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This is one of the best posts on the "state of the Bitcoin economy" I've read yet. They nail a few key points that shows they get it in a real-world sense. *

by nlh 12y ago

This is one of the best posts on the "state of the Bitcoin economy" I've read yet. They nail a few key points that shows they get it in a real-world sense. * Mass-consumer adoption of Bitcoin is a tough sell in developed countries (USA, etc.) * Bitcoin the Network may ultimately be more valuable than BTC the currency * "No chargebacks!" is a pitch to merchants for BTC, not consumers. Consumers like chargebacks & trust. * BTC the currency may end up being a behind-the-scenes player so long as traditional currencies do their job. This says to me that Stripe's position is ultimately to be the Visa of Bitcoin or the SWIFT of Bitcoin. And that's could indeed be a huge opportunity.

chadkruse 12y ago
> This says to me that Stripe's position is ultimately to be...the SWIFT of Bitcoin. Agreed. To illustrate how broken the SWIFT system is for those unfamiliar with international wires: Last week I wired AUS$2,500 from an account I control in Australia to an account I control in the US. It touched 4(!) banks in the process, who collectively took ~$45 in fees ($25 of that being a total surprise to me, represented only by a small asterisk footnote in the fee schedule of my initiating Australian bank). I became a huge Bitcoin cheerleader following the experience.
- afro88 12y ago
  Try Transfer Wise. It's a very useful middle ground between the current method of SWIFT and the potential of Bitcoin as a medium of exchange. It costs much less than a SWEIFT transfer and is much quicker.
- deleted 12y ago
  [deleted]
- jarek 12y ago
  That's 1.8%. What are the current spread rates for AUD-BTC and BTC-USD? For comparison I get 0.6 - 1.4% from an online specialized currency service, taking a couple of days. Set-up was a bit involved. How good is connecting BTC to real world bank accounts these days?
  - runeks 12y ago
    Buying BTC for 2500 AUD on https://anxbtc.com/ https://anxbtc.com/ right now would net you 3.875512102 BTC, which can be sold for 2302.054188836 USD on Bitstamp. At current exchange rates that's a 2% loss on the transfer alone, and you'd incur the wire transfer fee anyway, when sending the USD from Bitstamp to your US bank account. I think the bottleneck is currently the BTCAUD market, where the spread is 1.43% (http://bitcoincharts.com/markets/anxhkAUD.html http://bitcoincharts.com/markets/anxhkAUD.html), and also liquidity on US-based exchanges where you can avoid the subsequent international wire transfer.
brg444 12y ago
> * Bitcoin the Network may ultimately be more valuable than BTC the currency This is a fundamental misunderstanding of Bitcoin. Because each and every Bitcoin function as a sort of "token" that provides access to this payment network, their value is closely tied to the value of the network. For Bitcoin to become an international payment gateway system, liquidity requires every Bitcoin to be worth a lot.
- nlh 12y ago
  I guess I mean "valuable" in the intrinsic sense, not the financial sense. If, for example, in the model that Stripe outlines, the Bitcoin network ends up powering the Bank-to-Bank side of things (away from the consumer), only a handful of counterparties are going to be involved on the BTC side of things. Millions of consumers may use Stripe/whoever to send $$ to millions of other consumers, but that might all be handled by a (relatively) few BTC flying back and forth in batches on the back-end, which doesn't necessarily require a large per-BTC price. I know not a perfect example but that's my gist.
  - brg444 12y ago
    I understand but I'm afraid you are being misled by the article. While I believe it is an interesting scenario. I do not envision something like that will happen. The only reason it might is for its "consumer protection" value. I appreciate that Greg realises some of the promises of Bitcoin but the true value for "billions of people" is not an optimized "clearing house". I expect Bitcoin to scale to a point where the store of value and liquidity concerns are non-existent. At this point, high-inflation economies will turn to Bitcoin, and not gateways that will convert their already worthless currencies to USD or whatever. This provided value will ultimately catch on over here at which point some will find it largely preferable to hold BTC and not their "normal currency. Hell, some already do.
  - runeks 12y ago
    > Millions of consumers may use Stripe/whoever to send $$ to millions of other consumers, but that might all be handled by a (relatively) few BTC flying back and forth in batches on the back-end, which doesn't necessarily require a large per-BTC price. That depends on what you mean by "large per-BTC price". It requires a certain minimum BTC price to move a certain amount of money when settling in bitcoin. You can't move $1M USD in one Bitcoin transaction if a single bitcoin is worth 1 cent and there are only 20 million of them. So the bitcoin price measured in a certain currency limits the maximum transaction volume for that currency when settling in bitcoin. Secondly, and perhaps more importantly, it requires great liquidity/market depth. One must be able to buy or sell a lot of bitcoins without affecting the price. This is the essence of money: a high-liquidity commodity. > I guess I mean "valuable" in the intrinsic sense, not the financial sense. When settling in bitcoins, they need to have value in "the financial sense". That's a requirement.
oska 12y ago
> "No chargebacks!" is a pitch to merchants for BTC, not consumers. Consumers like chargebacks & trust. Consumers also like discounts. Merchants can return the savings from unfair chargebacks and reduced fraud as a percentage discount for paying with bitcoin. Many merchants are already doing this. And the multisignature transaction feature of bitcoin allows for a more robust and fairer 'chargeback' feature than currently provided by credit cards, where arbitration is done by a third party who has built a reputation for fair rulings. See for example Bitrated [1]. [1] https://www.bitrated.com/faq.html https://www.bitrated.com/faq.html

