$38M USD moved for half a penny | Hacker News Reader

$38M USD moved for half a penny

nitter.42l.fr

29 pointshggh71 comments

This is cool but it's hard to see how using a fork of BTC, even if it's optimized for les fees currently, is the best option for pure transactions. It still uses Proof of Work, no matter how you stuff the blocks and better (to my eyes) alternatives already exist like Nano which is feeless, even faster and doesn't waste energy.

Overall I agree with you, but what bothers me is that people continue to say that PoW is waste of energy, even if the article is about moving 38M USD for 0.0064 USD. How does that make sense if it's actually doing something useful? Or you think in general moving money around is not useful?

I think it's useful. I just think that it's comparably less useful than doing it in a way that costs less energy like in Nano's (and others) case.

So you think the drawbacks of Nano are not impacting it's usefulness compared to Bitcoin? Last time I checked, Nano didn't have any trustless lightweight wallets, you can't attach any data to transactions and also no multisig.

>Nano which is feeless, even faster and doesn't waste energy.

Suddenly the internet is getting filled by shilling of this thing.

There's a lot of comments about it online now, yes, but it's pretty relevant when talking about alternatives in a thread about the cost of a big BCH transaction. This isn't shilling.

It’s telling that the amount is always specified in dollars, because that’s the stuff that actually people want and use. And if you wanted to convert it to usable dollars, it would cost thousands of times more.

Henry Ford also thought it was telling that people wanted faster horses right?

Again, and I hate to keep repeating myself, but this is not true and just shows that people are not doing their research and/or they're stuck in 2016.

Strike (https://global.strike.me) has built a product in which they use Bitcoin and the Lightning Network to send money (fiat currency like USD, EUR, etc.) around the world instantaneously and at virtually no cost. In some cases, they are able to offer exchange rates that are better than the inter-bank FX rate.

Explanation of how it works: https://jimmymow.medium.com/announcing-strike-global-2392b90...

There's always a cost. Even if you do not see it in the numbers.

No doubt. But that also applies to the legacy financial system. It's just much more difficult to calculate.

I think in the case of crypto the cost is the volatility of the coins against the dollar . So that if you wanted to do something with those 64 usd you may end up with 1 million less by the time you exchange it due to volatility and slippage.

This must be the 4th time ive seen this app linked here and every time i go to use it THERE IS NO WORKING PRODUCT THAT I CAN USE. Also the hipster tone from the founder of this app makes me cringe every time because it seems very forced.

I thought this was Hacker News? What does the personal style of the founder have to do with the technology?

The app has already launched in the US and you can use it if you live there. Global launch is coming soon - they're running a trial in El Salvador.

Why is a community of makers hating on a fellow maker? Beats me.

Does it make sense to use BTC (or another crypto) to wire money internationally? I assume that there are fees for transforming USD to BTC and BTC to local currency, but are those higher than Transferwise or doing a traditional bank wire transfer? Is there a service that wires money and uses crypto as a backend?

Exactly. These type of posts and comments ignore the fact that the actual transaction costs involved are higher, perhaps even much higher.

Depositing and converting that amount to Binance will cost you 0.02% in fees, and same to convert on the other end (assuming there's buyers for such an amount). Of course, that's assuming you are going from/to cash rather than keeping them in crypto.

So $7600 (plus half a penny) in transaction fees on $38M. How much would a bank charge for wiring that amount?

you are mixing exchange rate premiums and transaction fees. imagine 30M or so EUR to USD first then transaction fee. most certainly more.

It depends. The fees for international wire transfers of those amounts are more complex. A random calculator I found suggested much, much more. Transferwise (cheapest I know) doesn't do that large transfers so you'll have to do it in ~100 transactions but the fees will be a lot larger, and this does not account for conversion fees which will be higher on their own. I found this for GBP, I assume it's similar.

>For payments in GBP the fee percentage for the first 100,000 is 0.35%, and for any amount above that it’s only 0.20%.

https://transferwise.com/gb/blog/send-large-sum-of-money-how

Up to $50 for a SWIFT transaction, without currency conversion.

There's likely to be a similar charge for making a transfer that large from a bank to a Bitcoin exchange anyway.

For those numbers you would be going through OTC, not buying on the open market, so the fees would likely be much lower.

This is not true. I'm sorry to post this twice but it's relevant to the discussion and also an answer to the OP.

Explanation of how it works: https://jimmymow.medium.com/announcing-strike-global-2392b90...

