Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Bitcoin: the Stripe perspective

stripe.com

Post reply on HN
Print view View original

241–249 of 249 posts

Re: Bitcoin: the Stripe perspective

#241

Post by sanswork »

mrb wrote: post #240
sanswork wrote: post #239

Earlier quoted context omitted.

The people that use western union/moneygram etc do so because they need their family on the other side to be able to stop by a location near their house and get the money and they probably need the same on their side too. Bitcoin isn't going to help those people at all at any lower costs. Since it is the person on the other side with a shop that is the reason for the higher fees not the transmission of funds. Edit: a…

I point you back to my 1st example: this overheard (offices, employees) is what Bitcoin makes unnecessary if users can spend the coins directly, or exchange them directly for cash with friends/family/people in their community, or use a Bitcoin ATM (ATMs cost less to operate than a full blown WU-type office so they would lead to lower fees - anything below the average worldwide remittance costs of 8.5% is better.) You…

Yes but again they can't. If you used local bitcoins or a bitcoin ATM to buy and sell bitcoin it would cost you more using almost any ATM around.

It wouldn't make things cheaper. The people with the money on the other side to run the western union shop are the same people with the money on the other side to buy the ATM or the liquidity to give you cash for your bitcoin. They have no incentive to lower the price just because you use bitcoins instead of their traditional services.

Side note:

Overstock released their Q2 results today. So now we can say for sure if it's just a case of them having a slow second quarter which is leading to the dropping bitcoin revenue! Turns out their revenue is up for the second quarter. It's just bitcoin sales that are down.

Unless you want to argue that bitcoin sales are detached from normal sales and operate on an offset cycle I think you have to admit that you were incorrect there.

Re: Bitcoin: the Stripe perspective

#242

Post by chatmasta »

samstave wrote: post #145
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?

Working on it. (Also was researcher for TorCoin). Get in touch if you're interested -- email in profile.

Re: Bitcoin: the Stripe perspective

#243

Post by superuser2 »

rockyleal wrote: post #127
mbillie1 wrote: post #113

Earlier quoted context omitted.

> It doesn't get much easier than that I think a lot of people would argue that sticking with their current system (banks, fiat currency, etc) is, in fact, much easier than that.

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.

Oh? Something tells me I can't write a Bitcoin address on my direct deposit form.

Seriously, the interface provided by Citibank is pretty freaking great. I work, I swipe my credit card places. As long as I do the former more than the latter, I don't need to touch anything else. Also every few months I accumulate enough points to buy something on Amazon for $50-$100 for free.

Bitcoin could be even better if I got paid in Bitcoin and could pay people in Bitcoin, but I can't.

Re: Bitcoin: the Stripe perspective

#244

Post by mrb »

sanswork wrote: post #241
mrb wrote: post #240

Earlier quoted context omitted.

I point you back to my 1st example: this overheard (offices, employees) is what Bitcoin makes unnecessary if users can spend the coins directly, or exchange them directly for cash with friends/family/people in their community, or use a Bitcoin ATM (ATMs cost less to operate than a full blown WU-type office so they would lead to lower fees - anything below the average worldwide remittance costs of 8.5% is better.) You…

Yes but again they can't. If you used local bitcoins or a bitcoin ATM to buy and sell bitcoin it would cost you more using almost any ATM around. It wouldn't make things cheaper. The people with the money on the other side to run the western union shop are the same people with the money on the other side to buy the ATM or the liquidity to give you cash for your bitcoin. They have no incentive to lower the price just…

"they can't"

Yes they can. I already gave you the Italy->China example. I already said Bitcoin ATMs have fees lower than the worldwide remittance average of 8.5%. You initially said if the Bitcoin infrastructure and services are available that it "would not" make remittances cheaper. I am showing you it does. I gave you hard evidence. You gave me footnotes about a hypothetical service on a slide deck.

"are the same people"

No they are not. Do you not understand the market dynamics? A WU competitor who installs a network of Bitcoin ATMs has lower operational costs and overhead than WU (who has offices + employees staffing offices all day), therefore they have an incentive to compete and beat WU's costs.

Overstock: no you still have to wait longer before concluding anything. Bitcoin sales are somewhat detached. For example we know there was a spike of Bitcoin sales in Q1 because this is when they started accepting it, so a initial surge of Bitcoin enthusiasts purchased stuff in Q1 (I bought a $150 kitchen bin from them, haha).

