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Comment by breck | Hacker News Reader

I love this sort of thing. He’s making a bet, explains his reasoning, and does it in the open! That’s great.

I disagree that there’s no tech here. IMO public ledgers that never sleep are far superior(thanks to the hard work of many people over the past decade), and their advantage over retail banking will only increase. My online banks keep getting worse, crypto keeps getting better. Think about this: banks are CLOSED 77% of the time! Need to send a wire? 3/4 times bank will be closed. Capital will just move far more efficiently on block chains.

I have NO idea whether crypto is a good investment. I agree with the OP that insiders dominate it. But the tech has gotten really solid and I don’t see how the rest of banking has a chance, unless our government wants to burn our economic lead down to protect the status quo.

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Banks are bad because they charge to much, but they aren't that bad. What kind of unbelievably shitty bank doesn't provide 24-7 money transfers through a convenient phone app? Those transfers always take 0 time within the bank and have legally forced waiting periods between banks and between regions. The time may be legally required to be higher for certain scales of transactions, but they are generally as fast as they can be. Btw if your bank does not provide these services, just switch to one that does.

Another curious thing to note is that the legal requirements on transaction delays are mostly regarding wealth control, scams and ensuring its difficult to launder money. Strictly speaking, if bitcoin was treated as a currency, or even a publicly traded derivative, internationally a lot of them would apply to bitcoin. Bitcoin of course cannot obey these by design, but the more popular it gets, the more countries will try to enforce these, most recently china. That bitcoin is more vulnerable to state actors than people seem to think is pretty funny too. If china turned all its supercomputing clusters to bitcoin mining without building anything new, they might well become big enough to control the blockchain. If they made an investment in asics large enough to match just the recent baidu supercomputer, they would control the blockchain entirely. So good luck getting your assets out when they decide to really enforce their rules. Just kidding, this will only ever be approved when the officials in charge want to really own a lot of bitcoin^^. More realistically they would just simultaneously and long term kill every major exchange via hacking and ddos and asset freezes, but thats just because that would be cheaper.

Having 51% of the network does not mean they can know your private key.

It does mean the ability to block transactions at will.

lol, or switch to Dogecoin — now accepted at Sheetz!

Eh. Brazil (the government! same one that botched the response to Covid) instituted an universal mechanism to wire any amount of money instantly for free — there goes your use case, not to mention Venmo, etc.

Of note: INSTANTLY. You can pay a random handyman you need in an emergency, or split bar tabs, or pay out-of-pocket expenses with doctors, whatever. I use it in lieu of credit cards for e-commerce too.

https://www.paymentsjournal.com/why-pix-is-the-revolution-of...

https://en.m.wikipedia.org/wiki/Pix_(electronic_payment_syst...

https://www.bcb.gov.br/en/financialstability/pix_en

Its only interesting when compared with the US. Japan put in instant payments in 1973. And Nigeria, Philippines and many other developing countriesall have local instant payment systems.

I have been using BRL (a stellar based stable token) to pay a programmer from Europe. Zero fee, Sepa instant to PIX. Allows me to pay him daily as that is what he wanted.

https://www.ntokens.com/blog/brl-anchor-stellar

There are Argentian, Nigerian, South African, USDC, Chilean (https://kbtrading.org)

Limits exist, they're just undocumented. Fine for day-to-day expenses, not ok for business, real estate etc.

https://www.google.com/amp/s/labsnews.com/en/news/economy/br...

You're relying on a nation state to behave in a certain way. This never works out in the long term. The winds of politics change on a whim. That's just history for you.

With Bitcoin you instead rely on the intrinsic properties of the protocol. No ifs or buts.

you still need a way to turn that BTC into cash you can use daily, and that requires an on/off ramp. For any large amount, P2P is out of the question. You will need to go through an exchange which will have to comply with the local laws of the nation state.

On ramps yes, many bitcoin holders are waiting for the day where it's spendable and accepted by more merchants and that's going to take decades.

The core problem is that no mature economy will have any need to accept BTC payments. Their native currency will likely be stable and they'll also have infrastructure to support fast, cheap payments via legacy means.

There is really no incentive to accept crpyto for any large merchant. In fact, the number of online merchants I've seen who accept crypto has actually gone down over the last few years.

True and that's why I think it'll take many decades. Merchants accepting before the mass adoption of lightning and other layer twos are way too early, and no one wants to spend it before it reaches mass adoption.

