[babypuncher]

The analogy falls flat on its face when you realize that crypto transactions both take more time and cost more money than PayPal, credit/debit, ACH, etc.

When Apple introduced iTunes, the appeal to consumers was obvious: You can buy only the songs you want, you are not forced to buy a whole album. You can do it from the comfort of your home. And you don't have to go through the (then time consuming) process of ripping a CD to get it on your iPod.

With cryptocurrencies, I see no such obvious benefits that would compel consumers to trade their bank accounts and credit cards for ethereum wallets. The transaction fees are considerably higher. Their decentralized nature, often touted as their greatest asset, becomes and anti-feature once you need to issue a chargeback for a purchase from a fraudulent seller. Crypto does not solve a problem people regularly deal with, and nothing about it is fundamentally easier than the systems it seeks to replace.

[OrlandoHakim]

It’s true that txs take more time and money in POW chains such as Bitcoin or Ethereum, but it is certainly not true of many many other cryptocurrencies.

For example, Terra is a Proof of Stake blockchain with negligible fees and a 6 second settlement time. It is currently widely used as a payment system in South Korea.

[viceroyalbean]

I live in South Korea and like to think that I keep track of the current state of fintech but I have never heard of Terra or any cryptocurrency being widely used for payments. Where is it usable?

[OrlandoHakim]

https://www.terra.money - to learn about Terra, founded by Do Kwon a Korean Billionaire entrepreneur They offer many currrency mirroring stablecoins including Korean Won in addition to the US dollar-pegged coins.

https://chai.finance/ Chai is the Payments solution. I’m told they have 2 million users in Korea but you may know better. It can be used to pay in MacDonalds and Starbucks to name a couple examples.

[viceroyalbean]

Ah, I see. I haven't used Chai but from what I can tell it's a service that lets you make payments through multiple methods (e.g credit card, bank transfer). I don't think they've published statistics but I'm guessing most of their payments don't go through crypto.

[OrlandoHakim]

Probably true that most payments still go through traditional payment rails. Crypto is still an emerging technology and most people don’t own crypto.

I still find it interesting to know that one can pay for a Big Mac or a Latte using stablecoins as an option in Korea.

[2muchcoffeeman]

What about charge backs? What protections do I have?

[OrlandoHakim]

I can’t speak to the payments solution https://chai.finance/ but UST is censorship-resistant like Bitcoin and does not have chargebacks. I consider that a feature, not a bug.

[babypuncher]

You may consider that a feature, but most people don't. As someone who has had to issue a chargeback in the past, I'm not about to give it up in exchange for solving a hypothetical problem that does not affect me. Chargebacks are not "censorship".

[OrlandoHakim]

Fair enough. I still use my credit card for most purchases also and I too appreciate the ability to chargeback if needed.

Still, it is important to appreciate that consumers do pay a premium for this feature on all transactions built into the price because merchant account for the risk of chargebacks when setting their prices. I can’t estimate the amount of premium but I would guess it adds up to a few percent.

[ipaddr]

No chargebacks and ability for government or corporate deplatforming.

[kaesar14]

That’s not a problem the average consumer has, not even close to the same way music was really annoying to consume before the iPod. Like, sucks for those it happens to, but it just isn’t a “real” problem in the grand scheme of life

[OrlandoHakim]

The average consumer is currently facing the prospect of high-inflation, exploding gas prices, and is facing a real challenge if they want to safely save the purchasing power of their earnings. I consider these to be important problems to solve so the average consumer can continue to stay above water and maybe even get ahead in life.

There is a joke about how the things we want are getting cheaper (iPhones, TVs, music streaming) while the things we need are getting more expensive (food, housing, healthcare, higher education)

Offering society a high-yield stablecoin savings option finally allows people to grow their savings and stay ahead of inflation with low relative risk.

I think that’s a honking good idea.

[babypuncher]

These aren't problems crypto actually solves. If used as an actual day-to-day replacement for the dollar, they would still be subject to the same market pressures that drive inflation and gas prices.

[delabay]

> both take more time and cost more money than PayPal, credit/debit, ACH, etc.

Stopped paying attention here. So, so..so incorrect.

[scubbo]

Wow, did gas fees drop to $0!? That's huge news, I'm surprised the media hasn't reported on it!

[OrlandoHakim]

Right now the average on-chain Bitcoin payment for $0.94 USD. I bought a conference ticket a couple weeks ago from someone in Thailand for $0.24 USD. One confirmation took 6 minutes. This isn’t a Lightning payment which would be nearly instant and almost free. It is a payment on the Bitcoin blockchain.

Remember, that payment includes final settlement, something that can take months for a credit card merchant.

Also, there are many other Proof-of-stake chains that offer faster and cheaper settlement.

[scubbo]

$0.24 > $0.00, though. And:

> something that can take months for a credit card merchant

OK, instant closing is desirable for sellers - but why would a consumer care?

[OrlandoHakim]

Whether consumers realize it or not, the risk of chargebacks does increase the cost to the merchants which they absolutely pass onto consumers in the form of higher prices.

[scubbo]

And those merchants will still charge those higher prices no matter what method you're using to pay, unless they only accept crypto. So by paying with crypto you're paying an artificially-higher price _and_ paying gas fees.

[themacguffinman]

That's quite a high fee for zero fraud protection.

[namibj]

PayPal is around 2-3%, credit/debit around 0.5-5% depending on where and whether you have a physical card reader. ACH is, to my understanding, cents or even less than one, but suffering from an utter lack of security/authentication.

[biztos]

Meanwhile, in the Eurozone, electronic cash and wire transfers have had fees of exactly €0.00 for many years, and my online-only bank does “instant” transfers (takes a few seconds but that’s mostly the app latency) up to €2000 for the same price.

The transaction-cost problem has many possible solutions.

[iudqnolq]

CashApp/Venmo is free from the perspective of the average American if they have a debit card. (They make money off data and credit card fees).

[namibj]

Last I looked, they did not seem to be free for commercial use (including cases with just B2C transactions).

I see these as worse, because they suggest to the average consumer American that sending money is free, reducing pressure on a proper low-delay settlement system with sufficiently low fees to allow users to ignore the fees in most instances. Say, 1ct + 0.05%. (That's AFAIK comparable to SEPA's version of electronic checks (i.e., asynchronous pull), and fees for low-latency push shouldn't exceed 0.2%, either. With delayed settlement, even push should allow the very low fees, though.)

[OrlandoHakim]

Correction: They make money by selling your transaction data to hedge funds and advertisers for profiling and targeting.

[iudqnolq]

As I said, data and credit card fees.

[mperham]

You make a lot of sense, babypuncher.