MasterCard to open up network to cryptocurrencies • Hacker News Board

Re: MasterCard to open up network to cryptocurrencies

#351

Post by martamorena923 » Thu, Feb 11, 2021, 6:52 PM UTC

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…

OMG in what country do you live? 15%??? We have to pay 50% on this in Canada, well at least the ones who are in the top earning bracket.

I would gladly pay the 15%. I mean how greedy is it to make these kind of gains in crypto and then trying to avoid a measly 15% of tax lol.

Re: MasterCard to open up network to cryptocurrencies

#352

Post by skybrian » Thu, Feb 11, 2021, 6:53 PM UTC

liquidify wrote: post #27

sschueller wrote: post #10

Earlier quoted context omitted.

That is outright scam in my view. They never have to hold bitcoin. They may as well sell paypal coin. Robinhood and Revolut do the same thing. If you can't transfer out your bitcoin, you don't have any bitcoin.

They couldn't do that. If they didn't actually have any crypto, in the event of a large scale increase in price combined with a large scale cash out, Paypal would have to eat the difference from buy to sell price. They would lose their shirt. At minimum, Paypal is buying some percentage of the crypto sales in actual crypto to act as a hedge. However, it is more likely they are closer to 1 to 1 backing since they prob…

Or maybe even buy more Bitcoin than they need? It seems to have worked out well for Tesla so far.

As Matt Levine pointed out yesterday, a mainstream company can make money by buying Bitcoin and then making an announcement that sounds like they're going to use it. (It doesn't matter whether that plan works out or not, as long as the price of Bitcoin goes up.)

For Paypal, getting their own customers to buy Bitcoin (that they already own) would be a way of hedging, if they're long Bitcoin to begin with.

Re: MasterCard to open up network to cryptocurrencies

#353

Post by xirbeosbwo1234 » Thu, Feb 11, 2021, 6:53 PM UTC

koonsolo wrote: post #228

ArtTimeInvestor wrote: post #4

The game Paypal currently plays with Crypto is the closest thing to printing money I have ever seen: Their users can "buy and sell Bitcoin" and pay "no fees". How does Paypal make money? "From the spread". The difference between bid and ask. And who sets the spread? Drumroll ... Paypal! Since you cannot transfer your bitcoins out, when you sell your bitcoins, Paypal pays you whatever they like. So far, Paypal only of…

Quote from Elon Musk: "If PayPal had executed the plan that I wanted to execute on, I think it would probably be the most valuable company in the world".

Which plan was that? The one Musk was fired for pushing, i.e. getting them to switch all their infrastructure to Microsoft Windows?

Elon Musk is best ignored.

Re: MasterCard to open up network to cryptocurrencies

#354

Post by ska » Thu, Feb 11, 2021, 6:54 PM UTC

krisdol wrote: post #175

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…

Full disclosure: I own about $11 worth of bitcoin if I round up a bit, so this might be biased. The most convincing "point" of bitcoin I've heard is to accomodate transfer of large sums of money across borders, quickly, with minimal transaction costs and oversight. Everyone here can afford the fee to transact 8 billion dollars worth of bitcoin. And settlement happens in seconds to a couple minutes. That's appealing t…

I've never understood this argument. Moving large amounts of one currency between countries isn't expensive or slow (relative to how quickly you typically need to do this). Assuming you are allowed to do it at all. Oversight is a different story, but there aren't many legitimate reasons to want to do that (probably none that aren't problematic). There are, of course, a ton of illegitimate reasons but that's a different conversation.

Getting that 1mm+ from one currency to another is a whole different story, but that story only gets worse if you involve crypto.

Paying $40 in wire fees to move $200 sucks, but it's just not an issue on large transactions. So I think your real use case is lots of small transactions, not a few big ones. And unless you can spend the crypto directly, the volatility can kill this application pretty easily.

What am I missing?

Re: MasterCard to open up network to cryptocurrencies

#355

Post by rank0 » Thu, Feb 11, 2021, 6:54 PM UTC

arcticbull wrote: post #299

rank0 wrote: post #271

Earlier quoted context omitted.

There's actually considerable debate on the subject. I find it reasonable that things which are outside the CPI basket can indeed experience inflation. https://www.investopedia.com/articles/07/consumerpriceindex.... If 25% of circulating USD were created last year, and our economic value is the same or even diminished, wouldn't it follow that there must be significant inflation?

