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Visa May Add Cryptocurrencies to Its Payments Network, Says CEO

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Re: Visa May Add Cryptocurrencies to Its Payments Network, Says CEO

#41

Post by hn_throwaway_99 »

doggosphere wrote: post #10
lovetocode wrote: post #2

Cryptocurrency continues to gain more ground but I still have my reservations about it being the currency of the future. If by design, cryptocurrency has a finite volume of transferrable currency, do early adopters have an unfair advantage that could potentially make the currency unusable? I don’t see how it could possibly be fair when earlier mining yielded currency more quickly.

Fiat currencies will probably always exist. Digital crypto assets like Bitcoin or Ethereum will exist alongside them. Bitcoin can be an asset like gold, of which users keep a portion of their networth to protect from economic uncertainty. Its deflationary policy may make it less usable as a currency, but at least crypto gives people choice.

I was having this discussion with a friend recently, arguing over what the actual use cases are for crypto, and I came to a similar conclusion.

In terms of facilitating payments, cryptocurrencies are worse in almost every way I can think of compared to existing systems. They are (currently) slow, have high transaction fees, but most importantly the non-refundability of crypto transactions is a bug, not the feature crypto proponents suggest.

However, as a store of value (e.g. "digital gold"), I think crypto has real potential. There is a reason crypto is very popular in places with hyper-inflationary monetary systems like Venezuela and Iran. And compared to actual, physical gold, crypto is almost better in every way: it is much more easily transferred and stored, and the ledger means establishing "provenance" is not an issue. Yes, it's obviously currently extremely volatile, but it's not hard to imagine that volatility lessening over time.

Re: Visa May Add Cryptocurrencies to Its Payments Network, Says CEO

#42

Post by Nursie »

z0xz0xz0x wrote: post #5
lovetocode wrote: post #2

Cryptocurrency continues to gain more ground but I still have my reservations about it being the currency of the future. If by design, cryptocurrency has a finite volume of transferrable currency, do early adopters have an unfair advantage that could potentially make the currency unusable? I don’t see how it could possibly be fair when earlier mining yielded currency more quickly.

Not all cryptocurrencies have finite volumes by design. Ethereum, for example, currently doesn't have one. It also uses a proof-of-stake instead of proof-of-work for consensus, so even early owners of hardware don't maintain an advantage.

Has ethereum actually switched to PoS? It was still in the pipeline last I heard.

Re: Visa May Add Cryptocurrencies to Its Payments Network, Says CEO

#43

Post by xirbeosbwo1234 »

shanecoin wrote: post #9
bootyfarm wrote: post #6

Great, let’s all accelerate climate change even faster.

I hear this argument a lot and have a genuine question. How does Bitcoin electricity usage compare to something that achieves a similar goal? A good example is gold—many people compare Bitcoin to gold. What are the relative electricity costs of the two, and does that justify the cost of either asset? This would take into account the electricity costs of mining, labor, supply chain, storage, etc.

Bitcoin is in the same league as all datacenters in the world combined.

Datacenters use about 205 TWh/year.

https://www.networkworld.com/article/3531316/data-center-pow...

Bitcoin uses about 75 TWh/year.

https://digiconomist.net/bitcoin-energy-consumption

Visa operates out of just two datacenters. They are famously secretive about their operations so I don't know how much power they use. The most I've found is that they have 'multi-megawatt' datacenters, which means they probably use more than three megawatts and less than 100.

https://youtu.be/fpmS0JYyCGs?t=66

Bitcoin uses about 8.5 gigawatts. Clearly it uses at least a few orders of magnitude more electricity than Visa. It can process four transactions per second compared to about 25,000 for Visa, so the energy per transaction is even worse by a few more orders of magnitude.

The inefficiency of Bitcoin is truly mind-boggling. If I were trying to write a hit piece, I wouldn't have the guts to make up numbers as bad as the reality.

Re: Visa May Add Cryptocurrencies to Its Payments Network, Says CEO

#44

Post by eMGm4D0zgUAVXc7 »

Nursie wrote: post #36
eMGm4D0zgUAVXc7 wrote: post #31

Earlier quoted context omitted.

> If by design, cryptocurrency has a finite volume of transferrable currency, do early adopters have an unfair advantage that could potentially make the currency unusable? > I don’t see how it could possibly be fair when earlier mining yielded currency more quickly. If by design, fiat currency has an infinite volume of transferrable currency, do governments have an unfair advantage that could potentially make the cur…

That doesn't even make sense. For a start governments don't earn money. Secondly, a managed currency controlled by a central bank under the control of a democratic government is a good thing.

> For a start governments don't earn money.

Build infrastructure = provide a service.

Get paid taxes for usage of said infrastructure = earn money for properly providing a service.

> Secondly, a managed currency controlled by a central bank under the control of a democratic government is a good thing.

That is a tautology, you merely rephrased the claim without providing any argument.

Re: Visa May Add Cryptocurrencies to Its Payments Network, Says CEO

#45

Post by pmorici »

lovetocode wrote: post #2

Cryptocurrency continues to gain more ground but I still have my reservations about it being the currency of the future. If by design, cryptocurrency has a finite volume of transferrable currency, do early adopters have an unfair advantage that could potentially make the currency unusable? I don’t see how it could possibly be fair when earlier mining yielded currency more quickly.

