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Bitcoin: the Stripe perspective

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Re: Bitcoin: the Stripe perspective

#151

Post by Cyther606 »

Natanael_L wrote: post #115
Cyther606 wrote: post #72

Earlier quoted context omitted.

First, Bitcoin resembles MLM / network marketing more than any one traditional financial instrument. Second, that the State would want to allow a free market currency of fixed supply to compete with their own digital currency that can be whimsically inflated and used to fund endless warfare and welfare just doesn't fit the historical record. Never, in the past hundred some odd years, has any competing currency been a…

No it doesn't resemble MLM more than superficially, because there's no hierarchy or levels of anything of that kind. At worst it is like another bubble in that manner, like tech stock bubbles before it.

Everyone who holds Bitcoin has a vested interest in seeing the network gain value. Those who hold Bitcoin are incentivized to talk other people into holding it, which is very much in the spirit of network marketing.

While there aren't "multiple levels", there are certainly early adopters who bought coins for next to nothing, and those people stand to profit much more substantially than those who come later.

As for the difference between a tech stock and Bitcoin. Holding Bitcoin entitles you to nothing: no voting rights, no dividends. Bitcoin is backed purely by air.

One more aspect of Bitcoin that bears an uncanny resemblance to MLM is the "cliqueness" of the network. There are superstar early evangelists, many of whom are popular for selling the libertarian dream to people, which they buy into. Of course, many of those people have XXX,XXX BTC to their name and thusly stand to profit from their talking points taking root.

Re: Bitcoin: the Stripe perspective

#152

Post by napoleond »

rsp1984 wrote: post #97
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…

Let me ask a dumb question: If money exchange is the main problem that Bitcoin solves, then why isn't the problem of money exchange attacked directly instead, i.e. through some other less volatile classical stores of value like gold or stock? Why is money exchange a problem anyway and why couldn't a classical wire transfer solve the problem? The article doesn't say anything about these things and the underlying princ…

I am returning to this thread a bit late, but let me try to answer your questions:

> If money exchange is the main problem that Bitcoin solves, then why isn't the problem of money exchange attacked directly instead, i.e. through some other less volatile classical stores of value like gold or stock?

"Money exchange" is a poor way of phrasing the problem that Bitcoin solves. Satoshi called it "Peer-to-Peer Electronic Cash", which is a better way to think of it: currently, without Bitcoin, the only way to transfer money to a peer without relying on a third party of any sort is to hand deliver a wad of cash. Bitcoin enables that transaction to happen electronically, for free. I don't see how it would be possible to enable those features (no need for third party, free international transfer) while using classical stores of value, and as far as I know neither does/has anyone else.

> Why is money exchange a problem anyway and why couldn't a classical wire transfer solve the problem?

This is basically asking "why is the trust thing so important?" That's a pretty heavy question, but one simple answer that comes to mind is that trust is expensive, and economically inefficient. The capital involved in mimicking the behaviour of a company like Western Union is a small fraction of what they're worth by virtue of being Western Union (ie. having people trust them) and the fact that they meet regulatory requirements everywhere they operate. That brand is only valuable and those regulations are only necessary because transferring money used to be impossible without them.

Now, what Stripe is suggesting (and I happen to agree) is that there may always be trusted third parties and possibly some level of regulations involved to protect the consumer, but the level of trust and the amount of safeguards will ultimately be tempered by the enormously reduced barriers to entry (and hence vastly increased competition), potentially to the point where consumers will have almost the same variety of choice with their payment providers (ie. replacing credit card) as they currently enjoy with email. There are still a lot of technical hurdles to work out before that can become a reality, but that's the dream I'm excited about and the real value I see in Bitcoin.

Re: Bitcoin: the Stripe perspective

#153

Post by aianus »

doctorpangloss wrote: post #64

> First, the resulting ecosystem is technologically open. Open ecosystems have a way of getting better much faster than their closed counterpart. Unless you are specifically in the business of making financial institutions, it would seem that Stripe (and for that matter, nearly every payment provider that a computer can interact with) is open in all the ways that matter to a normal person. > There are a number of cry…

Take a look at this list of prohibited businesses on Stripe and tell me again how open it is: https://stripe.com/ca/prohibited_businesses

The vast majority are perfectly legal businesses but the chargeback risk is so high they refuse to process payments for you.

Re: Bitcoin: the Stripe perspective

#154

Post by wcummings »

Alex-Galapagos wrote: post #112
Natanael_L wrote: post #98

Earlier quoted context omitted.

