcements, driving the price up. So what? Does every investor use the products of the companies they invest in? Professional investors don't care about that, they care about how well the company is doing and what they think its trajectory will be (up or down), not whether they personally will use the services offered.
    • PragmaticPulp 6y ago
      Bitcoin isn't a company, though. It's an asset. Bitcoin itself doesn't do better or worse or grow in value. It's just moving up and down according to supply and demand.
  • UncleOxidant 6y ago
    > Spending cryptocurrency would result in selling that cryptocurrency, which would drive the price down. An economy based on BTC would be highly deflationary as no one would want to spend - why buy something today when it'll be cheaper in a week or a month? Scarcity isn't necessarily a good feature for a currency. Ideally supply of a currency should increase as more people enter the economy. Such a currency would aim for stability instead of aiming for the currency itself to increase in value (as happens for BTC or even physical gold).
    • emteycz 6y ago
      Finally some solution for consumerism that could work! Yay Bitcoin!
    • nybble41 6y ago
      > why buy something today when it'll be cheaper in a week or a month? Because you need it today? We already see this all the time in subsets of the market which experience deflating prices. If you wait a year to buy that fancy device you're wanting there will most likely be a better model available at a lower cost. People still buy the current model, though, because there is a cost to waiting which offsets the expected price deflation.
      • PragmaticPulp 6y ago
        It's a different situation when the currency itself is deflationary, not the goods being purchased. Instead of thinking in terms of buying a phone, think of this in terms of capital allocation and investment. Deflationary currencies are designed to accrue value to those who don't use them. An economy built on the idea of incentivizing people to not spend any money is not good at all. Everyone knows about the downsides of excessive inflation, but deflationary spirals are a well-known economic problem. In short: Deflation reduces demands for goods, which causes producers to lower production targets, which causes people to be laid off, which further reduces demand for goods and so on. A hypothetical Bitcoin economy rewards early adopters massively at the expense of newcomers. The current wealth situation is already heavily biased toward older generations, even on an age-adjusted basis (see charts: https://www.wealthmanagement.com/client-relations/illustrating-wealth-gap-between-boomers-and-millennials https://www.wealthmanagement.com/client-relations/illustrati... ). If you think that's bad, just imagine a Bitcoin economy where the underlying financial system accrues wealth to the older holders, at the expense of newcomers to the system. People love Bitcoin because they think they're the ones getting in at the ground floor, getting wealthy at the expense of the new arrivals. The love for Bitcoin would flip very quickly as young people realize they're deeply on the losing end of that deal.
  • gt565k 6y ago
    You are so wrong. Spending crypto using a card is actually what people want in order to avoid taxes on crypto as it's treated as a security from the IRS tax perspective. Anyone who has made money on crypto would love it if they can just spend the crypto as currency and buy every day things with it and remove the tax liability from having to convert to fiat. 15% tax capital gains, no thanks, let me spend it on food and furniture.
    • gnaritas 6y ago
      You are wrong, the ability to spend it in no way removes your tax liability. Currency traders still owe taxes on their gains, it doesn't matter what currency it is, if you make gains you owe taxes. You don't owe money because you convert to fiat, you owe money because you made gains.
    • martamorena923 6y ago
      OMG in what country do you live? 15%??? We have to pay 50% on this in Canada, well at least the ones who are in the top earning bracket. I would gladly pay the 15%. I mean how greedy is it to make these kind of gains in crypto and then trying to avoid a measly 15% of tax lol.
      • xsmasher 6y ago
        Are you sure you pay 50% in tax on the profits? A quick google suggests that 50% of the profits counts as income, which is then taxed at your income rate. 50*50 = 25% in the top bracket. In the US long-term cap gains is 0%, 15%, or 20% - not far off from 25%.
    • draaglom 6y ago
      _people_ may believe that but I don't think the IRS does. Spending crypto that has appreciated in value on goods and services is still a taxable event for CGT purposes.
      • PragmaticPulp 6y ago
        Exactly. "Spending" the cryptocurrency is just convenient UX over the exchange process. Using a credit card that abstracts the details doesn't get you off the hook from paying capital gains tax.
  • dalbasal 6y ago
    Well... Cryptocurrency people are hoping for all sort of things... that's part of why enthusiasm can be currently quantified at a $1trn. While I'm sure you're right for most of the current bets (bitcoin owners are long, after all), there's something to be said for blind, dumb momentum. Connecting more people & financial nodes to the network, however disintermediated, for whatever reason. Maybe the "mastercard model" of denominating in bitcoin and clearing yourself in dollars is an early version of how bitcoin transaction costs actually get to normal. That's not unlike how stocks, bonds, forex & such are exchanged. I know. I know. Irony. Inevitable though, I think. Pretty much all currency & currency-like stuff gets moved around through clearing houses. Direct blockchain transactions are the theoretically ultimate transaction in the same way that NYSE transactions are theoretically ultimate. Actual stock transactions generally happen within a broker, the broker's broker or whoever else is between them and the actual stock market. The logic is similar. TLDR... People are giddy or hypocritical because they're long (or short) on bitcoin. That doesn't mean that momentum isn't momentum.
  • Triv888 6y ago
    > Should also note that MasterCard crypto transactions almost certainly won’t be settled on the blockchain. That is almost certainly wrong... otherwise, they could claim to have bitcoins and would not really need any?
