9 ms·

Banks are too big to see what's coming

41 points by dublinclontarf 15y ago

jaipilot747 15y ago
I think that Bitcoin payment services hold the most promise in third-world countries where credit cards haven't really become the de facto payment standard for non-cash transactions. Any company that could tie Bitcoin with low-end mobile systems available in these countries would be of great service.
- shareme 15y ago
  they already have a mobile SIM card that acts as a credit card..this is why Smartphones will take longer to uptake there due to the different SIM card not necessarily the phone device price.
  - zzimbler 15y ago
    The best example of this is m-pesa by Kenya's Safaricom. In Kenya the banks market share has been totally cannibalized because most people couldn't afford a bank and then when most of the population went to strictly m-pesa so did a majority of the vendors, etc. I wouldn't say bitCoin doesn't have a shot at replacing that, but it's got a long long way to go. http://en.wikipedia.org/wiki/M-Pesa http://en.wikipedia.org/wiki/M-Pesa
- JumpCrisscross 15y ago
  I don't know if emerging markets are the right place for an inherently deflating currency. That is a lot of continuous forecasting for a financially un-sophisticated population to do, let alone one that generally needs to take on debt to jump classes within a generation.
  - kiba 15y ago
    I don't know if emerging markets are the right place for an inherently deflating currency. I think you mean a stable or predictable currency. What you need is more volume in the bitcoin economy to stabilize the price. Of course, when the economy grow at extreme rate, the expense of that is a predictable currency. But with bitcoin, you can be certain 99% that it will never exceed 21 millions. let alone one that generally needs to take on debt to jump classes within a generation. But you don't need debt if you can merely save and jump classes within a generation. If you have saving, you can benefit from extreme growth in the bitcoin economy.
bpd1069 15y ago
I would like to see a major player accept bitcoins as a method of payment. Just imagine for a moment, Google accepting bitcoins as floating currency, to be used in its Google Play service, or with its Android devices with NFC enabled Google Wallet. That would blur the line between digital currency and digital/real goods and services.
- iheartmemcache 15y ago
  As a developer who's been following (albeit not too fastidiously) the progress of Bitcoin since it's emergence, I still have no idea how to accept Bitcoin payments. Is there something like authorize.net (or better yet, Stripe) for this? Bitcoin API bindings for the languages du jour would help adoption I'm sure. Though, maybe there are libs out there already and I'm just not aware of them
  - wmf 15y ago
    People seem to be building their own or using Bit-Pay (2.69% fees; interesting).
  - codexon 15y ago
    Download bitcoind and learn to use the json interface. When a buyer comes, generate a new wallet for them. Poll the wallet to see if payment comes. That's how you accept bitcoin payments.
    - foxhill 15y ago
      generating a new wallet for every transaction is a bit wasteful, you can however just create a new payment address, and watch for payments on that. if you create a few hundred receiving addresses, then you can keep the wallet (and hence private key) offline, as all transactions are public, and minimise the risk of having funds stolen (as we've seen a lot of places lately getting hacked and having their accounts drained..)
      - codexon 15y ago
wmf 15y ago
Yet another one-sided Bitcoin article. Yawn.
tptacek 15y ago
Let me spare you some trouble. Here's what this article says: * 10-15% of all transactions are fraudulent. In other words, something like $150Bn-$200bn/yr, or up to 2 times the entire market cap of Cisco Systems, is being lost every year to online fraud. * Banks are investing in multifactor authentication systems to try to do away with passwords. * But that won't work, so the only solution is to scrap the entire financial system and start over... * ... with Bitcoin, for which there is "no payment fraud", "no paper work", "no merchant accounts", and "more privacy". This argument isn't even coherent enough to be wrong. The types of mainstream attacks modern banking authentication systems are trying to deal with assume customer machines are actually owned up by attackers. They'd be happy just to find a way to make it harder to automatically extract value from accounts using standardized malware. This isn't a problem Bitcoin contemplates.
- Metapony 15y ago
  >This argument isn't even coherent enough to be wrong. Oh man, that's a great line.
- foxhill 15y ago
  it's unfortunate that many of bitcoin's proponents (of which i am one of), are unable to critically explain why bitcoin might be better than regular money.. the result being articles like this one. however, this does not mean bitcoin isn't actually a pretty useful system, and with some trade-offs from traditional currencies, has some very good benefits.
- deleted 15y ago
  [deleted]
  - kiba 15y ago
    That's merely apple and oranges. Bitcoin isn't a payment processor, it's a whole technology and social system in itself, in which you can build a payment processor with chargeback.
- kiba 15y ago
  Banks are investing in multifactor authentication systems to try to do away with passwords. The bitcoin ecosystem are also converging toward that. Or rather, any serious bitcoin payment processor will also be exploring any real security solution, even if it comes from traditional banks. This isn't a problem Bitcoin contemplates. Think of bitcoin technology as the OS which bitcoin banks run on. There are advantages and disadvantage to using bitcoin as cash, or storing bitcoin with your bank, depending on situations you may encounter.
incongruity 15y ago
I feel like the basic premise is right – there is clearly a lack of regard for the threat posed by the potential for disruptive innovation... AND there is clearly a lack of regard for consumers and merchants (both are users of banking products, of course and both are essential for banks to continue). If not a completely radical solution like Bitcoins, even some low-margin, relatively more secure solution seems to be more of a question of "when", not "if". I'm excited to see what happens, personally...

