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Comment by henrikschroder | Hacker News Reader

There's absolutely zero evidence for the headline in the actual bulk of the article.

SWIFT launched a new service last year, that is now handling 25% of all cross-border transactions, to the tune of 100 billion USD per day.

Meanwhile, Bitcoin peaked last year at a total trading volume of 5 billion USD per day, and is now doing less than 1 billion per day. How much of that is cross-border is unknown, but even assuming 100%, it's still a tiny fraction of what SWIFT is handling.

Extrapolating from that that cryptocurrencies somehow drove SWIFT to launch their new service is a bit of a stretch to put it mildly.

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SWITH gpi was announced in 2015, piloted in 2016, and incorporated a blockchain PoC in 2017[1]. While only SWIFT knows if cryptocurrency was part of the conversation at the start, I'd be surprised if it didn't at least come up very early on.

In the context of how the politics of upgrading a bank's stack work, "driving" is the wrong word because in that context there are always people trying to drive "innovation". A better word is tailwind. Generally, banking tech is pretty crappy and good technologist can easily spot places where a big upgrade (aka "innovation") is warranted. The problem these people run into when lobbying for the upgrade is overcoming the hurdle of migration risk. The bigger the project, the bigger the hurdle. For JPM, I've heard this hurdle was summed up as _demonstrate a 1000x return on investment_.

Blockchain (via cryptocurrency) provides a tailwind to the people already trying to drive "innovation" in 2 ways -- it gives these people two additional angles:

1. As much as banks dislike spending money they hate losing market share. The risk blockchain poses helps in the lobbying for "innovation" without being a central point.

2. Higher ups can have the opportunity to be seen as "innovative in blockchain" by having the main "innovation" have a pet blockchain PoC on the side (similar to [1]) that's only kinda taken seriously. While the first bite at the apple (the upgrade) may not be enough this second bite (PR about them using blockchain) may satisfy them.

Does blockchain/cryptocurrency actually drive the discussion or make it into the final "innovation"? Probably not... today's gen 2 stacks just aren't good enough. Hopefully some gen 3's can change this in the next few years but that market still needs to be proven[2]. In the meantime, when dealing with a big bank's bureaucracy, every extra knot of tailwind helps.

[1]: https://www.swift.com/news-events/press-releases/22-addition...

[2]: Disclosure: I was at JPM working on blockchain back when Gemini (now called Quorum) was first purposed and when Juno was the headline JPM blockchain project. I left to co-found one of these next-gen platforms: kadena.io

I think you mean USD/BTC exchanged. Bitcoin did like 5bn USD of transactions yesterday (on the blockchain). It did x10-50 more on the peak. But it is certainly a much less reliable figure since you can transact with yourself.

It peaked not from a lack of demand but from hitting an inevitable scaling roadblock. Now the community is busy deploying a layer 2 (Lightning) to the Bitcoin mainnet that can offer transactions per second that exceed any financial system today, not to mention a whole host of breathtakingly innovative developments powered by this new layer.

I understand the justifiable HN frustration at the prevalence of scams and overpromises that have plagued the blockchain (mainly ICO) world as of late. But the blockchain is getting better, and with developments that make SWIFT innovations seem trivial by comparison.

Lightning appears to be a set of hacks on top of a broken fundamental system.

It's been touted as the saviour of the BTC ecosystem for some time now, but would require massive sums to be locked in its channels to be near functional, and last time I saw figures it was effectively incapable of routing as little as $60 and required participants to be online 24/7 or was vulnerable to counterparty attacks if not.

It's really a bit of a joke.

Your argument is so short-sighted. Yes, right now the Lightning Network is not ready for mainstream use. It may turn out that the Lightning Network and Bitcoin itself are obsolete in 5-10 years. But are you seriously betting against crypto-currency long term?

Crypto-currency technology received billions of dollars in funding in 2017. Yes, plenty of that went to bullshit projects which have no chance at success, and probably have no intention to develop anything substantial. However, plenty of it also went towards hiring talented developers and creating projects focused on the next generation of crypto-currency.

Up until 2017, the actual investment into blockchain projects was minimal. And yet, even when the market was chopping around between 2014 and 2016, and barely any money was invested, very important milestones were reached. Most notably, Ethereum was launched, and has set the foundation for putting applications on the blockchain.

I don't think anyone argues that having full scale, working applications on the blockchain is a bad idea. They simply argue that the current applications are limited, and aren't working very well. As if the current state of crypto currency is static and will not improve in the next 10-20 years.

The reality is that crypto-currency and blockchain never got any serious attention until 2013-14. And even then it was short-lived. Today every single person in tech knows about blockchain and crypto-currency. They all have their own opinion on it, but compared to just 5 years ago, it has come an incredibly long way.

