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20% savings is not ground shaking. Remember that BTC is tackling an entrenched opponent, quasi monopolist. It'd take an order of magnitude in savings to guarant

20% savings is not ground shaking. Remember that BTC is tackling an entrenched opponent, quasi monopolist. It'd take an order of magnitude in savings to guarantee success. Think 50% to 90% less.

ronaldx 13y ago
It depends. A high-volume, low-margin retailer would save a huge amount from 20% on transactions. If Amazon were motivated to take on the risk of building the infrastructure, this could happen quickly. But, they have other things to focus on, and I doubt they would make the calculations in the same aggressively optimistic manner.
lhl 13y ago
There aren't guarantees in life, but I think you're wholly misunderstanding the scale we're talking about. Visa processes about 200M transactions/day. Almost $17B/day. These are not small numbers. I think you're also misunderstanding of how the financial system looks at payment rails - there's a pent up (ongoing?) demand for better ones. Also, while merchant transactions are one market, they certainly aren't the only one. There's lots of talk about international remittances. This is a $500B+ market[1] that is growing at an insane rate[2]. Average fees are 9.3%[3] and way worse for some countries - it's not unheard of to say, pay $40 for sending $100 from the US to Kenya. Now that is a market that's ripe for disruption (you'd have to balance bitcoin inflows w/ capital flight for the economy to work, but it's worth pointing out there's already a service linking bitcoin w/ M-Pesa: http://motherboard.vice.com/blog/one-third-of-kenyans-now-have-a-bitcoin-wallet http://motherboard.vice.com/blog/one-third-of-kenyans-now-ha... ) IMO, this is a particularly useful page which gives some context on where bitcoin currently sits with other payment networks: http://www.coinometrics.com/bitcoin/btix http://www.coinometrics.com/bitcoin/btix [1] http://www.bloomberg.com/news/2013-12-17/global-immigrants-send-500-billion-back-home.html http://www.bloomberg.com/news/2013-12-17/global-immigrants-s... [2] http://gulfnews.com/business/economy/global-remittance-flow-grows-10-77-to-514-billion-in-2012-world-bank-1.1172693 http://gulfnews.com/business/economy/global-remittance-flow-... [3] http://www.cognizant.com/InsightsWhitepapers/Remittance-Market-Ready-and-Waiting-for-its-Skype-Moment.pdf http://www.cognizant.com/InsightsWhitepapers/Remittance-Mark...
davidrangel 13y ago
As the two other comments here state, 20% is nothing to sneeze at when you are a low margin retailer (which many are). And I think 20% is the low end of possible savings (I'm the author of the post) - it's possible that the savings will end up being significantly higher, especially if retailers can keep some of the money in Bitcoin (because business partners start accepting Bitcoin and/or volatility comes down) and if fraud costs come down.

20% savings is not ground shaking. Remember that BTC is tackling an entrenched opponent, quasi monopolist. It'd take an order of magnitude in savings to guarantee success. Think 50% to 90% less.

ronaldx 13y ago

It depends. A high-volume, low-margin retailer would save a huge amount from 20% on transactions. If Amazon were motivated to take on the risk of building the infrastructure, this could happen quickly. But, they have other things to focus on, and I doubt they would make the calculations in the same aggressively optimistic manner.

lhl 13y ago

There aren't guarantees in life, but I think you're wholly misunderstanding the scale we're talking about. Visa processes about 200M transactions/day. Almost $17B/day. These are not small numbers. I think you're also misunderstanding of how the financial system looks at payment rails - there's a pent up (ongoing?) demand for better ones. Also, while merchant transactions are one market, they certainly aren't the only one. There's lots of talk about international remittances. This is a $500B+ market[1] that is growing at an insane rate[2]. Average fees are 9.3%[3] and way worse for some countries - it's not unheard of to say, pay $40 for sending $100 from the US to Kenya. Now that is a market that's ripe for disruption (you'd have to balance bitcoin inflows w/ capital flight for the economy to work, but it's worth pointing out there's already a service linking bitcoin w/ M-Pesa: http://motherboard.vice.com/blog/one-third-of-kenyans-now-have-a-bitcoin-wallet http://motherboard.vice.com/blog/one-third-of-kenyans-now-ha... ) IMO, this is a particularly useful page which gives some context on where bitcoin currently sits with other payment networks: http://www.coinometrics.com/bitcoin/btix http://www.coinometrics.com/bitcoin/btix [1] http://www.bloomberg.com/news/2013-12-17/global-immigrants-send-500-billion-back-home.html http://www.bloomberg.com/news/2013-12-17/global-immigrants-s... [2] http://gulfnews.com/business/economy/global-remittance-flow-grows-10-77-to-514-billion-in-2012-world-bank-1.1172693 http://gulfnews.com/business/economy/global-remittance-flow-... [3] http://www.cognizant.com/InsightsWhitepapers/Remittance-Market-Ready-and-Waiting-for-its-Skype-Moment.pdf http://www.cognizant.com/InsightsWhitepapers/Remittance-Mark...

davidrangel 13y ago

As the two other comments here state, 20% is nothing to sneeze at when you are a low margin retailer (which many are). And I think 20% is the low end of possible savings (I'm the author of the post) - it's possible that the savings will end up being significantly higher, especially if retailers can keep some of the money in Bitcoin (because business partners start accepting Bitcoin and/or volatility comes down) and if fraud costs come down.