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MasterCard to open up network to cryptocurrencies

reuters.com

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Re: MasterCard to open up network to cryptocurrencies

#341

Post by emteycz »

UncleOxidant wrote: post #340
PragmaticPulp wrote: post #2

These stories usually spur more enthusiasm for buying cryptocurrency, but ironically those buyers aren’t interested in spending cryptocurrency using their MasterCard. They’re hoping other people will buy cryptocurrency from these announcements, driving the price up. Or, more likely, they’re just hoping other people will buy cryptocurrency and not use it in these spending systems. Spending cryptocurrency would result…

> Spending cryptocurrency would result in selling that cryptocurrency, which would drive the price down. An economy based on BTC would be highly deflationary as no one would want to spend - why buy something today when it'll be cheaper in a week or a month? Scarcity isn't necessarily a good feature for a currency. Ideally supply of a currency should increase as more people enter the economy. Such a currency would aim…

Finally some solution for consumerism that could work! Yay Bitcoin!

Re: MasterCard to open up network to cryptocurrencies

#342

Post by sorbits »

tenaciousDaniel wrote: post #280
vbezhenar wrote: post #255

Earlier quoted context omitted.

Your view must be skewed by privilege of having stable currency. Currency of my country lost 250% of its value over last 7 years. It's not bitcoin-level volatile, but close to it. Thankfully I have an option to use USD to hoard money, but that option is not something that's given, in many countries you just can't exchange for fair price. I agree that for someone living in US or EU there's no much point using BTC.

It's sad that this aspect of the conversation so often gets replaced by everything else. This is (IMO) the most important point about digital currency - the promise of providing consumers in unstable economies the chance to convert to a more stable currency without government intrusion. We're still not there, but that should be the north star for crypto (again, in my opinion).

Normally the government leverages its power to keep its currency stable. If a country fails at that, the residents tend to switch to another country’s currency, for example USD is widely accepted in countries with unstable currencies, and this makes sense, since a lot of commodity prices are set in USD.

What we have seen with crypto currencies are extreme volatility, not useful to base a country’s economy on, and because it is decentralized, no-one can really intervene to control this volatility, by e.g. changing the interest rate, and nothing is priced in crypto currencies, to sort of keep it tied to something.

The only metric for what a coin should cost seems to be the electricity/leasing of computers required to mine one. But even this metric is not good, as it is proportional to the size of the network, which is not a constant, and is likely to grow, as the price goes up.

Re: MasterCard to open up network to cryptocurrencies

#343

Post by vbezhenar »

lazide wrote: post #315
scandox wrote: post #304

Earlier quoted context omitted.

I think they mean mathematically how could it lose more than 100%.

My guess is they meant their equivalent of the $4 cappuccino is now $10 (or more) in their local currency, which while not mathematically correct is probably the most intuitive way to understand it (as compared to losing 60% which would more than double prices). Not the poster though.

You're right. 1 USD = 155 KZT in 2014, 1 USD = 425 KZT right now.

Re: MasterCard to open up network to cryptocurrencies

#344

Post by vineyardmike »

spmurrayzzz wrote: post #260
systemvoltage wrote: post #190

Earlier quoted context omitted.

That’s the thing. By the time the transfer takes place, BTC exchange rate is now 7% off. How convenient is the transfer mechanism when the underlying is a speculative instrument? Until BTC exchange rate gets stable or gets pegged do the ground, it’s gonna float around in the air of extreme volatility and manipulation - pretty risky adventure to transfer large sums of money.

This is problematic for layer 1 settlement for sure. But there are layer 2 solutions that can help with the slippage issue (lightning network being the most prevalent). With a sufficient density of multisig wallet availability, as a proxy for liquidity, transactions are near-instant. That said, there are differences in settlement guarantees at layer 2 that might make certain use cases less optimal.

> for layer 1 settlement for sure. But there are layer 2

layers?

Re: MasterCard to open up network to cryptocurrencies

#345

Post by gt565k »

PragmaticPulp wrote: post #2

These stories usually spur more enthusiasm for buying cryptocurrency, but ironically those buyers aren’t interested in spending cryptocurrency using their MasterCard. They’re hoping other people will buy cryptocurrency from these announcements, driving the price up. Or, more likely, they’re just hoping other people will buy cryptocurrency and not use it in these spending systems. Spending cryptocurrency would result…

You are so wrong.

Spending crypto using a card is actually what people want in order to avoid taxes on crypto as it's treated as a security from the IRS tax perspective.

