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> you still need to have a bitcoin exchange accessible, both to the sender and to the receiver, right? No, you only need an exchange accessible to the sender.

by sshine 4y ago

> you still need to have a bitcoin exchange accessible, both to the sender and to the receiver, right? No, you only need an exchange accessible to the sender. The receiver can receive Bitcoins; they don't even need to be online while receiving them, because they can agree on a fixed address. > in the cases of unbanked areas that exchange needs to be physical and able to give out physical cash That is the case for traditional currency exchanges. It is not the case for Bitcoin. The missing part that you might object to is of course: If the receiver eventually wants to convert their Bitcoins into some other currency (USD, or some local, not hyper-inflated currency), they do need some kind of exchange. But they can choose to wait until they have access, they can send Bitcoins themselves, and they can meet with people to exchange Bitcoins with the risk that involves. None of these scenarios requires a traditional currency exchange to be available in their area. Running such a currency exchange is presumably too risky / not worth it. But being an individual Bitcoin trader might, because individuals are exposed to and assess different risks.

SahAssar 4y ago
> No, you only need an exchange accessible to the sender. I said in my original comment that the recipient will need to exchange it to be able use the funds. Unless there has been a huge upswing in bitcoin usage for payments in the areas of the world remittances typically flow to that will be true. > That is the case for traditional currency exchanges. It is not the case for Bitcoin. I said unbanked since many remittances are sent by and received by people who are unbanked. How do you exchange something from/to bitcoin if you have no bank account (which usually means no way to pay or receive traditional money online) and there is no physical exchange? > meet with people to exchange Bitcoins with the risk that involves That's literally a physical exchange, regardless of if it's just one dude or if it's a company with a physical presence.
- sshine 4y ago
  > the recipient will need to exchange it to be able use the funds Eventually, undoubtedly. Given the choice between non-existent traditional currency exchanges, and some sketchy guy your friend knows who will exchange your Bitcoins into iPhones or USD, Bitcoin presents a solution to a problem that isn't otherwise solved. Bitcoin, being risky and decentralised, allows for being traded in places where traditional currency exchanges will not go. > How do you exchange something from/to bitcoin if you have no bank account Using cash, for example. If you've tried to buy Bitcoin from your bank account, you will have experienced that it is, due to KYC rules, often more difficult than when you exchange them for cash. The interface between Bitcoin and existing money systems is at conflict in our society. In societies that don't have well-functional money systems, less so. Bitcoining the unbanked is easier than bitcoining the banked. :-)
  - SahAssar 4y ago
    > Using cash, for example. We are literally back to what I said a few comments ago: > And in the cases of unbanked areas that exchange needs to be physical and able to give out physical cash. It doesn't need to be the same exchange, but both those exchanges would still have the same issues as a traditional exchange, right? So again: Why would a physical bitcoin exchange be easier to operate than a physical traditional exchange? If your reason is laws then I'm guessing you'd also need to explain why widespread bitcoin usage wouldn't be subject to those laws too.
    - hnfong 4y ago
      I'm not a believer in crypto by any means, but I think there's some fundamental differences between physical money, conventional currency, and bitcoins. - physical money (eg. precious metals, physical cash) is hard to transfer, so that's out. - conventional currency requires recognition from a legal system; anyone can open an illicit "exchange" claiming to trade foreign currencies, and record a bunch of numbers in a spreadsheet, in the same way I can claim to have paid you US$100000 through this HN comment. But nobody takes it seriously unless the transfer is recognized as legitimate by some legal body. And if local laws prohibit or severely limit the operation of such exchanges, it just cannot exist. - Bitcoin's legitimacy is not based on recognition by legal systems, but rather a common, mutual recognition of a blockchain protocol. As long as there's just one shady dealer who accepts bitcoins in exchange for physical money (gold, precious goods, physical local currency), then this is an "exchange". It's not an exchange in the usual sense, but it doesn't really matter. The crucial point is that the "protocol" if you will of conventional (non-physical) currency depends on some sort of legal system recognizing the currency. We're talking about wire transfers, cheques, etc., not paper money (which in this context is considered physical). The reason I can instruct my bank to transfer money from my bank account to your bank account is because of a bunch of legal rules and processes that ensure that it happens properly. If either party is in a place where such transactions are prohibited by the law, it is fundamentally impossible to do such a transfer because such transfers require recognition by the legal system. Your confusion might stem from mixing up two concepts -- (A). the general duty to follow the law, and (B). the fact that conventional currencies depend on the law to operate. The GP's friend might be breaking the law no matter what kind of currency they are using, this is consideration (A). This is the same. But Bitcoin doesn't have problem (B).