The technology will improve. It will improve at a much faster rate now, thanks to the bubble in 2017. These projects don't need to post quarterly earnings improvements. The developers don't need to follow a corporate timeline. You can't kill these projects. They will always improve incrementally, until at some point the technology is truly unrecognizable from what it is today.

Go back and check a computer from 1950. I'm sure plenty of people back then were laughing at how ridiculous the concept was of owning a PC. Technology moves in a straight line, forward. And unless a competitor outpaces the improvement, then every day crypto currency gains on other forms of currency.

> Your argument is so short-sighted. Yes, right now the Lightning Network is not ready for mainstream use.

That was literally my argument, well that and it seems like it never will be because of the fundamental design of the thing.

Not sure why you felt the need to write the rest of that, it's nothing to do with what I posted. It appears to be a lot of wishful thinking and idealism.

I did some blockchain related work and now my linkedin messages from consultants and crypto-practitioners never stop.

If you "want strong blockchain with 100.000 TPS" I can connect you over InMail.

I'm not sure what that had to do with the Lightning Network?

I already get enough cryptocurrency related recruitment mail, ta. Some of it is very scammy - I particularly like the ones that want you to make them a new currency, and propose that they will then use it to pay you!

> But are you seriously betting against crypto-currency long term?

Yes.

>Go back and check a computer from 1950. I'm sure plenty of people back then were laughing at how ridiculous the concept was of owning a PC.

Computers in 1950 were being used for useful work that could not have been done before them. They had a track record of successes which has continued uninterrupted until today.

Cryptocurrency has yet to show a legal success story of any kind. The story on what cryptocurrency is "for" has swung wildly over the years as each attempted use case proves either inferior to existing solutions or impossible to achieve.

Bitcoin is digital cash. Bitcoin isn't digital cash, but it is for micropayments. Bitcoin isn't for micropayments, it's a settlement system. Bitcoin isn't a settlement system, it's borderless transactions for the unbanked. Bitcoin isn't for the unbanked, it's a settlement system again for different layers. Segregated witness will fix everything. Segregated witness wasn't meant to fix anything, it's the lightning network that will fix everything. The lightning network isn't meant to fix everything, it's designed to lock in vast amounts of currency and work only for those use cases that makes sense.

It's just endless. Cryptocurrency has no success stories, just a constant stream of "hope" that never goes anywhere in order to keep people hooked on a system that transfers a lot of money to a handful of centralised large-scale mining corporations and increasingly shady exchanges.

Bitcoin can be used however people want. People are certainly using it. Over 162,000 transactions have been sent today, basically all of them with a fee (meaning people actually were willing to pay to use the service).

Even on a slow day, hundreds of millions in USD are transacted through Bitcoin alone. And plenty more through Ethereum. There are tons of use cases for crypto-currency as a transfer of value.

Eventually, there will be more stable coins, there will be instant (or virtually instant) transactions, and the cost to send a transaction will be virtually 0. That's the future of crypto-currency, and you'd be insane to think that once these basic milestones are achieved, that it won't serve any purpose.

It's a work in progress, but there are definitely people using the service as is right now for considerable amounts of money.

To what ends? There's no indication that those transactions are being used to fulfill any kind of purpose, and plenty of hints that many of them are spam and intentional churn.

If nobody is buying anything, nobody is transferring money cross-borders, and no previously-unbanked people are being banked, then what are these transactions for? Nobody seems to _know_.

I can't tell you what every person uses it for. But I can say for certain that it is already being used to transfer money cross-border. And I can say for sure that people use it in nations like Venezuela, where the banking system has failed.

How do I know this? I run a business which buys and sells digital items for online games. Every single seller from Venezuela is looking for BTC. Most sellers from Kosovo as well. And tons of people are asking for BTC in general. The majority of $500+ transactions in the industry (often B2B) are done in crypto.

> Bitcoin can be used however people want.

I can't pay my rent with it, I can't pay for groceries with it, I can't pay my taxes with it.

Those are things I want.

Haha no successes? The biggest success is that it works at creating digital scarcity. That's a pretty big accomplishment. Various cryptos trade to the tune of billions of dollars a day. Ethereum has layered an open source, open computation, virtual machine on top of a monetary layer. It has inspired and spun off dozens of other blockchains each with their own takes on smart contracts. Meanwhile there are projects already implementing prediction markets, gold-backed ERC20 tokens, video games using ERC721 tokens, provably fair online casinos, decentralized exchanges (0x), automated crypto backed loans (DAI), crypto backed computation and digital storage (Sia), social networking with integrated micropayments for curation (Steemit), you've got Brave browser and it's BAT token with a novel approach to paying content creators...can go on and on. Just need to take your blinders off and do some research.

