Western Union May Offer Digital Currency Services Similar to Bitcoin
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Edit: Lol.. not sure why I was downvoted. It is obvious the previous poster meant that bitcoin is over-the-heads of employees of Western Union... this was a play on that.
HN is a hideous bitch goddess.
I agree that "if you have to explain a joke, it isn't funny", but not only was I on-topic for the story -- but also for the specific thread.
The implied point was that the good people at Western Union aren't as dumb as the previous commenter stated, and probably are excited about a (possible) reinvention and embracing of bitcoin.
Forgive me for injecting some levity into an otherwise boring story, but my point was clear and remains valid.
I suppose I should have just called the previous poster a troll and stated "they're probably excited". Oops. I'll be more confrontational next time.
(Also, not on reddit, just would rather attempt to use humor to get a point across. Maybe I watched too much Monty Python as a kid...)
Western Union can provide a lot of relevant services: escrow, conversion to obscure currencies (or just general exchange), fraud mitigation, etc.
Ah yes. The fraudsters favorite service for irreversible cash transfers will certainly have an advantage there.
But OK, I'll take the bait :).
Yes, Western Union can provide a lot of relevant services, but so can _anybody_, and there are already a number of Bitcoin exchanges.
To assume that Western Union ought to provide Bitcoin services is like assuming that a horse-and-buggy company ought to start making cars. I mean, sure, it might be a really good idea, but cars are a _revolution_ of the horse-and-buggy, not an _evolution_. Likewise, Bitcoin is a revolution compared to traditional money transfer, not an evolution.
All of that being said, Bitcoin eliminates or at least reduces many of those costs, in that delivery and receipt of payment can proceed without the involvement of the agent. And FinCEN, with its determination that institutional bitcoin services must be handled by a money transmitter, has just created a barrer to entry that WU is well inside of.
I concur with you, however, that interbank fees are a minimal component of their cost. Also, transfers processed by WU and its competitors are usually instantaneous from the point of view of their customers (part of the value they bring is the massive network of paying and receiving terminals that exist worldwide).
Source: I was the head of IT and operations for a money transmitter in a previous life.
1. This will probably mean WU wants a cut of all transactions in any digital currency they create... for life. 2. No benefit over fiat currency? 3. Not anonymous. 4. All the "coins" are controlled by WU.
I'm similarly dubious as to their chances of success with the initial population ( the part of the market for digital currencies that overlaps with bitcoin traders ), however they do have a global retail presence and a brand that is recognizable even if it's trustworthiness is suspect.
And all the coins being "controlled" by a regulated, profitable multinational business with a lot to lose from scamming people (and probably tied to the dollar) is a lot more reassuring than a software protocol administered by a mysterious foreign foundation - transaction fees or no transaction fees.
Not every product has to be an appealing proposition to US-based early adopters to be phenomenally useful.
The FED is privately owned by the big banks, see "The creature from Jekyll Island". The senator Aldrichs daughter who was on the island was married to one of the bankers. The by bank created new debt money out of thin air blows up assets bubbles that the central bankers later ride in and try and save, by saving the debt bubbles losses are socialized ie its burden is put to the people through inflation instead of the bank owners/bond holders taking the losses. Central banks centrally plan the price of new money by controlling the interest rate.
It would be good if more viewed the documentary film "The four horsemen".
I don't like the Federal Reserve either, but ignorance & conspiracy theories of the way the system actually works does no one any good.
"The members of the Board of Governors are nominated by the President of the United States and confirmed by the U.S. Senate." http://www.federalreserve.gov/faqs/about_12591.htm
http://falkvinge.net/2013/03/06/the-target-value-for-bitcoin...
Whether that will ever happen, or if it will happen in the next few decades, it remains to be seen. But the point is a Bitcoin does have the potential to be worth a lot per unit. It all depends on how many people and businesses are going to use it in the future. If you look at it like that, Bitcoin hasn't even scratched the surface of its potential.
Let's say all bitcoin becomes is a paypal killer.
Paypal had a total payment volume of $145 billion in 2012. Now you can't just say a fair value for bitcoin's market cap is $145 billion because that doesn't take money velocity into account. Some of that volume could be the same dollars floating around. You don't need $145 billion in cash all at once to cover that activity. But paypal's revenue was $5.6 billion. So the amount bitcoin needs to be worth to handle the same amount of business as paypal is somewhere between those two numbers, and even a low $10 billion prices bitcoins at $1000 each.
Visa Inc had a total payment volume of $6.4 Trillion in 2012. Of course in addition to figuring out the actual money velocity you need to remove the credit component since bitcoin doesn't do that. But some sketchy back-of-the-envelope math can demonstrate that a $100 billion dollar market wouldn't be unheard of, with $10,000 bitcoins.
Of course I'm talking like 10-20 years out for anything like that, not today.