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Bitcoin: the Stripe perspective

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Re: Bitcoin: the Stripe perspective

#141

Post by [deleted] »

Natanael_L wrote: post #105
ceallen wrote: post #78

Earlier quoted context omitted.

Individual transaction fees are being heavily, heavily subsidized by block rewards currently. Just eyeballing the current numbers: ~400 transactions per block, 25 btc reward, ~500 usd / btc gives a transaction cost of 31 dollars each. What happens to fees when mining rewards taper off? Just authoritatively stating "it'll be fixed" blindly pushes these problems into the future.

Transaction count will go up, and nothing says the value given to miners must stay the same. It is fine if some miners leave due to unprofitability.

[deleted]

Re: Bitcoin: the Stripe perspective

#142

Post by abalone »

The last section on trust & protection cuts to the heart of what it will take for general consumer adoption. But it leaves unstated the fundamental tension: the very nature of bitcoin is that of anonymity and finality. Whereas card and even ACH transfers can be reversed, bitcoin cannot.

The essay hints that it will take a central trust provider to regulate and police transactions to control for fraudulent activity. That's true. The key question is whether they'll be able to sustain the promised cost efficiencies of bitcoin by the time they build in this capability.

If the technical differences melt away and it just becomes another competitor to Visa/Mastercard, minus the billions of dollars of marketing and POS infrastructure over decades that have gone into cementing that network, then we really have to scrutinize whether "openness" and "unbundling" present a serious enough benefit to warrant the cost of a consumer global payments network rollout.

And couldn't a central trust provider work against this openness and unbundling? That's the whole point of a central entity, right?

Re: Bitcoin: the Stripe perspective

#144

Post by a_c_s »

neom wrote: post #133
wpietri wrote: post #128

Earlier quoted context omitted.

Bitcoins are way more volatile than gold: http://btcvol.info/ That you bought something and had it go up is great for you, but it does not mean the volatility is low. Indeed, if it went up a lot, it means volatility is high. Volatility is the inverse of stability.

A currency can be as volatile as it wants from day to day, but if over a very long time the value appreciates consistently then wouldn't that make it a good value store? You're hedging day to day against a long term win, surely?

Nope: long term appreciation may make it a good investment but a poor store of value.

Lets say you have two magical safes, and you put $100 in each one.

The first safe gives you the real-dollar value of what you put in, less $0.50 per-month. So a year later, you get $94 worth of inflation-adjusted dollars no matter how high or low inflation has been over the course of the year.

The other safe gives you an additional dollar for each day you keep the money in it, but there is a 70% chance all but $10 catches on fire when you open the safe. So one year later you have $465 or $10, statistically averaging $149.5 .

The second safe might be worth gambling on as statistically you get almost a 50% return on investment: but if you need to be certain the value you put in is maintained, the first safe is the better option. Therefore, the first safe is a far better store of value.

Re: Bitcoin: the Stripe perspective

#145

Post by samstave »

napoleond wrote: post #9

This is my favourite article about Bitcoin to date, and properly describes one of the main ideas I wish Bitcoin detractors would come around to. Bitcoin has a lot of problems as a unit of account and as a store of value, but that is not primarily what Satoshi was building ( https://bitcoin.org/bitcoin.pdf ). Bitcoin is, and has always been, a medium of exchange first and foremost. It still has some shortcomings in th…

Has/Is someone building a payload VPN transaction system based on the bitcoin protocol?

Re: Bitcoin: the Stripe perspective

#146

Post by throwaway2274 »

One problem with the current system that the article did not mention is that having a central party handle all the global financial transfers creates a big handle for nation states to put leverage on.

We saw this very clearly when the US government put pressure on VISA and mastercard to reject donations going to WikiLeaks. I remember watching that whole episode in disgust. With bitcoin, this is pretty much impossible.

Re: Bitcoin: the Stripe perspective

#147

Post by drusenko »

neom wrote: post #133
wpietri wrote: post #128

Earlier quoted context omitted.

Bitcoins are way more volatile than gold: http://btcvol.info/ That you bought something and had it go up is great for you, but it does not mean the volatility is low. Indeed, if it went up a lot, it means volatility is high. Volatility is the inverse of stability.

A currency can be as volatile as it wants from day to day, but if over a very long time the value appreciates consistently then wouldn't that make it a good value store? You're hedging day to day against a long term win, surely?

how can you make the assumption that "over a very long time the value appreciates consistently"?

in fact, one definition of a bubble is when people start to assume that an asset will always appreciate over time...

Re: Bitcoin: the Stripe perspective

#148

Post by sanderjd »

Cyther606 wrote: post #65
IgorPartola wrote: post #13

Earlier quoted context omitted.

Agreed. The more I think about BTC, the more I understand that the exchange protocol is the most useful part of it. Storing value in an encrypted wallet on your computer is inconvenient to say the least. Not that I want local storage of value to go away, but as a consumer I want a very different payment experience than "here, have my CC number" or "let me pay with PayPal".

Satoshi wrote in the genesis block: The Times 03/Jan/ 2009 Chancellor on brink of second bailout for banks Bitcoin was released in staunch opposition to the banking system. > Storing value in an encrypted wallet on your computer is inconvenient to say the least It's possible to store Bitcoin on sheets of paper, or entirely in your brain, safely and securely. I get the distinct feeling you've never used Bitcoin before…

I have bought and sold a few hundreds of USD worth of BTC and even used a few tens of USD of it for transactions, and while you're definitely right about the intent and philosophy of BTC, I agree with your parent comment that what is actually exciting about BTC (or something inspired by it) is its potential as the lowest-friction way to buy things digitally. The sooner BTC shakes its crypto-libertarian culture the better. Right the vast majority of people in the world (at least those who've heard of it) know it as this weird, unsavory, and probably criminal thing, instead of as the backbone of the new cheaper and much more convenient way of buying things and moving money around.

If it can still be used by die-hards like you to protect themselves from the State, all the better, but that part of it is never going to be of much interest to most people.

Re: Bitcoin: the Stripe perspective

#149

Post by mrb »

nemo1618 wrote: post #7

It worries me to see people describe Bitcoin as the "IP layer of payments." I have serious doubts about Bitcoin's ability to scale to a global audience. Transactions are too slow, the blockchain is too heavy, etc. I see Bitcoin in a very similar light to IPv4 and JavaScript: a good idea that escaped into the wild too quickly. And so we wind up piling hacks upon hacks to make up for the lack of a solid foundation, and…

Bitcoin can scale: https://en.bitcoin.it/wiki/Scalability Key quotes: "we will not run out of CPU capacity for signature checking unless Bitcoin is handling 100 times as much traffic as PayPal [100 * 40 tps]", "bandwidth [for handling 2000 tps] is already common for even residential connections today".

Bitcoin already handles more volume than Xoom: http://www.coinometrics.com/bitcoin/btix and is on its way to surpass Western Union. Western Union does merely 600k transaction/day. Bitcoin hovers around 65k/day right now and it can do 600k/day if the artificial block limit is raised from 1MB to 2MB (it will happen at some point).

Re: Bitcoin: the Stripe perspective

#150

Post by Guvante »

sanswork wrote: post #135
rockyleal wrote: post #127

Earlier quoted context omitted.

They are more familiar with the current system, but after you have done it for the first time, you realise that electrum is actually way easier than banks. People just think its harder, but it is not really.

It's only easier if you ignore the part where you have to get bitcoin in the first place.

All the examples of "see Bitcoin isn't hard, here is $0.0005 worth" completely gloss over this point.
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