German online bank uses Bitcoins to transfer loans
reuters.com
reuters.com
On their website[1] they make no claim of being a bank. The text only speaks about being a "regulated financial institution" and the footer states "unbank" and "no bank". Their terms of use[2] clearly state that they are only a credit broker, don't loan themselves, and are not party of the loan contract. This is not banking and I'm not sure why Reuters uses that word so much. They don't even mention once that this company is not the lender and heavily imply they are.
[0]: in the database of the German Federal Financial Supervisory Authority: https://portal.mvp.bafin.de/database/InstInfo/institutDetail...
Sad thing is these kinds of articles get translated and end up in hundreds of papers all over the world all as fact.
In this way you can tell which newspapers actually have people reading what they publish and which ones can't be bothered.
“Briefly stated, the Gell-Mann Amnesia effect is as follows. You open the newspaper to an article on some subject you know well. In Murray's case, physics. In mine, show business. You read the article and see the journalist has absolutely no understanding of either the facts or the issues. Often, the article is so wrong it actually presents the story backward—reversing cause and effect. I call these the "wet streets cause rain" stories. Paper's full of them. In any case, you read with exasperation or amusement the multiple errors in a story, and then turn the page to national or international affairs, and read as if the rest of the newspaper was somehow more accurate about Palestine than the baloney you just read. You turn the page, and forget what you know.”
https://www.goodreads.com/quotes/65213-briefly-stated-the-ge...
As far as I know, Reuters isn't big on aiding pump-and-dump schemes but this sure looks like it.
however I don't think they have a stock/coin/token to pump or dump.
I don't see this argument as valid. When was the last time the currency of a solvent country fell more than 10% within a day? With Bitcoin this happened just yesterday. This means you lost 10% of your money during fiat -> Bitcoin -> fiat if you kept the Bitcoin for longer than 12 hours.
Edit: bitbond.com has a link to a "eBay SEO" optimizer in their website footer. I don't know how much this says about their credibility.
That's why this bank can calculate this factor in and have a small off-set budget for daily fluctuations.
Of course, there are also weekly 30% drops, but there are also weekly 30% hikes.
Across a span of a year, all of this volatility cancels each other out.
Bitcoin price was around $19k in December 2017. The price tumbled all the way down to around 7k in February, came back up to 11k, and now it is hovering at around 8k (numbers massively rounded, but you get the picture).
If we consider this span alone (~6 months), Bitcoin's value has fluctuated by more than 50%.
But if we consider a full year, things are even crazier since bitcoin was worth around 1k then.
Source: https://www.coindesk.com/price/
The above is great if you are selling bitcoin.
It is not so great if you are chained to any sort of contract (loans, phone contracts, car payments, etc).
If the contract stipulates "X bitcoin per month", your loan/rent/whatever went up 8x in one year. If you are chained to that contract for several years (phone contracts in my country are typically for 2 years), you are massively fucked.
Giro transfers clear within minutes. This is the day-to-day mechanism that EU citizens use to pay their bills. This smacks of a US-centric analyst who does not understand the Euro market at even the most basic level.
The reality is the US is decades behind the state-of-the-art in banking and pretty much none of the issues that are relevant to US citizens are relevant anywhere else in the world. Sending money to someone else's bank account within minutes is pretty much a solved problem, for anyone who isn't living in a 70s-era cheque-based world like the US banking system.
Sending some bits between highly trusted parties within a formal banking system is not some unsolved problem that only Bitcoin can tackle.
Not true at all. This is just starting to get implemented in the EU. Until now transfers took usually a full banking day, thus nothing happened on the weekend and holidays. Last year over easter I had a transfer between two German banks take 7 days because of that.
And international transfers are still a nightmare.
It generally clears within minutes if you're transferring between participating Banks. If not, the maximum amount of time they're permitted to take is exactly one business day after they've accepted your order. This acceptance is not necessarily the time you've entered the details on their website. It is often, but there are some outliers that only accept them at a specific time each day. (But still let you schedule them at all times.)
Can confirm. I've spent months in multiple Southern-African countires who all have chip-n-pin, instant bank transfers etc.
Namibia, Botswana, Lesotho, Mozambique, etc make the USA look like the dark ages when it comes to banking
I travel to europe extensively and on my trip to what most people dont even know a country name Poland, in 2012 they had near-field contact debit and credit banks. All card use them! When i gave them my swipe credit card a clerk couldnt stop but mention he hasnt seen one in probably five years. I told him within few years USA will switch to chip cards, to what he told me they had those circa 2010. I seen friend using near field card it was a tap of a card to the reader (no sliding no alignments) in literally 0.8 seconds his card got read and authorized. Within seconds with his personal settings he got text message confirming purchase. We then went to ATM cause he owned me money. I said we probably need bank for that kind of amount. He just smiled at me and withdrew $8,000 worth of local currency (PLN) from an ATM!! Just like that. Meanwhile just yesterda for mothers day Bank of America just again block my debit card “due to suspicious activity” despite the fact i been using this specific BOA ATM on my street for last five years, and was taking only $350 usd. I called up and told them few months ago i raised up limit to your max of 1,500. I was explained due to my own security thos limit is reset every 6 months.
15 January 2015: https://en.wikipedia.org/wiki/Swiss_franc#End_of_capping the EUR and USD fell more than 20% against the CHF, in a single day.
If I sell muffins for USD$1 and I raise my price to USD$2, it would be a real stretch to say the USD fell by 50%.
Isn't that exactly the story?
https://www.cnbc.com/2015/01/15/swiss-franc-sours-stocks-tan...
