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Comment by seanalltogether | Hacker News Reader

"The formula sets the cap at 21 cents, plus .05 percent of the transaction amount, plus another penny in certain cases, for fraud-control measures."

I understand that running to the government for solutions is rarely a good thing, but in this case, shouldn't "digital currency transactions" be something that the federal government maintains as a free utility to society? Isn't something like this just as important as printing currency?

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So you know cash has processing fees associated with it, right? Really. They're totally orthogonal to the cost of physically creating paper or metal currency, and they're mostly subsidized by merchants. Cash management is a hard problem. WalMart spends about 3 million every year moving pennies around -- that actual coin type. Every time a salon owner has to spend time driving to the bank or money leaves a cash register, that's just another cost incurred because the merchant accepted cash money as a payment type.

Checks also have processing fees associated with them. They're mostly subsidized by banks.

Credit cards have processing fees, paid for mostly by merchants.

Merchants really want banks to subsidize their use of debit cards, like banks subsidize their use of checks.

There is no such thing as free, there's just free-from-the-perspective-of-your-own-P&L-statement.

I also understand that maintaining roads is not free, however I'm not paying fees to private companies for the privilege of using them because of how important they are to national infrastructure. I should be paying less overall in taxes to maintain these roads then I would be paying a collection of individual for-profit companies to get the same level of service...in theory.

Is digital currency still too immature to consider the same?

Real costs are probably higher than you expect. Sure, it's so cheap it might as well be free to write a program that debits one number and increases another and run it a few billion times, but reliable financial systems require more than that. Consider what it takes not just to implement a chargeback, but to be able to implement a chargeback, and to be able to stand behind it legally, and to be able to defend against lawsuits, to be able to prove compliance with various regulations, etc etc. Everything looks easy from the outside.

I don't see any compelling reason to think the government would intrinsically do any better, it would just move the costs around and probably incur more of them overall when the full accounting was made, which it never would be, because who can regulate the regulators?

Is there any evidence that there is a competitive market driving the prices down though? Looks like this regulation was designed to push down costs by fiat, but people wanted to keep their profit margins and shifted the costs, so no worse than what you are saying the government would do. The government should be trying to design cmpetition into the system.

I think he was saying that the gov't should make it free, not that it is a free service with artificial costs attached to it.

Why do banks in the USA charge so much for generic P2P wire transfers between accounts? It's cheaper and quicker to give someone a check in the USA in a face to face situation vs. a simple wire transfer to their bank account. Wire transfers would be cheaper for the bank since they wouldn't have to process paper checks. ACH is kind of there, but that's not open to the general public.

> WalMart spends about 3 million every year moving pennies around -- that actual coin type

I tried googling the data but I didn't find it. Is there a reference for that?

Yes. Google walmart "moving pennies" and click on the first result

Please don't use google as a reference. Please, when you want to make a reference, use anything else.

The first two results are to hacker news (this page!) and after that the results are to pages about penny stocks.

http://www.google.dk/search?q=walmart%20%22moving%20pennies%...

I know my google-fu is worthless but I can at least follow directions, and it still comes up with nothing.

To be honest, I think he was making a joke about the HN post being its own reference, although I'm not too sure...

I was trying to illustrate that telling someone to google for references when they already indicated that it was unsuccessful, is not likely to be successful.

It can be done. Up until 2005 Denmark's government-regulated debit card network called Dankort was completely free of fees.

Eventually the banks lobbied the government to allow per-transaction fees to be charged for use of the card, but after only a few months of that practice there was so much protest among consumers that the per-transaction fee was converted into a fixed annual fee.

http://en.wikipedia.org/wiki/Dankort

How do you maintain something as "free" when it costs money? Do you mean having no fees for the digital currency transactions and having the tax payer pick up the cost?

Tax payers have been paying for manufacturing of tangible currency for many centuries. Creating and supporting financial environments is one of the features of governments.

It depends on whether or not there's still room for innovation in digital currency transactions. If there is room for innovation then the private sector should focus on it before everyone combines their effort on a consensus.

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