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In Fifty Days, Payments Innovation Will Stop In Silicon Valley

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Re: In Fifty Days, Payments Innovation Will Stop In Silicon Valley

#191

Post by ChuckMcM »

tptacek wrote: post #186
ChuckMcM wrote: post #173

While I agree with other commentators that the prose is a bit over the top, its an interesting move on the part of financial interests. (there was a great report in the Murky News that special interests are writing the laws [1]) Clearly financial transactions have provided a means for the state to both detect and to a lesser degree mitigate criminal activity. The phrase 'follow the money' works because such activitie…

Does contractor licensing and bonding cut down innovation in contracting? Aren't most contractors firms of less than 10 people? Are there not hundreds of them? How can you defend the argument that a yearly bond premium payment that is less than many companies pay for liability insurance is a serious drag on innovation?

Hmm, I'm curious how you equate building a contracting business is equivalent to building a new payments system?

I agreed that the article's portrayal of the fees as extortionate was hyperbole but agreed that raising the barrier to entry would slow down the creation of new payment systems. If you accept that the rate of innovation is related, at least linearly, to the creation of new companies in a product space, then reducing the creation rate would necessarily reduce the rate of innovation.

An alternative look at your question with contractors would be to ask "Has the licensing and bonding requirements cut down on innovation in contracting business models?"

I don't know how to answer that question without first removing the licensing and bonding requirement and then observing the resulting market. It certainly mitigates crime in the contracting market to some extent by making it more difficult for a criminal to pass themselves off as a bonafide contractor. But the current state of affairs don't say about whether or not the contracting market would be more innovative without those restrictions.

Re: In Fifty Days, Payments Innovation Will Stop In Silicon Valley

#192

Post by sophacles »

hammock wrote: post #113
tptacek wrote: post #84

Earlier quoted context omitted.

The question was not whether unregulated markets spawn "trusted rating services". It's whether society could function with private rating services in lieu of regulation.

http://en.wikipedia.org/wiki/Moving_the_goalposts#As_logical... Go back and read your exchange. It looks to me like he answered your question, and you're changing it now.

Actually, he is not moving goal-posts, he is just asking for the second half of his originally stated question to be answered. I know it is silly, and probably sounds like nitpicking to you, but please, don't make false claims, particularly when they are just veiled ad-hominem.

Re: In Fifty Days, Payments Innovation Will Stop In Silicon Valley

#193

Post by gburt »

redthrowaway wrote: post #180
dpatru wrote: post #70

Earlier quoted context omitted.

An unregulated market will spawn entities that provide the services it needs. This includes security and trust. Insurance companies, for example, are entities that people trust to protect them against loss. Rating agencies are entities that people trust to provide risk assessment. The difference between non-coercive (private) entities and government is that non-coercive entities adapt better. So, for example, if you'…

The mortgage crisis says hi. The problem with free-market ideologies isn't that the market won't adjust to consumer need, it's that it causes considerable pain in doing so and will only provide a counterbalance if there's a monetary incentive. Free market capitalism is, at it's core, evolution. It leads to amazing responsiveness, complexity, and, arguably, beauty. It also has made 99.99% of all species that have ever…

The Community Reinvestment Act seems to be a pretty likely stimulus for the mortgage crisis - incentivizing "anti-racist" behavior rather than good lending practices. Worse yet, the "considerable pain" you're trying to avoid gets worse over time -- as central bankers reduce interest rates (read: print money) to jack up growth until it gets too fast then pull money from the market (read: increase interest rates) to slow down a "bubble", the yo-yo effect amplifies until pop.

Pine beetles in BC are an interesting point, as it seems like it is precisely the lack of ownership over valuable forest land that is preventing the type of extensive research we would need to protect that resource. While research outcomes are entirely uncertain, it seems that ownership and the forecast loss of value is a pretty solid motivator for solving problems.

Re: In Fifty Days, Payments Innovation Will Stop In Silicon Valley

#194

Post by vacri »

jrockway wrote: post #48

Doesn't all regulation stifle innovation? If I wanted to sell a homes in a skyscraper made of papier-mâché, building codes would prevent me from doing that. But that's not necessarily a bad thing: the first time someone leaves their soldering iron on while they're not using it, the building burns down and we have five hundred dead families on our hands. "Innovators" tend to think about the good aspects of their ideas…

Nope. Sometimes regulation spurs innovation, forcing businesses to go from "business as usual" to "how do we deal with this?". Air pollution regulations in California helped drive a lot of innovation around cleaning up car exhausts, for example. Without that restriction, movement in that area would have been very slow.