Bitcoin only makes sense for emerging market countries with unstable currencies or formerly stable countries going through a crisis. In the former case it takes a long time for those economies to mature. In the latter case, it might be temporarily adopted by their citizens until they can escape to a more stable country or the country manages to turn itself around. These events take decades.

For now, it's just a store of value. You put it in a portfolio like gold as another uncorrelated asset that tends to go up over time as fiat currencies inflate which is what got some of the recent big macro/portfolio construction crowd interested last year and driving up price in this recent run up, and unfortunately the market cap is too low again for more serious allocation to it without driving up price too much.

We're a decade into an adoption curve that was planned to be over a century long

You aren't making a lot of sense here since you are relying on an unelected group of people to behave in a certain way. > This never works out in the long term. The winds of politics change on a whim. That's just history for you.

With a nation state you instead rely on the intrinsic properties of the law. No ifs or buts.

The law changes dramatically every time there is a new government. The bitcoin protocol stays the same.

That is not true. The bitcoin protocol can change and did change. If you fire up the original wallet it won't sync.

Small incremental changes based on almost universal consensus, yes. Not the same as political change. The big block size guys failed to make a big politically charged change. Bitcoin has shown its resistance to political change very clearly.

That's interesting - can you use it to send me a little money over the internet?

Bitcoin isn't good for this either any more, but litecoin, monero and bitcoin cash all work well.

Same with twint.ch in Switzerland.

> Think about this: banks are CLOSED 77% of the time! Need to send a wire? 3/4 times bank will be closed

Physical branches, sure, but I don't know of any online service that has ever closed, in the UK at least...

We can send payments to other banks and they arrive almost instantly (or within 2 hours) any day of the week. For free.

This is why I wasn't that impressed when US friends were excited about instant transactions using BTC, when we've had this in our banking system for over a decade

And with companies like Wise (previously trasnferwise) I can convert a USD balance into GBP in seconds, and then withdraw to a UK bank in a few more seconds.

Send money to chile and wise charges 5-8%. They mostly only good in OECD countries. Plus they don't support sending money out of hundreds of countries.

I figured that they changed their name to wise as their transfer business was not profitable in anticipation of their ipo.

People who don't get crypto typically live in countries with not corrupt or inept government officials.

I don’t believe conversion from fiat in home country + transfer fees + conversion to fiat again in Chile costs less than 5-8% except for very large transfers.

That's not true everywhere. My transferwise from EU to Asia takes a good week to arrive and still costs more than Bitcoin and significantly more than any altcoin or lightning network.

Fixing these issues on a per-country basis is most likely easier than the necessary adoption for crypto to replace these mechanisms altogether.

I get what the GGGP's point is, but the baseline to compare with is the EU IBAN system, not the US banking system.

Where are you importing to?! To Thailand, Philippines and Indonesia I’ve never had anything take more than 24hrs

Right, but with Bitcoin, it can be achieved without having government totally (and arguably quite invasively) integrated into every facet of our society.

You have obviously never tried to move money on the public blockchain. Bitcoin is actually slower and more expensive than it used to be.

Need to send a wire? Locally (within the same currency) I can send 24/7 with an average time to hit the other persons bank account of around 5 seconds - cost is $0. No blockchain involved just old fashioned brick and mortar banks.

Perhaps you need to change banks.

I live in Germany, and even local transfers (between different banks) are not guaranteed to come fast - sometimes it's quick, sometimes it's next working day. So what's true for you is not true everywhere even in the Western world.

Yes, certainly some countries need to modernize their banking infrastructure.

But you can do that without a blockchain for a tiny fraction of the energy cost, transaction time, and transaction fee (if there's a fee at all).

Example: twint.ch Instant transfer, no fees, ubiquous (you can pay you train ticket/parking/groceries etc... with it as well as transfer money to anyone). No blockchain.

There are in Instant Money transfers in Germany if the banks in transaction support it.

Like he said it seems to depend. Last week sending Revolut to N26 was instant. N26 to Revolut took 3 days (weekend).

There is no sepa rule that requires inst sepa if it is available.

Crazy limits though. Here in the US, the limit is so tight one friend with a swanky apt can't even pay rent without wire xfer.