If they are able to beat the interbank rate it means they are either buying the currency from someone below market value (in which case that person is being shafted) or taking on Forex risk themselves.

From the article:

> Strike maintains a live Forex rate and compares that to its own rate before every transaction. However, in our testing, a Strike international transfer has never been done at an unfavorable exchange rate when compared to Forex rates. Shockingly (or maybe not) it was even cheaper sometimes, exposing the flaws and lag in Forex rates and how they are used. Bitcoin, as the most liquid, globally transferable asset is already acting as the new world reserve currency with Strike.

A Forex trade is still taking place so there must be a counterparty. The USD don't just disappear and reappear as EUR. Someone is buying them on the other side. Getting a better rate implies the counterparty getting a worse rate.

I'm not sure I understand your criticism. The USD is used to buy BTC. The BTC is then sold for EUR. There's no Forex trade, not directly at least.

If x EUR is worth y USD, any discount results in someone losing money or taking on Forex risk through some derivative product. It doesn't matter which settlement layer is used.

Sadly still not available, do you know of any fully functional alternatives? Even if more expensive. Just surprised no one has done a Transferwise / traditional bank alternative yet considering it is one of the main publicized advantages of Bitcoin.

Strike is promising a lot (which is exciting!) but don't have a fully functional product yet.

I'm not aware of any alternative. Hopefully the global launch is not too far away.

You can typically wire (ACH in US, SEPA in the EU) within country for no fees to a big exchange like Binance or Coinbase, take something like 0.02% to 0.5% for converting to crypto (depending on amount and exchange, maximum fee is 0.1% at Binance, 0.5% at Coinbase) and do the same thing at the other end.

ofc. fees are just one thing. permission is the other much bigger benefit. it is not easy to send a large sum of fiat internationally. not even even within SEPA. fiat payments are easier but still not "easier" than crypto.

That doesn't mean anything.

The true cost is when the network is saturated.

You can also have this same fee in BTC. If there are no competing transactions, this fee transaction will be mined.

The number of transactions per day on Bitcoin and Bitcoin Cash appears to be roughly the same:

https://bitinfocharts.com/comparison/transactions-btc-bch.ht...

Just to give credit, the title is not mine but Roger Ver's: https://www.reddit.com/r/btc/comments/ltc9g9/38m_usd_moved_f...

Forgive my ignorance, but wouldn't it be free to just hand over the wallet?

Then you'd have to trust that the original owner destroys their copy.

Sure, if you want to give them the exact amount you currently hold and you don't need the wallet for anything else, and the buyer is fine having no guarantees that the original owner cant still access them.

Well, would you trust that the original owner erased his/her private keys and not made a copy?

I agree with you, but what bothers me is that people continue to say that PoW is waste of energy, even if the article is about moving 38M USD for 0.0064 USD.

It didn't though. It moved bitcoin which is worth 38M USD, but crucially it's not the same thing. If you wanted to convert that bitcoin to actual dollars it would cost you a lot more.

Like, if you had a painting worth 38M dollars you could just throw it in the car and drive it somewhere and give it to someone. You just "moved" 38M dollars, but I hope it's clear that it's not the same as actually sending 38M dollars.

The PoW energy is paid for via mining rewards, which are minting new coins (inflation).

The inflation rate in bitcoin is about 2% right now. That means your wallets real world value is shrinking by about 2% annually to pay for those miners. So far, thats been dwarfed by other reasons for bitcoin to change in value.

Shows the power of crypto. Except don't use unsupported crappy forks. Gotta use the original.

But they are using the original Bitcoin, not the Lightning Network altcoin.

They are using Bitcoin Cash which is a fork of Bitcoin.

I would bet 100$ with you on this but unfortunately I have to use it for fees to pay for my 10$ Bitcoin coffee invoice.

they are using a Bitcoin Cash, a failed fork of the original Bitcoin blockchain

You can't do the same low-cost transfer with the original though.

https://mashable.com/article/bitcoin-1-1-billion-transaction...

1B moved for $80 fee. Do your research.

I don't see how this proves anything, on a linear scale it's still much more expensive than BCH fees.

It proves you can do a low cost transfer of a large quantity of money on the original network.

At the moment BTC fees are 100 times higher than those of bitcoin cash though. (Of course for $38M it doesn't matter, but at least with “half a penny” transactions, you can actually use it as a mean of payment (but even BCH wouldn't scale for mainstream payment)

BTC won't be the transaction layer for crypto. It'll be the base settlement layer and a store of value. There's a reason the internet OSI model has layers. Bitcoin Cash is trying to optimize Bitcoin for something it isn't.

