A Revolution in Money • Hacker News Board

Re: A Revolution in Money

#11

Post by surfmike » Wed, Apr 02, 2014, 2:50 PM UTC

edanm wrote: post #9

wdewind wrote: post #4

Earlier quoted context omitted.

On the other hand... The 2 to 3% drag needs to be corrected for increased liquidity, which is difficult to do. People don't use credit cards because they are convenient, people use credit cards because they do not have the extra money, which drives compounded economic growth. If bitcoin succeeds, credit mechanisms will be built on top of it, and they'll behave almost identically to credit cards, including have fraud.…

"People don't use credit cards because they are convenient, people use credit cards because they do not have the extra money, which drives compounded economic growth." That's not true everywhere. I'm not sure if it's US-only behaviour, but in other countries, the majority don't use credit cards for debt - just as a convenient payment mechanism.

True, and fees are often way lower for debit cards as well. Not sure what it is in practice, but here's an example: http://www.cardfellow.com/blog/debit-card-charge-calculator-...

Re: A Revolution in Money

#12

Post by tpeng » Wed, Apr 02, 2014, 3:35 PM UTC

bsirkia wrote: post #3

I like that this is at least opening up to the possibility of new, more efficient transaction methods. Marc Andreessen made me think about credit cards differently after hearing him on a Freakonomics podcast: "And so one way to think about credit card fraud, is credit card fraud is a two-to-three percent drag on the entire economy. It’s an artifact of the fact that credit cards were never designed to be used the way…

Bitcoin doesn't eliminate security risks, it pushes the costs onto consumers. It's inconceivable to me that regular users can be trusted to maintain and secure their own wallets, so the only solution is an online wallet. But those businesses will need to be paid for their service, and face security risks as well, which under the current system are ultimately transferred to users. For bitcoin to work, we need a system that guarantees that consumers will not bear losses from fraud or hacking.

Re: A Revolution in Money

#13

Post by fixedd » Wed, Apr 02, 2014, 3:36 PM UTC

vvvv wrote: post #10

wdewind wrote: post #4

Earlier quoted context omitted.

On the other hand... The 2 to 3% drag needs to be corrected for increased liquidity, which is difficult to do. People don't use credit cards because they are convenient, people use credit cards because they do not have the extra money, which drives compounded economic growth. If bitcoin succeeds, credit mechanisms will be built on top of it, and they'll behave almost identically to credit cards, including have fraud.…

>People don't use credit cards because they are convenient, people use credit cards because they do not have the extra money I use my credit cards because they don't cost me any more than using cash (I pay off the full amount each month) and I get a lot of various perks in return, like cashback, airmiles and insurance. They are convenient and I use them whenever I can.

Also decreased risk. Loose your cash and it's gone, loose your card and you just call in for another.

Re: A Revolution in Money

#14

Post by wdewind » Wed, Apr 02, 2014, 3:37 PM UTC

Xdes wrote: post #6

wdewind wrote: post #4

Earlier quoted context omitted.

On the other hand... The 2 to 3% drag needs to be corrected for increased liquidity, which is difficult to do. People don't use credit cards because they are convenient, people use credit cards because they do not have the extra money, which drives compounded economic growth. If bitcoin succeeds, credit mechanisms will be built on top of it, and they'll behave almost identically to credit cards, including have fraud.…

>If bitcoin succeeds, credit mechanisms will be built on top of it, and they'll behave almost identically to credit cards, including have fraud. Why? One way transactions cut down fraud. It's not inconceivable to have a hardware digital currency wallet that can be used similar to the modern credit card. Banks could issue credit that is spendable in the same way with additional automatic escrow. Why continue to have t…

Huh? One way transactions cut down charge backs, they don't cut down fraud. It just moves the fraud risk to the consumer (and the wallets), instead of the merchants. Great for merchants, not great for consumers. Again, as merchants are already willing to take a cut to attract consumers via credit cards, it seems unlikely that consumers will be motivated to use bitcoin over credit cards.

Re: A Revolution in Money

#15

Post by wdewind » Wed, Apr 02, 2014, 3:38 PM UTC

bsirkia wrote: post #5

wdewind wrote: post #4

Earlier quoted context omitted.