I think that Bitcoin payment services hold the most promise in third-world countries where credit cards haven't really become the de facto payment standard for non-cash transactions. Any company that could tie Bitcoin with low-end mobile systems available in these countries would be of great service.

shareme 15y ago
they already have a mobile SIM card that acts as a credit card..this is why Smartphones will take longer to uptake there due to the different SIM card not necessarily the phone device price.
- zzimbler 15y ago
  The best example of this is m-pesa by Kenya's Safaricom. In Kenya the banks market share has been totally cannibalized because most people couldn't afford a bank and then when most of the population went to strictly m-pesa so did a majority of the vendors, etc. I wouldn't say bitCoin doesn't have a shot at replacing that, but it's got a long long way to go. http://en.wikipedia.org/wiki/M-Pesa http://en.wikipedia.org/wiki/M-Pesa
JumpCrisscross 15y ago
I don't know if emerging markets are the right place for an inherently deflating currency. That is a lot of continuous forecasting for a financially un-sophisticated population to do, let alone one that generally needs to take on debt to jump classes within a generation.
- kiba 15y ago
  I don't know if emerging markets are the right place for an inherently deflating currency. I think you mean a stable or predictable currency. What you need is more volume in the bitcoin economy to stabilize the price. Of course, when the economy grow at extreme rate, the expense of that is a predictable currency. But with bitcoin, you can be certain 99% that it will never exceed 21 millions. let alone one that generally needs to take on debt to jump classes within a generation. But you don't need debt if you can merely save and jump classes within a generation. If you have saving, you can benefit from extreme growth in the bitcoin economy.

bpd1069 15y ago

I would like to see a major player accept bitcoins as a method of payment. Just imagine for a moment, Google accepting bitcoins as floating currency, to be used in its Google Play service, or with its Android devices with NFC enabled Google Wallet. That would blur the line between digital currency and digital/real goods and services.

iheartmemcache 15y ago
As a developer who's been following (albeit not too fastidiously) the progress of Bitcoin since it's emergence, I still have no idea how to accept Bitcoin payments. Is there something like authorize.net (or better yet, Stripe) for this? Bitcoin API bindings for the languages du jour would help adoption I'm sure. Though, maybe there are libs out there already and I'm just not aware of them
- wmf 15y ago
  People seem to be building their own or using Bit-Pay (2.69% fees; interesting).
- codexon 15y ago
  Download bitcoind and learn to use the json interface. When a buyer comes, generate a new wallet for them. Poll the wallet to see if payment comes. That's how you accept bitcoin payments.
  - foxhill 15y ago
    generating a new wallet for every transaction is a bit wasteful, you can however just create a new payment address, and watch for payments on that. if you create a few hundred receiving addresses, then you can keep the wallet (and hence private key) offline, as all transactions are public, and minimise the risk of having funds stolen (as we've seen a lot of places lately getting hacked and having their accounts drained..)
    - codexon 15y ago

wmf 15y ago

Yet another one-sided Bitcoin article. Yawn.

tptacek 15y ago

Let me spare you some trouble. Here's what this article says: * 10-15% of all transactions are fraudulent. In other words, something like $150Bn-$200bn/yr, or up to 2 times the entire market cap of Cisco Systems, is being lost every year to online fraud. * Banks are investing in multifactor authentication systems to try to do away with passwords. * But that won't work, so the only solution is to scrap the entire financial system and start over... * ... with Bitcoin, for which there is "no payment fraud", "no paper work", "no merchant accounts", and "more privacy". This argument isn't even coherent enough to be wrong. The types of mainstream attacks modern banking authentication systems are trying to deal with assume customer machines are actually owned up by attackers. They'd be happy just to find a way to make it harder to automatically extract value from accounts using standardized malware. This isn't a problem Bitcoin contemplates.

Metapony 15y ago
>This argument isn't even coherent enough to be wrong. Oh man, that's a great line.
foxhill 15y ago
it's unfortunate that many of bitcoin's proponents (of which i am one of), are unable to critically explain why bitcoin might be better than regular money.. the result being articles like this one. however, this does not mean bitcoin isn't actually a pretty useful system, and with some trade-offs from traditional currencies, has some very good benefits.
deleted 15y ago
[deleted]
- kiba 15y ago
  That's merely apple and oranges. Bitcoin isn't a payment processor, it's a whole technology and social system in itself, in which you can build a payment processor with chargeback.
kiba 15y ago
Banks are investing in multifactor authentication systems to try to do away with passwords. The bitcoin ecosystem are also converging toward that. Or rather, any serious bitcoin payment processor will also be exploring any real security solution, even if it comes from traditional banks. This isn't a problem Bitcoin contemplates. Think of bitcoin technology as the OS which bitcoin banks run on. There are advantages and disadvantage to using bitcoin as cash, or storing bitcoin with your bank, depending on situations you may encounter.

incongruity 15y ago

I feel like the basic premise is right – there is clearly a lack of regard for the threat posed by the potential for disruptive innovation... AND there is clearly a lack of regard for consumers and merchants (both are users of banking products, of course and both are essential for banks to continue). If not a completely radical solution like Bitcoins, even some low-margin, relatively more secure solution seems to be more of a question of "when", not "if". I'm excited to see what happens, personally...