5 ms·

Instantaneous payments exist, I use them several times a day, with traditional banking. I never quite understood what problem bitcoin was supposed to solve beyo

Instantaneous payments exist, I use them several times a day, with traditional banking. I never quite understood what problem bitcoin was supposed to solve beyond anonymity.

anonporridge 5y ago
These are instant payments, not instant settlement. Your bank abstracts the underlying inter bank settlement complexity and aggregates all the minor transactions and transfers that individuals do to a small number of larger settlement transactions, likely on the SWIFT network. When you make a payment, that transfer of money isn't instantly settled. The instantaneous feeling is a service that the bank provides you, but it's an illusion. There are similar experiences being built now on top of bitcoin, like http://strike.me http://strike.me, although the lightning network that Strike and CashApp are building upon actually is instant finality, unlike Visa/Paypal. This is why comparing bitcoin to Visa or PayPal is fundamentally flawed, since those are both layer 2/3 networks on top of SWIFT. The proper comparison is with other settlement networks that create finality, like SWIFT. Where SWIFT may take days to create final settlement of a transfer, bitcoin takes ~1 hour depending on how much confidence you want. Where SWIFT is secured by nation state monopolies on violence and global banking gatekeeping, bitcoin is secured by the most powerful computer network on the planet that no single nation state has the power to disrupt. Bitcoin is open and permissionless and anyone and everyone can join. SWIFT is tightly permissioned because it relies heavily on exclusive networks of humans who trust each other.
- pgwhalen 5y ago
  At a high level this comment is correct, but SWIFT is not a settlement network. A message on the network does not actually represent the movement of money between accounts.
smolder 5y ago
Bitcoin only gives you a pseudonym wallet ID. I'd say it's less anonymous than cash, since everyone has the ledger.
Gigachad 5y ago
I'm not convinced bitcoin solves _any_ problems at all. It isn't anonymous at all, exchanges are the gatekeepers of the whole system and they have to comply with local laws. Canada was found to be directing exchanges to not allow cashing out of certain coins and putting the coins through a mixer just automatically blacklists them from being cashed out. Bitcoin does not provide sufficient privacy which allows exchanges to freeze tainted coins and authorities to track down real identities.

Instantaneous payments exist, I use them several times a day, with traditional banking. I never quite understood what problem bitcoin was supposed to solve beyond anonymity.

anonporridge 5y ago

These are instant payments, not instant settlement. Your bank abstracts the underlying inter bank settlement complexity and aggregates all the minor transactions and transfers that individuals do to a small number of larger settlement transactions, likely on the SWIFT network. When you make a payment, that transfer of money isn't instantly settled. The instantaneous feeling is a service that the bank provides you, but it's an illusion. There are similar experiences being built now on top of bitcoin, like http://strike.me http://strike.me, although the lightning network that Strike and CashApp are building upon actually is instant finality, unlike Visa/Paypal. This is why comparing bitcoin to Visa or PayPal is fundamentally flawed, since those are both layer 2/3 networks on top of SWIFT. The proper comparison is with other settlement networks that create finality, like SWIFT. Where SWIFT may take days to create final settlement of a transfer, bitcoin takes ~1 hour depending on how much confidence you want. Where SWIFT is secured by nation state monopolies on violence and global banking gatekeeping, bitcoin is secured by the most powerful computer network on the planet that no single nation state has the power to disrupt. Bitcoin is open and permissionless and anyone and everyone can join. SWIFT is tightly permissioned because it relies heavily on exclusive networks of humans who trust each other.

pgwhalen 5y ago
At a high level this comment is correct, but SWIFT is not a settlement network. A message on the network does not actually represent the movement of money between accounts.

smolder 5y ago

Bitcoin only gives you a pseudonym wallet ID. I'd say it's less anonymous than cash, since everyone has the ledger.

Gigachad 5y ago

I'm not convinced bitcoin solves _any_ problems at all. It isn't anonymous at all, exchanges are the gatekeepers of the whole system and they have to comply with local laws. Canada was found to be directing exchanges to not allow cashing out of certain coins and putting the coins through a mixer just automatically blacklists them from being cashed out. Bitcoin does not provide sufficient privacy which allows exchanges to freeze tainted coins and authorities to track down real identities.