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Comment by celticninja | Hacker News Reader

with bitcoin you are your own bank, you dont need a bank to give you an account. You create your own and people can send you money and you can send them money at very low cost. sure you dont get traditional services such as overdrafts, or bank charges but for the underbanked this is part of the problem not the solution.

A user in the Phillipines can create a wallet for nothing. Their relative in the US can send them bitcoin, then they exchange it for cash in the phillipines. they dont need a bank just a local trader who will trade bitcoin for cash, this will become more widespread as adoption grows so finding someone to trade with will be easier.

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I cant reply to hnnewguy so i will post it here.

What services does a bank provide? it holds your money, it sends your money, it allows people to send you money. all of these can be achieved by bitcoin.

Outside of these functions everything else is a finacial service; loans, overdrafts, mortgages etc. all of which attract fees and charges, these are products you are being sold, this is not banking.

hnnewguy says that banks accept risk, well the risk they accept is not you, not if you are the one depositing money with them. you are taking the risk by letting them hold your money. they do assume risk but that is when you are taking out a loan or an overdraft, bitcoin does not replace these fucntions. bitcoin replaces, holding, sending and receving money, it does this far cheaper than a bank does, especially for the poor who are hit unfairly with charges that are very high in comparison to their income.

>it holds your money, it sends your money, it allows people to send you money

It also provides an audit trail for where money comes from and where it's going, and assumes some of the responsibility as an intermediary during those transactions. Believe it or not, that's vitally important to businesses.

Banking isn't about making payments. It's financial intermediation, and will not be usurped by Bitcoin. If anything, it will merely adopt Bitcoin into its practices.

>especially for the poor

Maybe I'm dense, but how exactly are the poor paying for things with Bitcoin?

The Blockchain provides an audit trail that is considerably more transparent and easy to access than the audit trail a bank uses.

I agree, bitcoin is not out to replace banking but it can offer banking facilities to those who cannot get them and banks will adopt bitcoin for the benefit it provides them, in all likelihood bitcoin will underpin financial transactions without the end user knowing particularly with regard to international transfers.

It is not about paying for things with botcoin, for the poor most banks won't touch then because they are not financilly viable, ie their income is to low for the bank to safely lend them money (loans, overdrafts, credit cards) as a result they don't even get to access the basic hold, send, receive money services.

Think of international remittance, a worker wants to send money home, he wants to send $50, Western union charge 10% of that, a bank would probably charge 20% to send it to Philippines. This second option requires the person in the Philippines to have a bank account, which is not always the case. The first option cones at significant expense for the sender.

>The Blockchain provides an audit trail that is considerably more transparent and easy to access than the audit trail a bank uses.

If I send money to someone unintentionally or undeservedly, how does the block-chain rectify that charge?

My bank simply reverses it. That's powerful.

>This second option requires the person in the Philippines to have a bank account

True, but Bitcoin requires a cell phone or consistent internet access, doesn't it? And there's no recourse to having your money stolen or lost? I'm not sure those are appealing scenarios to the poor, either.

Transaction fees aren't high "just because". Otherwise anyone could open a lending facility of some sort and kill it. I mean, it's not like Western Union is making excessive profits. There's a matrix of risk involved with the movement of money. Bitcoin solves some, and creates others.

Point 1 - there is no way to reverse a transaction in bitcoin. If you make mistake you make a mistake. You can request the funds be returned and these things have happened. But let me ask you how often do you send bank payments to the wrong person. Most people will check the details, be it sort code and account number or bitcoin address. Even getting a transaction reversed with a bank is not a simple process and it is not always possible otherwise carders would not be able to withdraw funds successfully because at some point a bank can stop the outflow of money, the difference is the bank takes the loss not you. However when banks take a loss we all take a loss.

You don't need constant Internet access to use bitcoin. If you have an address for payment you can receive payment to it without being online. Next time you check the address the funds are there.

There is recourse to theft, the same ones available to people now, law enforcement. Yes you cannot guarantee the return of funds at present however insurance and insured wallets will be available and in some cases already are. Also security in the area is improving significantly all the time.

Western union make about $200 million a year in profits. So it is making a good profit. But transaction fees are high because the infrastructure needed to send payments internationally is extremely entice to build. Or it was before bitcoin came along. People forget that bitcoin is as much about the Blockchain technology as it is the currency. It is the Blockchain that makes transaction fees low and it is one of the primary reasons that bitcoin will "kill it" in the end.

Perhaps you are being dense I am not sure. I said

The poor pay more for banking services than the better off do. This means they pay a higher percentage of their income for bank fees. I did not say they were buying things with bitcoin. Just that bitcoin allows them to transact far more cheaply than traditional banks do.

>with bitcoin you are your own bank

A bank isn't a vault to store money, it's a service provider. They provide services for money, including the assumption of risk. Whether those services justify the fees charged is another story. But you certainly aren't "banking" with bitcoin any more than putting cash in your wallet is "banking".

celticninja replied to you here: https://news.ycombinator.com/item?id=8734653

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