  • yarcob 6y ago
    > Exchange fees are a great way to charge consumers for spending their own money in 2021, when normal credit cards actually pay people 1-2% to use them Credit card companies in the US are a special kind of evil. They charge huge fees, force vendors not to pass the fees on to customers, and then pretend to be the consumer's best friend by returning a bit of the fees to them. They insert themselves between buyer and seller, drive prices up, and their customers think they are saving money.
    • PragmaticPulp 6y ago
      Paying with Bitcoin or any other cryptocurrency requires the customer to pay the transaction fees. Regardless of what you think about credit card companies, which payment method do you think the average consumer would choose? 1) Pay by credit card, get 2% cash back, reserve option to reverse charges if vendor fails to deliver, don't lose all of your money if you lose your credit card. 2) Pay by Bitcoin, pay $8 transaction fee, wait 10-30 minutes for transaction to be confirmed, resubmit if transaction fee was too low, no recourse if vendor runs away with your money, lose all of your money if you forget your password. Realistically, any crypto-as-payment service will either charge the merchants large fees (to cover risk, volatility, exchange, transaction costs) and/or collect profit on the exchange rate. There's no free lunch, but the lunch is definitely not cheaper on the Bitcoin side for average transactions.
      • ric2b 6y ago
        Nothing stops you from having Bitcoin credit cards. In fact they already exist. Dollar bills don't have any of the advantages you mentioned either. How fast and secure do you think mailing them to some company is? A lot of these arguments are really just cherry-picking whichever portion of the financial system best suits your argument at the time and pretending they're only possible if they're built on top of pieces of paper.
        • PragmaticPulp 6y ago
          > Dollar bills don't have any of the advantages you mentioned either. How fast and secure do you think mailing them to some company is? No one mails paper dollar bills around. Bitcoin always sounds fantastic when compared to these straw-man alternate universes where everyone is mailing dollar bills around, but let's stick to reality where no one does that. > pretending they're only possible if they're built on top of pieces of paper. USD isn't literally built on top of paper money. Cryptocurrency, however, is literally invented out of thin air by programmers. New cryptocurrencies are released every week. Even Bitcoin gets forked at times.
  • me551ah 6y ago
    I don't get why bitcoin is worth so much.Bitcoin is called a store of value like gold, but gold has inherent uses. If the price of gold went to zero then you could still use it to make jewellery or use it for electrical conductivity. If the price of bitcoin goes to zero then it's worthless. It's also not environmentally friendly and bitcoin mining uses up 0.21% of the world's power supply. And all of this energy is used to calculate billions of hashes per second out of which all but one will be discarded. There is also increased regulatory focus from governments who see it as a threat , with India even going so far as to suggest they would ban it.
    • krsdcbl 6y ago
      I'd argue that the demand for gold jewelry would drop accordingly to the gold price falling to zero. Jewelry is a secondary form of said value store, nothing inherently useful
      • OOPMan 6y ago
        Well, unlike Bitcoins, I can put gold jewellery in a sack and use it as a cosh ;-)
    • alantrrs 6y ago
      We live in the information age. Information has a lot of value, most software companies' main asset is information. Visa, Mastercard and all the banks are companies that are valued very highly because they provide the infrastructure for managing money. Bitcoin is not just the asset, it is the network and the infrastructure. It's a whole system that works semi autonomously by by aligning the incentives of all of its members. Wouldn't you say that's valuable?
    • BTCOG 6y ago
      Do you typically just copy/paste the same comment on every Bitcoin article rather than think of nuanced commentary? Are you a part of ArcticBull's astroturfing campaign? Edit: I see that you've copy/pasted it once but some other commentary on Bitcoin seems mostly genuine.
    • 6y ago
  • ca98am79 6y ago
    I am very interested in spending cryptocurrency using my MasterCard, especially and only if it does not result in a capital gains transaction that I have to report on my taxes. If I have to report each transaction to the IRS, I am not interested and will not spend it. If I do NOT have to report it, I will use it all the time
  • dman7 6y ago
    We're not actually certain whether Mastercard will include volatile cryptocurrencies, such as Bitcoin. Reading this article (https://arstechnica.com/tech-policy/2021/02/mastercard-will-support-cryptocurrencies-but-not-the-ones-you-think/ https://arstechnica.com/tech-policy/2021/02/mastercard-will-...), their requirements suggest supporting stablecoins (i.e. USDC). These cryptocurrencies are pegged to the dollar and should be backed by a reserve. In that case, your argument about price movements doesn't apply here.
    • TylerE 6y ago
      That's a rather heavy should. I'd bet dollars to pesos at least some of them are operating fractional reserve schemes, or have the reserve "invested" in crypto.
      • dman7 6y ago
        True. I'm mainly referring to the fact that some stablecoins, such as Tether, are not honest about their actual reserves: https://news.ycombinator.com/item?id=25788409 https://news.ycombinator.com/item?id=25788409
    • PragmaticPulp 6y ago
      Stablecoins are, in theory, just a cryptocurrency representation of actual money in the bank somewhere. I'm all for it, if it's properly audited and confirmed that the funds are in place. I'm a huge proponent of cryptocurrency technology as long as it doesn't: 1) Depend on wasting ever-increasing amounts of electricity doing arbitrary useless proof-of-work 2) Create a new currency out of thin air, when all we really want is a way to move our existing money around. I don't want to have to buy an arbitrary cryptocurrency from some early adopters at an inflated price just to move my USD from point A to point B.
