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MasterCard to open up network to cryptocurrencies

reuters.com

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Re: MasterCard to open up network to cryptocurrencies

#331

Post by sz4kerto »

Mc_Big_G wrote: post #50
liquidify wrote: post #27

Earlier quoted context omitted.

They couldn't do that. If they didn't actually have any crypto, in the event of a large scale increase in price combined with a large scale cash out, Paypal would have to eat the difference from buy to sell price. They would lose their shirt. At minimum, Paypal is buying some percentage of the crypto sales in actual crypto to act as a hedge. However, it is more likely they are closer to 1 to 1 backing since they prob…

You're giving Paypal and Robinhood too much credit. It wouldn't surprise anyone if they both consider themselves "too big to fail" and do not have sufficient crypto to cover themselves. It's easy to imagine the meetings where someone "important" says "That will never happen, end of discussion." and then it turns out they they're wrong and they get bailed out (or not).

These meetings don't exist. Occasionally fraud and negligence happens, but not this casually. People running PayPal-sized companies are neither completely stupid not completely evil. A bit yes, but not this much.

Re: MasterCard to open up network to cryptocurrencies

#332

Post by ivalm »

whatshisface wrote: post #305
ivalm wrote: post #301

Earlier quoted context omitted.

If you sell Bitcoin every time you buy bread then you just sell whenever. It will be a large flow of market orders even if there aren’t enough asks.

You don't sell Bitcoin every time you buy bread, the merchant obtains bitcoin and sells it when they think they should. If nobody is holding Bitcoin, you have to buy it when you buy bread, which means there's a 1:1 balance between buying and selling with each transaction. If everybody is holding bitcoin, then the merchant will not mind waiting a little to offload it, because they know they will do better by taking th…

Baker definitely should sell Bitcoin every time someone buys bread, otherwise they would be taking on currency risk, which is insane. Since they paid for flour/labor/amortized capex in fiat, if BTC price moves down they won’t be able to cover their obligation. This means a baker need to sell at least as much BTC as would cover their fiat costs. Since bakery margins are low it means they should sell most of the BTC they get every time someone buy bread from them.

Again, in real/practical world merchants are not there to invest in crypto, they are there to produce tangible goods and collect surplus of exchange tokens —- everything that is not profit needs to be de-risked.

Re: MasterCard to open up network to cryptocurrencies

#333

Post by rank0 »

koonsolo wrote: post #232
PragmaticPulp wrote: post #12

Earlier quoted context omitted.

Bitcoin transaction fees are currently around $8. My credit card pays me 2% to use it. No one wants to use the Bitcoin blockchain for average transactions. No one is buying Bitcoin as anything other than a speculative investment right now.

Nano has 0 fees and 1< second transactions. What is your argument against that?

I've read briefly about nano and its super interesting. I don't really understand how its feasible though. What is the incentive for operating a node in the network?

A cryptocurrency that would ACTUALLY be used as a currency needs a resilient network. But if operating a node yields no financial incentive, how is that network supposed to be created?

Re: MasterCard to open up network to cryptocurrencies

#334

Post by cableshaft »

PragmaticPulp wrote: post #2

These stories usually spur more enthusiasm for buying cryptocurrency, but ironically those buyers aren’t interested in spending cryptocurrency using their MasterCard. They’re hoping other people will buy cryptocurrency from these announcements, driving the price up. Or, more likely, they’re just hoping other people will buy cryptocurrency and not use it in these spending systems. Spending cryptocurrency would result…

> ...ironically those buyers aren’t interested in spending cryptocurrency using their MasterCard.

> They’re hoping other people will buy cryptocurrency from these announcements, driving the price up.

So what? Does every investor use the products of the companies they invest in? Professional investors don't care about that, they care about how well the company is doing and what they think its trajectory will be (up or down), not whether they personally will use the services offered.

Re: MasterCard to open up network to cryptocurrencies

#335

Post by koonsolo »

Sargos wrote: post #322
koonsolo wrote: post #319

Earlier quoted context omitted.

People can pay with their phone using a simple QR code. Merchants can check on any computer with a web browser. How complex does Mastercard make it right now? Like I said, it's a dinosaur ready to go extinct.

That's from an end users perspective. From a merchant's perspective if they provide that QR code they now have the additional burden of custody of a bunch of crypto assets which means learning about, installing, making a specific bank account to sell the coins, dealing with tax burdens, etc which is a lot of work and risk for someone already overworked and stressed by their primary business. Or they can just use a pa…

Sorry, maybe I'm just ignorant, but since when do Mastercard and Visa handle taxes and everything you describe?

Re: MasterCard to open up network to cryptocurrencies

#336

Post by mlthoughts2018 »

PragmaticPulp wrote: post #125
mlthoughts2018 wrote: post #97

Earlier quoted context omitted.

