[MusaTheRedGuard]

First of all, no. Global, trustless coordination is a hard problem and is not necessarily illegal.

Second, legality is subjective around the world. It is currently illegal in the US to gamble online, for some reason, even though casinos and lotteries are a thing.

It is illegal in many countries to transfer a certain amount of money out of the country, for some reason.

Certain sexualities are illegal in quite a few countries.

Illegal != bad

[gregschlom]

I'm not saying: you don't need the blockchain because you shouldn't be doing bad things.

I'm saying: you need the blockchain if and only if you are doing things that are illegal in your country. It's a decision criteria for when you need the blockchain.

I'm making no moral judgement. And there are very good reasons to want to do things that your government deems illegal (for example, donating to a political organization that has been blacklisted)

[skilgarriff]

I can send 1 bitcoin from myself living in Minnesota to my friend living in Japan for the equivalent of $0.46.

That's an improvement over the existing system. I don't have to trust anyone in between to get my money to him.

How would that be as possible and as "trustless" without blockchain?

[gregschlom]

1. Regarding the fees: $0.46 is (I presume) only the transaction fees. To make an accurate comparison, you'd have to include the exchange fees to convert from USD to BTC and then from BTC to JPY.

Right now Coinbase is charging me $59 to buy 1 BTC, and I don't know how much more it would be to sell exchange that back to JPY.

You can send $4000 (about 1 BTC) to someone in Japan for $30.14 with TransferWise.

And guess what? Last time I had to send money to my family in Europe, that's exactly what I did.

2. Regarding trust:

> don't have to trust anyone in between to get my money to him.

Yes you do. Both your friend and you need to trust your Bitcoin exchange. Which sometimes, cannot be trusted. Remember Mt Gox?

[skilgarriff]

1. First these are totally different points.

a. If you do not currently own Bitcoin and want to own it there are many ways you can get it. They range from fast (generally more expensive) to slow (generally less expensive). Sure, if you want to buy Bitcoin on Coinbase you can do that and you will pay them a fee for that service - which I've done. You can also mine it - which I've done, be paid it in - also done, etc.

b. Secondly you are assuming that my friend can't pay for services in Bitcoin. We have both had lunch together at a restaurant in which we paid for the entire meal in BTC.

So it's an unfair statement to say my transferring of BTC to my friend costs me these fees. If you want to make the statement of "transferring USD to BTC to my friend to JPY" then sure, your statement about fees is relevant. I'm not sure suggesting that a pure BTC transfer is not an "accurate comparison" is fair.

2. See the above point. There is no trust beyond math when it come to a pure Bitcoin to Bitcoin transfer. There are plenty of things that you can buy using pure Bitcoin which I, and many of my friends, have done.

[arcticbull]

1a. Mining is absolutely inefficient as an individual and barely economical if you're Bitmain. That's a complete red-herring.

1b. Effectively nobody accepts bitcoin. It's something like 3 major merchants and around a couple thousand total, world-wide. So yes, you will be buying BTC for real money and exchanging it for real money on the other side. Pretending we live in a land of hyperbitcoinization isn't helpful.

Further, you incur huge forex risk in between the time it takes to buy, transfer and re-sell. Do it at the wrong time and you could lose tens of percentage points. The parent post understates the cost as a result.

2. Drugs.

[Mirioron]

>You can send $4000 (about 1 BTC) to someone in Japan for $30.14 with TransferWise.

Doesn't TransferWise rely on MasterCard? In other words, if MasterCard bans you then you wouldn't be able to send it.

[gnopgnip]

The real cost is much higher than that, because you are not paid in bitcoin in the US, and your friend in Japan cannot spend bitcoin to buy food or pay rent. You also have to trust multiple entities along the way.

You can send money to Japan using moneygram, or transferwise, or a number of other services for a lower all in cost.

[skilgarriff]

In fact I am paid in Bitcoin -> On my weekends I accept code bounties for small amounts of Bitcoin for fun. I've used that Bitcoin to buy coffee at my local coffee shop and have lunch with my friend in Japan at restaurants that accept Bitcoin (which is actually what got me into it in the first place).

[roenxi]

The $0.46 figure is deceiving though; at the moment the cost of running the blockchain is being paid for by the 4% inflation rate. That cost is being masked by the high volatility and speculative forces controlling the bitcoin price, so you aren't really paying it.

At some point, miners aren't going to be paying for themselves by inflating the monetary supply, and then the cost of what they are doing is going to rise to be more than a centralised database tracking everything. Because the mining process for bitcoin is so expensive relative to updating a database controlled by trusted entities, ie, banks. And that will manifest in transaction fees.

[skilgarriff]

I don't disagree with you at all -> In fact most people who I read about in the space actually want high transaction fees.

I think that's what makes Lightning Network very exciting. I've used it a few times, and it's a very pleasant experience although definitely still early - only has a capacity of about 3 million at the moment.