  • michaelmrose 6y ago
    If your credit card gives you 1% back but charges walmart 2% and walmart takes this 2% into account when setting their prices then you aren't getting paid to use your credit card you are paying 1%.
    • kristianp 6y ago
      Are you talking about flyer miles when you say the card gives you 1% back? (I'm not in the USA, so I might not know what you're referring to)
      • gpanders 6y ago
        Many credit cards literally give cash back (in the form of a statement credit).
  • oogetyboogety 6y ago
    How will it compare to what Square does? Centralization always occurs at the point of the exchange, I guess. It does seem a little less criminal than what Robinhood was doing.
  • oorion 6y ago
    Bitcoin Cash functions as peer to peer electronic currency with low fees. No need for Mastercard when using it.
• cbradford 6y ago
  I thought the whole idea of Bitcoin was to get out of the financial system that Mastercard is a central piece of.
  • neals 6y ago
    Can't really call it freedom if you're not going to allow specific companies to join and use it though...
  • PretzelPirate 6y ago
    The original idea of Bitcoin was to have a currency that wasn’t in government control - not to keep the government and big banks away from it. The current world of cryptocurrency gives you a choice of trusting big banks or not, and having the same economic opportunities regardless of the level of trust you are comfortable with.
    • the_local_host 6y ago
      > The original idea of Bitcoin was to have a currency that wasn’t in government control I've never understood this. With an immutable ledger of all transactions, governments simply have to make it illegal to transact anonymously (or pseudonymously), watch the blockchain, and investigate any un-attributed transactions. It would actually enhance governments' surveillance capabilities against anyone not willing to run the risk of trying to obscure their identity, which I expect would be most people. If you can intimidate the participants, the inescapable math of the whole thing becomes a tool that can be used against those participants. You don't need to control a currency if you can control anyone who holds it.
      • solosoyokaze 6y ago
        1. It would be prohibitively expensive for the government to track down every blockchain transaction IRL to find the identity behind the wallet (if even possible). This cost rises with adoption. 2. Different crypto currencies have different roles. If you want to avoid traceability altogether, use zCash.
• ArtTimeInvestor 6y ago
  The game Paypal currently plays with Crypto is the closest thing to printing money I have ever seen: Their users can "buy and sell Bitcoin" and pay "no fees". How does Paypal make money? "From the spread". The difference between bid and ask. And who sets the spread? Drumroll ... Paypal! Since you cannot transfer your bitcoins out, when you sell your bitcoins, Paypal pays you whatever they like. So far, Paypal only offers this in the United States. And do the Americans take this offer? Yes! They buy over a billion dollars worth of Bitcoin per month on Paypal. If this continues, it means that every American from toddler to senior buys $50 worth of Bitcoin per year. Other companies in the finance industry will want the same free lunch. Run on crypto in 3..2..1.. This will continue until the first companies will start to offer you to transfer your crypto out. Then slowly the market will normalize. Now everyone has crypto. In their paypal/mastercard/bank/whatever account and/or in their own wallet. Looks like chances for broader crypto adoption are pretty good.
  • abluecloud 6y ago
    Same with their forex rates. What's new.
    • deleted 6y ago
      [deleted]
  • sschueller 6y ago
    That is outright scam in my view. They never have to hold bitcoin. They may as well sell paypal coin. Robinhood and Revolut do the same thing. If you can't transfer out your bitcoin, you don't have any bitcoin.
    • liquidify 6y ago
      They couldn't do that. If they didn't actually have any crypto, in the event of a large scale increase in price combined with a large scale cash out, Paypal would have to eat the difference from buy to sell price. They would lose their shirt. At minimum, Paypal is buying some percentage of the crypto sales in actual crypto to act as a hedge. However, it is more likely they are closer to 1 to 1 backing since they probably believe that there will be large upward movements in the future and they believe they can make money on both the spreads and the actual bitcoin (assuming they ever care to sell it).
• sschueller 6y ago
  I don't want mastercard supporting crypto. I want the merchants and payment providers supporting crypto so I do not have to use mastercard and their "rules". If I want to pay for porn or send a donation to wikileaks I do not want mastercard/paypal or anyone else other than the government (if it's legal I should be allowed to pay for it) deciding if that is ok.
  • PragmaticPulp 6y ago
    Bitcoin transaction fees are currently around $8. My credit card pays me 2% to use it. No one wants to use the Bitcoin blockchain for average transactions. No one is buying Bitcoin as anything other than a speculative investment right now.
    • vortico 6y ago
      Bitcoin is only good for large transactions, but there are 1000000 cryptocurrencies that solve this problem such as BCH, USDT, and LTC. Use one of them.
      • PragmaticPulp 6y ago
        Honestly, why? My credit card pays me 2% to use it. If there’s a problem with my transaction, I click some buttons and the card company reversed the charges. If I lose my card, I call them up and get another one overnight without losing all my money. Why would I give all of that up, pay exchange fees on both ends of a transaction, pay transaction fees (however small), and wait longer for my transactions to clear?
        • exdsq 6y ago
          I regularly invoice internationally. I can get a crypto payment through with a small transaction fee (a few cent for $20k) which clears in ~5 minutes, or I can get a payment that takes several days to clear with a larger fee. Crypto works perfectly for me!
