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MasterCard to open up network to cryptocurrencies

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Re: MasterCard to open up network to cryptocurrencies

#381
post #307

Earlier quoted context omitted.

my favorite is M3 https://fred.stlouisfed.org/series/MABMM301USM189S Edit: I thought it was obvious, yet in response to comment below - theoretically to get real inflation one has to adjust the M3 for the growth of the total amount of "stuff" in the economy. As that growth is just 1-2%/year , the M3 shape is visually indistinguishable from the real inflation on any given time period of up to several years.

That's not a measure of inflation, it's just a measure of money supply.

inflation is defined as expansion or contraction in the money supply

Re: MasterCard to open up network to cryptocurrencies

#382

Earlier quoted context omitted.

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 bl…

But how quickly does SWIFT or ACH settle? When one wires money overseas, settlement is counted in days, not minutes or hours as in bitcoin's case. Most of us use layer 2 or 3 solutions in our legacy national currency systems, such as Cash App, PayPal, Venmo, etc. Non elite don't have access directly to FedWire or ACH or SWIFT... it all has to pass through banks and other 'trusted third parties.'

Also, eventually most lower-value transactions in bitcoin will be on layer two technologies, like the lightning network (peer to peer) or liquid bitcoin (federated peer to peer, mostly for exchanges and traders to quickly move funds between exchanges).

Re: MasterCard to open up network to cryptocurrencies

#383

Earlier quoted context omitted.

That's not a measure of inflation, it's just a measure of money supply.

inflation is defined as expansion or contraction in the money supply

https://www.investopedia.com/terms/i/inflation.asp

> Inflation is the decline of purchasing power of a given currency over time.

https://www.economicshelp.org/macroeconomics/inflation/defin...

> A more exact definition of inflation is a sustained increase in the general price level in an economy. Inflation means an increase in the cost of living as the price of goods and services rise.

https://www.economicsonline.co.uk/Definitions/Inflation.html

> Inflation refers to a rise in the average level of prices sustained over time, which also corresponds to a fall in the internal (domestic) purchasing power of money.

Re: MasterCard to open up network to cryptocurrencies

#384

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…

I agree that paying for things directly with bitcoin doesn't make sense. However, that doesn't mean bitcoin doesn't have a use case as a global settlement network and volatility isn't what's important, it's liquidity, which bitcoin has far more of then any other cryptocurrency. For an example of this take a look at something like Strike Global using bitcoin's lightning network. https://jimmymow.medium.com/announcing-…

>it's liquidity, which bitcoin has far more of then any other cryptocurrency.

"Far more of than any other cryptocurrency" is kind of a moot point. Does "bitcoin" (the people converting it to cash) have enough reserves in any real currency to cover even 10% of its value? There's no federal government backing it, and as best I can tell nothing to prevent the proverbial "run on the bank".

I still struggle to see how bitcoin has anymore intrinsic value than collecting pokemon cards. It's worth something right up until it isn't without a major government supporting it.

Re: MasterCard to open up network to cryptocurrencies

#386
post #315

Earlier quoted context omitted.

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.

In all honesty though if you started using BTC as your main currency*, replacing your national currency, one day you'd have your money in BTC, the next day their value would be wiped out. We're not talking about a slow and steady decline, halving of the value in a decade. We're talking "no money to buy food for the next few months". Many people in countries with unstable currencies are particularly vulnerable to this kind of fluctuations because in general they have nothing to absorb the shock, no assets, no savings, etc. Unlike traders these people can't just wait for the rebound, by that time they're bankrupt.

BTC is useful for exactly the scenarios it's almost exclusively used in now: speculative transactions (buy low, sell high), or transactions for less than legal stuff and the overwhelming majority of proponents are in these 2 camps. There's a much smaller group of proponents made up of people who don't understand currencies in general (besides the basics, like spending them), or cryptocurrencies in particular.

I'm sure some form of electronic tender would fill this role you're describing but it's not BTC and probably none of the major cryptocurrencies on the market now.

* (putting aside the network capacity, number of transactions/sec, the cost of producing a BTC and of a transaction, etc. which make it completely unsuitable for the purpose of using the currency instead of just storing and trading it, which is probably the only significant purpose of BTC today)

Re: MasterCard to open up network to cryptocurrencies

#387

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…

> Sure, now you have 10 mln dollars in BTC at all tine high, and 2 mln after price drops but in day to day purchases it doesn't matter.

This doesn't track at all, unless it is a safe assumption that the general trend of Bitcoin will always be up, and you are able to time the market to do any major withdrawals at higher prices. Or, you don't have any major withdrawals, and you luck out in that your many small withdrawals average out at a higher price.

None of that is guaranteed, and with Bitcoin's volatility, you're in for a bit of a ride every step of the way.

For people who have big Bitcoin hoards due to (say) mining back when mining was cheap, maybe they won't mind the swings so much since all of it is "free surprise money", but this doesn't really work for people who bought into Bitcoin in the last 5 years or so (either by buying coins with fiat currency, or by building expensive mining rigs and burning electricity).

(If you're solely talking about the first kind of person, then: apologies! In that case I think you're pretty much on the nose.)

Re: MasterCard to open up network to cryptocurrencies

#388

Earlier quoted context omitted.

You know, your point about Tesla has given me lots of conflict. What did I miss? Obviously this question came when I sold off my TSLA stock at 500$ thinking — it was overvalued — and then watching it rise to the equivalent of 4,000$. I reached the conclusion it’s no longer solely about cash flow and debt ratios and market cap and addressable market and whatever other traditional metrics we previously used to value co…

> People are buying TSLA because they want to do something about climate change. I hope given Tesla's new affinity with Bitcoin that what they want to do is "make it worse" lol. Tesla is literally selling its green energy credits to dirty car companies, then throwing it at Chinese coal miners. The market goes through particularly bubblicious periods of pricing mania from time to time. It's happening now, it's happene…

It will only revert if people sell. What if nobody sells because they equate selling with giving up on their dreams of fighting climate change?

Re: MasterCard to open up network to cryptocurrencies

#389

Earlier quoted context omitted.

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…

Forget million and billions. Hasn't anyone on this thread lived and worked abroad? Transferring 10s of thousands from the US to the EU or vice versa costs a ton in the banks skimming off the back of exchange rates that they choose and fees. There are ways to do it via trading accounts but it's a pain.

It's actually pretty cheap and easy these days with a transferwise account. But I agree, it used to be a massive pain, and still is for smaller currencies or more closed-off banking systems like japan.

Re: MasterCard to open up network to cryptocurrencies

#390
post #345

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…

Spending the crypto through a card will not stop the IRS from coming after you for their cut.
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