I've done plenty of research, and I know about every one of those examples. Those aren't "success stories" - none of them have succeeded.

I don't know what your definition of success is? They certainly haven't failed.

Significant usage of any kind, achieving some goal which couldn't have been achieved before without a list of massive caveats longer than my arm, or anything of that ilk. What we have right now is one neat innovation with a tonne of caveats being plugged into a bunch of stuff it doesn't work for, called "success stories", and then moved on from before people realise they aren't going anywhere.

Can you name one thing that's come out of crypto that has seen any significant usage in the market it's trying to break into which isn't just using "we have a blockchain!" as a marketing tool?

The applications which are most interesting are the first implementations of smart contracts. Most notably, truly "stable" tokens which track the price of something like the USD. One example of this being https://makerdao.com/

This is made possible through increased liquidity in crypto markets. Specifically, the movement towards decentralized exchanges for crypto to crypto transactions. As this continues to progress, interesting financial innovations like MakerDAO will be become more and more sustainable. One of the primary caveats of doing business in crypto-currency is the fluctuating value.

Imagine holding a real decentralized crypto-currency that is pegged to the USD. That will open many doors for commerce, and decrease transaction costs. The ability to swap this token back and forth using atomic swaps will allow people to remain in crypto longer, without exposure to crypto price swings.

Once this happens, people will be able to keep a portion of their net worth within crypto currency indefinitely. A stable coin is what the market needs to move forward, and it will happen within the next few years.

This is literally my point.

>most interesting

not most successful

>the first implementations of smart contracts

the latest in the long line of "no, _this_ is what cryptocurrency was always for! All the previous examples were wrong!"

>Imagine holding a real decentralized crypto-currency that is pegged to the USD. That will open many doors for commerce, and decrease transaction costs. The ability to swap this token back and forth using atomic swaps will allow people to remain in crypto longer, without exposure to crypto price swings.

Imagination is not a successful project. This is literally talking about things which _don't even exist yet_.

>Once this happens

And here we reach the crux of the issue.

_If_ this happens, not once. Just like all the previous things that would have "changed the world", if only a long series of long-unsolved problems in cryptography and distributed computing were solved.

>that can offer transactions per second that exceed any financial system today

>that make SWIFT innovations seem trivial by comparison

Listen, those two phrases alone are gigantic signs of your bias. Even if they were true, the way you phrase it just screams "I own a significant amount of Bitcoin"

Add to that a sentence about

>a whole host of breathtakingly innovative developments

and, oh boy, do I ever think you are biased.

There is actually a pretty clear value prop for Bitcoin: you can exchange something approximating money for services which are undesirable or risky to do so with your traditional money. But needing to build an entirely new layer which, if I'm understanding right, has some significant impact on the semantics of how your transactions end up on the blockchain, just in order to be able to do a completely unimpressive level of throughput, is hilariously far from "breathtaking innovation" that makes traditional financial "innovations seem trivial".

Thise are opinions. It's not necessary for someone to state that an opinion is biased, that's implied by taking any non-impartial stance on anything.

For what it's worth, programmable, open source money has far bigger implications than you lead on here.

It's not Bitcoin that pushed SWIFT to this, it's Ripple.

https://ripple.com/

Ripple's explicit goal has always been replacing SWIFT, and they started to get some real traction. I think it's pretty clear that they were motivated by cryptocurrency, they'd been stagnant for decades despite the fact that it would have been trivial for them to do what they're doing now.

So, Ripple is saying that SWIFT is slow to settle and unreliable. I wonder how much of that is because of SWIFT itself, or because of how slow and sucky the banks are that are using it?

Anecdote: I have a sucky US bank, and a non-sucky Swedish bank. Last year I made a transfer from the US to Sweden, but it was after East Coast bank closing time, so it got scheduled for the next morning's batch transfer. Since I entered SWIFT details for my Swedish bank, I'm assuming the transfer went over SWIFT, but I don't actually know.

Early in the morning the next day the transfer happened, and the money was immediately available to me in my Swedish bank account, because that bank doesn't suck.

Three hours later I get an email from my US bank saying that they've processed the wire transfer, and I should maybe expect to see the money in my Swedish bank account in three business days... And I'm once again struck by how incompetent, slow, and sucky my US bank is.

And I don't think the underlying money transfer technology can do much about that.

That all may be true. But SWIFT clearly thinks they need to innovate in this space, which means by their own admission they have room for improvement, particularly along the dimensions that Ripple was challenging them.

SWIFT is working with Chainlink to provide decentralized oracle data between SWIFT network between banks.

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