• grishka 6y ago
  So how would they ruin it with KYC/AML this time?
  • superkuh 6y ago
    No, no. KYC/AML ruins actual means of getting Bitcoin. This ploy for siphoning off money by Mastercard is perhaps the one thing in reality that is not good for Bitcoin intrinsically. No need for KYC here.
• impostervt 6y ago
  Unclear what this actually means. Can I pay my credit card bill using crypto? That's a taxable event and a pain in the butt to track. Can I buy stuff from merchants using crypto, and they receive crypto? Useful, but most merchants will want fiat currency, so someone on the chain will have to convert it to dollars, which again would be a taxable event.
  • loceng 6y ago
    I don't get it - you're trying to avoid paying tax into the society that you're using, benefitting from? Edit to add: Many replies are acting as if it's difficult to automatically, digitally track conversions and taxes, to then pay your taxes? It's a digital "currency" we're talking about here.
    • mindvirus 6y ago
      I think the OP is noting that it makes taxes complicated. Imagine having to track and report every time you went to Starbucks to the IRS, which you would have to if you converted crypto to dollars to buy a coffee.
    • impostervt 6y ago
      No, I don't mean sales tax. I mean converting from crypto to fiat, in the US, is treated like capital gains. So you get to pay taxes twice on the event.
    • drcode 6y ago
      It's not about paying taxes, it's about not wanting to have to declare the cheeseburger you bought for lunch as a line item on your year-end taxes.
      • loceng 6y ago
        So how do you protect against the actions of bad actors - who otherwise then have free reign to do whatever the fuck they want in your "country"/area that you seem to not think you'll need to defend from bad actors? Or you want a wild west, free-for-all environment? In your own house, do you want to have control of who gets to come in or not? It's that same type of control that is inherently tied to security and safety.
• purple_ferret 6y ago
  What exactly does this mean? Basically what Visa is doing by facilitating the Coinbase card or something more involved?
• randomopining 6y ago
  Bitcoin = store of value. Network effect is reducing the chance of government intervention, as well as blockchain tail risks. Getting 1 of the 21 million bitcoins is like decentralized proof of saying "I had 48k worth of value in Feb 2021!" It locks in the value that you created forever. Otherwise governments will just keep printing money, and your value gets diluted arbitrarily. Assuming the mechanisms of protection for the blockchain holds, it should work out exactly as that.
  • nexthash 6y ago
    Sorry to burst your bubble, but if a government wants to prevent you from using a cryptocurrency it has many tools at its disposal. Firstly, they control the ground upon which you stand. If they don't like that you are using crypto, they will simply arrest you and charge you with a newly-formed crime like 'digital tax evasion'. Secondly, if they can't find who is using crypto, they have the power to shut down the Internet or simply censor requests. No ISP has the military force to prevent a government from walking through the door and cutting the cable. Point is, as long as you are on their turf, you will follow their rules. Unless you want to make your own rules, in which case you will have to fight the government, become the government, and realize that having no control over a currency being used in your turf can be really bad for you and your citizens. You have no control over its value to at least try keep the economy stable, and they will have nowhere to turn in event of a financial crime or scam. No courts, no recourse, no trust.
    • randomopining 6y ago
      1. As larger entities are getting into it, it will decrease the chance that the government cracks down. 2. There are obviously ways to transact anonymously, also P2P/OTC. 3. The government gets to tax all exchange crypto... easy revenue source.
      • catmanjan 6y ago
        How do you transact in crypto without internet? Maybe that's musk's long term plan with satellites
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• throwawaysea 6y ago
  The last thing I want is to help the MasterCard and Visa duopoly persist, given how many times these companies have polices others by instituting payment blocks on people like Wikileaks. I view cryptocurrency as an alternative to the current financial system and not something meant to be leveraged by these incumbents.
  • warkdarrior 6y ago
    People who want to avoid the "duopoly" can transact directly with the blockchain, no?
• kseistrup 6y ago
  Wirex is gonna use this, AFAIK. ⌘ https://wirexapp.com/ https://wirexapp.com/ (Use https://wirexapp.com/r/kseistrup https://wirexapp.com/r/kseistrup if you wanna sign up through a referral link.)
• maxkwallace 6y ago
  To everyone saying "my credit card pays me 2% to use it", no, your credit card charges the merchant 2.3%+ to use it, that gets bundled into the price, and they give you 2% of that as a kickback.
  • bagacrap 6y ago
    I'm not sure how that's different? When a merchant accepts cash, they have to pay for physical security and pickup, it's prone to theft or miscounting, etc. So cash isn't free. Accepting card payments is also not free. Merchant pays visa for convenience (to both merchant and customer); visa kicks some back to customer.
    • cesarb 6y ago
      I've seen this said a lot, but in my experience whenever a merchant has different prices for cash and credit card, the cash price is always lower. So whatever the merchant is paying to Visa and/or MasterCard, it's more than it costs to handle cash.
      • leighfuu 6y ago
        Traditionally the discount for cash in many professions is due to avoiding tax. i.e. a plumber will do a job for cheaper if they are paid in cash as they won't be declaring that work in their accounts - avoiding the ~20% tax that would be due otherwise.
        • BitwiseFool 6y ago
          While true, I know of many small businesses that give cash discounts because the credit card fees ruin the profit margin on small purchases. Sometimes they even lose money on transactions. For instance if you buy a scone for a $1.05, the credit card fees alone might come out to 38¢ for the merchant. This is why you often see "minimum card purchase $5" at coffee shops and small businesses.