[biot]

What are you trading the 1 bitcoin for? Given that the typical use case is to purchase some product or service (rather than just transferring bitcoin for fun), how do you secure that aspect of the transaction?

[skilgarriff]

The same way that I secure my transaction when I pay the waiter for my meal in cash by giving it to them when I'm done eating.

I've paid for a lot of services in Bitcoin and been paid in Bitcoin. It's generally been a very smooth and enjoyable process.

[biot]

A successful transaction is when one party pays and the other party delivers the good/service. If one party delivers but the other fails to hold up their end, blockchain technology doesn’t help and the solution is to seek recourse via the courts. You can mitigate this via escrow but that’s no different than non-blockchain transactions.

[MusaTheRedGuard]

And I'm saying illegality is not the only usecase, though it is definitely a valuable and useful one.

In case it wasn't clear, the usecases i mentioned above (gambling, getting around capital controls) exist and are live in crypto right now.

[oarabbus_]

>I'm saying: you need the blockchain if and only if you are doing things that are illegal in your country. It's a decision criteria for when you need the blockchain.

This is, at face value, simply false.

I want to send $5 to a poor African family. I'll even relax my criteria - I'm willing to wait _up to 3 business days_ for this African family to receive my $5. I live in California.

Could you please point me towards the non-blockchain way to do this?

[roywiggins]

Western Union can send $5 to Ghana. They'll charge you a dollar. I can't speak to the actual speed, but they claim minutes, and the recipient gets to pick up their money in cash from their nearest affiliated agent. WU has a pretty extensive network.

https://www.westernunion.com/us/en/send-money/app/start?SrcC...

If not WU, there's probably some other remittance company operating in their area. The fees might be pretty exorbitant though, especially for small amounts.

[arcticbull]

You want to send five DOLLARS to a poor African family. Here's a few questions.

(1) Since the African nation in question doesn't accept either dollars or bitcoin, you're going to have to convert the currency one way or another. Buying BTC is not cheap, you pay ~1%+ to Coinbase, so that's 5 cents right there. Transaction fees on Bitcoin are $0.36 right now. Then you're going to have to convert it to something they can spend in their local country, and good luck to you. That second transaction is going to cost them another $0.36, and so is any other transaction they may be wanting to spend the BTC in. If they're making purchases of just $1, thats a THIRTY SIX PERCENT transaction fee.

(2) Does this poor African family have a phone, laptop or computer, and access to get to their nearest BTC exchange/ATM? Are there any in your country in question?

(3) WU is $1. Other services exist and are priced competitively. Have you looked into M-PESA?

[the_gastropod]

Transferwise is both faster and cheaper than sending Bitcoin. And it doesn't require your poor African family to sign up for a probably poorly run poor African Bitcoin exchange.

[skilgarriff]

You are assuming they can't pay for services in Bitcoin - which they can. There are a number of things that currently accept Bitcoin, and that number is only growing imo.

[arcticbull]

>> number is only growing IMO

Please cite sources to justify your opinion because every graph I've seen has accepance going down.

[skilgarriff]

I don't have any graphs as like I said it's just my opinion. I'm really only basing it off of 4 things.

1. The general excitement around Lightning Network on Twitter with Jack and tippin.me, as well as this website: https://lightningnetworkstores.com/

2. Coinbase's reported 48,000 merchants/partners reported here: https://www.coinbase.com/clients?locale=en-US

3. I frequent similar places everyday - 2 out of the 3 places that I frequent almost everyday are now accepting btc within the past 3 months - My coffee shop and bar.

4. Musing about Venezuela from crypto podcasts, and articles.

I'll admit I'm biased as I do think it's a good invention, and tend to support Bitcoin. Despite that, I am open minded and would happily check out any information that would propose things are tending in the opposite direction.

[notahacker]

Western Union will do it in minutes, and I've actually used it to send myself money in Africa in lieu of better options when having bankcard issues (turnaround time <1 hour including finding the agent, fee ~5%). Admittedly the transaction fee on a transaction as small as $5 is pretty steep (20%!), but they're getting spendable cash for it, and I doubt the average family in Africa is getting a better deal when asking the local computer expert if he'll give local banknotes in exchange for their satoshis...

[pessimizer]

If you live in a medium sized city, probably within the hour and within walking distance of your house, an African person walked into a store covered in colorful signs advertising phone cards, cheap plane fares and bus tickets, and sent half of their week's paycheck to their family somewhere in Africa.

This is not only not a mystery, but common, and individual remittances from emigrant relatives are a major consideration in the economies of some underdeveloped countries.

[pjc50]

The blockchain way doesn't send them $5, it sends them a token which is surprisingly hard to redeem for $5.

[donarb]

In Kenya, you can use M-PESA. Money is transferred digitally and quickly.

[jayd16]

The concept at question isn't really illegality as much as alegality (which is not a word that exists). Which is to say, the use case where no legal jurisdiction exists or is ineffectual. I suppose anarchy would be the proper term.

[MusaTheRedGuard]

Or a jurisdiction which has rules that you can't or choose not to comply with