> but even BCH wouldn't scale for mainstream payment

Yes it will: https://bitcoincashresearch.org/t/testnet4-and-scalenet/148

That's still 2 orders of magnitude off: to reach something akin to Visa/Mastercard (tens of thousand tx/s) with a single-chain and a 10-min block target spacing, you'd need a block-size of tens of GB! Good luck finding people willing to run a full-node for zero compensation in such case.

There are alternative designs being studied right now[1][2], but BCH is not a real contender here.

[1] Elastico: https://arxiv.org/pdf/1805.03870.pdf

[2] Masa: https://arxiv.org/pdf/1803.09029.pdf

Visa processes an average of 150 million transactions per day [1] (less than 2000 tx per second), so a 256MB block would do it. Of course that blocksize should be incremented with more demand.

[1] https://usa.visa.com/run-your-business/small-business-tools/...

150Mtx/day means less than 2000 tx/s on average, but you can't dimension the throughput of a system on the average load… If you read the entire sentence in the link you posted, you'd see that VISA's network can handle peaks way higher than the daily average (which is mandatory if you don't want your payment system to break during Black Friday or the last Saturday before Christmas).

> VisaNet handles an average of 150 million transactions every day and is capable of handling more than 24,000 transactions per second

And even if a 256MB was enough, it's still way too much to work with the incentives of the bitcoin protocol: you cannot expect people to run full nodes on dedicated machines with several TB of storage, without any retribution whatsoever. And if nobody runs a full node, then the mining cartel have total control of the blockchain, which is obviously not what you want…

> 150Mtx/day means less than 2000 tx/s on average, but you can't dimension the throughput of a system on the average load…

Keep in mind that BCH transactions are "zero-conf" (there is no return-by-fee issue, so double spends aren't viable in the vast majority of transactions [1]). So, in case of a big peak in, most of the transactions would "settled" without the 10-minute confirmation, and after the peak they would be confirmed eventually. It's not the ideal situation, but the final user wouldn't see any difference (unless they are buying something expensive like a car).

> without any retribution whatsoever

If someday Bitcoin Cash gets to that level, the price will rise (and the number of tx per block) and so the coinbase will be much higher. For example with 2000 tx/s, around 200 bytes/tx, and 1 sat/byte, the coinbase of a block would be 2.4 BCH in fees + the reward (currently 6.25 BCH), and then you can expect coinbases of tens of thousands if not hundreds of thousands of dollars.

[1] https://doublespend.cash/

> Keep in mind that BCH transactions are "zero-conf" (there is no return-by-fee issue, so double spends aren't viable in the vast majority of transactions [1]). So, in case of a big peak in, most of the transactions would "settled" without the 10-minute confirmation, and after the peak they would be confirmed eventually. It's not the ideal situation, but the final user wouldn't see any difference (unless they are buying something expensive like a car).

Wat? You realize that without the “10-minute confirmation” as you called it (10 min is not enough, there are stale blocks from time to time) you can spend the same money indefinitely? (double-spending)

> If someday Bitcoin Cash gets to that level, the price will rise (and the number of tx per block) and so the coinbase will be much higher. For example with 2000 tx/s, around 200 bytes/tx, and 1 sat/byte, the coinbase of a block would be 2.4 BCH in fees + the reward (currently 6.25 BCH), and then you can expect coinbases of tens of thousands if not hundreds of thousands of dollars.

Miners get that reward. (non-mining) Full nodes get zero, which is the fundamental problem of the bitcoin protocol (Nakamoto didn't envisioned that there could be miners that wouldn't run full nodes, and that most full nodes wouldn't be mining).

I think this e-mail [1] answers these two points

[1] https://satoshi.nakamotoinstitute.org/emails/cryptography/2/

It doesn't. Satoshi simply failed (as you can see in this response) to imagine a world where full nodes and miners would be disjoint entities, and as a result full node receive no reward whatsoever (and the biggest miners don't even bother to verify that the blocks they mine are correct).

The reliability and independence of the bitcoin blockchain runs on top of the shoulders of benevolent people running full nodes. Increasing the block size, means increasing the cost for those essential people. Not a good idea at all.

downvoters are B cash shills that need to do their research

“Moved”. Nothing moved, numbers changed in a database.

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