          • 6y ago
• qwerty456127 6y ago
  What if we could just attach a MasterCard to a bitcoin wallet rather than a bank account and then use it to pay at any ordinary POS terminal so the conversion would be done seamlessly and the store would get ordinary money? Is this what they are going to implement?
• chenster 6y ago
  FOMO
• deleted 6y ago
  [deleted]
• deleted 6y ago
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• suikadayo 6y ago
  Everyone on this thread seems to be missing the point that they’ll be working with stablecoins on Ethereum and other smart contracts chains, and not Bitcoin.
  • Sargos 6y ago
    Hacker News is still trying to grasp Bitcoin so I feel like Ethereum is going to take another few years to even begin productive discussions.
    • seibelj 6y ago
      HN should have been on the cutting edge of crypto, given its “hacker” supposed ethos, but a large group of no-coiners couldn’t understand it and have posted the same tired arguments ad nauseum for years. There are a lot of people on HN who love and support crypto but the arguments are exhausting and you get nothing but downvotes. All of my friends and family I convinced to buy and hold have been texting me how I changed their lives. It’s just so sad to see what this website did to engineers who normally have open minds but were convinced to hate crypto.
      • whitepaint 6y ago
        I've read many good arguments against cryptos here. If 80% drop happens within the next month, nobody really would be surprised. Cryptos can still easily fail. I hold Ether (just it) because what they are doing is really extraordinary but gazillion things might go wrong with it, Bitcoin, and others.
        • lifty 6y ago
          Do you think the code will fail, the consensus model, or there are no uses cases? If you have concerns about this I would love to hear them. But if you are only afraid that the price can fall 90%, then who cares? Let it fall, there is too much hype anyway, to the point it has created great division between coiners and no-coiners. For example, the 2001 stock market crash, it cleared out projects based on fluff and the rest continued to build. I would reckon we would see a similar dynamic now, but probably with faster market cycles.
• maceurt 6y ago
  I am not big on cryptocurrency. Look how the price of these "currencies" fluctuate like crazy, because people buy and treat it like an investment. What is the actual current practical utility of cryptocurrency except for buying/selling illegal things online? People are so horny to get in on the next computer/iphone/etc that they forget that new ideas can fail.
  • solosoyokaze 6y ago
    There is a ton of utility in crypto. Here's one scenario I've never seen discussed but is absolutely real: Imagine you're an abused spouse or child who needs money to escape their situation. Opening up a bank account isn't an option for a lot of people, but anyone can instantly open a crypto "account" and start stashing a nest egg away from the prying eyes of their oppressors. Crypto is the only option for this, and I've seen it successfully used like this multiple times. The existing banking system favors those in power and those in good standing in the existing systems. If you're underage or financially dependent on an abuse spouse, it's a lot more obvious why you might want a way to store and transact money outside of that system.
    • nmfisher 6y ago
      Where is this nest egg coming from?
      • solosoyokaze 6y ago
        Friends, supporters, paid work... an increasing number of sources as more and more crypto infrastructure comes online.
    • thehappypm 6y ago
      This scenario is hard to imagine being worth a trillion dollars.
      • solosoyokaze 6y ago
        Think of it this way. How many people on earth can't easily get a bank account (people under the age of 18 included)? It's a huge number that suggests massive scale in that use-case alone.
• motohagiography 6y ago
  Given their volatility and lack of a derivatives market to drive liquidity, I wonder what the banking capitalization requirements for crypto-currencies will be. I can see the argument of "it's just another currency for exchange, how is this hard," but the difference today is it's super high volatility, without a rescue facility, and given bitcoin's public ledger of every bad person who has ever owned it, it is arguably less fungible than cash because MC would have to track the provenance of every block it had on its books. Your mastercard probably won't be a bitcoin wallet either due to card chip capabilities, and I'd bet heavily they will just support it as another virtual currency and do your real bitcoin settlement asynchronously on their back end in a hypothecated and risk-managed form, and even then it will be a private ledger with their bitcoin capital levels levered way up. IMO, the entire levered business model and capitalization requirements when applied to cryptos sets banks up for the squeeze to end all squeezes, like when countries demand delivery of their physical gold from bullion banks and it creates political instability, except next time it will be 4chan organizing to get delivery of their bitcoin. For an issuer to act as a bank maintaining a float of cryptocurrencies to facilitate settlement seems like a super interesting hard problem. Edit: this will probably be handled by reserving the right to pay you in bonds or IoUs instead of bitcoin, just like paper gold and silver today, which reduces the usefulness of doing your BTC payments through them in the first place.
  • 3np 6y ago
    CME has derivates. As do several other exchanges. Some argue that the derivates are actually part of driving price movements these days, but it's not the consensus yet. Interesting take, BTW - I don't see it as impossible. There's some possibility this is the greatest trojan horse ever (unless it was just inevitable just like the internet was).
    • hntrader 6y ago
      Derivatives are typically leading crypto spot markets (although recently it flipped for a while) It's been that way for a few years. I'm talking Bitmex, Binance derivatives, not CME.
