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Supplier insolvency has nothing to do with money transfer. And if you think that you can "lock bitcoin" into an account to avoid this, you obviously don't know
by 323 5y ago
Supplier insolvency has nothing to do with money transfer.
And if you think that you can "lock bitcoin" into an account to avoid this, you obviously don't know much about how these things work. Hint: you can also "lock dollars" today, it's called "escrow". But it wasn't used in WireCard (I take your word for it, I don't know the case).
Explained like I'm five: BMW will not accept it's bitcoin being locked for 90 days, so that it's supplier can be sure it will receive it's pay. Because if BMW would have accepted such a thing, it would pay today, not 90 days later. So crypto doesn't solve any problem here, because BMW doesn't want this problem solved.
And today, the supplier would use "factoring" so that it can receive the money instantly, instead of 90 days later, and the bank which provides the factoring service will make sure to take it's money from BMW later. Hint: you need capital to be able to provide factoring, since it involves credit risk, so crypto can't replace that either directly (it could with some fancy smart contracts that pool liquidity and yield)
- TekMol 5y agoBMW will not accept it's bitcoin being locked for 90 days The way I see the future, BMW will not only lock their Bitcoin for 90 days but much longer. And not only the Bitcoin they owe to one supplier. But a large portion of their Bitcoin. Aka their virtual bank account. They can still use their account however they like. But if one of their suppliers feels that the balance goes dangerously low, the supplier can block further spending or settle everything.
- johnday 5y agoSurely suppliers want to be paid? Accumulating a huge pile of IOUs is of zero benefit to someone who has actual real-world costs, such as taxes, payroll and capital outlays.
- TekMol 5y agoWhat do you mean by "be paid"? Usually, one is "paid" when "the money is in the bank", right? And this is what happens here. The initial step is to create a bank and then "payments" happen there. As for how to pay someone who is not "customer" of this bank, see my answer to this question: https://news.ycombinator.com/item?id=29227788 https://news.ycombinator.com/item?id=29227788
- jessaustin 5y agoLots of firms, especially those whose value is based partially on "predictable" profits, want to schedule payments in Q2 rather than Q1.
- danlugo92 5y agoLightning transactions are final. Anything else is FUD.