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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

#441

Earlier quoted context omitted.

There is a ton of utility in crypto. Here's one scenario I've never seen discussed but is absolutely real: Imagine you're an abused spouse or child who needs money to escape their situation. Opening up a bank account isn't an option for a lot of people, but anyone can instantly open a crypto "account" and start stashing a nest egg away from the prying eyes of their oppressors. Crypto is the only option for this, and…

Where is this nest egg coming from?

Friends, supporters, paid work... an increasing number of sources as more and more crypto infrastructure comes online.

Re: MasterCard to open up network to cryptocurrencies

#442

Earlier quoted context omitted.

> 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…

I live and work in the US, but originally I'm from Croatia. I wire money every month to my family back there. It takes 5 work days for the wire to fully clear. Since 5 days is a full work week, it almost always bleeds over to the weekend and in reality takes 7 days. BTC might still be a terrible system for international transactions but it's still 168 times faster than the one that exists now.

> BTC might still be a terrible system for international transactions but it's still 168 times faster than the one that exists now.

It is 168 times faster than what you currently use.

There are services like TransferWise who specialize in fast international money transfers.

I could imagine that part of your delay is because the bank your family use (in Croatia) does not themselves handle international transfers, so they go through an intermediary bank, only adding delays.

I have often done ~12 hours international wires from Wells Fargo (U.S.) to Asia, and here the delay could simply have been due to the time zone.

Within the European Monetary Zone I often see money arrive in 10-30 minutes (crossing borders).

Re: MasterCard to open up network to cryptocurrencies

#443

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.

> Currency of my country lost 250% of its value over last 7 years. It's not bitcoin-level volatile, but close to it.

The way I understand volatility, it means wild swings in both directions over short periods. Your country’s currency however has been monotonically weakening. And the citizens have been able to react to that steady decline by storing their wealth in different forms, as you said yourself that you’ve been storing it in USD.

For sure even USD denominated assets have periods of volatility as we saw March last year when the entire world sought to refuge in the safety of US treasury bills or currency. Oil too witnessed some crazy gyrations like negative future pride. But they are in reaction to the extraordinary phase the world was going through then, when the world and hence the business practically shut down. Something which hasn’t happened in at least a generation.

Butcoin prices on the other hand regularly swing 10-15 in a day. Definitely not something you’d call stable compared to any of the world’s current currencies. Perhaps these swings will dampen over time?

Re: MasterCard to open up network to cryptocurrencies

#444

Earlier quoted context omitted.

Also people don't expect the dollar to become more valuable anytime soon, so spending it doesn't effect seller's remorse a day later, which happens to everyone spending ETH or BTC these days.

And, since USD is inflationary, we expect it to become less valuable (real value) over time which encourages investment and spending today. Since we don't have crazy levels of inflation this doesn't fully discourage savings (with a 10% or higher inflation rate you have very little incentive to save, with 1 or 2% your savings lose value over time, but slow enough that it's still worth saving). Economies are improved a…

> Economies are improved and sustained by moving money, not by stagnant money.

A common misconception. The health of an economy lies in the goods that are exchanged; money is merely a placeholder. They are improved by producing more goods than are consumed, which creates room for investment in capital goods (tools for enhancing the productivity of goods and labor) and the research and development of improved technology (learning to make better tools).

"Stagnant" money just means that more goods were produced than were consumed, and the surplus was not actively invested. The surplus still exists, and continues to fuel investment (by others) so long as the money remains unspent. The "stagnant" money is off the market, not competing for goods and services, and as such contributes to a reduction in prices similar to what would occur if that money were simply destroyed (albeit temporarily), shrinking the money supply. In effect this leaves the decision about how the surplus of goods should be invested up to other market participants.

If the owner of the "stagnant" money knows of ways to invest which would provide an ROI better than the average rate of return on the market (i.e. the rate of deflation) then they should do so, earning themselves a profit and raising the average rate of return. However, below-average investments—malinvestments—would lower the average rate of return and reduce overall economic growth, and ought to be discouraged. It's better for everyone for the owner to simply sit back, "hoard" the money, and receive a passive reward for producing more than they consumed than it would be for them to actively invest in ventures with below-average realized returns and thus divert resources from better-performing ventures, but that is exactly what an actively inflationary monetary policy encourages by driving people who lack the competency to choose good investments to invest in the market anyway merely to avoid losses due to money supply inflation.

Re: MasterCard to open up network to cryptocurrencies

#445
post #391

Earlier quoted context omitted.

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).

Why would someone give btc against a more risky local money? What I wonder is, why is it more convenient for someone who has some unstable money available to trade it for btc rather than euro directly for example? - i assume the end goal is to convert it back to a real money you can use to purchase thing?

Why would someone give euro against a more risky local money?

Re: MasterCard to open up network to cryptocurrencies

#446

Earlier quoted context omitted.

> 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…

Awesome, go to the supermarket, pay with BTC and wait there for an hour for your transaction to complete. Or try to buy anything time/quantity limited, so you don't get it because the transaction took too long to complete. Meanwhile, in Canada, I just do a money transfer by email without any fees (if sending more than $10), and it's almost instant if the receiver have auto-deposit set up.

How does that email system work? Can’t you just do free instant wire transfers in Canada?

Re: MasterCard to open up network to cryptocurrencies

#447

Earlier quoted context omitted.

> 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…

I live and work in the US, but originally I'm from Croatia. I wire money every month to my family back there. It takes 5 work days for the wire to fully clear. Since 5 days is a full work week, it almost always bleeds over to the weekend and in reality takes 7 days. BTC might still be a terrible system for international transactions but it's still 168 times faster than the one that exists now.

honest question: what's the advantage of bitcoins over amazon gift cards (or any other prepaid credit)?

they are immediate, cheap and can be exchanged for real money for free.

Re: MasterCard to open up network to cryptocurrencies

#448
People often think crypto == bitcoin. I think there are 4 categories that people should think about: 1. Crypto as asset class (BTC/ ETH) 2. Crypto for transactions - usually pegged to a dollar or other fiat eg. USDC 3. Crypto as a utility/ asset backed token - filecoin etc 4. fraud.

I think mastercard visa etc will focus on #2 above and it will bring extremely powerful dynamic to these ecosystems

Re: MasterCard to open up network to cryptocurrencies

#449

Earlier quoted context omitted.

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).

Say everyone in an unstable economy were paid in usd. If that country has foreign deficit, if that country has high government debt. What happens? How can the government keep paying its own employees? How does it pay retiree checks? How does it subsidize farming when needed? As long as a country cannot print usd itself, this is a fast shortcut to unemployment, hunger, etc... Strong currencies are not the solution to…

> As long as a country cannot print usd itself, this is a fast shortcut to unemployment, hunger, etc...

We don’t even need to make up hypothetical examples. We have a live one in Greece. The Greek citizens went through this exact ordeal for the exact reason you stated. They couldn’t print EUR and the ECB wouldn’t extent monetary support to Greek government.

Re: MasterCard to open up network to cryptocurrencies

#450

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…

I don't get why bitcoin is worth so much.Bitcoin is called a store of value like gold, but gold has inherent uses. If the price of gold went to zero then you could still use it to make jewellery or use it for electrical conductivity. If the price of bitcoin goes to zero then it's worthless. It's also not environmentally friendly and bitcoin mining uses up 0.21% of the world's power supply. And all of this energy is used to calculate billions of hashes per second out of which all but one will be discarded. There is also increased regulatory focus from governments who see it as a threat , with India even going so far as to suggest they would ban it.
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