
Why Bitcoin Can't Help the Poorest, Yet - kennethologist
http://techcrunch.com/2016/01/10/why-bitcoin-cant-help-the-poorest-yet/
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bduerst
The author is ignoring the fact that there are no refunds with bitcoin.

He talks about predatory banking, but the finality of bitcoin transactions and
lack of competitive insurance makes it even easier to scam the "unbanked".
Bitcoin is also only pseudo-anonymous, and is more complicated to use than
cash.

The Bill & Linda Gates backed M-Pesa fits most of the criteria laid down in
the article, much more than bitcoin, but seeing as that is a competitor of
Freemit (the author is the CEO), I don't think they're going to go into it.

~~~
drcross
>The author is ignoring the fact that there are no refunds with bitcoin.

The author's first point was that "the unbanked want to remain anonymous".
Refunds cannot happen while being anonymous.

Bitcoin is a replacement for cash, not an pseudo escrow service which we have
come to expect in the western world with credit cards. Transactions are built
on end-user trust. Credit card companies introduce a third party into the
transaction which costs money. This is not a bug of bitcoin, it's a feature.
The services you are referring to can, however, be built on top of the bitcoin
system.

~~~
bduerst
> Refunds cannot happen while being anonymous.

Preferring anonymity != preferring no payment disputes.

Bitcoins are also only _pseudo_ -anonymous, and every transaction is publicly
available making it less anonymous than a closed payments system or cash.

This rhetoric that apologizes for Bitcoins design flaws ("it's a feature not a
bug") is detrimental to future blockchain implementations that could design a
competitive solution to refunds.

~~~
CyberDildonics
That's like saying paper money has a design flaw, or ethernet has design flaws
because it doesn't account for serving web pages.

~~~
bduerst
Or its like saying an automobile has a design flaw because it can't go in
reverse.

~~~
CyberDildonics
How is it at all the same thing? Bitcoin isn't a contained technology, it can
be built on top of just as the internet is built on top of.

~~~
bduerst
Nope. It's even easier to mod an automobile because it doesn't require a
consensus from the mechanics (miners) to make a change. See the block chain
size debate if you're still unconvinced.

~~~
CyberDildonics
There are many companies already building services on top of bitcoin, it
doesn't take a change to the protocol and therefore it doesn't take any
permission or consensus from anyone. I can't tell if you have a fundamental
ignorance of crypto currencies or if this was an intentional straw man, but
either way it is so far from being rational I'm not even sure how you would
come up with it except for maybe learning about bitcoin through a game of
gossip rather than reading or experience.

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afreak
Why do people assume that Bitcoin is going to revolutionize the banking sector
when it cannot even scale? Why would we want to subject the poorest to a
system that won't be able to handle at best more than a handful of
transactions per second?

Bitcoin is literally a bottom-tier system and suggesting that we use it to
help those who are financially not-well-off is insulting.

~~~
drcross
Bitcoin can, and is in the process of scaling.

~~~
McGlockenshire
Transactions per second are bound to the block size.

The mining groups in China are against raising the block size because of
bandwidth and other realistic concerns.

The core developers, many of whom are employed by a company that has a
business model that has a higher chance of success if bitcoin does not raise
the block size, can neither agree that the block size needs to be increased,
nor how to perform the increase, nor to what size to increase it to. Even if
they could agree, the Chinese miners wouldn't update their software, and we'd
end up with a forked blockchain.

The primary places where bitcoin is discussed are moderated by a single
individual that considers things like XT and implementations of BIP-101 to be
altcoins and actively shuts down discussions about them and other block size
increases.

It seems to me that bitcoin isn't in the process of scaling at all.

~~~
bduerst
It's tragedy of the commons.

Bitcoin is designed for having rational actors as miners. The miners profit
less from the larger block sizes, and since they control the block size it's
not going to happen.

Bitcoin users who think the miners will do it "for the good of bitcoin" don't
realize that the entire bitcoin ecosystem is built on the miners acting in
their own best interest, not bitcoin's.

~~~
danharaj
I wouldn't call that a tragedy of the commons. I would call that "capitalism"
because it is exactly the relationship between the owners of the means of
production and everyone else.

"But anyone can become a miner" so it's free as in market and fair as in game.
/s

~~~
bduerst
It's tragedy of the commons because the miners are trying to reap from a
shared resource, with no alignment to the changes that are beneficial for
Bitcoin.

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fiatmoney
Bitcoin or its relatives is an excellent way to drive down the cost of sending
remittances. The US poor do not depend on them, but in many areas they are a
substantial part of the local economy. Initial retail liquidity isn't as much
of a problem as you'd think if you have the equivalent of wholesalers making a
market.

But yes, in general the existence of new cash-like asset classes isn't that
helpful to people with ~no cash assets.

~~~
joosters
Bit coin simply doesn't help with remittances:
[https://www.saveonsend.com/blog/bitcoin-money-
transfer/](https://www.saveonsend.com/blog/bitcoin-money-transfer/)

~~~
circlecrimson
Bitcoin helped me with servicing my loan in my home country when I was earning
in another currency. I escaped foreign exchange fees. Its a use case that a
lot of people have but it's unfortunate that the most vocal people telling us
bitcoin can't do something are those who don't seem to have that need for its
use.

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jrochkind1
What does "bitcoin is illiquid in the poorest countries" mean?

~~~
mgraczyk
It is not easy to exchange Bitcoin for spendable currency in those countries.

~~~
KMag
Specifically, there are several quantitative measures of liquidity, and
they're generally correlated. In particular, the average bid-ask spread (the
time-weighted or trade-volume-weighted average between the lowest asking price
from local BTC sellers and highest bid from local BTC buyers) and the average
daily trade volume (add up the number of BTC exchanged to or from local
currency in an average day). Low liquidity generally means wide spreads and
low trade volumes. As a result, if you want to convert BTC into local currency
in the morning to buy chickens in the market and convert your chicken soup
earnings back into BTC in the afternoon, you're going to either buy high and
sell low crossing the bid-ask spread each time, or you're going to wait a long
time for someone else to cross the spread and fill your orders. Of course, you
can offer price improvement, allowing a whole range of price-time tradeoffs,
but time is going to be expensive all along the tradeoff curve.