Re: Bitcoin: the Stripe perspective

#245

Post by sanswork »

mrb wrote: post #244
sanswork wrote: post #241

Earlier quoted context omitted.

Yes but again they can't. If you used local bitcoins or a bitcoin ATM to buy and sell bitcoin it would cost you more using almost any ATM around. It wouldn't make things cheaper. The people with the money on the other side to run the western union shop are the same people with the money on the other side to buy the ATM or the liquidity to give you cash for your bitcoin. They have no incentive to lower the price just…

"they can't" Yes they can. I already gave you the Italy->China example. I already said Bitcoin ATMs have fees lower than the worldwide remittance average of 8.5%. You initially said if the Bitcoin infrastructure and services are available that it "would not" make remittances cheaper. I am showing you it does. I gave you hard evidence. You gave me footnotes about a hypothetical service on a slide deck. "are the same p…

You gave me an example of someone with a bank account on both sides. What I'm saying is most remittances where price is an issue don't have that benefit.

> I already said Bitcoin ATMs have fees lower than the worldwide remittance average of 8.5%

And you were wrong since most bitcoin atms charge 5% per side.

>I am showing you it does. I gave you hard evidence.

Where? You haven't shown any evidence of a comparable service that is actually cheaper.

>No they are not. Do you not understand the market dynamics?

Do you not understand economies of poor towns or that the country receiving the remittances would be a buyers market because of the high sell pressure and low buy pressure causing the spread to be huge?

>A WU competitor who installs a network of Bitcoin ATMs has lower operational costs and overhead than WU

No they don't. They still need someone to watch the ATM and help people use it and it is almost certainly stuck in a store somewhere like every other bitcoin ATM. Hell even the one in Vancouver has to pay someone to sit next to it all day to help people use it and scare off people trying to undercut them.

>Overstock

No we really don't. Bitcoin sales have negatively diverged from their real sales and the divergence is continuing. Even 2 months ago the CEO said on Reddit that bitcoin sales were nothing and he's a huge bitcoin supporter.

Anyhow it's clear we'll never agree and I'm getting bored of going back and forth on the same 2 or 3 points. So I'm going to stop now. Good luck with your investment.

Re: Bitcoin: the Stripe perspective

#246

Post by runeks »

jarek wrote: post #103
chadkruse wrote: post #28

Earlier quoted context omitted.

> This says to me that Stripe's position is ultimately to be...the SWIFT of Bitcoin. Agreed. To illustrate how broken the SWIFT system is for those unfamiliar with international wires: Last week I wired AUS$2,500 from an account I control in Australia to an account I control in the US. It touched 4(!) banks in the process, who collectively took ~$45 in fees ($25 of that being a total surprise to me, represented only…

That's 1.8%. What are the current spread rates for AUD-BTC and BTC-USD? For comparison I get 0.6 - 1.4% from an online specialized currency service, taking a couple of days. Set-up was a bit involved. How good is connecting BTC to real world bank accounts these days?

Buying BTC for 2500 AUD on https://anxbtc.com/ right now would net you 3.875512102 BTC, which can be sold for 2302.054188836 USD on Bitstamp. At current exchange rates that's a 2% loss on the transfer alone, and you'd incur the wire transfer fee anyway, when sending the USD from Bitstamp to your US bank account.

I think the bottleneck is currently the BTCAUD market, where the spread is 1.43% (http://bitcoincharts.com/markets/anxhkAUD.html), and also liquidity on US-based exchanges where you can avoid the subsequent international wire transfer.

Re: Bitcoin: the Stripe perspective

#247

Post by runeks »

nlh wrote: post #63
brg444 wrote: post #51

Earlier quoted context omitted.

> * Bitcoin the Network may ultimately be more valuable than BTC the currency This is a fundamental misunderstanding of Bitcoin. Because each and every Bitcoin function as a sort of "token" that provides access to this payment network, their value is closely tied to the value of the network. For Bitcoin to become an international payment gateway system, liquidity requires every Bitcoin to be worth a lot.