Re: In Fifty Days, Payments Innovation Will Stop In Silicon Valley

#195

Post by Groxx »

gokka wrote: post #46
Groxx wrote: post #40

Earlier quoted context omitted.

I'm sure similar claims can be made for Linden dollars, which have been used for far more transactions over the years than Bitcoin has. Why single out Bitcoin? Because it's new?

Bitcoin is much more powerful then Linden dollars, Egold etc. because it allows transactions online, anonymously, and has no central authority. No other payment method has ever had all three of these characteristics.

No?

I can create an anonymous Second Life character at any time, linked only to my account info (an email - Mailinator solves that). I can build something in-game and sell it, creating money with no person bound to it. Or be given money in-game for a real-world purchase, leaving me with money that still has no connection with me. There's barely a central authority, as there's nothing stopping you from passing money around in-game, which would be the major barrier to illegal trading. And what is there is rather impotent, as everything can be done just as anonymously as in Bitcoin - they can get your IP address, but only if they're watching, and that's far from an identification. Just go to a coffee shop.

Bitcoin just makes it easier, and fault/attack-tolerant. It's been possible for quite a while. Though perhaps the most useful aspect to this is that transactions aren't revokable, where they are in nearly any other non-physical system.

Re: In Fifty Days, Payments Innovation Will Stop In Silicon Valley

#197

Post by ra »

lhnn wrote: post #126
ra wrote: post #74

Earlier quoted context omitted.

Thanks for clarifying. I'd like to add that this is a good practice in the financial industry, and isn't a bad thing at all. It's consumer protection. And, $500k is actually a pretty low figure for this type of 'bond'. For example, in Australia I believe you would need a banking license (or a guarantor with a banking license) which requires a deposit of at least $40M in to an escrow account which is managed by the ce…

I'd like to say this should not be legislated, and people should choose who to do business with on their own. If they offer the government a bond to cover losses, then people might go to that business instead of some startup. OTOH, perhaps I don't care when all I'm investing in my "Silicon Valley Facespacecash" bank is $20. Another reason to use alternative currencies...

People choose who to bank with based on marketing and suitability of product.

No one chooses a bank based on their balance sheet.

Re: In Fifty Days, Payments Innovation Will Stop In Silicon Valley

#198

Post by [deleted] »

jonknee wrote: post #144
yoyar wrote: post #52

So, a new startup comes along, and things are going well. The have new, innovative ideas that satisfy the needs of consumers. They manage to get a few hundred thousand dollars from a VC so that they keep operating for another 6 months. This startup offers a service that is cheaper, safer, quicker and generally more efficient that what is currently available. All of a sudden they'll be breaking the law unless they han…

> All of a sudden they'll be breaking the law unless they hand over half a million to the government. Or put up a few coins for a surety bond. If you're a financial startup and your investors don't trust you enough to put up bond money, you should probably find a different niche (or investors).

[deleted]

Re: In Fifty Days, Payments Innovation Will Stop In Silicon Valley

#199

Post by lurker19 »

gburt wrote: post #193
redthrowaway wrote: post #180

Earlier quoted context omitted.

The mortgage crisis says hi. The problem with free-market ideologies isn't that the market won't adjust to consumer need, it's that it causes considerable pain in doing so and will only provide a counterbalance if there's a monetary incentive. Free market capitalism is, at it's core, evolution. It leads to amazing responsiveness, complexity, and, arguably, beauty. It also has made 99.99% of all species that have ever…

The Community Reinvestment Act seems to be a pretty likely stimulus for the mortgage crisis - incentivizing "anti-racist" behavior rather than good lending practices. Worse yet, the "considerable pain" you're trying to avoid gets worse over time -- as central bankers reduce interest rates (read: print money) to jack up growth until it gets too fast then pull money from the market (read: increase interest rates) to sl…

Right, that is why We the People create regulations to protect the society that We own. General welfare and common defense and all that jazz.

Re: In Fifty Days, Payments Innovation Will Stop In Silicon Valley

#200

Post by olalonde »

tzs wrote: post #142
olalonde wrote: post #62

Earlier quoted context omitted.

No I don't think most regulations are good for society in aggregate, including building codes. What if we had software codes to make sure we write secure software, would that be a good or a bad thing? Take this payments law for example. Its intended objectives are admirable but I don't believe it will accomplish them nor benefit consumers in the long run. By artificially imposing a high barrier to entry (licensing fe…

> No I don't think most regulations are good for society in aggregate, including building codes. Nearly every large earthquake proves you wrong on building codes. Compare deaths for a given magnitude quake in areas with strong building codes vs. areas with weak or no building codes.

That's not the point. Alcohol prohibition reduces alcohol related deaths. Doesn't make alcohol prohibition a good thing for society.
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