95% of blockchain projects are a garbage heap, crypto currency is WAY overvalued, but the 5% of projects that are actually useful, and have a real need for a blockchain may just fundamentally change parts of how we live life
when micro transactions as a concept came to games, it changed the way people wrote games. when crowd funding became mainstream, it allowed more innovation from people with just a need and an idea
don’t dismiss the 5% useful for the 95% useless (and no, i’m not going to enumerate the useful cases because it’s been done to death)
*EDIT: and to be clear, i think the currency part of crypto currency is in the 95% not helpful (maybe unless you’re talking about stellar, which deals more with fiat/other currency exchange and for the most part eschews spending crypto currency itself)
> don’t dismiss the 5% useful for the 95% useless (and no, i’m not going to enumerate the useful cases because it’s been done to death)
It sounds like you can't point to any, like everyone else who insists there's a 'there' there. Nobody has been able to point to a single, legal, use case where crypto is better than a fiat based technology. Zip. None. But they're all sure it's there.
Don't you think with all the interest in the space, if someone had come up with one, it'd be enormous? EOS raised over four BILLION dollars a few years ago and still doesn't have a working blockchain. [1] You can fire up a blockchain in minutes. If there was a company that actually created something of value, it'd be worth more than the mewn y'all are trying to reach.
We've been waiting for a decade now, I'm sure OP will deliver /s.
How about real time cross border remittance and settlement? Current fiat approaches require large illiquid reserves, are slow, and not very scalable.
It’s also useful for transmitting money long distances when banks won’t do business and you want to avoid a paper trail (drugs). Fiat is perfectly fine for in person transactions, but not when distance is involved. You may or may not morally agree with it, but this is a proven use case.
> How about real time cross border remittance and settlement? Current fiat approaches require large illiquid reserves, are slow, and not very scalable.
It's bad for that, we've been through this. To send money you have to pay ~1% to an exchange in your home country, wait a few days for it to clear exposing yourself to huge forex risk, pay a $1 transaction fee give or take, then pay ~1% to an exchange in your destination country netting you 3-5 days latency, 2% fee plus $1 plus 10 minutes and incalculable forex risk. And the risk your exchange will literally just steal your money a la Quadriga. Or getting it confiscated en route like the $825M taken from Bitfinex by various government entities for laundering money.
There are a lot of solutions to this problem ranging from a credit card to buy things, TransferWise (0.85% fee give or take) to Interactive Brokers ($20 per million fee, or 0.002%) to Norbert's Gambit (free) to a wire transfer if you have to settle instantly. Or even just opening an HSBC account in both countries and moving the money instantly online via web banking.
Then there's Square Cash and Venmo for free domestic transfers, the free/instant domestic RTP network in the US, the free/instant SEPA network in Europe and the often free/instant Interac e-Transfer network in Canada.
> ...and not very scalable.
According to the Bank for International Settlements triennial report of 2016, the foreign exchange market cap averaged $5.1 trillion per day.
That's $1,861.5 trillion dollars per year. Forgive me for thinking that means the scaling issue is pretty much solved. It's probably the single most liquid market in the history of the world.
> It’s also useful for transmitting money long distances when banks won’t do business and you want to avoid a paper trail (drugs).
I did say a legal use case. One that neither violates laws nor sanctions. Worse, Bitcoin leaves you with a paper trail. You'd have to use Zcash or Monero.
> Fiat is perfectly fine for in person transactions, but not when distance is involved. You may or may not morally agree with it, but this is a proven use case.
It is, though, because you can use your Visa card to send money instantly to anywhere in the world that isn't sanctioned.
You've done a good job explaining how to do foreign exchange and how you can personally buy things in other countries. What happens if you're an international business that uses Bank of Melborne and has to pay vendors in Croatia using Primorska Banka? How does actual money get sent? Not credit that can be settled at a later date. Real money, sometimes large amounts that needs to be settled. A forex market is absolutely going to be necessary to do this, and as you pointed out those are very liquid markets which helps. A forex is only one piece of the puzzle though. You somehow need to get money out of Bank of Melborne and into the forex market. Then you somehow need to get the money out of the forex market and into Primorska Banka.
I get it, you want to play devils advocate, but every example you gave solves a problem that isn't "real time cross border remittance and settlement". They either aren't cross border (Venmo/Square Cash), or don't actually result in settlement (TransferWise, Norbert's Gambit), or aren't realtime (Interactive Brokers takes 3 days to settle your account FWIW).
EFT transfer to an exchange, purchase crypto (1% fee), withdraw to a different exchange ($1 fee), sell crypto (1% fee), SEPA transfer to recipient.