by sshine 4y ago

SahAssar 4y ago

> No, you only need an exchange accessible to the sender. I said in my original comment that the recipient will need to exchange it to be able use the funds. Unless there has been a huge upswing in bitcoin usage for payments in the areas of the world remittances typically flow to that will be true. > That is the case for traditional currency exchanges. It is not the case for Bitcoin. I said unbanked since many remittances are sent by and received by people who are unbanked. How do you exchange something from/to bitcoin if you have no bank account (which usually means no way to pay or receive traditional money online) and there is no physical exchange? > meet with people to exchange Bitcoins with the risk that involves That's literally a physical exchange, regardless of if it's just one dude or if it's a company with a physical presence.

sshine 4y ago
> the recipient will need to exchange it to be able use the funds Eventually, undoubtedly. Given the choice between non-existent traditional currency exchanges, and some sketchy guy your friend knows who will exchange your Bitcoins into iPhones or USD, Bitcoin presents a solution to a problem that isn't otherwise solved. Bitcoin, being risky and decentralised, allows for being traded in places where traditional currency exchanges will not go. > How do you exchange something from/to bitcoin if you have no bank account Using cash, for example. If you've tried to buy Bitcoin from your bank account, you will have experienced that it is, due to KYC rules, often more difficult than when you exchange them for cash. The interface between Bitcoin and existing money systems is at conflict in our society. In societies that don't have well-functional money systems, less so. Bitcoining the unbanked is easier than bitcoining the banked. :-)
- SahAssar 4y ago
  > Using cash, for example. We are literally back to what I said a few comments ago: > And in the cases of unbanked areas that exchange needs to be physical and able to give out physical cash. It doesn't need to be the same exchange, but both those exchanges would still have the same issues as a traditional exchange, right? So again: Why would a physical bitcoin exchange be easier to operate than a physical traditional exchange? If your reason is laws then I'm guessing you'd also need to explain why widespread bitcoin usage wouldn't be subject to those laws too.
  - hnfong 4y ago
    I'm not a believer in crypto by any means, but I think there's some fundamental differences between physical money, conventional currency, and bitcoins. - physical money (eg. precious metals, physical cash) is hard to transfer, so that's out. - conventional currency requires recognition from a legal system; anyone can open an illicit "exchange" claiming to trade foreign currencies, and record a bunch of numbers in a spreadsheet, in the same way I can claim to have paid you US$100000 through this HN comment. But nobody takes it seriously unless the transfer is recognized as legitimate by some legal body. And if local laws prohibit or severely limit the operation of such exchanges, it just cannot exist. - Bitcoin's legitimacy is not based on recognition by legal systems, but rather a common, mutual recognition of a blockchain protocol. As long as there's just one shady dealer who accepts bitcoins in exchange for physical money (gold, precious goods, physical local currency), then this is an "exchange". It's not an exchange in the usual sense, but it doesn't really matter. The crucial point is that the "protocol" if you will of conventional (non-physical) currency depends on some sort of legal system recognizing the currency. We're talking about wire transfers, cheques, etc., not paper money (which in this context is considered physical). The reason I can instruct my bank to transfer money from my bank account to your bank account is because of a bunch of legal rules and processes that ensure that it happens properly. If either party is in a place where such transactions are prohibited by the law, it is fundamentally impossible to do such a transfer because such transfers require recognition by the legal system. Your confusion might stem from mixing up two concepts -- (A). the general duty to follow the law, and (B). the fact that conventional currencies depend on the law to operate. The GP's friend might be breaking the law no matter what kind of currency they are using, this is consideration (A). This is the same. But Bitcoin doesn't have problem (B).