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Bitcoin transaction costs are very high so I’m assuming all these payment processor transactions will be off-chain. Do you think that having so many off-chain t

Bitcoin transaction costs are very high so I’m assuming all these payment processor transactions will be off-chain. Do you think that having so many off-chain transactions that are essentially converting USD reduces the perceived value of BTC or raises it?

imtringued 6y ago
It would raise it because more people will use it, but it would also eliminate all the usual "crypto" marketing reasons to put money into Bitcoin.
fearface 6y ago
Yes
thebean11 6y ago
Why would it reduce the value? Off-chain transactions are something the core Bitcoin team are very much in favor of.
- postalrat 6y ago
  That sounds like they are in favor of not using bitcoin.
  - MrMan 6y ago
    If your purchasing power is calculated in bitcoin but your purchasing in some other currency, there is no real problem there. Bitcoin network can get used one per day for settlement, and the rest of the time use visa digital coins! Which they call dollars or euros, some differently named legacy meatspace fiat. Then bitcoin is free to just swim around in libertarian platonic ideal of freedom from societies obligations and rules
  - thebean11 6y ago
    They are in favor of not using the L1 Bitcoin blockchain for small payments. L2 solutions, both decentralized ones like the lightning network and centralized ones like Visa are still "using Bitcoin" as a currency, even though they are not using the L1 blockchain.
    - deleted 6y ago
      [deleted]
    - amznthrwaway 6y ago
      This is very much how the US stock market works. Stocks aren’t actually traded in real-time, but instead are netted and eventually settled through DTCC. Similarly, BTC will just be a transmission mechanism between multiple large, centralized, highly regulated, trusted entities, which will perform all of the work.
  - tylersmith 6y ago
    Instead of using Bitcoin, the transaction network, they are using their transaction network to transact bitcoins, the asset. The chain gets used primarily for settlements in this model.
freeone3000 6y ago
It sounds more like Visa will let you settle your statement in BTC than actually using it as a processor.
kevinak 6y ago
It's just on-chain layer 1 transactions that are somewhat expensive. The lightning network solves this and works great, can do thousands of transactions per second and has close to 0 fees. Feels like magic to use it :)
- imtringued 6y ago
  Visa is a competitor to the lightning network. What makes you think that people will prefer lightning over Visa?
- ketamine__ 6y ago
  It's magic until you realize you need to spend $15 to get off chain to buy a coffee. And then you realize you aren't ready to commit a bunch of cash to a speculative currency (or investment) so that you can buy coffee. Also, you will need to file taxes for your coffee if your bitcoin goes up after you bought it. Fun!
  - kevinak 6y ago
    The idea is to never go off-chain, so no need to close your channel(s). And aren't you already committing cash if you're "in" bitcoin? The tax filing doesn't sound so bad in the long run. I'm sure someone will write some nifty tool to extract whatever payments you've done.
    - nonameiguess 6y ago
      Arguably, the tax filing sounds like the single worst part of it. Imagine if you really used Bitcoin for every purchase you make in a normal tax year. Suddenly how much you pay in taxes depends on the path integral of the exchange rate over the entire period. That's an absolute accounting nightmare. Now you have a huge incentive to batch all of your purchases at market low points to minimize tax burden and you're stuck trying to beat the market just to buy groceries. That isn't something I want to have to think about.
      - 6y ago
matheusmoreira 6y ago
All trading within exchanges already happens outside the blockchain. This allows them to offer low or zero fees since transactions only cost money when users withdraw their cryptocurrencies. I'd say it adds a lot of value.

imtringued 6y ago

It would raise it because more people will use it, but it would also eliminate all the usual "crypto" marketing reasons to put money into Bitcoin.

fearface 6y ago

Yes

thebean11 6y ago

Why would it reduce the value? Off-chain transactions are something the core Bitcoin team are very much in favor of.

postalrat 6y ago
That sounds like they are in favor of not using bitcoin.
- MrMan 6y ago
  If your purchasing power is calculated in bitcoin but your purchasing in some other currency, there is no real problem there. Bitcoin network can get used one per day for settlement, and the rest of the time use visa digital coins! Which they call dollars or euros, some differently named legacy meatspace fiat. Then bitcoin is free to just swim around in libertarian platonic ideal of freedom from societies obligations and rules
- thebean11 6y ago
  They are in favor of not using the L1 Bitcoin blockchain for small payments. L2 solutions, both decentralized ones like the lightning network and centralized ones like Visa are still "using Bitcoin" as a currency, even though they are not using the L1 blockchain.
  - deleted 6y ago
    [deleted]
  - amznthrwaway 6y ago
    This is very much how the US stock market works. Stocks aren’t actually traded in real-time, but instead are netted and eventually settled through DTCC. Similarly, BTC will just be a transmission mechanism between multiple large, centralized, highly regulated, trusted entities, which will perform all of the work.
- tylersmith 6y ago
  Instead of using Bitcoin, the transaction network, they are using their transaction network to transact bitcoins, the asset. The chain gets used primarily for settlements in this model.

freeone3000 6y ago

It sounds more like Visa will let you settle your statement in BTC than actually using it as a processor.

kevinak 6y ago

It's just on-chain layer 1 transactions that are somewhat expensive. The lightning network solves this and works great, can do thousands of transactions per second and has close to 0 fees. Feels like magic to use it :)

imtringued 6y ago
Visa is a competitor to the lightning network. What makes you think that people will prefer lightning over Visa?
ketamine__ 6y ago
It's magic until you realize you need to spend $15 to get off chain to buy a coffee. And then you realize you aren't ready to commit a bunch of cash to a speculative currency (or investment) so that you can buy coffee. Also, you will need to file taxes for your coffee if your bitcoin goes up after you bought it. Fun!
- kevinak 6y ago
  The idea is to never go off-chain, so no need to close your channel(s). And aren't you already committing cash if you're "in" bitcoin? The tax filing doesn't sound so bad in the long run. I'm sure someone will write some nifty tool to extract whatever payments you've done.
  - nonameiguess 6y ago
    Arguably, the tax filing sounds like the single worst part of it. Imagine if you really used Bitcoin for every purchase you make in a normal tax year. Suddenly how much you pay in taxes depends on the path integral of the exchange rate over the entire period. That's an absolute accounting nightmare. Now you have a huge incentive to batch all of your purchases at market low points to minimize tax burden and you're stuck trying to beat the market just to buy groceries. That isn't something I want to have to think about.
    - 6y ago

matheusmoreira 6y ago

All trading within exchanges already happens outside the blockchain. This allows them to offer low or zero fees since transactions only cost money when users withdraw their cryptocurrencies. I'd say it adds a lot of value.