On the other hand... The 2 to 3% drag needs to be corrected for increased liquidity, which is difficult to do. People don't use credit cards because they are convenient, people use credit cards because they do not have the extra money, which drives compounded economic growth. If bitcoin succeeds, credit mechanisms will be built on top of it, and they'll behave almost identically to credit cards, including have fraud.…

Definitely a good point, particularly that bitcoin will have credit mechanisms built on top of it. Maybe I'm wrong, but I think that the point of bitcoin is that any credit mechanism built on top of it wouldn't have the same problems of identity fraud. I also don't think the article is necessarily saying that we will have different crypto-currencies for each business, just that we already use a bunch of different pay…

> Definitely a good point, particularly that bitcoin will have credit mechanisms built on top of it. Maybe I'm wrong, but I think that the point of bitcoin is that any credit mechanism built on top of it wouldn't have the same problems of identity fraud.

How?

Re: A Revolution in Money

#16

Post by snarfy » Wed, Apr 02, 2014, 3:53 PM UTC

wdewind wrote: post #4

bsirkia wrote: post #3

I like that this is at least opening up to the possibility of new, more efficient transaction methods. Marc Andreessen made me think about credit cards differently after hearing him on a Freakonomics podcast: "And so one way to think about credit card fraud, is credit card fraud is a two-to-three percent drag on the entire economy. It’s an artifact of the fact that credit cards were never designed to be used the way…

On the other hand... The 2 to 3% drag needs to be corrected for increased liquidity, which is difficult to do. People don't use credit cards because they are convenient, people use credit cards because they do not have the extra money, which drives compounded economic growth. If bitcoin succeeds, credit mechanisms will be built on top of it, and they'll behave almost identically to credit cards, including have fraud.…

What? I don't own a credit card, but I use a visa card all the time, because it's convenient. I'm pretty sure more people use their bank cards than their credit cards. It still the same crappy technology underneath.

Re: A Revolution in Money

#17

Post by wdewind » Wed, Apr 02, 2014, 3:56 PM UTC

canvia wrote: post #8

wdewind wrote: post #4

Earlier quoted context omitted.

On the other hand... The 2 to 3% drag needs to be corrected for increased liquidity, which is difficult to do. People don't use credit cards because they are convenient, people use credit cards because they do not have the extra money, which drives compounded economic growth. If bitcoin succeeds, credit mechanisms will be built on top of it, and they'll behave almost identically to credit cards, including have fraud.…

"people use credit cards because they do not have the extra money" So you think it's better for people to be able to spend money that they don't have and pay usurious interest rates and fees, decreasing the utility of their future income and locking them into perpetual debt? Maybe it would be better if credit were a bit more difficult to access so that people think about it more before utilizing it.

False dichotomy.

Re: A Revolution in Money

#18

Post by mbrynard » Wed, Apr 02, 2014, 4:06 PM UTC

The idea of wallets with dozens of digital currencies ties in with another idea which I've been intrigued by recently.

Apart from the payment mechanism functionality, units of cryptocurrency are much like shares in a company.

The Cypherfunks experiment (www.thecypherfunks.com) illustrates this concept: Imagine anybody could own shares in the music industry. To make this possible bands simply accept payment in a specific cryptocurrency (e.g. FUNK). As more people support bands using this form of payment, the value of the cryptocurrency grows and the entire network of bands and their supporters benefits.

Re: A Revolution in Money

#19

Post by sailfast » Wed, Apr 02, 2014, 4:07 PM UTC

wdewind wrote: post #4

bsirkia wrote: post #3

I like that this is at least opening up to the possibility of new, more efficient transaction methods. Marc Andreessen made me think about credit cards differently after hearing him on a Freakonomics podcast: "And so one way to think about credit card fraud, is credit card fraud is a two-to-three percent drag on the entire economy. It’s an artifact of the fact that credit cards were never designed to be used the way…

On the other hand... The 2 to 3% drag needs to be corrected for increased liquidity, which is difficult to do. People don't use credit cards because they are convenient, people use credit cards because they do not have the extra money, which drives compounded economic growth. If bitcoin succeeds, credit mechanisms will be built on top of it, and they'll behave almost identically to credit cards, including have fraud.…

Great point. As for the questions below, let's talk real numbers for the US in 2014:

Average household owes $7,115 on their credit cards. Average indebted household owes 15K+.

http://www.nerdwallet.com/blog/credit-card-data/average-cred...

Re: A Revolution in Money

#20

Post by funkydallas » Wed, Apr 02, 2014, 4:07 PM UTC

"A Revolution in Money" would mean that no third parties do have control over its value. Nowadays we have something like a server based money network. If the server (bank) goes down, everybody is screwed.

Imagine a peer to peer kind of money network. Every member is a bank himself. Getting a credit works like crowd funding. People can invest their money into several projects. Investors get a certain percentage of the profit. This way you avoid the "interest and compound interest" problem.