I still don't get how this solves any major issues. Neither major companies or the vast majority of people need to wire money at 2am. The main utility of banks (and the main profit center) is giving users the ability to spend money on credit.

Crypto doesn't solve that. I feel like everything you said about the upside of crypto would have applied even more so to the invention of 24 hour ATMs. Was it a huge upside to users they could get money at 2am? Yes. Did it change banking - no. Will faster transfer be upside for consumers? Yes. Will it change banking - probably not the existing banks will just get faster at it and things will be marginally better. I can already use zelle to transfer instantly.

  My online banks keep getting worse, crypto keeps getting better.

That resonates with me after my bank shut down my ability to transfer money (via eTransfer) because I hit their arbitrary $20,000 limit for the month. I had to wait THREE weeks before I could send another transfer.

It's also worth reflecting on the fact that banking being terrible is predominantly an American problem among the developed nations. Even in 3rd world countries, banking is pretty awesome. Checks have been obsolete for decades, any kind of money transfer takes around 5 seconds after you press send from your bank's app, even during weekends and between different banks. Transfer limits are generally settable from the apps as well. Worst case they sort you out through phone immediately. Waiting for 3 weeks for something like that is unheard of where I live which is a developing country.

And crypto gives the entire world that great experience, without needing a bank or a government. It is hard to say that isn't an amazing technical solution to an organizational problem.

There are worse countries to manage your finances in than the US by the way. Lebanon is in the midst of a terrible bank and currency crises. People literally are not allowed to take money from the bank. This happens repeatedly throughout history.

> And crypto gives the entire world that great experience, without needing a bank or a government

ha ha keep drinking the kool aid:

- crypto is difficult to use (really, no one wants the hassle of managing private keys)

- transactions are irreversible (i realise by design, but actually most people just want some measure of fraud protection)

- often high transaction costs

- slow transaction times (>10 mins for btc, often longer, versus literally instant for conventional payments)

- very, very limited transaction rates.

- oh and you could easily lose your cash with no recovery (go to point one re private keys)

Yeah, no. Crypto does not provide (or even support) the experience I talk about when I say "great".

Every bank will reimburse you in the event of getting hacked or fraudulent withdrawals (to varying degrees), so withdrawal limits reduce their liability.

Bitcoin doesn't provide any protections in the case of your money being stolen, so it doesn't impose any limits.

Depends what you prioritise I suppose.

Federal reserve regulation D puts strict limitations on transfers from savings to ensure bank capital ratios and solvency, not liability.

Fraudulent withdrawals (eg: check forgery, ACH fraud) are caused by the nature of our high trust banking system.

Account takeovers are easiest to pull off via social engineering vectors.

Alternatively build a good key management UX and don't talk to any Nigerian princes. I'd rather prioritize that.

No they don't. They will weasel out of reimbursing you any time they can.

Looking at you, BBVA.

where i live daily upper limit is $20k and transcation costs from 0 to 20 cents and money is transfered instantly.

It makes me belive USA is far behind when it comes to financial tech

It’s not an arbitrary limit, it’s for money laundering risk-monitoring and reporting purposes.

What kind of a bank do you use that doesn't allow you to send money 24/7?

Send is only 1 leg of the transaction though? Time is money, if I need to move funds across the globe I would prefer to do it as fast as possible. I am pretty sure this is a common sentiment.

"Banks are old and slow, technology is fast and new" so technology will win. That is totally reasonable logic.

But bitcoin provides no protection from fraud by design. If someone breaks into your house or hacks your computer and steals your private key you have no way of getting that bitcoin back. But if someone impersonates you at the bank the bank has ways of refunding you. Maybe some people prefer the bitcoin design, but most people will not.

> banks are CLOSED 77% of the time! Need to send a wire? 3/4 times bank will be closed

Wait, what ? I have never, ever been unable to pay (aka: send money) regardless of the day/time. Wanna order that sweet RTX 3080 on amazon at 3 AM on a sunday ? Got you covered ! My business is also able to charge (aka: receive money) 24/7/365. It's a 100% uptime from my POV). Just need the app on my phone.

And usually the confirmation takes less than 15 seconds. The few payments I made with bitcoin took around 24 hour to be confirmed (granted I just said, "** it, I'll check tomorrow" after waiting for a few minutes).

In my whole life, I have seen one (1) single Bitcoin brick and mortar "store" (basically, an ATM behind a glass, and some bitcoin swag). Funny enough, it was closed when I was there because I was visiting on a sunday. Compare apple to apple and oranges to oranges.

