[krisdol]

Full disclosure: I own about $11 worth of bitcoin if I round up a bit, so this might be biased.

The most convincing "point" of bitcoin I've heard is to accomodate transfer of large sums of money across borders, quickly, with minimal transaction costs and oversight. Everyone here can afford the fee to transact 8 billion dollars worth of bitcoin. And settlement happens in seconds to a couple minutes. That's appealing to people trying to move millions or billions of dollars around.

[blackbrokkoli]

Yeah, sure settlement in Bitcoin happens within a few minutes. Getting that converted into usable money is a whole other story, no?

I can basically think of two scenario types when you are in need of international, spontaneous money transfer:

a) "I just got carjacked in Sierra Leone and need some money for an hotel and a flight home"

b) "I have some weird novel business and I would like to pay my contractors in East Timor biweekly"

I cannot image using Bitcoin for either, first one because of the convert-to-money-thing, second one because of the volatility. There is also some kind of - how do you call this - meta-trust that I just don't have in Bitcoin: Go off-grid for two weeks and there is a non trivial chance that some weird shit happened within crypto that is now an obstacle (crash or rally, outlawing, split, ...). That does not happen with US dollars.

I got the feeling that this is yet another incredibly obscure use case that doesn't even really work Bitcoin fanatics (not directed at the quite reasonable parent comment) use to justify their gambling and Lambo-dreams. Just like "it could be the new gold" or "what if the US gov collapses".

But I am certainly no expert in international money transfer by any means, so feel free to change my mind!

[throw89323432]

I had contractor on Litecoin in Russia for 6 months. Worked pretty well.

[faffe]

Out of curiosity, can I know why you did use Litecoin rather than others crypto???

[brianobush]

Speed of transactions and less fees.

[FalconSensei]

> Go off-grid for two weeks and there is a non trivial chance that some weird shit happened within crypto that is now an obstacle

For people in countries with a more stable economy/currency, this is very true. Even in countries with a bigger inflation, things are a bit more predictable.

But of course, different countries/economies/currencies have different realities.

[GoblinSlayer]

Life outside of USA is basically cryptozoology: https://www.reuters.com/article/us-crypto-currencies-africa-...

[SuoDuanDao]

>Go off-grid for two weeks and there is a non trivial chance that some weird shit happened within crypto that is now an obstacle (crash or rally, outlawing, split, ...). That does not happen with US dollars.

That is fair, but it would be more accurate to say 'has not happened with US dollars since 1930'. Currencies collapse is not that unusual an occurrence, my own (German) grandparents live through five separate currency regimes in the same country. Being truly uncorrelated with most other investments can be a real selling point for a hedge like BTC.

Disclosure: I own several cryptocurrencies including BTC which I mentally categorise as 'collectables'.

[u678u]

No if you have millions or billions basic wire transfers are instant and cheap. It is more interesting for if you have a few hundred or a few thousand dollars, where a $10-$50 fee is significant. Or you want to bypass regulations or bureaucracy eg send money to a friend in Argentina or Lebanon which have currency controls.

[whatshisface]

Bitcoin's use as a way of bypassing currency controls is one of the best arguments against it, because governments, already prone to suspicion towards anything that might upset their monetary policy, will have no quarter towards anything that upsets their laws.

[Alupis]

That, and folks like Elon Musk perpetrating blatant Pump 'n Dump Schemes[1].

Eventually it'll be regulated after a bunch of opportunistic "investors" get hosed - which ironically, will make the dump even worse.

[1] https://www.valuethemarkets.com/2021/02/09/if-dogecoin-is-a-...

[cacarr]

The dump doesn't seem to have happened yet, though. DOGE has stabilized at about $.07, down from ~$.08.

[red_trumpet]

That's just not true. Every Bitcoin transaction is conserved in the blockchain, so a government can easily reconstruct the money flow.

[smartties]

And the transactions made on the exchange ? and decentralized exchange ? Can they all be tracked and reconstructed ?

[faffe]

BTC is not anonymous. In theory, it is possible to track all the transactions. That the main reason why others crypto like Monero or Dash had emerged

[heavyset_go]

Pretty sure exchanges need to follow KYC laws.

[anonisko]

https://twitter.com/JackMallers/status/1346867753253220356

[ur-whale]

> basic wire transfers are instant and cheap

This is woefully incorrect. Wire transfers are neither instant nor cheap, depending on the source and destination country.

If you wire from US to US, or EU to EU, they yeah, maybe.

The moment you move large sums across borders, especially to /from countries that aren't in the US's "good guys" list (as dumb and childish as that sounds, this is typical language in USistan for politicians and media), things gets very tricky.

[heavyset_go]

It costs a few dollars to transfer money via Western Union, and the receiver can pick up the money almost instantly.

