Western Union: Bitcoin isn’t ready for international money transfer yet
coindesk.com
coindesk.com
“We’re a long, long way from sending momma in Mexico $240 each month or a Somali family in a refugee camp $200 each month in bitcoin that is held in a wallet for conversion to local fiat currency and spending as needed,” he suggests.
This is absolutely the case.
It's worth noting that there are tremendous opportunities for arbitrage in a market like that too.
Is it? Assuming users don't wish to hold BTC directly, the buys and sells should match up in the long run, and the only costs will be exchange fees.
Implementing international remittance will probably help bitcoin liquidity.
Go to a Somali refugee camp in Kenya and attempt to exchange your Bitcoin at anything approaching international market rates.
This doesn't mean it will always be like that, though. The arbitrage opportunities (if nothing else) make it too attractive for that need to remain unserviced.
(I speculate elsewhere about alternative international payment networks may fit perfectly into this model: https://news.ycombinator.com/item?id=6666899)
However, dumping even half of the Visa/MC daily tx volume would bring the network to a halt. The transaction fee scheme has issues as is, it needs to be reworked before it can handle even double the current daily volume. [need to find source, gavin mentioned it somewhere]
We could raise the block size, but that's no free lunch (makes it more costly to run a node, etc...), things could go off chain, we could use Ripple, etc... etc.
Point being, something will need to change before the big players come in, and it's more than just liquidity and user security.
That doesn't seem to be the direction they're going, though.
In all honesty I see Bitcoin becoming more of a commodity in the long term, and it is traded sparingly, or other coins/digital currencies are built that allow you to peg the value of Bitcoin to them, as to move it faster. This is just speculation, of course.
My coworker has a regular checking account. One day he noticed he had something like $20K missing. He called the bank, they have a long conversaton, put him on hold, long long hold, then they say "Your money is back, let's never talk of this incident again".
If he hadn't noticed it, he would be out $20K.
The ability to irretrievably lose massive sums of money with no recourse is a challenge for Bitcoin. Banks have insurance for just this sort of eventuality. Cash is relatively hard to steal in gigantic quantities.
I find it funny that you pose the problem and give the solution in such close proximity. (In case you miss my meaning, the solution is to trust large wallets with third party companies that insure their holdings and guarantee your money even if they are successfully attacked)
The FDIC isn't really relevant here ー it doesn't really insure against theft or bank error. But banks have other insurance which does precisely that.
I am sure there are already virus and malware out in the wild which target private keys.
Offline wallets are the only way around this - but eventually the user will need to use their private key to move those funds.
They are equivalent to DMZ servers; hold only what is necessary for the service and be prepared to drop them quickly if problems occur.
The real money ( such as received salary and savings ) should be in firewalled deposit-only accounts ( like servers in the secure internal network ). Push from the salary receiving account to checking when necessary. Don't accept any requests from the DMZ.
If he's serious I don't think he understands much about bitcoin. (More likely, he's trying to preserve a role for Western Union.)
They are stuck - they can see the short-term huge benefits and profits from being a trusted middleman, but once it takes off and becomes accepted in the mainstream they would be cut out of the picture (and forced to pivot again...)
WesternUnion would cost me at least 4.5%, their fee calculator doesn't even support large amounts.
Bitcoin will cost me around 1.0% in fees (including USD wire-in, buy bitcoin, sell for Euro, SEPA-out).
Guess which method I will be using.
Here in Japan it's not so bad but when you get audited they generally have a list of all your inbound international wires and ask you to prove that the money is not taxable... otherwise you can get fined heavily.
It's a sad state of affairs when free people are not allowed to move their money as they see fit without explanations and justifications. It's yet another proof that fiat is not really your money and that it needs to go. Can't wait till Bitcoin becomes more ubiquitous.