International transfers are a mess but domestic transfers in my country are open 24x7 and are instant with minimal or even no fees.

Payments is a solved problem technologically. It's only American banks that refuse to get with the times.

> My online banks keep getting worse, crypto keeps getting better. Think about this: banks are CLOSED 77% of the time! Need to send a wire? 3/4 times bank will be closed.

This is a very American perspective. It's not like this in most places. And even if it was, Blockchain isn't the only solution. By far.

> Think about this: banks are CLOSED 77% of the time! Need to send a wire? 3/4 times bank will be closed. Capital will just move far more efficiently on block chains.

What country are you in where this is a problem?

The amount of time it takes for me to move my own money between my own accounts pisses me off mightily. I can pay to have an "instant" transfer but that is just double dipping by the banks for a service that should be provided in the cost I'm already paying for my accounts. Crypto currently has far greater UX challenges but once these are fixed this is where crypto can win.

Free, instant transfers are already the status quo in a lot of the world, as of course they do not require blockchain. SEPA Instant Payment in the EU, for instance. In fact they're way faster than a Bitcoin transaction much of the time - and obviously way less expensive ($0 vs. $5-60).

The US is moving to 24/7 free, instant payments as RTP rolls out. [1]

The US has been quite far behind historically on this front however they are closing this gap, probably motivated in no small part by Bitcoin.

[1] https://www.theclearinghouse.org/payment-systems/rtp

Costs me €1.50 per transfer in Germany. Also costs me in Singapore. It should just be the be default.

Here in India, I can make transfers via UPI for free. For larger amounts, I can use IMPS which costs INR 5 ($0.067). Both are instant and have highly usable apps from trustworthy providers.

I guess in India they can’t get away with this nonsense

While it's true in some regions, most of the globe banking is still very slow. In any digital currency, like cryptocoins of CBDC it's the same globally, not per region.

Global transfers are slow because they generally undergo some form of manual review for risk and AML/KYC. Crypto is fast because it pretends that this isn't a requirement. That only works as long as it's small enough people don't care. Once people care, things will look a lot different than they do now.

There's no reason whatsoever that a crypto payment would be faster than a traditional payment - in fact, there's a ton of reasons the lower bound is much slower.

This is an intentional process decision, combined with some (replaceable) outdated technology. However, the former strictly dominates the latter.

Funnily enough my transferwise international payments are basically instant.

With Borderless/Multi-Currency it's even cooler, since it grants you local banking details in many different locales, so someone can pay you via ACH, FedWire, SEPA, EFT, etc and have that value reflected in your account almost immediately (depending on the transfer method) and (depending on the transfer method) without charge.

Isn't this convenience at the cost of trusting a third party, I.e. Transferwise, with your money? They can unilaterally hold, delay, or stop you from using your money.

Yes, that is true, however Wise is a heavily regulated entity (in the sense that they are regulated simultaneously by a number of global regulators). Broadly speaking they would have to have a very good reason - a legal one - to preclude you from accessing your money. The flip side is you have a legal pathway to recovering your value in the unlikely situation you describe. Pros and cons.

Lol really i can internally move all the money around i will for free, this must be an american problem ?

I’m in Germany

Banks are closed only in US. In countries like India you can do transactions near real time for most consumer transactions with 0% fee.

About the whole GameStop thing, for me the most interesting thing was how old school the whole stock market is. 2 days until you really own the stock?!? And then even some trading companys are just take your stocks and lend it for shorting?!?

They don't "just take" it, it gets lent out to them by your broker, who charges the shorter a fee for this. This fee (amongst other things) subsidizes your free account and low trading costs. For large investors it is possible to share in this income, though not via one of the currently popular retail brokers as far as I'm aware.

Most brokers here in the UK have an annual custody fee of say 0.25%, capped at some fixed amount per quarter.

Trading tends to be expensive though, say $14/trade.

Some broker do this, when customers don't even know about it and also get no lending mony.

Customers who have not read the terms and conditions of a service they are using to store a significant part of their net worth you mean? Every broker I have ever seen very clearly lists in the T&C that they do this.

It was even a discussion here on HN because of an broker frome Sweden ord Norway (I don't remember). So no, it is not allways clear. And no, you may don't own the stock.

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