• 0xcb0 6y ago
  I'm pretty sure Mastercard did know that there are a lot of CC companies that already use crypto. And they just want to get a share of that pie. And if they do it now, their share can still be enormous. If they just take the same percentage the use now for traditional payments, the will get a lot of exposure to crypto. And they might speculate that the whole sector will grow over the next X years. And just them onboarding, will make it more likely for this to happen. I use a crypto backed cc since nearly 1 year. It's NOT that you are paying in crypto, you still have to convert the coins to a stable currency and the top up your card with it. There are cards that 'make it look' like you are paying in crypto. But the do the same thing in the background.
• Kiro 6y ago
  The public thinks Bitcoin is the currency of hackers. Decentralized, technical, innovative and challenging the whole financial backbone. In reality... We have threads like this. Never seen so much hate for Bitcoin as on HN.
  • rantwasp 6y ago
    “People fear what they don't understand and hate what they can't conquer.” Bitcoin itself may end up being worthless or being a fortune. The block-chain technology is the revolutionary part that is here to stay and will only continue to grow in the future.
    • nexthash 6y ago
      Don't invest in what you don't understand is the #1 rule of investing. If you jump off the deep end without knowing what's at the bottom, you are at a high risk of losing what you put in. New technology always comes with this risk. That's kind of why most don't touch crypto - its far too technically complex for them to even comprehend the risks. If you've followed crypto and blockchain for long enough though, you realize that the risks are high and the value is low. It's a shitty technology, and a shitty investment. The cryptoverse is filled with volatility, no real-world "thing" to tie value back to, and scams upon scams. Blockchain is an innefficient, energy-guzzling excuse for a database. Oh but you forgot its decentralized So what? Most applications don't need decentralization - it makes them inefficient and slow. Why do you think the general trend of the world has been centralization into hubs, cities, and services? Here's a nice refuter of the blockchain hype: http://doyouneedablockchain.com/ http://doyouneedablockchain.com/ And of course, the classic: https://twitter.com/vgcerf/status/1019987651301081089 https://twitter.com/vgcerf/status/1019987651301081089
      • rantwasp 6y ago
        it’s okay to not see the potential. blockchain is more than a distributed database. in a distributed database someone is still in charge and can make decisions unilaterally about how the data is altered. in blockchain you have a bunch of entities that can transact with each other with zero trust and without the need of a central authority. that is the truly innovative aspect of the blockchain and what sets it apart.
• Consultant32452 6y ago
  How long will it take before the float on networks like Visa/Mastercard grant them the ability to perform 50% attacks on the blockchain? Note: I don't really understand how this all works, so if my question is silly, I'd love to learn.
  • RealityVoid 6y ago
    There is not _a_ blockchain but multiple and on Bitcoin this would not grant these payment processors any power to perform 51% attacks. I think currently it is out of the power of one single attacker to perform such a feat (maybe China?) And am not sure if they would even want to if they could since they would be very invested in the cosystem by that point. Overall, I think BTC is extremely secure.
• OnlyMortal 6y ago
  What could possibly go wrong?
• f430 6y ago
  This seems like a bad idea.
• nikolay 6y ago
  I am not sure who in their right mind will buy BTC at $48K a piece! There's nothing major that's has happened, yet, the bubble has inflated from $6K to $47K only because it's now harder to steal electricity in China and the rest of the world to mine bitcoins. Every week in Bulgaria we hear for a new electricity thieves who got caught and have stolen electricity for millions - often in the middle of nowhere like in small villages, farms, etc. Didn't China started to crackdown on miners last summer [0]? And, yes, all marketplaces are manipulated by the same miner cartels. I am not sure how China has allow this so far - especially when many used Bitcoin as a vehicle to export capital. So far, Bitcoin is wasting as much electricity as Argentina, but if this bubble keeps inflated so that the Chinese miners can stay in business, where are we going to end up soon? [0]: https://news.bitcoin.com/chinese-government-crackdowns-and-cheap-hydropower-miners-migrate-from-north-to-south-china/ https://news.bitcoin.com/chinese-government-crackdowns-and-c...
  • zionic 6y ago
    Mining participation does not change the issuance of new bitcoin. If there was 1 miner in the entire world the issuance would be the same. Please educate yourself more about crypto in general, understanding the core concepts only takes a few minutes of research.
    • nikolay 6y ago
      Why would I want to touch something laden with crime with a 10-foot pole?! And something so detrimental to climate? Bitcoin didn't, isn't, and is not gonna change anything - it's nothing but a speculation tool! Can we please stop inflating its bubble? Yes, there are meaningful cryptocurrencies, but Bitcoin holds no future - it's like sticking to VHS when there's Bluray or to a 3.5-inch floppy when there's MicroSD.
      • hanniabu 6y ago
        > Why would I want to touch something laden with crime with a 10-foot pole?! So I guess you should get rid of your USD....
    • 6y ago
• lupajz 6y ago
  Anybody kind here whou would explain me how is this different from Binance card https://www.binance.com/en/cards https://www.binance.com/en/cards ? Of course Binance card is not available everywhere but excluding this restriction these two are the same system, right ?
• sktrdie 6y ago
  Aliens: look at this species they've come up with this weird concept of "money". Some of them have more & can obtain more resources with it. Because they can't trust each other they need a book-keeping system that uses more resources than they needed in the first place! Quite ironic.
  • whitepaint 6y ago
    If you could provide a better solution, a Nobel Prize is waiting for you. It is truly extraordinary what people have achieved. Especially since around 18th century (wonder why..).