> If 25% of circulating USD were created last year, and our economic value is the same or even diminished, wouldn't it follow that there must be significant inflation? Not necessarily, no. The value of money is a function of supply and velocity. If the velocity went down and the supply went up 25% the fed can still nail its 2% target. [1, 2, 3] If the velocity increases next year the fed can shrink the supply commens…

That's very interesting I was not familiar with the concept of velocity.

It still seems to me that velocity can vary depending on the underlying entity. So unless every asset has the same velocity measure as the items in the CPI basket, it seems that there has to be some amount of inflation somewhere like possibly US equities.

Re: MasterCard to open up network to cryptocurrencies

#356

Post by Alupis » Thu, Feb 11, 2021, 6:54 PM UTC

whatshisface wrote: post #312

u678u wrote: post #205

Earlier quoted context omitted.

No if you have millions or billions basic wire transfers are instant and cheap. It is more interesting for if you have a few hundred or a few thousand dollars, where a $10-$50 fee is significant. Or you want to bypass regulations or bureaucracy eg send money to a friend in Argentina or Lebanon which have currency controls.

Bitcoin's use as a way of bypassing currency controls is one of the best arguments against it, because governments, already prone to suspicion towards anything that might upset their monetary policy, will have no quarter towards anything that upsets their laws.

That, and folks like Elon Musk perpetrating blatant Pump 'n Dump Schemes[1].

Eventually it'll be regulated after a bunch of opportunistic "investors" get hosed - which ironically, will make the dump even worse.

[1] https://www.valuethemarkets.com/2021/02/09/if-dogecoin-is-a-...

Re: MasterCard to open up network to cryptocurrencies

#357

Post by draaglom » Thu, Feb 11, 2021, 6:54 PM UTC

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…

_people_ may believe that but I don't think the IRS does. Spending crypto that has appreciated in value on goods and services is still a taxable event for CGT purposes.

Re: MasterCard to open up network to cryptocurrencies

#358

Post by xirbeosbwo1234 » Thu, Feb 11, 2021, 6:54 PM UTC

warkdarrior wrote: post #282

ArtTimeInvestor wrote: post #128

Earlier quoted context omitted.

You can show up at a bank and demand your balance in central bank money aka cash. The equivalent for Bitcoin would be that Paypal has to send your balance to you on the blockchain. But they do not do that. They will pay you in dollars. How much dollars? However much they like.

We'll see whether consumers like their offering. [checking...] It looks like they are doing alright: https://www.coindesk.com/paypal-2020-results-outstanding-fin...

Yes, the cryptocurrency markets are famously rational.

Re: MasterCard to open up network to cryptocurrencies

#359

Post by 01100011 » Thu, Feb 11, 2021, 6:55 PM UTC

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…

Does bartering an investment vehicle allow you to escape capital gains? If so, that seems like a loophole that should be closed. Why should you be exempt from gains on your capital investment?

It seems like MasterCard should be reporting each swap of crypto for dollars to the IRS and sending you a tax form at the end of the year. If that's not the case, expect regulatory action to correct it.

Re: MasterCard to open up network to cryptocurrencies

#360

Post by sorbits » Thu, Feb 11, 2021, 6:55 PM UTC

krisdol wrote: post #175

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…

Full disclosure: I own about $11 worth of bitcoin if I round up a bit, so this might be biased. The most convincing "point" of bitcoin I've heard is to accomodate transfer of large sums of money across borders, quickly, with minimal transaction costs and oversight. Everyone here can afford the fee to transact 8 billion dollars worth of bitcoin. And settlement happens in seconds to a couple minutes. That's appealing t…

> And settlement happens in seconds to a couple minutes

That is incorrect. On average it takes 10 minutes to mine a block, but you have to submit the transaction to be included in the block, so > 10 minutes before it appears on the blockchain.

However, there are actually many block chains, as miners creates block in parallel, it’s the longest one that is the “official”, but the minute you see your transaction in a block, you do not know if this block will stay in the longest chain, so in general you want at least 5 new blocks, after your block, before it is considered “safe”.

So now we are talking about one hour to do a transaction, and that assumes that the network is not overloaded, because there is also a cap on number of transactions that can be included in a block.

All in all, it is a terrible system for fast transactions.