I guess I mean "valuable" in the intrinsic sense, not the financial sense. If, for example, in the model that Stripe outlines, the Bitcoin network ends up powering the Bank-to-Bank side of things (away from the consumer), only a handful of counterparties are going to be involved on the BTC side of things. Millions of consumers may use Stripe/whoever to send $$ to millions of other consumers, but that might all be han…

> Millions of consumers may use Stripe/whoever to send $$ to millions of other consumers, but that might all be handled by a (relatively) few BTC flying back and forth in batches on the back-end, which doesn't necessarily require a large per-BTC price.

That depends on what you mean by "large per-BTC price". It requires a certain minimum BTC price to move a certain amount of money when settling in bitcoin. You can't move $1M USD in one Bitcoin transaction if a single bitcoin is worth 1 cent and there are only 20 million of them. So the bitcoin price measured in a certain currency limits the maximum transaction volume for that currency when settling in bitcoin.

Secondly, and perhaps more importantly, it requires great liquidity/market depth. One must be able to buy or sell a lot of bitcoins without affecting the price. This is the essence of money: a high-liquidity commodity.

> I guess I mean "valuable" in the intrinsic sense, not the financial sense.

When settling in bitcoins, they need to have value in "the financial sense". That's a requirement.

Re: Bitcoin: the Stripe perspective

#248

Post by runeks »

natrius wrote: post #17
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…

Transactions are instant unless the sender double spends. Wait ten minutes for anonymous senders. Trust known senders, then blacklist their identity for instant transactions if bad behavior is detected. This is effectively what any merchant who accepts credit cards does today. Credit card transactions look instant, but can be rejected weeks later. If the blockchain is too heavy, why are miners willing to process tran…

> Transactions are instant unless the sender double spends.

Sure. But if we don't need to worry about double spends, we wouldn't need Bitcoin in the first place. Bitcoin solves the double spend problem, which takes, roughly 60 minutes.

> Wait ten minutes for anonymous senders.

A single confirmation is not sufficient for large-value transfers. The larger the transfers the longer one should wait (up to about 6 confirmations).

A miner with, say, 5% of the global hashing power has a 5% chance of finding the next block. That means someone working with the miner has a 5% chance of successfully pulling off a 1-confirmation double spend. If I transfer 100,000 BTC to someone as payment for something, and the recipient delivers to me a product worth 100,000 BTC after one confirmation, then I have a 5% chance of successfully scamming someone of something worth 100,000 BTC (~$60M). That's an average profit per attempt of 5,000 BTC (~$3M).

If I instead wait, say, 7 confirmations (~65 minutes), the probability of pulling of a successful double spend with 5% of the network hash rate is around 0.000000078%. That's an average profit per attempt of $0.05.

Re: Bitcoin: the Stripe perspective

#249

Post by mrb »

sanswork wrote: post #245
mrb wrote: post #244

Earlier quoted context omitted.

"they can't" Yes they can. I already gave you the Italy->China example. I already said Bitcoin ATMs have fees lower than the worldwide remittance average of 8.5%. You initially said if the Bitcoin infrastructure and services are available that it "would not" make remittances cheaper. I am showing you it does. I gave you hard evidence. You gave me footnotes about a hypothetical service on a slide deck. "are the same p…

You gave me an example of someone with a bank account on both sides. What I'm saying is most remittances where price is an issue don't have that benefit. > I already said Bitcoin ATMs have fees lower than the worldwide remittance average of 8.5% And you were wrong since most bitcoin atms charge 5% per side. >I am showing you it does. I gave you hard evidence. Where? You haven't shown any evidence of a comparable serv…

"You gave me an example of someone with a bank account on both sides"

Wrong. I was assuming one side would purchase Bitcoin cheaply on an exchange (eg. the migrant worker in Italy) and the other side (eg. China) would sell on a Bitcoin ATM. So 1% (or less) + 5% of fees which is still less than the 8.5% average of remittances. This is more evidence (again!) that Bitcoin can and does make it cheaper.

"No they don't."

Even banks would disagree with you. Running an ATM (even staffed by one guy sitting next to it) is cheaper than a branch office (which needs employees too). The office has higher costs on all aspects: rent (more square footage), employees (likely more than 1), other utilities, etc.

You look very silly, and alone, to argue that Bitcoin cannot make remittances cheaper. Virtually everybody would disagree with you.

Overstock: come back after they have done 1 year of sales, we will see.

Post reply on HN