I would like to see some worked examples here that take into account local Bitcoin pricing and the time taken to withdraw from exchanges, vs Western Union and other commercial “Send Money” organisations. The space is intensely competitive, so I suspect the margin consumers pay if they do a minimum of research is tiny, so I’m skeptical that Magic Bitcoin Magic is somehow making this better.
The loss is closer to 1%. E.g. 1k usd costs $10 to transfer at the googled exchange rate.
Better solutions are out there. Bitcoin is, as always, a solution looking for a problem.
I recently did a lot of EUR-USD transfers and have evaluated several options. I came to the same conclusion as other posters here: Services like Transferwise and Currencyfair are all very cheap, and do the job well and without risk.
Going through Bitcoin was not even close to competitive.
And no, despite doing some research on Transferwise before using them I didn't run into horror stories of them freezing wires. Transferwise has always been very professional and helpful in interactions with me (more so than my own bank).
But no, if I were putting such a big amount of money in their hands at once I would certainly do more research and look for better safeguarding.
Unfortunately all those money-wire services are registered in UK and UK has the most strict KYC rules I think ever existed in free commerce. If you start sending bigger amounts they will shut you down, no matter how much due diligence you provide they just scared of repercussions, just in case.
Of course they do. There is an inherent transaction fee built into networks like Bitcoin, plus the fees exchanges charge.
That's reasonable, as banks in those places usually support very fast local transfers, and that's what Transferwise is doing. A bitcoin exchange could meet this speed, but won't be able to beat it.
Many electronic bank transfers are approximately instant.
When I pay myself from my business account and it happens just about instantly. Max I've ever waited was like 15 minutes.
Using Transferwise, a friend from Australia paid me back in the UK and it went through in like 1 hour.
The Bitbond site says “See no bank. Hear no bank. Speak no bank.”
In addition, it’d be quite weird if a random startup can get a banking license just like this. Consider N26, the Berlin-based fintech “bank” and unicorn took years and just got theirs some months ago.
Exchanges like Transferwise work by not actually transferring your money internationally. Once Transferwise receives my money in their UK account, they just instantly transfer the money from their Aus account to the recipient. It doesn't take several days because my money never actually went overseas
When transferring via Bitcoin, you only to get the recipients Bitcoin address and that is. Do a bank transfer to another side of the world and you need to find out bunch of information for the recipient (their bank details, probably address etc). There's also a chance you will get some of this wrong and then there will be a manual hassle to sort things out.
The older way of doing this would be based on expensive contracts, legal regulation, and potentially intermediaries, who will happily take their own cut.
Bitcoin will allow smaller banks to transfer money without the help of the giant banks who have built up relationships (and binding legal agreements) over the years.
Honestly, even though some large banks bullish on bitcoin, the real benefit will accrue to the smaller institutions.
"We broker bitcoin loans between marketplace participants ('users'), who want to use bitcoins for a specific time period and pay interest ('borrowers') and marketplace participants who want to lend bitcoins to other people for interest ('lenders')"[1]
So then it is up to the recipient to do the exchange for fiat - if they require that. Based on the website Bitbond seems to be targeting for example people selling stuff online so it might be some of their customers can directly pay for their suppliers in bitcoins.
Even if there would be full fiat-bitcoin-fiat cycle involved, that may be easier and cheaper than doing a cross-border payment via traditional banks. The cross-border payment thing via banks is complicated and has multiple steps. Small banks don't usually have direct relationships between each other, instead there are larger banks involved in the middle to facilitate the payments. With fiat-bitcoin-fiat you might be dealing with local players on both ends, which makes things easier.
Good thing for bitcoin if you fuck up the address your transaction and all its money goes right off into the ether.
As a swift alternative that's fine, but you can't avoid banks if you're using country denominations.
Who offers free transfers permanently?
That's why one of the first 2 will probably replace Bitcoin until the end of 2018.
It may be time to evaluate if you, yourself, are the mark.
I'm also very skeptical of Skycoin and their "web-of-trust" which is even more experimental than "proof of stake" which is itself rather unproven at this point.
Reading through the whitepaper I also feel like Skycoin has an issue that's shared with many newer cryptocurrencies trying to break through (including IOTA) which is to attempt to do way too much stuff at once. It's just just "web-of-trust", it's also "skywire meshnet", "fiber application ecosystem", "Skyminers custom-built hardware VPN" etc... In an effort to differentiate themselves they just pile the features on top of each other instead of focusing on doing one thing right. At least they don't use ternary I suppose.
It seems like a very wild bet to me (even by cryptocurrency standards) than either of them are going to manage to replace Bitcoin by the end of the year. After all, what drives adoption at this point is mainly speculation, not the features otherwise Bitcoin would've been replaced long ago.
Skycoin's consensus algorithm is among the few that are peer-reviewed next to Cardano, so i think that's as much credibility as you can get as a new coin.
Iota's coordinator is expected to be decentralised and then removed next year already.
In order to gain control of the network, you would need to gain 34% of the hash power, omnipresence in the network and omnipotence. I'm not sure what the cost of this is, but there is currently no more secure decentralized network design that I know of.
Keep in mind that 45% of Bitcoin's hash power is currently controlled by one company, Bitmain, and they are investors in the 3rd biggest mining pool, totalling 75% hashing power of the entire Bitcoin blockchain.
Is the price of interbank transfers / clearing really a big deal for banks?
Not to mention that, should it ever prove to work at any reasonable scale, LN is basically adding a layer on top of Bitcoin that gives up almost all of the things that were supposed to be core values.