[systemvoltage]

That’s the thing. By the time the transfer takes place, BTC exchange rate is now 7% off. How convenient is the transfer mechanism when the underlying is a speculative instrument?

Until BTC exchange rate gets stable or gets pegged do the ground, it’s gonna float around in the air of extreme volatility and manipulation - pretty risky adventure to transfer large sums of money.

[spmurrayzzz]

This is problematic for layer 1 settlement for sure. But there are layer 2 solutions that can help with the slippage issue (lightning network being the most prevalent). With a sufficient density of multisig wallet availability, as a proxy for liquidity, transactions are near-instant.

That said, there are differences in settlement guarantees at layer 2 that might make certain use cases less optimal.

[vineyardmike]

> for layer 1 settlement for sure. But there are layer 2

layers?

[jkepler]

Sure. Layers, like the Internet is made up of protocol layers.

Bitcoin on-chain is layer one: slow, sure, and after 6 confirmations considered irreversible and immutable.

Layer 2 protocols would include the lightning network and the liquid bitcoin protocols - both systems designed for different use cases, with differing technological benefits and risks. There may be other layer 2 systems that I'm not aware of.

Some might consider the OpenBazaar marketplace protocol, the Open Timestamps (https://opentimestamps.org/) application, or the Bisq decentralized bitcoin/fiat exchange to be layer 2 applications, as they're built directly on top of bitcoin but includes protocols. But I think they're simple examples of the kinds of applications that can be built on top of the programmable trust-net that bitcoin represents.

Because bitcoin is a decentralized and permissionless technology protocol, anyone who thinks of a way to build on top of it can do so---without needing anyone else's permission.

Layer 3 might be applications built on top of layer 2, such as the censorship resistant Juggernaut chat app, built on top of the lightning network: https://www.getjuggernaut.com/. As layer 2 matures, I imagine we'll begin to see a wave of creativity unleashed globally as people create layer 3 applications.

[spmurrayzzz]

Yea this terminology is borrowed from the OSI model for networking, with which you're likely familiar. It originally was used as just an analogy, but has increasingly just become the way the space describes (and markets) the different protocol layers of cryptocurrencies generally.

[panarky]

I prefer to own an asset with high volatility that gets more valuable over time than an asset with low volatility that gets less valuable over time.

[edgyquant]

We aren’t talking about assets and what you’ve just said is the reason we have controlled inflation. Currency isn’t supposed to incentivize hoarding it, quite the opposite in fact.

[vntok]

Not everyone agrees with that view. I for one would rather people spent their hard-earned money in a smart, slow and well-thought way than feel compelled by inflation to do so fast and lose.

[lmm]

People should spend or invest thoughtfully, but they should spend or invest - if people are encouraged to hoard a pile of wealth so they can live off the labour of others while contributing nothing themselves, that's bad for society. So central banks tend to aim for low but nonzero inflation (e.g. the Fed's 2% target).

[arnavs]

One reason I dislike inflation is that I don't want my currency -- a utility object -- having opinions about my financial life. Inflationary monetary policy and its consistent 'nudge' to spend is the economic equivalent of the pop-up.

Of course, you could argue that a hard cap is equally opinionated. But I think it's a much more 'neutral' position, where it deflates because of real economic growth, and you spend it because of your own time preference.

[edgyquant]

They may not agree, but currency isn’t supposed to be an investment it’s supposed to be a rationing device.

[pertymcpert]

Yeah but that disincentivizes investments.

[vntok]

Another way of looking at it: that incentivizes better investments.

[panarky]

Inflation is only "controlled" for some baskets of goods.

If your basket of goods consists of salty snacks and consumer electronics, then yes, inflation is controlled.

But if your basket of goods consists of Hamptons real estate and fine art, then your inflation rate feels a lot steeper.

Investors are finding it very difficult to discover investments that don't depreciate with respect to that second basket of goods.

That's why institutions, family offices and high net worth individuals are shifting single-digit percentage allocations into Bitcoin.

[IgorPartola]

Where have you seen real estate get cheaper over time? NYC? SF? Somewhere else?

Also when it comes to setting up an economic system, high net worth individuals are the last people we should be worrying about, not the first.

[edgyquant]

I’m talking about currency not appreciating commodities, assets or investment. The US dollar, and the currencies of most western nations, is/are in fact controlled and inflate at a targeted rate.

[panarky]

When I think about inflation, I think about the purchasing power of money for the basket of goods I'm likely to purchase. I'm less interested in theoretical or academic concepts like the rate of growth of M2 or the velocity of money. Preserving purchasing power over time is my priority.

[ur-whale]

>we have controlled inflation

We do not have controlled inflation (I'm assuming you're talking about USistan). Please remember that the fed is an independent institution which refuses to get audited.

[kelnos]

It absolutely is controlled[0], just perhaps not controlled in a way you would personally like.