So you want Ripple, essentially. You should be aware that anything dependent on a small set of entities can fail spectacularly. You never know if they get hacked, bankrupt, sued, raided, etc ...

Ripple is a rip-off. You buy a gift card and the money stays there..

Ripple allows people to issue cryptographically secured debt securities, not sure what you think it is

Re: Bitcoin: the Stripe perspective

#155

Post by freedom123 »

brg444 wrote: post #100
freedom123 wrote: post #77

Earlier quoted context omitted.

Aluminum was more expensive than gold until a cheap way to purify it was developed. Now we wrap our food in it. Gold is only valuable until the first metallic asteroid is placed into high Earth orbit. Not tomorrow, but probably sooner than you think. reply If gold wasn't used as a store of value its value would be very maybe a hundredth of what it is now: Gold-plated jewelry in our modern era is essentially indisting…

I suggest you return to your economic and history books. Gold has no intrinsic value as you would probably call it. It is only because of some VERY distinctive properties that are not found in other metals that gold was ultimately selected as the better store of value available. Its only value comes from a market agreement. Bitcoin is essentially the same as it replicates the same properties of gold while having a mo…

Gold has intrinsic value because 1: Its rare 2: Its tangible 3: People want it. Look at history and you will see gold wrapped around everyone's neck and fingers. As mentioned before, a currency has to be back by something. Bitcoin is backed by nothing - nothing cannot be something - no matter how much you exclaim - that is the risk of investing any time with Bitcoin. Just because you like the utility of of bitcoin almost has nothing to do with it being a currency. Example - You can have 50 coins of solid gold or 50 zeros on a computer.

Re: Bitcoin: the Stripe perspective

#157

Post by wcummings »

throwaway2274 wrote: post #146

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…

This is a great example, since iirc Wikileaks started accepting BTC donations shortly thereafter...

Re: Bitcoin: the Stripe perspective

#158

Post by megablast »

Bakkot wrote: post #107
rsp1984 wrote: post #97

Earlier quoted context omitted.

Let me ask a dumb question: If money exchange is the main problem that Bitcoin solves, then why isn't the problem of money exchange attacked directly instead, i.e. through some other less volatile classical stores of value like gold or stock? Why is money exchange a problem anyway and why couldn't a classical wire transfer solve the problem? The article doesn't say anything about these things and the underlying princ…

The answer to basically all of your questions is that to transfer money, you need to move money . This can be basically a promise of money, as with wire transfers, or physical, as you'd do by transporting bullion or cash. The problem with using a promise to move money is that you have to trust whoever's promising. That works alright if there's a central authority, like a bank, but less well if you don't want to trust…

> The answer to basically all of your questions is that to transfer money, you need to move money.

Is that true? I everyone around the world is moving money around, then most trades can be covered by not moving any money around, just between people in the same country.

If I want to move $1000 to France, and someone else wants $1000 from France, we just swap money, and two people in France do the same.

What is left is keeping track what everyone has put in, and what they have taken out.

Re: Bitcoin: the Stripe perspective

#159

Post by ejhong »

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 currently is very good at eliminating counterparty risk and providing anti-censorship for payments. Many people are hoping this leads to other benefits like low transaction fees, micropayments and privacy. The blockchain doesn't seem like the best solution for these other features but it may provide a foundation for innovation. I have hope that new layers will be built on top of bitcoin to solve these issues (see open transactions for example).

Re: Bitcoin: the Stripe perspective

#160

Post by XorNot »

Bakkot wrote: post #134
rsp1984 wrote: post #131

Earlier quoted context omitted.

Thanks for your answer. However I still don't fully understand the problem I'm afraid. How is the trust required to move money cross borders different to the trust required to have an account with money at your bank? That acct is just a "promise" of money as well isn't it? Also, according to your response a domestic money transfer would suffer the same problems but these seem to work just fine (at least much better t…

> Also, according to your response a domestic money transfer would suffer the same problems but these seem to work just fine (at least much better than international transfers). Certainly they work better, but "just fine" is a much stronger claim and one I'd disagree with. I don't find myself spending money by wire transfer hardly ever, eg, and when I do it is a much larger affair then using cash. See also andrewla's…

This is absurd. I spend money by wire transfer all the time. A good 80% or so of my ebay shopping would be wore transfers to merchants in Hong Kong via Paypal. This is a big enough issue in Australia that we've had retailer associations complain about it on occasion. Overseas money transfer is not at all difficult on a consumer level.
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