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> Should also note that MasterCard crypto transactions almost certainly won’t be settled on the blockchain. Not with $8 Bitcoin transaction fees. They could ea

by 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.
PragmaticPulp 6y ago
You’re ignoring the consumer’s transaction fee for making the purchase in the first place. Who pays that? Even if you turn this into a credit card that a consumer pays off once a month, how many consumers want to pay $8 for the privilege of paying their credit card bill? Also, $8 is just the current transaction fee, with virtually zero vendors accepting Bitcoin. If Bitcoin became popular, the transaction fees would become prohibitively expensive. The transaction fees have been in the $60 range before, and that’s still before any widespread vendor adoption. Bitcoin isn’t usable for transactions at scale. It’s by design. Bitcoin has rejected proposals to increase the block size. Bitcoin holders don’t want anyone doing anything with Bitcoin other than holding it
- 14 6y ago
  Wouldn’t MC just buy thousands of BitCoins then just keep track of how many they owe you and not actually interact with the block chain every time?
  - PragmaticPulp 6y ago
    Yes, that was my point in the higher comment: > Should also note that MasterCard crypto transactions almost certainly won’t be settled on the blockchain This is just an exchange service where Mastercard collects exchange fees, in the same way that PayPal offers cryptocurrency payments.

by runeks 6y ago

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.

PragmaticPulp 6y ago

You’re ignoring the consumer’s transaction fee for making the purchase in the first place. Who pays that? Even if you turn this into a credit card that a consumer pays off once a month, how many consumers want to pay $8 for the privilege of paying their credit card bill? Also, $8 is just the current transaction fee, with virtually zero vendors accepting Bitcoin. If Bitcoin became popular, the transaction fees would become prohibitively expensive. The transaction fees have been in the $60 range before, and that’s still before any widespread vendor adoption. Bitcoin isn’t usable for transactions at scale. It’s by design. Bitcoin has rejected proposals to increase the block size. Bitcoin holders don’t want anyone doing anything with Bitcoin other than holding it

14 6y ago
Wouldn’t MC just buy thousands of BitCoins then just keep track of how many they owe you and not actually interact with the block chain every time?
- PragmaticPulp 6y ago
  Yes, that was my point in the higher comment: > Should also note that MasterCard crypto transactions almost certainly won’t be settled on the blockchain This is just an exchange service where Mastercard collects exchange fees, in the same way that PayPal offers cryptocurrency payments.