
Hawala: The Working Man’s Bitcoin - ryan_j_naughton
http://priceonomics.com/hawala-the-working-mans-bitcoin/
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GigabyteCoin
Hawala seems more analagous to Ripple or the #bitcoin-otc IRC channel than to
Bitcoin imho. Interesting read, nonetheless!

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amalag
Yes Ripple is much more similar because it doesn't have any mining, the
theoretical basis is disparate parties are unlikely to collude, not proof-of-
work.

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kolev
Ripple is superior to Bitcoin, but because it lacks the speculation element
(i.e. "get rich quick"), it's not attractive.

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oleganza
How exactly is it superior? If I understand correctly, Ripple moves around
IOUs backed by trust in intermediaries. Bitcoin is a commodity in itself that
can be owned directly, without trusting any broker. Ripple to Bitcoin is like
a banking network of inter-bank promises to personally owned physical gold
under the mattress. Of course, Bitcoin can be stored cheaper and in many more
interesting ways than gold, which makes it much safer and more useful.

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kolev
Well, in the real world, Bitcoin needs the exchanges, which are good only for
speculation and hoarders and not having this in Ripple is actually a good
thing, especially for commerce! Ripple builds the system and specifications
from A to Z, so, it's a more complete piece of technology, more universal, and
more applicable to our daily lives, but it's not attractive to anarchists and
speculators as there's very little in it for them.

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oleganza
Bitcoin does not need exchanges. Exchanges are just one method to get your
hands on Bitcoin. Then you can trade in Bitcoin directly without any extra
financial institution in between you and another guy. Exchanges are prevalent
today as the easiest way to get BTC, but you can do it also by mining, by
buying on the street or by selling your goods and services for BTC. You can
invent new trading places or entire networks, or trade directly. Once no one
needs USD or EUR, existing exchanges will become irrelevant.

~~~
kolev
Most people who sell bitcoins at LocalBitcons.com have their price based on an
exchange plus a significant premium, not to mention, amounts you can get are
very small. A lot of Bitcoiners don't look into Ripple or totally discount it
as they see it as a competitor, when, in fact, it's the only thing that can
save Bitcoin and keep it truly decentralized.

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aabalkan
Hawala is discussed widely on HN before, see
[https://news.ycombinator.com/item?id=6666557](https://news.ycombinator.com/item?id=6666557)

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JonSkeptic
I thought this was a fairly good explanation of Bitcoins broken down into
simple terms so that non-technical people can easily grasp the concepts. The
Hawala parallel only helps.

That said, it's not really news and doesn't bring any new information to the
Bitcoin discussion on Hacker News.

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umeshunni
This is a fairly good article on hawala too, but tacking on the somewhat
forced Bitcoin analogy makes it clickbait.

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schoen
I found the parallels interesting -- many people would like fast cheap
payments to anywhere in the world without interacting with a bureaucracy.
Though there's almost no demographic overlap right now in who uses the various
techniques for this!

I wonder what hawaladars' techniques for information and communications
security are like, and what efforts people have made to spy on their
communications -- or to defraud them by impersonating another hawaladar and
originating fraudulent payments.

By using personal trust relationships, hawaladars don't need to solve the full
Byzantine Generals problem, but they do face authentication and
confidentiality problems from outsiders.

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zhemao
They probably just call each other up on the phone. If two hawaladars know
each other well it would be pretty difficult to impersonate one to the other.

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quarterwave
Hawala is closer to traditional banking than is made out to be. Despite the
hash code entries there must be a form of eventual resettlement. There must
also be a distributed enforcement apparatus that charges its own fees. Also,
in many countries hawala operators are 'too big to fail', which is the
ultimate proof that they _are_ banks.

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ChuckMcM
So it seems there is an opportunity for a hawala/bitcoin exchange is there
not? I'm not sure the payments would balance out (would people accept btc and
pay cash) but its an interesting thing to think about.

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mik3y
I think that's effectively what Ripple is trying to do
([https://ripple.com/](https://ripple.com/)) -- a sort of Hawala-like exchange
protocol with an open ledger, mixing in their own cryptocurrency. At least,
that's the way I thought of it since I last looked..

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maerF0x0
Didnt the templar do something like this before? I think so:

[http://history.econtrader.com/the_first_banking_institution....](http://history.econtrader.com/the_first_banking_institution.htm)

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maaku
The Templar is interesting history, but every society everywhere in the world
has done this before. Because what do you think came first: regulated or
unregulated banking? That's all hawala (and bitcoin, and the Templar system)
is: unregulated banking.

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yetanotherphd
It seems that Hawala might be used for import tax evasion:

>Most hawaladars take care of money transfers as a side part of their small
business, so often hawaladars pay each other back in non-monetary ways. The
most common case is by discounting goods in an export/import business. So in
Ibrahim’s case, if the hawaladar he visits in Dubai exports goods to the
hawaladar in Alexandria, the Dubai based lender can pay off his debt by
discounting the value of his goods.

If the cost of the imported goods is discounted, then proportionally less
import tax will be paid.

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caycep
All I know about this I learned from that Joseph Gordon Levitt movie about
bike messengers in New York

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notduncansmith
Premium Rush
([http://www.imdb.com/title/tt1547234/](http://www.imdb.com/title/tt1547234/)).
I loved that movie!