There is no reason that limited supply need be an inherent mechanism to a crypto currency.

Re: Visa May Add Cryptocurrencies to Its Payments Network, Says CEO

#46

Post by nowherebeen »

lotsofpulp wrote: post #21
toomuchtodo wrote: post #15

Earlier quoted context omitted.

Visa is in the payments business. The US Federal Reserve ("The Fed") is going live with an instant payments service in 2023-2024 [1] [2]. What does that leave Visa with? Hence, the existential crisis (first, trying to buy Plaid, and now "Crypto!"). [1] https://www.frbservices.org/financial-services/fednow/index.... [2] https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federa...

Visa is left with a valuable rewards game system where people get cash back or points or whatever. Plus the liability protections that credit cards come with. People can already use debit cards with no effort, and merchants can accept that at very minimal costs. But still, most merchants are hesitant to offer lower prices to purchases with debit card because they are betting people spend more with credit cards. I don…

I don't think their rewards system is as valuable on you might think. When the cost of visa transactions are ultimately pushed to the consumer (~3%), they will eventually realize, those rewards are not worth the cost.

Off course, this will probably take some time. But in my opinion, Visa's moat is thin and mostly reliant on the behavior of their users. For US, I expect Visa to still be dominant, but not so much in other countries in Europe and Asia where people are much more savvy with their money habits.

Re: Visa May Add Cryptocurrencies to Its Payments Network, Says CEO

#47

Post by lotsofpulp »

nowherebeen wrote: post #46
lotsofpulp wrote: post #21

Earlier quoted context omitted.

Visa is left with a valuable rewards game system where people get cash back or points or whatever. Plus the liability protections that credit cards come with. People can already use debit cards with no effort, and merchants can accept that at very minimal costs. But still, most merchants are hesitant to offer lower prices to purchases with debit card because they are betting people spend more with credit cards. I don…

I don't think their rewards system is as valuable on you might think. When the cost of visa transactions are ultimately pushed to the consumer (~3%), they will eventually realize, those rewards are not worth the cost. Off course, this will probably take some time. But in my opinion, Visa's moat is thin and mostly reliant on the behavior of their users. For US, I expect Visa to still be dominant, but not so much in ot…

> they will eventually realize, those rewards are not worth the cost.

Debit cards in the US have been available and basically free to use for all merchants and purchasers for many decades. Yet, merchants willingly do not give people that buy with a debit card a discount. That seems like proof to me that merchants are betting that they earn more money from the use of credit cards, even after the fees associated with them, so I don’t see why another no or low fee purchase mechanism would change the situation.

Re: Visa May Add Cryptocurrencies to Its Payments Network, Says CEO

#48

Post by Forge36 »

toomuchtodo wrote: post #15
kneel wrote: post #8

Don't trust, verify. It makes sense to Visa since they are in the business of verifying trust. Proof of transaction history (ie credit) is public and inherent to blockchain, apparently this is taking some time to realize.

Visa is in the payments business. The US Federal Reserve ("The Fed") is going live with an instant payments service in 2023-2024 [1] [2]. What does that leave Visa with? Hence, the existential crisis (first, trying to buy Plaid, and now "Crypto!"). [1] https://www.frbservices.org/financial-services/fednow/index.... [2] https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federa...

I dug into the frbservices page and unfortunately many of the links are broken. Is the fed offering an alternative to consumers or banks (both?) I couldn't find anything about what the proposal was

Re: Visa May Add Cryptocurrencies to Its Payments Network, Says CEO

#49

Post by dalbasal »

lovetocode wrote: post #2

Cryptocurrency continues to gain more ground but I still have my reservations about it being the currency of the future. If by design, cryptocurrency has a finite volume of transferrable currency, do early adopters have an unfair advantage that could potentially make the currency unusable? I don’t see how it could possibly be fair when earlier mining yielded currency more quickly.

Is it? I mean it's certainly gaining value, but are people using it to pay for stuff?

In the earlier days of bitcoin there where ATMs near me, and bars that accepted bitcoin.

Re: Visa May Add Cryptocurrencies to Its Payments Network, Says CEO

#50

Post by cauthon »

hn_throwaway_99 wrote: post #41
doggosphere wrote: post #10

Earlier quoted context omitted.

Fiat currencies will probably always exist. Digital crypto assets like Bitcoin or Ethereum will exist alongside them. Bitcoin can be an asset like gold, of which users keep a portion of their networth to protect from economic uncertainty. Its deflationary policy may make it less usable as a currency, but at least crypto gives people choice.

I was having this discussion with a friend recently, arguing over what the actual use cases are for crypto, and I came to a similar conclusion. In terms of facilitating payments , cryptocurrencies are worse in almost every way I can think of compared to existing systems. They are (currently) slow, have high transaction fees, but most importantly the non-refundability of crypto transactions is a bug, not the feature c…

> Yes, is obviously currently extremely volatile, but it's not hard to imagine that volatility lessening over time.

I feel like I’ve heard this every year since 2015. I think it’s going to be hard to shake the majority perspective that it’s a speculative asset.

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