Classic path:
TransferWise handles everything (0.85% or less). Or:
EFT transfer to Interactive Brokers, FOREX exchange ($20 per million), withdraw via SEPA to Croatian account. They allow you to link both AU and Croatian accounts. Or:
Open an HSBC account in both places and use the online instant account-to-account global transfer tool (rates vary, ~2%) and send a SEPA payment. Or:
Wire money (pricey). Or:
With a brokerage account and an established business you can instantly make your payment through margin (3.9% per annum). IB will allow you to borrow Hrvatska kruna and withdraw instantly via SEPA payment. Then you can transfer in Australian dollars over EFT at your leisure.
Seriously, this is a solved problem and the crypto path is not faster, it's not safer, it's not cheaper, it's not easier.
> TransferWise handles everything (0.85% or less).
TransferWise doesn't do settlement. You still have to pay a merchant with a card who then needs to settle. No actual money is being settled through TransferWise.
> EFT transfer to Interactive Brokers, FOREX exchange ($20 per million), withdraw via SEPA to Croatian account. They allow you to link both AU and Croatian accounts.
EFT transfer to IB isn't instant. SEPA requires you to be using Euro. SEPA does handle settlement, but you still need to do settlement with both the EFT transfer as well as within your IB account. IB does have programs to allow early withdrawal before your account is settled if you quality, but again that isn't settlement.
> Open an HSBC account in both places and use the online instant account-to-account global transfer tool (rates vary, ~2%) and send a SEPA payment.
Again, SEPA requires you to be using Euro. Additionally, you would need to do settlement on the initial transfer to HSBC.
> Wire money (pricey).
The company you're using to wire money needs to handle cross border remittance and settlement, so how do they do it?
Just to reiterate... you've done a fine job explaining how a consumer can send money across the globe. You're not wrong to say that as a consumer there are perfectly acceptable solutions that can accomplish what they need. What you've completely failed to do is explain how to accomplish "cross border remittance and settlement" using Fiat in a way that is fast, doesn't require vostro account (i.e. illiquid reserves), and is scalable with the number of possible banks you'd need to transfer money to/from.
Ah I guess I misunderstood your question. My understanding is that settlement can be accomplished the way that TransferWise bootstrapped. They matched up two pairs of domestic transfers, where if I wanted to send money to Canada, they waited until someone wanted to send money to the US, then we'd each domestically transfer money to eachothers recipients. Minimal reserves, and everything happened domestically.
Visa is NOT instant. VISA transactions take up to 48 hours to clear. And in some cases the credit card processor can and will hold funds for even longer than that.
Some do, but some like Square will pay you out next business day free of charge or instantly for a small surcharge. To your point they’re floating that during settlement. It’s instant in the sense that the transaction is approved instantly and the settlement is a formality.
Settlement is not a formality. Money still has to change hands behind the scenes in various bank accounts. The only thing that's instant is the check for available funds. The actual transfer of money still occurs via ACH.
Within the US, ACH is being superseded by RTP realtime payments. SEPA is realtime in Europe. It's a formality from the perspective of the customer because the payment 'happens' immediately, and the merchant gets paid out within 24 hours, sooner if they really need it. Is this really a problem?
But still, definitely a promising improvement over ACH.
It is a practical problem that the merchant has to wait 24-48 hrs for funds. It's a cash flow problem. It slows down the speed at which that cash can be used to purchase other goods or services. For example, a made-to-order business has to wait for funds to clear from a customer (or front the capital) before they can turn around and order goods to produce the product a customer is purchasing. Which slows down delivery. And that effect is amplified across the whole supply chain.
> It's a cash flow problem. It slows down the speed at which that cash can be used to purchase other goods or services.
No. That's what lending is for. Square will allow you to cash out instantly for a 1% fee, they offer merchants a debit card they can use to access the funds in real-time as they're received for no additional fee, or you borrow some amount of float at today's incredibly low interest rates.
As a business in need of liquidity you can even sell your accounts receivable for less than 1% to invoice factoring companies. There's so many options out there.
Or the merchant can open a credit card and get fee-free interest-free loans for a whole month.
This is not an issue today, or rather, you’re making mountains out of molehills. There are ways of addressing this without crypto or throwing out the existing financial system. But more importantly what how many merchants wait for funds to clear before they go out and buy the supplies to do a job?
We get it- Hacker News is rabidly, irrationally anti-cryptocurrency. Which is ridiculous, considering most people here 1) Create or participate in online spaces and 2) Wish to monetize their services in ways that don’t necessarily involve advertising. You don’t think peer-to-peer micro transactions are going to transform your work in a fundamental way? Then I’m sorry, but you lack imagination.