(Also, I recommend you quit it with the "USistan" stuff. It comes off as childish and detracts from the point you're making.)

[0] Maybe "strongly influenced" is a better framing when talking about the Fed.

[edgyquant]

I am beyond sick of this Libertarian lie that has somehow gone mainstream. The Federal Reserve is audited bi-annually by both a public and private commission

https://www.newyorkfed.org/aboutthefed/fedpoint/fed35.html

https://www.federalreserve.gov/faqs/about_12784.htm

In regards to your first point, inflation is targeted at ~2.5% a year. Some years do better and some do worse but on average that is the inflation rate. I challenge you to look at the inflation rates (provided below) in the first half of last century and provide a reasoned argument for why having years with +16% inflation (and years with -10% inflation) is a better system of currency than what we have now where people freak out if the deviation is over 2%. The gold standard provided a volatility that only hurt those with less money, and the argument your making is a fallacy (and is the reason I left the Libertarian party four years ago.)

https://inflationdata.com/Inflation/Inflation_Rate/Historica...

[adventured]

You're talking about something entirely different from what the parent comment is. What you're talking about is a long-term investment.

[mancerayder]

Forget million and billions. Hasn't anyone on this thread lived and worked abroad? Transferring 10s of thousands from the US to the EU or vice versa costs a ton in the banks skimming off the back of exchange rates that they choose and fees. There are ways to do it via trading accounts but it's a pain.

[louloulou]

It's actually pretty cheap and easy these days with a transferwise account. But I agree, it used to be a massive pain, and still is for smaller currencies or more closed-off banking systems like japan.

[sorbits]

> And settlement happens in seconds to a couple minutes

That is incorrect. On average it takes 10 minutes to mine a block, but you have to submit the transaction to be included in the block, so > 10 minutes before it appears on the blockchain.

However, there are actually many block chains, as miners creates block in parallel, it’s the longest one that is the “official”, but the minute you see your transaction in a block, you do not know if this block will stay in the longest chain, so in general you want at least 5 new blocks, after your block, before it is considered “safe”.

So now we are talking about one hour to do a transaction, and that assumes that the network is not overloaded, because there is also a cap on number of transactions that can be included in a block.

All in all, it is a terrible system for fast transactions.

[jkepler]

But how quickly does SWIFT or ACH settle? When one wires money overseas, settlement is counted in days, not minutes or hours as in bitcoin's case. Most of us use layer 2 or 3 solutions in our legacy national currency systems, such as Cash App, PayPal, Venmo, etc. Non elite don't have access directly to FedWire or ACH or SWIFT... it all has to pass through banks and other 'trusted third parties.'

Also, eventually most lower-value transactions in bitcoin will be on layer two technologies, like the lightning network (peer to peer) or liquid bitcoin (federated peer to peer, mostly for exchanges and traders to quickly move funds between exchanges).

[zhte415]

It doesn't take days. RTGS is named rhat for a reason.

If you're also doing FX that'll be minutes for major currencies. Should you be going through a network of correspondence banks from obscure bank to obscure bank it might be longer but even then rarely days. If currency controls some dalay depending on regulatory setup. Even if the banks do netting, cheaper than RTGS, that should be just a couple of hours between reasonably large banks.

What you may have is a problem with your bank or it using ACH.

[tomca32]

I live and work in the US, but originally I'm from Croatia. I wire money every month to my family back there.

It takes 5 work days for the wire to fully clear. Since 5 days is a full work week, it almost always bleeds over to the weekend and in reality takes 7 days.

BTC might still be a terrible system for international transactions but it's still 168 times faster than the one that exists now.

[sorbits]

> BTC might still be a terrible system for international transactions but it's still 168 times faster than the one that exists now.

It is 168 times faster than what you currently use.

There are services like TransferWise who specialize in fast international money transfers.

I could imagine that part of your delay is because the bank your family use (in Croatia) does not themselves handle international transfers, so they go through an intermediary bank, only adding delays.

I have often done ~12 hours international wires from Wells Fargo (U.S.) to Asia, and here the delay could simply have been due to the time zone.

Within the European Monetary Zone I often see money arrive in 10-30 minutes (crossing borders).

[tomca32]

That's a fair comment. I don't use Transferwise, rather just wire money via Chase Bank to an IBAN account. You are right that there is an intermediary bank involved in the process.

Also yes, within Europe, an IBAN to IBAN transfer is pretty much instantaneous. However US is not in the IBAN system, so that's a different story.

There are probably multiple reasons why the transfer takes a week, but the spirit of my comment was that an hour long (at worst) transaction time for BTC is actually very fast if you look at it through the international money transfer lens.

