31 ms·

Until someone comes up with a better solution for cross border payments ($150T market), I don't think bitcoin/crypto will go away

jboy55 4y ago
Aren't the vast majority of that 150T market in cross border payments already done outside of crypto?
lovich 4y ago
Cross border payments are 50% bigger than the total planets gdp?
- darig 4y ago
- SgtBastard 4y ago
  I mean technically it could. For example, to buy goods from China in AU, I need to pay in USD./ For 100 USD in goods, I could have to send AUD cross border to receive 100 USD and then definitely have to send 100 USD cross border to China - nominally triggering 200 USD in payment volume for 100 USD in GDP. And then for companies using a Double Irish, Dutch Sandwich... well, the volume adds up. Crypto still isn't the answer though.
  - lovich 4y ago
    I asked because it seems logically impossible since cross border payments are included in the aggregate of the world gdp. The same mechanism you are describing for the velocity of money also works inside national borders
adaml_623 4y ago
The current fiat/fx cross border payment mechanisms are better than crypto. Faster, cheaper and more secure.
- kevinak 4y ago
  No they are not, in what world can you transfer money instantly and settle it across borders in seconds? I'd love to see an insecure bitcoin transaction as well.
it_citizen 4y ago
I don't know much about crypto or cross-border payments. Is there current crypto solutions that work better than something like transferwise if i wanted to transfer USD to EUR for instance? (cheaper?, faster?, simpler?, reliable?)
- knorker 4y ago
  No, none of the above. Except in one aspect: Because cryptocurrency for these purposes at best use a loophole in AML/KYC laws, at worst just plain break them, if you do it right there's less risk of getting caught (guilty or innocently) in mandated money laundering tripwires. I've had banks call me about source of funds, and sometimes require proof, for large "unusual" transactions. I was an innocent victim of these audits. It delayed my transactions by maybe minutes. Yes, probably some percentage of people who've lost money, through no fault of their own, to these extra checks. But for every single one of those there are at least thousands who've lost cryptocurrency due to them not having these checks and audits. And on top of that of course cryptocurrency transactions are much fewer and move less value.
- kevinak 4y ago
  Yes. Bitcoin - It's cheaper, faster, simpler and more reliable. It's not just faster on the front end. It settles pretty much instantly on the back end as well, so no counter party risk like in the case of using banks.
aketchum 4y ago
you still have currency risk and exchange rate slippage, but even worse because you are introducing a third currency. Any "innovation" crypto does in cross border payments is skirting regulation which clearly will not scale well. Regulators will just crack down when the market is sufficiently large for their attention.
knorker 4y ago
How are the standard solutions for cross border payments worse than bitcoin/cryptocurrency? I regularly ship 5-6 digits between countries. It's not even hard. And I do it without gas fees (there's paying the spread, but if I'd use cryptocurrency then I'd have to pay the spread twice). And I can do it without the fear of a mistake, or a hack (of me or the bank), taking away the deposit on my house. The proposed cure is worse than the disease.
- kevinak 4y ago
  Not everyone has this privilege. In fact, most people in the world can't do what you're doing. For them it is immensely hard in comparison.
  - knorker 4y ago
    Most people in the world can definitely not use cryptocurrencies. Maybe the average nonprivileged will succeed once or twice, but this is like going to Vegas and using the martingale system: It'll make you win consistently, right up to the point where you lose everything you have. I've always found the "what about the third world" arguments bizarre. As if villages and huts are filled with technical geniuses who will never lose their passwords. And if not wallet keys, then all the blockchain mini-banks who give you no recourse if you lose your second factor, and don't have to because they're not regulated. And that's the mini-banks who aren't plain rugpulls, or get hacked. The people who are privileged enough to successfully be able to use cryptocurrencies are also privileged enough to even more successfully use proper banking.
    - kevinak 4y ago
      Are you insinuating folks in the developing world are incapable of understanding and handling their own keys? Wow.
      - knorker 4y ago
        People in rich countries can't either. Please review the HN guidelines: https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html I will not engage further.