No, I don’t think micro transactions have a future - peer to peer or otherwise - but not for any technical reasons. Humans suffer from decision fatigue [1] wherein making decisions just wears you out and you don’t want to do it regardless of size. A decision requires a costly, difficult evaluation of worth regardless. That’s why even though buying shows one at a time on iTunes would likely save you money, you pay for Netflix - because you don’t want to decide to pay. Micropayments aren’t a limitation of the existing financial system, it’s just accounting. This is a limitation of human physiology. We could have it right now if people wanted it but they just... don’t.
AWS became successful party because of the "micropayments for servers" style hourly model.
Micropayments are most certainly a limitation of the current financial system: Pulling together all the disparate banks of the world to cooperate to create a global API to facilitate payment for <$1 amounts? Don't assume that all problems are technical: This would be near impossible, where cryptocurrencies are doing this right now.
Flattr isn't micropayments. You as a reader pay a decidedly non-micro amount into a pool monthly that's then divided between flattr sites based on apportioned viewership on a monthly basis. This is the Netflix model, and exactly what I suggested. This is accounting, not micropayments. Neither the viewer nor the content creators ever transact sub-penny amounts, they only exist in the context of calculation and apportionment. And they do this specifically because people don't want to make individual purchasing decisions.
> AWS became successful party because of the "micropayments for servers" style hourly model.
Again, that's accounting, or more accurately, metered billing. A low price for services is not micropayments either.
> Micropayments are most certainly a limitation of the current financial system: Pulling together all the disparate banks of the world to cooperate to create a global API to facilitate payment for <$1 amounts? Don't assume that all problems are technical: This would be near impossible, where cryptocurrencies are doing this right now.
If this were something people wanted, you'd load up a, for instance, PayPal account and drain it pennies at a time. Once an aggregate payout to a specific merchant exceeded the transactable threshold it would execute automatically. This can be done today. People just don't want it.
And it only works like that because of the current financial system. Flattr exists because of the lack of a solution in the current financial system: Cryptocurrency (eg ETH with Web3) would allow sites to build a Flattr-like system without the middleman, and cut down on the overhead of actually building a company around it.
People don't want that. You're describing a solution in search of a problem. We have the technology to execute on this right now but nobody does, because people don't want it. If they wanted it, we'd have it, and we'd be iterating in the problem domain not the solution domain. There's no pent up demand for a world in which you're constantly forced to make tons of individual purchasing decisions.
More importantly though, people have learned not to value content. This is a huge problem for the media industry. Nobody wants to pay anything at all for what they create, they want to pay with their time and attention - through ads.
> when micro transactions as a concept came to games, it changed the way people wrote games
Has there ever actually been a case where microtransactions made for a better game? Everything I've read about what it's like working for studios that rely on them is creepy stories about trying to chase 'whales'.
If think in some games where cosmetics are the only commodity it works well. In-game customization frankly was not a priority for game-devs, as it did not turn a profit. That is until games like League of Legends et al made customization micro-transactions their entire business model. It's meant newly fantastic support for the art departments! It's also lead to a number of games that are constantly updated over many years instead of just made for release, so one can play their favourite games without them become stale. Yes, this has existed in the form of a subscription service before, but cosmetic micro-transactions have effectively socialised some games, where the whales pay for game development and less wealthy individuals still get to enjoy the game without paying anything! Path of Exile probably wouldn't exist without micro transactions, at least to the popularity it has become, and I've never had to pay a penny to play that game.
So there are a few cases. That's not to say that most mobile game micro-transaction models aren't absolute hot, filthy, dirty, disgusting, stinking garbage.
I wouldn't say "better"; That's pretty damn hard to substantiate! What's the other option? Well 1 is that the game wouldn't exist. I guarantee that Popcap [1] wouldn't be too happy, and there are plenty of people that get enjoyment from their games (arguably sometimes to an unhealthy degree). If micropayments weren't a thing, then many of their games would likely not exist.
when micro transactions as a concept came to games, it changed the way people wrote games. when crowd funding became mainstream, it allowed more innovation from people with just a need and an idea
don’t dismiss the 5% useful for the 95% useless (and no, i’m not going to enumerate the useful cases because it’s been done to death)
*EDIT: and to be clear, i think the currency part of crypto currency is in the 95% not helpful (maybe unless you’re talking about stellar, which deals more with fiat/other currency exchange and for the most part eschews spending crypto currency itself)