If you live in a situation where the only local fiat currency is even worse, then the “volatility fee” of cryptocurrency may be well worth the money to decouple yourself from that bad fiat currency risk. Maybe you can purchase things directly with the cryptocurrency, or maybe you just wait until you can drive across the border to a place with more stable fiat currency, sell cryptocurrency for that currency, and buy m…

If someone is in a country with a collapsing local currency, they still have to transfer that money to a Bitcoin exchange before they can transfer the Bitcoin. If the currency is collapsing, who’s going to trade Bitcoin for the collapsing currency? That’s the necessary first step in this process. If I’m just trying to cross the border with Bitcoin in my mind wallet so I can convert it back to cash on the other side,…

This is why you would speculatively buy Bitcoin and hold it long before that happened, at a time when people are happy to accept your fiat currency for Bitcoin. People learning from experience in Venezuela, Zimbabwe, North Korea, would probably feel glad to put some fraction of savings into crypto just in case, knowing that the interim volatility risk of it sitting in crypto is a worthwhile price to pay to have a reserve money supply that does not need to pass back through their original fiat currency on the way to being spent (as precious metals, stocks, bonds, securities, options, etc. all would).

Re: MasterCard to open up network to cryptocurrencies

#337

Post by heterodoxxed »

codebolt wrote: post #167
janoside wrote: post #116

Earlier quoted context omitted.

What's the point, you ask... Here is Ross Stevens, CEO of Stone Ridge Asset Management, describing "the point" for an hour: https://www.microstrategy.com/en/bitcoin/videos/bitcoin-macr... It sounds like you've made up your mind about Bitcoin, but I believe you've missed the big picture. The above video, if you watch it with an open mind, will help you to glimpse it. Hint: it's not about cappuccino, it's about living…

Any real value analysis of Bitcoin that doesn't take Tether into account isn't worth much. As long as the whole crypto market is built around a currency issued by an unregulated and unaudited company with a mile-long list of past controversies, any unbiased take on the future of Bitcoin has to allow for a significant downside risk.

Tether is a real Michael Burry moment for me. They claim to have 30 billion in reserves right now and are "printing" a billion tethers at a time. Yet nobody can confirm their reserves and the company itself is absurdly opaque.

Either there is an incredible amount of criminal fraud behind this or... this is perfectly reasonable?

Except nobody can really explain or confirm why.

Re: MasterCard to open up network to cryptocurrencies

#338

Post by Sargos »

koonsolo wrote: post #335
Sargos wrote: post #322

Earlier quoted context omitted.

That's from an end users perspective. From a merchant's perspective if they provide that QR code they now have the additional burden of custody of a bunch of crypto assets which means learning about, installing, making a specific bank account to sell the coins, dealing with tax burdens, etc which is a lot of work and risk for someone already overworked and stressed by their primary business. Or they can just use a pa…

Sorry, maybe I'm just ignorant, but since when do Mastercard and Visa handle taxes and everything you describe?

In this case it would be their ability to prevent you from having to deal with crypto taxes since you just receive USD like normal.

Re: MasterCard to open up network to cryptocurrencies

#339

Post by anm89 »

arcticbull wrote: post #188
anm89 wrote: post #106

Earlier quoted context omitted.

No currencies are "stable" inflationary, deflationary or neutral. Stabilize means that volatility reduces, not ceases to exist.

Yes there are, thanks to positive control from central banks. That's the point of central banks. Provide and maintain stability through the active expansion and contraction of supply against an index.

Show me a currency that has the exact same inflation figures every month for a single year and I'll send you a bitcoin.

Or alternately, just view a currency index like the DXY to see very closely that nothing comes close to this.

Here is what some real inflation data looks like (as viewedin terms of CPI). It can't even decide if it wants to stay positive or negative on a monthly basis.

https://tradingeconomics.com/euro-area/inflation-rate-mom

Re: MasterCard to open up network to cryptocurrencies

#340

Post by UncleOxidant »

PragmaticPulp wrote: post #2

These stories usually spur more enthusiasm for buying cryptocurrency, but ironically those buyers aren’t interested in spending cryptocurrency using their MasterCard. They’re hoping other people will buy cryptocurrency from these announcements, driving the price up. Or, more likely, they’re just hoping other people will buy cryptocurrency and not use it in these spending systems. Spending cryptocurrency would result…

> Spending cryptocurrency would result in selling that cryptocurrency, which would drive the price down.

An economy based on BTC would be highly deflationary as no one would want to spend - why buy something today when it'll be cheaper in a week or a month? Scarcity isn't necessarily a good feature for a currency. Ideally supply of a currency should increase as more people enter the economy. Such a currency would aim for stability instead of aiming for the currency itself to increase in value (as happens for BTC or even physical gold).

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