Anyone who has made money on crypto would love it if they can just spend the crypto as currency and buy every day things with it and remove the tax liability from having to convert to fiat.

15% tax capital gains, no thanks, let me spend it on food and furniture.

Re: MasterCard to open up network to cryptocurrencies

#346

Post by sharedfrog »

warkdarrior wrote: post #199
lawn wrote: post #171

Earlier quoted context omitted.

We shouldn't forget that there are other cryptos that don't have these ridiculous fees. Also, your credit card pays you 2% because they extract a larger fee from the merchant, who will raise prices to cover that expense. So you're not really saving money.

Will the merchants give me a 2+% discount and cover the BTC transaction fee if I pay in Bitcoin?

Intellimeds.net gives 8% off.

Re: MasterCard to open up network to cryptocurrencies

#347

Post by rawtxapp »

scotty79 wrote: post #325
PragmaticPulp wrote: post #2

These stories usually spur more enthusiasm for buying cryptocurrency, but ironically those buyers aren’t interested in spending cryptocurrency using their MasterCard. They’re hoping other people will buy cryptocurrency from these announcements, driving the price up. Or, more likely, they’re just hoping other people will buy cryptocurrency and not use it in these spending systems. Spending cryptocurrency would result…

When Visa and MasterCard will warm up to bitcoin they will have ideal product for all the bitcoin millionaires. When you are long on bitcoin you almost don't care about volatility. Because you can't predict the future the only good time to buy bitcoin is when you have too much dollars and the only good time when to sell bitcoins is when you have not enough dollars. Sure, now you have 10 mln dollars in BTC at all tine…

This is very similar to what I'm currently doing, just borrowing against my Bitcoin holdings using MakerDAO, I have good liquidity on a day to day basis and my Bitcoin is still appreciating.

Re: MasterCard to open up network to cryptocurrencies

#348

Post by halukakin »

vbezhenar wrote: post #255
systemvoltage wrote: post #84

Earlier quoted context omitted.

What's the point of an unstable, volatile, frantically manipulated currency that is susceptible to social media pump and dump schemes (Elon + Doge)? Currency and its exchange rate needs to be relatively stable for the world to put trust into it. Saying that BTC is stable, but the rest of the world's fiat currency is fluctuating makes no sense. US dollar provides stability and security, I feel confident that a cappucc…

Your view must be skewed by privilege of having stable currency. Currency of my country lost 250% of its value over last 7 years. It's not bitcoin-level volatile, but close to it. Thankfully I have an option to use USD to hoard money, but that option is not something that's given, in many countries you just can't exchange for fair price. I agree that for someone living in US or EU there's no much point using BTC.

Even if BTC were available to all countries, it wouldn't have stopped local currency value losses. And ironically hoarding stronger currencies makes local currencies lose value even faster.

Re: MasterCard to open up network to cryptocurrencies

#349

Post by strombofulous »

globular-toast wrote: post #105
maxkwallace wrote: post #75

To everyone saying "my credit card pays me 2% to use it", no, your credit card charges the merchant 2.3%+ to use it, that gets bundled into the price, and they give you 2% of that as a kickback.

And, by the way, the merchant incorporates that cost into their price.

Something I've always been confused about, maybe you know the answer -

Don't merchant's already charge the amount that causes (number of units sold) * (profit per unit) to be as high as possible? If visa suddenly dropped the transaction fee to 1%, I don't think stores would pass the 2% savings on to the customer

Re: MasterCard to open up network to cryptocurrencies

#350

Post by gnaritas »

gt565k wrote: post #345
PragmaticPulp wrote: post #2

These stories usually spur more enthusiasm for buying cryptocurrency, but ironically those buyers aren’t interested in spending cryptocurrency using their MasterCard. They’re hoping other people will buy cryptocurrency from these announcements, driving the price up. Or, more likely, they’re just hoping other people will buy cryptocurrency and not use it in these spending systems. Spending cryptocurrency would result…

You are so wrong. Spending crypto using a card is actually what people want in order to avoid taxes on crypto as it's treated as a security from the IRS tax perspective. Anyone who has made money on crypto would love it if they can just spend the crypto as currency and buy every day things with it and remove the tax liability from having to convert to fiat. 15% tax capital gains, no thanks, let me spend it on food an…

You are wrong, the ability to spend it in no way removes your tax liability. Currency traders still owe taxes on their gains, it doesn't matter what currency it is, if you make gains you owe taxes. You don't owe money because you convert to fiat, you owe money because you made gains.
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