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Ethereum's ecosystem is trying to solve a lot of this. For example, the 0x protocol allows exchanges (in the 0x parlance, 'Relayers') to forego holding customer assets (and therefore also avoid KYC/AML/etc.). They take a fee for creating the UI and matching orders, but the matched orders execute as smart contracts on the Ethereum blockchain pursuant to the open 0x protocol. Multiple relayers will compete for business using this protocol. The first relayers will be launching soon (e.g. Radar Relay).

That would be really useful if blockchains could handle more than 20-ish transaction per second without sacrificing either decentralization, security, or both.

The comparison to credit card theft is inappropriate; you are not exposing your private information in the same way you are with a credit card. When you pay for something online, you are transmitting your credit card number over the wire. When you pay for something with BTC, you are sending merely a signed transaction over the wire. When submitting a credit card or debit card number, you are trusting that the merchant or people that work for the merchant will not steal all the funds from your account, and that is why you need extra guarantees from your bank (granted, those guarantees are not always upheld https://nypost.com/2017/12/14/after-losing-familys-846k-inhe...). With BTC, it is not a requirement for an online transaction to expose credentials which allow an untrustworthy actor to drain your account. Similarly, you do not have as much risk from a Man-In-The-Middle attack with BTC.

For sure there are some untrustworthy exchanges as there are untrustworthy ICOs, but you have two options that are far better. You can rely on US Banking regulations and pay higher fees through Coinbase and Gemini, where your deposits are insured; or you can use a decentralized exchange like etherdelta that relies on atomic swap contracts.

As you mentioned, Monero (and potentially z-cash) are there as solutions to anonymity.

With a credit card, all I have to do is raise a dispute. I was overcharged, I didn't get the goods, it was DoA and the merchant didn't want to know. Money back in minutes.

With BTC you have to really, really trust the merchant, because you can't compel them to refund you. Without the chargeback ability, a lot of smaller merchants would never get business in the first place.

> With a credit card, all I have to do is raise a dispute.

And that's a real problem if you're trying to run a business.

You know what's a worse problem? Not having any customers, because nobody wants to get scammed and have no recourse.

Having a choice is always better. You are not required to accept crypto currencies.

Nor credit cards, for that matter.

That's my point. More choices = better for business. Not everyone is scared of being scammed because they pay with a crypto currency.

They will be, after a few bad experiences. And that never takes long.

There are countries where card usage is not as widespread as in the US, for various reasons. For example, in Germany most smaller merchants don't accept Visa and Mastercard.

You are not guaranteed to win a credit card dispute. Depending on the card, it takes a great deal of your time to file the dispute and continue to submit supporting evidence down the line. You are paying 1-3% on all of your transactions for this privilege; do you really want to pay that 1-3% every time you buy coffee? On the other side of the token is the merchant. How often do they lose out from a fraudulent credit card dispute? There are many businesses that refuse Amex for this reason among others.

The blockchain and smart contracts provide interesting ways to tackle these problems with clever and transparent protocols. It is not difficult to imagine a credit score system (https://hellobloom.io/) that is based off a transaction history tied to an identity token (https://www.uport.me/). In that case, merchants and customers can choose who they want to engage with based off reputation and history.

That is one way of doing a transaction with a merchant. Another way would be to use a hashed time lock contract that allows you to get a refund on demand. In that event, the merchant has to trust you.

As both a consumer and a business owner, I am excited to see a highly diverse market of options for how we do transactions, as opposed to a market dominated by 3-4 players.

I'm not guaranteed to win, but I am guaranteed to get my money back immediately, and have the case looked into.

The fees don't have much effect on me buying coffee and reputation based systems are a libertarian panacea that honestly, look nutty to the rest of us.

As a European consumer I too am looking forward to lots more options in the near future, some of which will ditch fees entirely,and none of them cryptocurrency based.

Right, but when you lose the case, you lose that money again, or vice versa as the business.

To many Americans and world citizens with less disposable income, you might seem kind of nutty to not worry about losing 3% on your under $15 purchases. Credit score and insurance industries are ubiquitous. For most folks if they move to another country you will often be penalized by that country's insurance or credit score agencies for not having recent history. There is certainly room for improvement.

Sure, but in the mean time,the consumer is protected, leaving them much more confident about trying new merchants, or about transacting at all.

And I'm not losing 3%, the business may be but I'm not in any way that's visible.

Further, there are new products and methods entering the market that require neither Visa/Mastercard nor a hideously inefficient PoW blockchain or multiple exchange parties.

Payments (in Europe at least) are likely to change in the near future, but not to that.

Links?

Keywords to search include -

  Payment Services Directive 2 (PSD2)
  Open Banking

This is what the EU payments industry are watching, according to my various links in that industry.

> You can make a digital transaction without trusting anyone, especially the other party.

Well you would need to trust the other party to get something in return, unless you're giving it away. The big part is making a transaction without trusting a 3rd party.

> Mainly transaction speed is super slow (10m to confirm a transaction went through)

It depends on how large your transactions are. If you buy a car for example you want to wait for more, maybe 6, confirmations while if you pay for coffee you can use a coin where zero-conf (basically instant) transactions can be considered okay.

Put that with the context that VISA has a settlement time of around 30 days.

> and transaction fees are very high (especially now with the "bubble", it's something above 10$/transaction)

Only for the crippled coin Bitcoin. Bitcoin Cash could for example easily handle all Bitcoin's transactions for pennies.

> (Fast payment, relative privacy, low transaction fees), with the further benefit of chargebacks. If someone steals money from your Bitcoin wallet, you're screwed, with a credit card you phone them up and they undo it.

If you're a business chargebacks are actually an anti feature. Chargeback fraud is a very real and very common occurrance.

> Actually, even with Bitcoin you need to trust a third party: the exchange.

Only if you use it to enter/exit with fiat.

> IMO a real bank or credit card processor is more trust worthy than a crypto exchange.

Absolutely. That's why it's recommended to hold your coins yourself and don't leave it on any exchange. Of course they could become more trustworthy as time goes on.

> That's all to say that currently crypto makes no sense for real transactions

Except I have used it successfully several times to buy stuff. It's also much better than any alternatives for donations (where for example PayPal cannot freeze the funds) or remittance to far away/difficult locations.

> As well, other uses may be valid, the main case is "a hold of value", like gold.

I find that stupid though.

> IMO, crypto has no intrinsic value (not even decorative like gold) and is very volotile, so it's up to you to decide whether it's going to last.

The value is transactions without a 3rd party and it's very hard to reverse already made transactions. There's no need to have any physical value.

There is also no central authority printing or seizing money. There will only ever be 21 million BTC and they are released on a schedule. The code is open source.

It isn't zero trust though, you're trusting the miners(collectively) at a minimum.

You're not trusting the miners, you're trusting a system that was designed so that one would need 51% of the mining power to perform an attack. While there is a worrisome level of centralization in mining, you are also trusting the economic incentive structure of the miners is sufficient for no one to coordinate a 51% attack given the current dynamics.

Right, so you're trusting the miners. Got it.

kind of. But the miners have a financial incentive to follow the system. The system is built in such a way that it's in their best interest to follow the system (except in a coordinated 51% attack, then the system falls apart).

Which is the same thing as saying that you are trusting that miners will be motivated by the financial incentive.

That's a generally sane reason to trust the miners, but the truth is, the mining nodes are controlled by people, and people can be motivated by many things other than money, including fear of people with much political power.

What about this scenario:

Mining becomes even more centralized due to high cost.

Next, attackers (mean, naughty miners) simultaneously launch / initiate / pay for a DDOS attack on the others such that they can reach this 51% figure?