[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.