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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

#451

Post by lifty »

whitepaint wrote: post #437
lifty wrote: post #404

Earlier quoted context omitted.

Do you think the code will fail, the consensus model, or there are no uses cases? If you have concerns about this I would love to hear them. But if you are only afraid that the price can fall 90%, then who cares? Let it fall, there is too much hype anyway, to the point it has created great division between coiners and no-coiners. For example, the 2001 stock market crash, it cleared out projects based on fluff and the…

2 most likely possibilities imo: some huge vulnerability that has not yet been found, and something much much better coming out.

Sure, vulnerabilities and bugs can happen. They get fixed and people move on. Something much better coming out is not an existential risk for the cryptocurrency/blockchain space, quite the opposite, it's very positive.

Re: MasterCard to open up network to cryptocurrencies

#452

Post by trhway »

ForHackernews wrote: post #379
trhway wrote: 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.

In response to your edit, I don't know how you can claim that "real" (according to who? you?) inflation is somehow divorced from the purchasing power of a dollar. What matters to most humans is how far their wages go at the shop. Hand-waving at money supply and "total amount of stuff" without reference to prices makes as much sense as arguing "Well obviously daily commutes were shorter in 2019 than 1919 because cars…

You forgot the second part - the total miles commuted. The same is inflation - faster growing total money divided by slower growing total "stuff".

Re: MasterCard to open up network to cryptocurrencies

#453

Post by PragmaticPulp »

nybble41 wrote: post #396
UncleOxidant wrote: post #340

Earlier quoted context omitted.

> 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…

> why buy something today when it'll be cheaper in a week or a month? Because you need it today? We already see this all the time in subsets of the market which experience deflating prices. If you wait a year to buy that fancy device you're wanting there will most likely be a better model available at a lower cost. People still buy the current model, though, because there is a cost to waiting which offsets the expect…

It's a different situation when the currency itself is deflationary, not the goods being purchased.

Instead of thinking in terms of buying a phone, think of this in terms of capital allocation and investment.

Deflationary currencies are designed to accrue value to those who don't use them. An economy built on the idea of incentivizing people to not spend any money is not good at all.

Everyone knows about the downsides of excessive inflation, but deflationary spirals are a well-known economic problem. In short: Deflation reduces demands for goods, which causes producers to lower production targets, which causes people to be laid off, which further reduces demand for goods and so on.

A hypothetical Bitcoin economy rewards early adopters massively at the expense of newcomers. The current wealth situation is already heavily biased toward older generations, even on an age-adjusted basis (see charts: https://www.wealthmanagement.com/client-relations/illustrati... ). If you think that's bad, just imagine a Bitcoin economy where the underlying financial system accrues wealth to the older holders, at the expense of newcomers to the system.

People love Bitcoin because they think they're the ones getting in at the ground floor, getting wealthy at the expense of the new arrivals. The love for Bitcoin would flip very quickly as young people realize they're deeply on the losing end of that deal.

Re: MasterCard to open up network to cryptocurrencies

#454

Post by GoblinSlayer »

toomuchtodo wrote: post #426
l_pan_ wrote: post #410

Earlier quoted context omitted.

It has already been https://www.investopedia.com/terms/s/stablecoin.asp Andreessen Horowitz invested $15 million in https://en.wikipedia.org/wiki/Dai_(cryptocurrency)

What happens to stablecoins when central banks hand out digital wallets [1] to everyone alongside instant payments [2]? [1] https://www.atlanticcouncil.org/blogs/econographics/the-rise... [2] https://en.wikipedia.org/wiki/Instant_payment#Examples_of_in...

Fiat systems impose the risk of opacity, regulatory heuristics and reversible transactions.

Re: MasterCard to open up network to cryptocurrencies

#455

Post by krsdcbl »

me551ah wrote: post #450
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…

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 u…

I'd argue that the demand for gold jewelry would drop accordingly to the gold price falling to zero. Jewelry is a secondary form of said value store, nothing inherently useful

Re: MasterCard to open up network to cryptocurrencies

#456

Post by PragmaticPulp »

cableshaft wrote: post #334
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…

> ...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. So what? Does every investor use the products of the companies they invest in? Professional investors don't care about that, they care about how well the company is doing and what they think its trajectory will be (up or…

Bitcoin isn't a company, though. It's an asset. Bitcoin itself doesn't do better or worse or grow in value. It's just moving up and down according to supply and demand.

Re: MasterCard to open up network to cryptocurrencies

#457

Post by shawnz »

xirbeosbwo1234 wrote: post #380
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.

Bitcoin, at least, absolutely does not solve this problem. Let's leave aside its volatility for now and assume it magically stays at exactly the same price. You are then left using a currency where each transaction costs several dollars and takes a half an hour, and that's the present state of affairs when no one is using it . So you would keep your cryptocurrency in a bank and transfer it through the normal channels…

> So you would keep your cryptocurrency in a bank and transfer it through the normal channels

You do your daily spending through the normal channels, sure, but why would you need to keep your cryptocurrency savings in a bank in such a situation?

Re: MasterCard to open up network to cryptocurrencies

#458

Post by thehappypm »

solosoyokaze wrote: post #141
maceurt wrote: post #123

I am not big on cryptocurrency. Look how the price of these "currencies" fluctuate like crazy, because people buy and treat it like an investment. What is the actual current practical utility of cryptocurrency except for buying/selling illegal things online? People are so horny to get in on the next computer/iphone/etc that they forget that new ideas can fail.

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…

This scenario is hard to imagine being worth a trillion dollars.

Re: MasterCard to open up network to cryptocurrencies

#459

Post by OOPMan »

krsdcbl wrote: post #455
me551ah wrote: post #450

Earlier quoted context omitted.

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 u…

I'd argue that the demand for gold jewelry would drop accordingly to the gold price falling to zero. Jewelry is a secondary form of said value store, nothing inherently useful

Well, unlike Bitcoins, I can put gold jewellery in a sack and use it as a cosh ;-)

Re: MasterCard to open up network to cryptocurrencies

#460

Post by PragmaticPulp »

draaglom wrote: post #357
gt565k wrote: post #345

Earlier quoted context omitted.

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.

Exactly. "Spending" the cryptocurrency is just convenient UX over the exchange process.

Using a credit card that abstracts the details doesn't get you off the hook from paying capital gains tax.

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