• Trumpi 6y ago
  What a clever way to tie an identity to a crypto wallet!
• wayeq 6y ago
  a positive story about crypto? unleash the HN Boomer kraken!
• pragmaticCrypto 6y ago
  People often think crypto == bitcoin. I think there are 4 categories that people should think about: 1. Crypto as asset class (BTC/ ETH) 2. Crypto for transactions - usually pegged to a dollar or other fiat eg. USDC 3. Crypto as a utility/ asset backed token - filecoin etc 4. fraud. I think mastercard visa etc will focus on #2 above and it will bring extremely powerful dynamic to these ecosystems
  • PragmaticPulp 6y ago
    #2 (crypto transactions backed by traditional currency) is far and away the most useful of these categories. Unfortunately, it doesn't offer the speculative upside of something like Bitcoin. People don't actually care if their transactions are carried across a blockchain or a database, as long as it gets done. Bitcoin is hot specifically because it's so detached from any real-world use cases or metrics that might put bounds on its price. There's a narrative that because no one can determine an upper limit for Bitcoin price, there's infinite upside. Of course that narrative is no different than any other arbitrary asset, but the Bitcoin narrative is strong because it's been in the news so much.
    • qqii 6y ago
      Pegged tokens like USDC and USDC can still be used to speculate in DeFi platform like AAVE with pretty lucrative returns.
      • PragmaticPulp 6y ago
        Where do the returns come from? Does the interest return come from actual investments? Or is it paid forward by newcomers? The latter is the literal definition of a ponzi scheme. There's no free lunch when it comes to generating interest.
        • rodiger 6y ago
          Borrowers pay more than lenders. You get a cut of those fees as interest. There's risk there of course, but it isn't magic money or a ponzi.
• orbots 6y ago
  Anyone know what the "select" cryptocurrencies are? The focus on Bitcoin's lack of intrinsic value and energy use is really getting boring. I read Hacker News comments for more information on a story. How about some of that for a switch? Go bitch about intrinsic value and ecological disaster on one of the other bitcoin threads please.
  • hanniabu 6y ago
    > Anyone know what the "select" cryptocurrencies are? Ethereum is pretty much where everything is happening and has been the case for a few years. On that platform there's multiple projects that are interesting and show promise like Uniswap, Aave, Synthetic, Maker, Vechain, Filecoin, etc.
• crazydoggers 6y ago
  There’s always lots of bluster and comments about cryptocurrency with things like this and not always much concrete information. I think as a tech community here on HN we should try to focus on why these changes are occurring so quickly and what the repercussions are. Let’s talk constructively about the risks and opportunities more than we do about who’s buying, who’s selling, on and on.... is it a bubble.. does it have value, etc etc. Clearly it’s here to stay and clearly large chunks of our economy will soon be dealing with it. So let’s instead talk about constructive ways to move regulation forward. Expand education and communication etc. For instance I have a concern that we’ll leave a large percentage of people further behind as digital cryptocurrency becomes a larger part of the economic system.
  • JulianRaphael 6y ago
    I like the spirit of your comment - that's the actual hacker mindset. Way too many comments on Bitcoin/Crypto-related submissions on HN are just knee-jerk reactions that don't really contribute to a constructive conversation. When I started lurking on HN in 2010, it was a very different culture. I miss these days! Regarding your concern around economic inequality: why do you think that people would fall further behind? I'd argue that cryptocurrencies have had a positive effect on inequality, particularly in countries like Argentina, Nigeria, Venezuela, etc. Without cryptocurrencies, people in these countries - particularly the ones who don't have assets in other countries - would have lost a lot of wealth due to the financial instability of their respective economies. As cryptocurrencies are here to stay, I'd even argue that they are currently still underpriced and hence provide many people from the lower income strata of society in 1st world countries with an opportunity to improve their financial wellbeing. This might not be true for people who don't understand technology, but then I ask myself what the current system has to offer to improve inequality for those who lag behind economically and in terms of education. A constructive idea how we could avoid further deterioration in terms of economic inequality: countries / communities could set up cryptocurrency trusts similar to Norway's Oil investment funds that are funded from cryptocurrency that was mined from e.g. excess energy in the grid from renewables. They could then invest a certain percentage of their cryptocurrency in trustworthy DeFi platforms to further increase yield. Returns from these trusts are invested into causes that benefit the public, e.g. education, health care, etc.
• hoka-one-one 6y ago
  I think this is a miss guided application and it's a sign that the cryptocurrency space is struggling to find a use case beyond as a store of value. Please upvote my very original opinion that hasn't been rehashed on nearly every cryptocurrency thread on hacker news.
• Thorentis 6y ago
  I wonder where this puts crypto's such as Bitcoin Cash (BCH), whose main benefit is having a faster and cheaper network? Is the final card Bitcoin has to play, the fact that it has the brand awareness to hide its faults behind the MasterCard/Visa network?