jboy55 4y ago

Aren't the vast majority of that 150T market in cross border payments already done outside of crypto?

lovich 4y ago

Cross border payments are 50% bigger than the total planets gdp?

darig 4y ago
SgtBastard 4y ago
I mean technically it could. For example, to buy goods from China in AU, I need to pay in USD./ For 100 USD in goods, I could have to send AUD cross border to receive 100 USD and then definitely have to send 100 USD cross border to China - nominally triggering 200 USD in payment volume for 100 USD in GDP. And then for companies using a Double Irish, Dutch Sandwich... well, the volume adds up. Crypto still isn't the answer though.
- lovich 4y ago
  I asked because it seems logically impossible since cross border payments are included in the aggregate of the world gdp. The same mechanism you are describing for the velocity of money also works inside national borders

adaml_623 4y ago

The current fiat/fx cross border payment mechanisms are better than crypto. Faster, cheaper and more secure.

kevinak 4y ago
No they are not, in what world can you transfer money instantly and settle it across borders in seconds? I'd love to see an insecure bitcoin transaction as well.

it_citizen 4y ago

I don't know much about crypto or cross-border payments. Is there current crypto solutions that work better than something like transferwise if i wanted to transfer USD to EUR for instance? (cheaper?, faster?, simpler?, reliable?)

knorker 4y ago
No, none of the above. Except in one aspect: Because cryptocurrency for these purposes at best use a loophole in AML/KYC laws, at worst just plain break them, if you do it right there's less risk of getting caught (guilty or innocently) in mandated money laundering tripwires. I've had banks call me about source of funds, and sometimes require proof, for large "unusual" transactions. I was an innocent victim of these audits. It delayed my transactions by maybe minutes. Yes, probably some percentage of people who've lost money, through no fault of their own, to these extra checks. But for every single one of those there are at least thousands who've lost cryptocurrency due to them not having these checks and audits. And on top of that of course cryptocurrency transactions are much fewer and move less value.
kevinak 4y ago
Yes. Bitcoin - It's cheaper, faster, simpler and more reliable. It's not just faster on the front end. It settles pretty much instantly on the back end as well, so no counter party risk like in the case of using banks.

aketchum 4y ago

you still have currency risk and exchange rate slippage, but even worse because you are introducing a third currency. Any "innovation" crypto does in cross border payments is skirting regulation which clearly will not scale well. Regulators will just crack down when the market is sufficiently large for their attention.

knorker 4y ago

How are the standard solutions for cross border payments worse than bitcoin/cryptocurrency? I regularly ship 5-6 digits between countries. It's not even hard. And I do it without gas fees (there's paying the spread, but if I'd use cryptocurrency then I'd have to pay the spread twice). And I can do it without the fear of a mistake, or a hack (of me or the bank), taking away the deposit on my house. The proposed cure is worse than the disease.

kevinak 4y ago
Not everyone has this privilege. In fact, most people in the world can't do what you're doing. For them it is immensely hard in comparison.
- knorker 4y ago
  Most people in the world can definitely not use cryptocurrencies. Maybe the average nonprivileged will succeed once or twice, but this is like going to Vegas and using the martingale system: It'll make you win consistently, right up to the point where you lose everything you have. I've always found the "what about the third world" arguments bizarre. As if villages and huts are filled with technical geniuses who will never lose their passwords. And if not wallet keys, then all the blockchain mini-banks who give you no recourse if you lose your second factor, and don't have to because they're not regulated. And that's the mini-banks who aren't plain rugpulls, or get hacked. The people who are privileged enough to successfully be able to use cryptocurrencies are also privileged enough to even more successfully use proper banking.
  - kevinak 4y ago
    Are you insinuating folks in the developing world are incapable of understanding and handling their own keys? Wow.
    - knorker 4y ago
      People in rich countries can't either. Please review the HN guidelines: https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html I will not engage further.