[gregschlom]

"There is no single obviously correct solution to these issues. Instead, each decision was sort of weird and contingent and reversible: not the immutable code of the blockchain, but just humans sitting around and trying to figure out which approach would cause the fewest complaints. In that, it's a bit like the Dole settlement process -- only instead of a neutral judge making decisions based on written contracts and established precedent, it's the people running each exchange making their own judgment calls."

This is what I'm always repeating about blockchains: they're very valuable if and only if you cannot use the protection of contracts and laws when making a transation - for example because you're doing something illegal. In Every. Other. Case. systems based on trust, contracts and law (such as the banking system for example) are more efficient.

It doesn't mean that there isn't room for improving existing systems, just this is probably best done with regular servers and databases rather than a blockchain.

[brownbat]

I like that rule, but I would extend ever so slightly:

If existing providers are anticompetitive, blockchains allow you to bootstrap an alternative without the same capital requirements you might need to compete with, say, VISA or Wells Fargo.

I'd also note that transacting across borders can easily make legal remedies cost prohibitive, especially for smaller transactions, even if both countries have mature legal systems. So I expect cross border activity to be more typical than the illegality example in the long run. But that fits your conditions as written, so this is just a quibble.

[goodplay]

>they're very valuable if and only if you cannot use the protection [..]

I don't think that's entirely fair. They're also valuable to those who want to transfer money without ridiculous fees, excessive bureaucratic friction, and many mandatory middlemen.

What other system would allow you to instantly be able to accept payments without giving an exorbitant portion of your revenue?

[slg]

But the "ridiculous fees, excessive bureaucratic friction, and many mandatory middlemen" are what buy you the protection. The fees from necessary middleman seem ridiculous when nothing goes wrong, but that is how Visa pays for a chargebacks or fraud protection. The governments bureaucratic friction might seem excessive, but that is how they ensure people are paying their taxes which goes to fund the court systems that help mediate disputed contracts.

[phlo]

Regulation can greatly improve things.

Within the Single Euro Payments Area, credit transfers (i.e. bank transfers) have been free for almost a decade and will be instant (<10s), effective November of this year. Another regulation, Payment Services Directive 2 will bring more open access to bank accounts as well, requiring banks to provide access to APIs.

Relatedly, the EU also limits interchange fees for credit and debit cards (to 0.2 and 0.3%, respectively). This is the reason why integrators like Stripe charge 1.4% for European and 2.9% for non-European cards.

Payments can be quick, simple and cheap. All you need is some competition, or regulation to favour end-users' interests.

[mcherm]

Yes, but that comes at a price. It means that banks and financial institutions cannot make the same level of outrageous profits -- or at least not without finding different income streams.

[icebraining]

Only a small part of those fees and frictions actually pay for that protection, and in the CC system, a good chunk of that protection is only needed because the system is almost designed to be abused.

But more importantly, that protection money becomes actual protection money, since you can't opt-out. I've bought a lot of used stuff over the years to strangers using cash, deliberately abdicating that protection. Yet if I want to do that online, I can't.

[closeparen]

Ridiculous fees, bureaucratic friction, and mandatory middlemen are exactly how I would describe converting the BTC someone transferred to you to a usable form (by exchanging to your local fiat currency).

[and0]

I'd really love to step into this magical world cryptoconcurrency advocates invented where modern banking is impossibly terrible for most people to utilize, and Bitcoin is easier and has lower fees (it doesn't).

This invention or exaggeration of issues with modern banking just shows how weirdly desperate these people are for a problem their get-rich-quick scheme actually solves.

[gregschlom]

This is fixed by creating new services and/or fixing regulation where needed. A good example of that is TranferWise which turned what used to be a horrible fee laden process into something as simple as fairly priced as it can be.

Fix the banking system. Make new banks. Whatever. You don't need the blockchain for that.

[ballenf]

Not everyone lives under a strong rule of law that we enjoy and take for granted or has access to stable currency. But, it's kind of ironic that if things turn really south everywhere, the infrastructure needed to maintain blockchains will go also go down. Exactly when such a thing would be pretty handy.

[marcosdumay]

That's why I think our current cryptocurrencies will just get destroyed by government centralized (that is, no block-chain) crypto-money attached to each of their currencies.

But well, governments won't move fast.