• tboyd47 6y ago
  It's important for people to read the actual press release: https://mstr.cd/3tLaPZM https://mstr.cd/3tLaPZM There's good info here which will be new info to many. Why did they do this? It turns out that about a third of Nigerians report using or holding cryptocurrency (!). https://www.statista.com/chart/18345/crypto-currency-adoption/ https://www.statista.com/chart/18345/crypto-currency-adoptio... Second place are Vietnam and the Phillipines. For all, the #1 reason was for remittances. Haven't we all had it drilled into our heads by CNBC and the likes that crypto was nothing but a big speculative bubble? Woops, I guess that was a big lie. > Users will also benefit from Wirex’s Cryptoback™ rewards program, which automatically gives customers up to 1.5% back in Bitcoin for every purchase made in-store. It does appear that they will support transfers to external wallets (!), contrary to what has been claimed elsewhere in this thread -> https://wirexapp.com/help/article/how-do-i-transfer-cryptocurrency-from-my-wirex-crypto-account-to-an-external-crypto-wallet-0056 https://wirexapp.com/help/article/how-do-i-transfer-cryptocu... The card is not yet available to US customers, although, apparently it is in the works -> https://news.bitcoin.com/wirex-launching-us-after-receiving-state-money-transmission-license/ https://news.bitcoin.com/wirex-launching-us-after-receiving-...
  • nexthash 6y ago
    Set this chart to "all" and tell me that this price movement is not a bubble. There is no earthly reason for why a "BitCoin" is worth $47,459.66 as of this post. https://www.coindesk.com/price/bitcoin https://www.coindesk.com/price/bitcoin Cryptocurrency adoption in 3rd world countries like Nigeria, Vietnam, and the Philippines is not a good thing. It's actually really sad, because it means they cannot rely on or trust their country's currency. Therefore, they are forced to place bets in a volatile and dangerous game to keep their life savings. If Bitcoin or Ethereum or Dogecoin go bust, they will still lose everything, because there is no trust, recourse, or regulation tolerated in a decentralized system. Well, not much worse than their home country's currency, I guess.
    • hntrader 6y ago
      I can say the same things about artwork or gold. To me these things are totally useless, paint on a canvas (when I could just look at a photo of the same thing) and a shiny piece of metal, no utility whatsoever, who cares? Well the value doesn't come from one person's assertion of value, it's supply and demand. Apparently enough people like paint on a canvas and shiny metal for their own reasons.
• georgeplusplus 6y ago
  So what exactly is MasterCard offering that relates to cryptocurrencies? What I gathered from the article was “it was planning to offer support for some cryptocurrencies on its network this year” But does not seem to go into detail further than that.
• smithza 6y ago
  Serious question: what happens when nobody wants their HW assets to verify the blockchain? What happens when the infrastructure falls apart or the demands on the blockchain verification outpaces the number of machines available to verify? Can you buy/sell btc off of the internet? Why would we want a future with digital assets that are inherently relying upon things that can fall apart with an EMP (not trying to be a doomsayer/fearmonger)?
  • hanniabu 6y ago
    It was have to be a global catastrophe, and at that point there's honestly probably more important things to worry about. Nevertheless, the blockchain can be rebooted from a checkpoint. This hasn't been done before but there's no doubt it's doable and I'm sure a somebody will put forth a proposal in the coming years for this.
• Solvitieg 6y ago
  It's bizarre that in this tread, the US dollar is treated like an immaculate flawless tool for transferring value. But in every thread about economics, its agreed the US dollar lacks trusts, is being manipulated by the fed, and is the leading cause of gross wealth inequality.
  • nexthash 6y ago
    What is your evidence for these claims? Bitcoin and other cryptocurrencies go through multiple price fluctuations a day. The American dollar currently underpins and backs a majority of the world's financial system [1]. Sure it isn't flawless, but its way better than something that has no backing from anything. I would prefer to use the currency issued by the world's most powerful independent state, because they are probably gonna be around for a while. [1] https://en.wikipedia.org/wiki/International_use_of_the_U.S._dollar https://en.wikipedia.org/wiki/International_use_of_the_U.S._...
    • Solvitieg 6y ago
      I'm not making claims, I'm posting my opinion about what I read on this website.
      • lotsofpulp 6y ago
        Because it’s still the best option. I know my USD tomorrow is going to be worth less than USD today. But I don’t think there is a better option for some portion of my assets, and I still trust that it will be useful to me in the future. But I also don’t keep more than a few years worth of USD, instead I hold other equities that I believe will increase in value relative to USD. USD gives me liquidity, but not necessarily a good store of value. Other assets give me store of value, but not liquidity.
        • jkepler 6y ago
          So, compare the volatility of Apple stock to Bitcoin for the last year or two. Which is more volatile, and which one has a long-term downward rate of volatility?
• plaidfuji 6y ago
  This is being wayy overanalyzed. MasterCard is in the business of payments. Millions of people now have a bunch of idle money sitting in a potential payment vehicle outside of their current network. Anything MasterCard can do to start to siphon off some of that value is good for them. This has nothing to do with ideology, philosophy or technology. And d4mn right it’s a good sign for the Bitcoin bulls.
• marshmallow_12 6y ago
  the tesla bandwagon is being jumped on by mastercard.
• villgax 6y ago
  Lol, now Indian government will be all hunky dory with such news articles related to crypto in the country.
• 4AoZqrH2fsk5UB 6y ago
  Im bullish on Monero becoming a winner in the space. It’s private and transaction fees are pennies. Mentioned elsewhere in the thread was a larger problem: the amount of time it takes to settle up. I’m very curious how this will be addressed.
• known 6y ago
  Is this why Musk promoting cyptocurrencies.
• farfignugenx 6y ago
  Checkout what amptoken.org is doing. A Mastercard employee is one of the advisors to the project