
Western Union: Bitcoin isn’t ready for international money transfer yet - cdvonstinkpot
http://www.coindesk.com/western-union-bitcoin-international-money-transfer/
======
nl
_One of the big sticking points is liquidity, he argues, adding that family
support payments can currently only be useful once converted to local fiat
currencies.

“We’re a long, long way from sending momma in Mexico $240 each month or a
Somali family in a refugee camp $200 each month in bitcoin that is held in a
wallet for conversion to local fiat currency and spending as needed,” he
suggests._

This is absolutely the case.

It's worth noting that there are tremendous opportunities for arbitrage in a
market like that too.

~~~
marcell
> This is absolutely the case.

Is it? Assuming users don't wish to hold BTC directly, the buys and sells
should match up in the long run, and the only costs will be exchange fees.

Implementing international remittance will probably help bitcoin liquidity.

~~~
nl
Yes, it is the case right now, because the long-term balance doesn't help the
person with short term needs.

Go to a Somali refugee camp in Kenya and attempt to exchange your Bitcoin at
anything approaching international market rates.

This doesn't mean it will always be like that, though. The arbitrage
opportunities (if nothing else) make it too attractive for that need to remain
unserviced.

(I speculate elsewhere about alternative international payment networks may
fit _perfectly_ into this model:
[https://news.ycombinator.com/item?id=6666899](https://news.ycombinator.com/item?id=6666899))

------
DigitalSea
Western Union are sort of right. Bitcoin although more stable recently than it
ever has been, is still pretty unpredictable and laws surrounding its use are
somewhat untested in a lot of regions. When Silkroad shutdown it cast a new
light on Bitcoin, people think Bitcoin is for buying illicit drugs anonymously
and don't currently see it as a valid alternative to actual currency, at least
not yet. Once more and more countries release their stance on the currency,
then Bitcoin might be ready for the prime-time.

------
jasonlingx
The biggest reason it is not ready for prime time: security. The regular user
is very likely to get all their bitcoin stolen from them sooner or later.
Heck, even the people running the exchanges and other bitcoin services get
hacked all the time. There simply is no good way to secure bitcoin for the
regular joe at this point in time.

~~~
ye
> _There simply is no good way to secure bitcoin for the regular joe at this
> point in time._

My coworker has a regular checking account. One day he noticed he had
something like $20K missing. He called the bank, they have a long conversaton,
put him on hold, long long hold, then they say "Your money is back, let's
never talk of this incident again".

If he hadn't noticed it, he would be out $20K.

~~~
ceejayoz
If it'd been in Bitcoins, he'd still be out the $20k.

~~~
AsymetricCom
If it'd been in his own bitcoin wallet, he would have never lost the $20k

~~~
ceejayoz
Plenty of people have had their coins stolen, both from personal computers and
hacked exchanges. For example: [http://www.geekosystem.com/first-major-
bitcoin-theft/](http://www.geekosystem.com/first-major-bitcoin-theft/)

The ability to irretrievably lose massive sums of money with no recourse is a
challenge for Bitcoin. Banks have insurance for just this sort of eventuality.
Cash is relatively hard to steal in gigantic quantities.

~~~
smithzvk
> The ability to irretrievably lose massive sums of money with no recourse is
> a challenge for Bitcoin. Banks have insurance for just this sort of
> eventuality.

I find it funny that you pose the problem and give the solution in such close
proximity. (In case you miss my meaning, the solution is to trust large
wallets with third party companies that insure their holdings and guarantee
your money even if they are successfully attacked)

~~~
alexeisadeski3
@ceejay,

The FDIC isn't really relevant here ー it doesn't really insure against theft
or bank error. But banks have other insurance which does precisely that.

------
drewblaisdell
(1977) IBM: Personal Computer Not Ready for Primetime Yet.

~~~
chollida1
To be fair if they did say that, they were right. It wasn't until 1981 that
the PC market started to take off.

~~~
drewblaisdell
The PC market of 1981 was taking off with the personal computer of 1977.

~~~
alphaoverlord
It's never just about the product. There's also the market, the logistics, and
the peripherals. Even if it is the same product and "before its time", it's
still before its time.

------
DennisP
"For bitcoin to overcome these regulatory challenges, there are several 'areas
of improvement,' he says. These include customer identification and due
diligence, verifying ownership and control of wallet addresses, and
transaction monitoring for fraud. Bitcoin institutions must prevent transfers
that would violate OFAC (Office of Foreign Asset Control) sanctions or the
UIGEA (Unlawful Internet Gambling Enforcement Act)."

If he's serious I don't think he understands much about bitcoin. (More likely,
he's trying to preserve a role for Western Union.)

~~~
jpatokal
I think he understands it just fine. Those aren't a problem with Bitcoin
itself, but they're very much a problem for any entity like Western Union that
has to abide by legal and financial regulations in all its business.

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badinker
Does anyone expect a company like Western Union to come out and endorse a
currency that can be transferred nearly instantly for practically
nothing???!!!

~~~
kbaker
This is their biggest issue... They have no incentive to bootstrap and provide
legitimacy to what would end up becoming their biggest competitor in the
future.

They are stuck - they can see the short-term huge benefits and profits from
being a trusted middleman, but once it takes off and becomes accepted in the
mainstream they would be cut out of the picture (and forced to pivot again...)

------
gexla
Translation: There is a lot of opportunity with Bitcoin and remittances.

------
yawaramin
... in other news, Blockbuster says Netflix isn't ready for the national movie
rental market yet.

------
ye
I'm actually in the middle of transferring a large sum of money between
countries.

WesternUnion would cost me at least 4.5%, their fee calculator doesn't even
support large amounts.

Bitcoin will cost me around 1.0% in fees (including USD wire-in, buy bitcoin,
sell for Euro, SEPA-out).

Guess which method I will be using.

~~~
usaphp
Did you try using a bank wire transfer? I've transferred money from US to
Russia via bank wire transfer and they had a flat fee ($45) which is perfect
for large amounts.

~~~
twelvechairs
the flat fee is not the only spot where money is made on these transfers. the
big one is giving you a bad rate (so effectively the bank takes a percentage
anyway). also they make money through holding your cash rather than
transferring straight through.

~~~
usaphp
> the big one is giving you a bad rate Not sure about that, they gave a usual
> bank rate, I doubt you can get a much better rate when you transfer and
> convert money from/to bit coin exchange.