[omegaworks]

My worry is that we will continue to see the pace of international money transfers increase as competition, trust and infrastructure improves. Bitcoin, on the other hand, is limited structurally by the very mechanism that guarantees its accuracy. Today miners burn 77Kwh of energy to mine the block that records your transaction[1]. Sure hashing tech might get more efficient, but the block mining complexity increases to keep their discovery rate constant at one every 10 minutes[2]. This does not set a cap on the energy usage of mining for the network.

1. https://www.vice.com/en/article/ywbbpm/bitcoin-mining-electr...

2. https://digiconomist.net/bitcoin-energy-consumption/

[brianobush]

Staking (for Ethereum 2.0) will be the mechanism over the current proof of work method. This will reduce the energy cost significantly by removing the requirement of mining.

[brianobush]

I wouldn't consider TransferWise fast. I used to send money to Canada from the US and it took a day or so for verification and settlement.

[africanboy]

honest question: what's the advantage of bitcoins over amazon gift cards (or any other prepaid credit)?

they are immediate, cheap and can be exchanged for real money for free.

[tomca32]

I don't know. I never tried doing that. Amazon is pretty useless in Croatia so that probably wouldn't work, but there might be some prepaid cards that would.

I don't know, haven't explored that option honestly.

[FalconSensei]

Awesome, go to the supermarket, pay with BTC and wait there for an hour for your transaction to complete.

Or try to buy anything time/quantity limited, so you don't get it because the transaction took too long to complete.

Meanwhile, in Canada, I just do a money transfer by email without any fees (if sending more than $10), and it's almost instant if the receiver have auto-deposit set up.

[sizzle]

Why would you have to wait an hour? A credit card isn't instant? Isn't there some level of trust involved here?

[imtringued]

You won't have to wait an hour because MasterCard will support Bitcoin. However, this completely goes against the idea of decentralization.

[faffe]

Actually the article mention " select crypto" but not the BTC.

And to be honest I do not see the point for them to support a decentralised currency like. just complying with the regulatory rules ( KYC, anti Money laundering,etc...) Would be a real nightmare

[makruiten]

How does that email system work? Can’t you just do free instant wire transfers in Canada?

[Jtsummers]

Possibly something like Zelle (in the US, not sure where else). Using someone's contact information (phone or email) you can send money to them quickly and easily. They can set it up with whichever bank and change it as they desire, no banking information never needs to be communicated between the two parties.

[cortesoft]

The price volatility is way more expensive than transaction cost, if you have billions of dollars.

[ad31mar]

It's usually in your favour tho.

Anyways, there are plenty of stablecoins if that's your thing and you can use Bitcoin (the network) for the rails only.

[cortesoft]

I don’t think I’d be making decisions on risk for BILLIONS of dollars based on something “usually” being in my favor.

Also, stablecoins staying “stable” is a huge risk you are taking on if you use them.

Again, if you have billions of dollars, you are going to be doing a lot more risk analysis and want a lot less uncertainty than you are going to get with any sort of cryptocurrency that exists today.

[kelnos]

People who want to move millions or billions of dollars around don't care about a $30 wire fee. What they do care about is recourse in the case of fraud or mistakes, which Bitcoin by design does not give you.

Moving large amount of money without government interference, however, is certainly a feature of Bitcoin that fiat currency usually doesn't have. And there are some (though perhaps not many?) non-shady reasons why someone might want this.

[MrMan]

By the time recourse and other modern financial conveniences are built on btc it will lose its luster for the hucksters

[ska]

I've never understood this argument. Moving large amounts of one currency between countries isn't expensive or slow (relative to how quickly you typically need to do this). Assuming you are allowed to do it at all. Oversight is a different story, but there aren't many legitimate reasons to want to do that (probably none that aren't problematic). There are, of course, a ton of illegitimate reasons but that's a different conversation.

Getting that 1mm+ from one currency to another is a whole different story, but that story only gets worse if you involve crypto.

Paying $40 in wire fees to move $200 sucks, but it's just not an issue on large transactions. So I think your real use case is lots of small transactions, not a few big ones. And unless you can spend the crypto directly, the volatility can kill this application pretty easily.

What am I missing?

[irae]

It is not that simple once you cross borders to countries USD is used by all kinds of criminals. When you have honest business, you are screwed by the system.

Here in Brazil, getting money in and out is a nightmare if above 5k USD.

I live in Brazil and work for a US company. My first month payment took 3 months to clear, and because of 3 accumulated payments I got audited and the 4th pay got delayed again. The first one that cleared in 3 days was the 6th payment. All payments were charged 40 USD to my employer, but 20 was charged by middle man every month.

I also have a US based health insurance but (again) I currently live in Brazil. I had a surgery reimbursement be withheld for 65 days, I had to send dozens of documents and when they finally cleared, I had not only lost to exchange rates, on middle man bank took 20 USD and my branch in Brazil took an extra 170 USD.

[MrMan]

I get free wire transfers at my bank