by nlh 12y ago

chadkruse 12y ago

> This says to me that Stripe's position is ultimately to be...the SWIFT of Bitcoin. Agreed. To illustrate how broken the SWIFT system is for those unfamiliar with international wires: Last week I wired AUS$2,500 from an account I control in Australia to an account I control in the US. It touched 4(!) banks in the process, who collectively took ~$45 in fees ($25 of that being a total surprise to me, represented only by a small asterisk footnote in the fee schedule of my initiating Australian bank). I became a huge Bitcoin cheerleader following the experience.

afro88 12y ago
Try Transfer Wise. It's a very useful middle ground between the current method of SWIFT and the potential of Bitcoin as a medium of exchange. It costs much less than a SWEIFT transfer and is much quicker.
deleted 12y ago
[deleted]
jarek 12y ago
That's 1.8%. What are the current spread rates for AUD-BTC and BTC-USD? For comparison I get 0.6 - 1.4% from an online specialized currency service, taking a couple of days. Set-up was a bit involved. How good is connecting BTC to real world bank accounts these days?
- runeks 12y ago
  Buying BTC for 2500 AUD on https://anxbtc.com/ https://anxbtc.com/ right now would net you 3.875512102 BTC, which can be sold for 2302.054188836 USD on Bitstamp. At current exchange rates that's a 2% loss on the transfer alone, and you'd incur the wire transfer fee anyway, when sending the USD from Bitstamp to your US bank account. I think the bottleneck is currently the BTCAUD market, where the spread is 1.43% (http://bitcoincharts.com/markets/anxhkAUD.html http://bitcoincharts.com/markets/anxhkAUD.html), and also liquidity on US-based exchanges where you can avoid the subsequent international wire transfer.

brg444 12y ago

> * Bitcoin the Network may ultimately be more valuable than BTC the currency This is a fundamental misunderstanding of Bitcoin. Because each and every Bitcoin function as a sort of "token" that provides access to this payment network, their value is closely tied to the value of the network. For Bitcoin to become an international payment gateway system, liquidity requires every Bitcoin to be worth a lot.

nlh 12y ago
I guess I mean "valuable" in the intrinsic sense, not the financial sense. If, for example, in the model that Stripe outlines, the Bitcoin network ends up powering the Bank-to-Bank side of things (away from the consumer), only a handful of counterparties are going to be involved on the BTC side of things. Millions of consumers may use Stripe/whoever to send $$ to millions of other consumers, but that might all be handled by a (relatively) few BTC flying back and forth in batches on the back-end, which doesn't necessarily require a large per-BTC price. I know not a perfect example but that's my gist.
- brg444 12y ago
  I understand but I'm afraid you are being misled by the article. While I believe it is an interesting scenario. I do not envision something like that will happen. The only reason it might is for its "consumer protection" value. I appreciate that Greg realises some of the promises of Bitcoin but the true value for "billions of people" is not an optimized "clearing house". I expect Bitcoin to scale to a point where the store of value and liquidity concerns are non-existent. At this point, high-inflation economies will turn to Bitcoin, and not gateways that will convert their already worthless currencies to USD or whatever. This provided value will ultimately catch on over here at which point some will find it largely preferable to hold BTC and not their "normal currency. Hell, some already do.
- runeks 12y ago
  > Millions of consumers may use Stripe/whoever to send $$ to millions of other consumers, but that might all be handled by a (relatively) few BTC flying back and forth in batches on the back-end, which doesn't necessarily require a large per-BTC price. That depends on what you mean by "large per-BTC price". It requires a certain minimum BTC price to move a certain amount of money when settling in bitcoin. You can't move $1M USD in one Bitcoin transaction if a single bitcoin is worth 1 cent and there are only 20 million of them. So the bitcoin price measured in a certain currency limits the maximum transaction volume for that currency when settling in bitcoin. Secondly, and perhaps more importantly, it requires great liquidity/market depth. One must be able to buy or sell a lot of bitcoins without affecting the price. This is the essence of money: a high-liquidity commodity. > I guess I mean "valuable" in the intrinsic sense, not the financial sense. When settling in bitcoins, they need to have value in "the financial sense". That's a requirement.

oska 12y ago

> "No chargebacks!" is a pitch to merchants for BTC, not consumers. Consumers like chargebacks & trust. Consumers also like discounts. Merchants can return the savings from unfair chargebacks and reduced fraud as a percentage discount for paying with bitcoin. Many merchants are already doing this. And the multisignature transaction feature of bitcoin allows for a more robust and fairer 'chargeback' feature than currently provided by credit cards, where arbitration is done by a third party who has built a reputation for fair rulings. See for example Bitrated [1]. [1] https://www.bitrated.com/faq.html https://www.bitrated.com/faq.html