
Kenya's mPesa vs. Bitcoin - jusben1369
http://www.pymnts.com/briefing-room/commerce-3-0/Electronic-Payments/2014/bitcoin-payments-igniting-or-not/
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1053r
Except his main point (of Bitcoin failing to grow exponentially) is just
false. Look at the "number of transactions per day excluding popular
addresses" (located at [https://blockchain.info/charts/n-transactions-
excluding-popu...](https://blockchain.info/charts/n-transactions-excluding-
popular?showDataPoints=false×pan=all&show_header=true&daysAverageString=7&scale=1&address=)).
You see a clear straight line on a logarithmic scale. So while Bitcoin may not
be growing as fast as mPesa did, it is definitely growing exponentially.

~~~
jnbiche
Agreed -- this is what I signed in to post. I have been waiting for a long
time, with growing frustration, for Bitcoin's transaction rate to start taking
off[1]. For several years, the transaction rate was near flat. But look at it
now! Clearly, people are using Bitcoin for to buy and sell.

In fact, my thesis is that increased use of Bitcoin as a currency is partly
what is driving down the price. Most of the highest-volume Bitcoin-accepting
vendors (Overstock, Gyft, Tiger Direct, etc.) change their Bitcoins
immediately to USD, which creates significant selling pressure.

1\. If anyone is wondering why the most popular addresses are excluded, it's
because those addresses are almost invariably the exchanges, and so they skew
the data upward.

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maxerickson
Can you explain why you think you have any visibility into the trades from
those retailers?

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eloff
Probably because they use coinbase or others that change the money immediately
(or guarantee the current price which usually amounts to the same.)

~~~
maxerickson
That just pushes it off a degree. How do you have any sense of that volume?

(volume being critical to deciding whether the trades are interesting)

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DrStalker
Bitcoin has no appeal as a payment system compared to fiat currency for legal
transaction. It might be fun and novel but that alone won't make it
successful.

~~~
abc123xyz
Erm near zero transaction costs and irreversibility are a HUGE appeal, anyone
who sells online and had to deal with Paypal and Credit cards would tell you
plenty of nightmares about frozen accounts, chargebacks and chargeback fees
and rampant fraud.

~~~
gamblor956
_near zero transaction costs_

Ignoring the sizable 3% or greater costs incurred in acquiring the currency,
plus the transaction costs associated with prioritizing a transaction for
processing.

 _irreversibility_

For merchants. It's a definite killjoy for _customers_ , and customer uptake
is far more important than merchant uptake for a new currency.

 _anyone who sells online and had to deal with Paypal and Credit cards would
tell you plenty of nightmares about frozen accounts, chargebacks and
chargeback fees and rampant fraud._

Nope. The only nightmares I've heard are from people who did things wrong.
Paypal and merchant services make their rules pretty clear, and they even
offer assistance to merchants to figure out what they need to do. If you're
having problems with Paypal or your merchant service provider, it's because
you messed up.

~~~
Casseres
I avoid eBay and use Craigslist for selling stuff because I don't want to risk
a PayPal nightmare (due to scams which I always hear about). I'd rather have
cash in my hand that I can verify is not counterfeit.

~~~
GFK_of_xmaspast
There's a huge cost to doing business on Craigslist, to wit, you have to deal
with people who do business on Craigslist. (there's good, but dang there's a
whole lot of flakes and wackos on CL)

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jusben1369
I enjoyed this article in that it seems fairly balanced, unemotional and
included hard data. It does raise the question about how much of Bitcoin's
interest in the press is driven by it's usage as a currency vs its
appreciation as a financial asset.

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muyuu
Unsurprisingly pymnts.com is not positive about payments going completely P2P
and wiping out the middle men from the picture entirely.

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abc123xyz
Well you do have to wonder as to who pays their bills

~~~
jusben1369
Well Gentlemen the arguments presented either hold water or they don't. Best
to stick to the points presented if a rebuttal is what you have in mind.

~~~
muyuu
They don't. The comparison makes no sense whatsoever.

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higherpurpose
mPesa has been around for longer, and has a bigger momentum. I don't think
there's anything to get out of this besides that. Also, how many people there
have at least smartphones, if not PCs, to make their Bitcoin payments? With
mPesa you can do it through SMS if I'm not mistaken. So again, of course the
market for mPesa is bigger right now.

I also don't think it's fair to look at Bitcoin's growth "over the past 5
years", and just conclude Bitcoin "has been flat", when it's just starting to
take off now in some countries, and the fact that those regions don't have a
ton of smartphones doesn't help.

~~~
infruset
Maybe this will help BTC take off?
[https://coinbase.com/sms_service](https://coinbase.com/sms_service)

~~~
tzs
That one depends on how long Coinbase manages to stay around. They are
registered as a money services business with FinCEN, but they do not seem to
have registered with the states.

It's possible that they did FinCEN registration first (as that is the easiest
and I believe is free, whereas the states require that you have a bond), and
state registration is in the works, but I've not seen any evidence of that.
I'd expect that if they were actually in the midst of getting that done, they
would be trumpeting that fact widely, as it would be a great way to make
themselves stand out from all the illegal-with-no-intent-to-become-legal
Bitcoin money transmitters.

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richcollins
Perhaps that's true in general but it wasn't true of the internet:

[http://www.zakon.org/robert/internet/timeline/#Growth](http://www.zakon.org/robert/internet/timeline/#Growth)

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brianfitz
For an apples to apples comparison, you must start with the premise that
Bitcoin is a platform. M-Pesa, built on top of multiple platforms, is a
company. If you want a starting point as a comparison between between the two,
you should start the clock on M-Pesa back to the origin of cell towers
(platform #1) followed by SMS (platform #2). It was only when these two
technologies matured that M-Pesa (a company) became possible.

~~~
jusben1369
I feel like you're stretching pretty hard here. Taking your second point
first, why wouldn't we turn back the clock for bitcoin then to the "start" of
the internet? And the author here, while sighting M-Pesa, references other new
payment types too like PayPal which feels closer to Bitcoin (independent
exchange mechanism that can be pulled out in a hard currency) when stating
that Bitcoin is well behind the curve of where it needs to be.

~~~
brianfitz
Paypal is another company, based on existing platforms. Their success was
directly tied to their ability to predict fraud and take real-time decisions
to block or, at times allow, a high risk transaction to process (assuming
their algorithm determined the cost of blocking the transaction was greater
than allowing it to go through and issuing a refund). People believe their
differentiator was payment processing, but its this very belief that allowed
them to kill off their competition.

If you view Bitcoin as similar to PayPal, then that is at the heart of why we
view this issue differently. I would compare Bitcoin much more closely to
HTTP, or other protocols -- and PayPal as being akin to BitPay. When Bitcoin
is compared to companies built on top of existing protocols and platforms,
then I believe the premise is misguided. M-Pesa's success is directly tied to
cheap mobile airtime. In Malawi, I purchased a new cellphone with minutes for
$12 USD, and I was paying the airport rate. The same principal goes for Kenya
-- there were M-Pesa booths everywhere I went in Nairobi, but only because of
the amazing uptake of basic cell phones mostly used for SMS. Without that
mature platform, the business could never survive.

Bitcoin could ultimately fail, but not due to the adoption curve as outlined
in the article.

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moens
pymnts.com ...I was so hoping for a site on grape meads. Alas.

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shitgoose
Kenyans are Keynesians, eh? Go figure...

