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Comment by noja | Hacker News Reader

> There is not a single alternative service in the world that would have made this possible.

Apart from any "send money to your relatives back home" service, sms banking in entire continents, or Hawala.

https://en.wikipedia.org/wiki/Hawala

I agree. I regularly send money from Denmark to unbanked friends in shanty towns in Zambia through World Remit — it works 24/7 as fast as an sms.

https://www.worldremit.com/en

I didn't know about these services and it's great that they exist. What makes bitcoin different is that it eliminates the need to trust a third party such as a bank to handle the transaction.

You just need a Bitcoin ATM in every shanty town. Easy.

Even then, you'd have to trust the third party that maintains the ATMs...

Except that it doesn't. You still need someone to put up and maintain ATMs, apps, exchange-sites etc. that allow for quick and easy transfer and exchange of bitcoin. People think this is all easy until things go wrong: Who do you appeal to if you get scammed? What do you do if you pay someone online with bitcoin who then just doesn't deliver what you've ordered? Who do you call if someone attached some kind of skimmer to a bitcoin ATM?

Don't get me wrong, there's so much wrong with the current banking system, and I really hope someone or something manages to disrupt it, but Bitcoin is no solution to that.

> What do you do if you pay someone online with bitcoin who then just doesn't deliver what you've ordered?

This is the big problem with crypto. Trust moves around. But there is one solution: escrow backed by smart contracts - see here for one implementation [1]

Personally I think what we'll see in future is people being offered the option of going through existing institutions as a form of insurance for the reasons you mention, but an alternative on offer for people who just want to minimize fees or who don't think they'll need those conflict resolution services.

[1] https://particl.wiki/learn/marketplace/mad-escrow/

what if the "smart" contract has a bug?

Also now I have to trust the smart contract developer

TBH I imagine developing smart contracts is clunky right now, like developing using AWS Lambda frameworks was a few years ago. But the tooling will improve. Perhaps it could be possible to digitally sign a smart contract's version, linking it to some proof of automated test coverage, or some other open way of verifying that it works as intended - e.g. attach the test suite and test results to the contract somehow and sign them. If you weren't happy with the quality of tests or their coverage, etc, you could decide not to use the smart contract.

Wouldn't that deposit requirement cause issues for high volume/low margin sellers?

Potentially. Or for sellers of particularly high value goods where buyers and sellers both have to put up the same amount again as a deposit. It still seems like a novel approach and I'm curious how it'll pan out.

this is not a leading question. what do you see as wrong with the banking system? It has taken 600 years to evolve, roughly. what does the next banking system look like? and do you really mean monetary system?

people are constantly conflating bitcoin the currency alternative with some kind of new way do banking, finance, monetary policy, and never explain what needs disrupting and what the new world look like. is it just better, faster, cheaper? or some fundamental disruption, not just incrementally less costly.

I think people have more of an issue with the rampant criminal financial sector than with banking itself. The problem is that banking has intermingled more and more in the last 30-40 years with finance, not sure if it's been overall positive for people's wellbeing.

That's right. But…

Ten+ years ago we were all told that the decentralised cryptocurrency would enable the unbanked masses to make micropayments to one another — and indeed, we could do that in the first few years. However, the mining fees are so exorbitant these days that micropayments end up being very expensive, at least percentage-wise. I didn't have any expectations about the bitcoin exchange rate ten years ago, but the “cheap micropayments” expectations were blown to pieces a long time ago.

Bitcoin Lightning, is that so simple that even my mother could use it without my help? For me that's the acid test.

Bitcoin Cash (BCH) works like original Bitcoin. It has no artificial blocksize limit, and has less than $0.01 transaction fees (1 sat/byte).

She could use BCH. Just open Bitcoin.com app on phone, tap "SEND", "Scan a QR code" (or enter email, or phone number, or BCH address), and slide. Video: https://twitter.com/rogerkver/status/1179037602499837954

How do you buy Bitcoin without going through a trusted third party? How do you cash out? Do you read the source code of your wallet software and scour the bitcoin source code for security breaking bugs?

How do we know that the Bitcoin ATM actually spit out cash?

We can prove that A transferred BTC to B thanks to cryptographic signatures. But what if the ATM machine (turning BTC into USD or whatever) on the other side fails? You still have to trust 3rd parties whenever you do an "off chain" transaction.

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As long as BTC has huge volatility, it fails as a store of value. Swings up, or down, will incentivize "games" to be played with regards to any BTC / USD exchange.

Thank you for sharing, I never knew that was a thing. If you don't take the comment at face value there's obviously differences between the two systems:

Bitcoin is well known globally whereas Hawala in a subset of countries.

In OP's example he has to trust the Bitcoin ATM whereas for Hawala you'd have to trust the honour system (thus at least 2 parties).

Bitcoin is digital whereas Hawala requires exchange of money in person. In OP's example this gives him the flexibility of not having to prearrange a transaction.

«send money to your relatives back home» → I suggested to the recipient we use Western Union, but he had been banned from WU. Thus demonstrating the censorship-resistant value of Bitcoin. Other services we briefly considered seemed like I would have to first go through a verification step which would have taken ~24 hours, so not a solution. Remember our transaction was made in under 1 hour.

«SMS banking» → Non existent in our situation (US recipient)

«Hawala» → Maybe, but unworkable in our situation. None of use have used Hawala, we wouldn't even have known WHERE to look for Hawala providers...

Thank you for demonstrating my point. Nothing could have beaten Bitcoin/crypto in this instance.

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