[aspidistra]

Every time I read an headline about "bringing bitcoin to the masses" I'm reminded of the saying that you can lead a horse to water, but you can't make it drink.

> "We don’t think consumers should be charged for using their own money."

Where I live (UK), I can't think of anything bitcoin services like Circle offer that is definitively better than my existing bank setup.

I'm not charged for using my own money. I don't pay a monthly fee for my bank account. I don't pay anything to send money to other people in the UK, which covers 98% of all the people I send money to. If I do send money to people in the UK, it's usually virtually instant, because of Faster Payments. I can withdraw money from nearly all ATMs in the UK free of charge -- the only exception are rare independent ones in places like nightclubs and out-of-the-way convenience stores, and I honestly can't ever remember using one. I can check my bank balance on my phone -- by app or by SMS. In lots of outlets I can pay for small value transactions, anything up to £20, just by waving my bank card.

I understand the banking system in the USA is ... different. (Some would say behind the times.) But in the UK at least, promoting a bitcoin-based service based around the concept of better retail banking is a hard sell.

[johnyzee]

The killer application for bitcoin, IMHO, is microtransactions. For global, universal microtransactions to take off, we need exactly something like bitcoin; purely digital, both a protocol and a service and not owned by anyone.

Once microtransactions take off it could turn a lot of things on their head. For example I wouldn't mind paying 0.001 cent to read an article. It just isn't possible with any current systems.

There are other fields where I easily prefer bitcoin over credit cards (pretty much any online purchase under $10), but microtransactions are the big one to me.

[saurik]

Nor is it possible with Bitcoin: the current default minimum transaction fee is 0.0001 BTC (which is ~$0.05). People often make a big deal about the transaction fee having been "lowered" (it used to be 0.0005 BTC), but as the transaction fee is measured in Bitcoin (which has highly-variable worth with respect to the things it is being used to purchase) this value must be adjusted occasionally, and Bitcoin happened to become much more valuable, requiring this fee to be lowered. At the same time, transactions less than this amount (by only about half, a 0.543 multiplier, so still larger than one cent) became "non-standard", which means that they will not be relayed; because, to quote the Bitcoin release notes, "storing them costs the network more than they are worth and spending them will usually cost their owner more in transaction fees than they are worth". The blockchain just isn't designed for this kind of use case, and the idea of "dust" (tiny transactions that overwhelm the blockchain) started becoming a serious political problem in the community due to a gambling service called Satoshi Dice that managed to become a large percentage of the total traffic on the blockchain despite moving almost no money. In reality, attempts to build microtransactions on Bitcoin are based on the same approach that people use to build microtransactions over bank accounts and credit cards: a separate currency stored with (and thereby "owned by") a single entity that can move the virtual money "effectively for free". Coinbase recently started offering these "off-blockchain microtransactions" as a service, allowing people to withdraw funds only once they accumulate 0.01 BTC (so ~$5.00).

[battani]

What kinds of use cases can you think of for microtransactions?

There's a reason entire industries are moving toward the pay-by-the-month/year model instead of pay per use (Spotify, SaaS, online edition of newspapers, etc.).

> For example I wouldn't mind paying 0.001 cent to read an article.

Most people would actually prefer paying a monthly price rather than pay each time they consume content. Why? Clay Shirky explained it best almost 15 years ago: http://www.openp2p.com/pub/a/p2p/2000/12/19/micropayments.ht...

In short, consumers HATE micropayments because they want predictable and simple pricing.

[pbreit]

And advertisers will pay much more than 0.001 cent per impression.

[bambax]

I'm French and I have the same experience as you: bank services are virtually free for individuals (although not for companies) and I don't see what Bitcoin conversion would add to the value proposition; it would add risk and uncertainty, but nothing in the way of convenience or cost.

[georgemcbay]

"(Some would say behind the times.)"

Joke's on you, we are ahead of the times!

It used to be pretty much just like you described here in the US and then they realized they could fee the shit out of us, "optimize" our deposits and withdrawal timings to maximize the likelihood of overdraft (which they would also then apply a series of meta-fees on), drop our earned interest to essentially 0% and most people would be too lazy to do anything about it.

[pjc50]

The UK has a bank regulator agency which isn't totally ineffective. Their main success was ending the sale of "payment protection insurance", which was overpriced and worthless in almost all cases.

There's still a level of BS fees, worse for business bank accounts, but the general consumer experience is fairly good at the moment.

[staunch]

A wise warden keeps his prison not so unpleasant as to cause a rebellion.

[peteretep]

Maybe this helps:

http://www.bbc.co.uk/news/business-23700012

[jvm]

I'm American and all these things are true of my bank (Ally). I don't quite understand why so many of my compatriots choose such crummy banks given the excellent alternatives available, but given that they're quite attached to brick-and-mortar big name banks that charge usurious fees, I can't imagine they'll flock to Circle.

[StavrosK]

Would you recommend Ally? How did you get an account? Can you transfer money to foreign accounts from the Web UI?

[jvm]

I would absolutely recommend it, except that international transfers seem to be quite difficult. The one time I tried to receive a wire from Europe, I had a lot of trouble and ended up with Paypal. I should say though, I didn't call support so maybe there was a solution and I just didn't figure it out. Ally phone support is quite awesome and has always been able to solve my problems.

But between check cashing via phone pic and being able to get reimbursed for using any ATM in the world, I couldn't be a happier customer.

[StavrosK]

Thanks for the information. Wells Fargo also offers reimbursement from any ATM (it's how I withdraw money, absent any reasonable way to transfer money out of it).

I've heard that many banks offer check cashing by photo, but it seems that the abysmal handling of transfers is a US phenomenon. Banks in Europe provide a seamless (and cheap/free) way to send money to anyone in Europe, inside or outside the country. US banks don't even seem to provide a way to send money to friends, outside their proprietary payment services which require that the recipient sign up with them, or something.

[torrent-of-ions]

It will ultimately come down to convenience as you say. Never mind that using the bank system is supporting literal criminal organisations like HSBC. And don't forget they can decide who you can and can't send money to (no Wikileaks). But convenience and a little bit of Someone Else's Problem is what the people want.

[ZenPro]

The bank did not say you couldn't send money to Wikileaks. They simply would not allow the transaction to be processed via their mechanisms due to opaque clarification regarding the status of Wikileaks.

If you were a shareholder in a bank you would probably vote for ending payments to Wikileaks also to ensure that your investment is sound. Employees of the bank have a fiduciary and legal responsibility to ensure that any action they take places the needs of the shareholders above the needs of the stakeholders.

Unfortunate for Wikileaks but inevitable.

People seem to be under the mistaken impression that corporate entities must serve their explicit wishes rather than the entities own wishes. It's ludicrous when you think about it.

[noselasd]

So e.g. all the fees stated here for your neigbor country cost 0p for you ? http://www.bankofireland.com/fees-and-charges-365-online/

[pjc50]

.. Yes?

In fact, read that table: ROI customers get charged for almost everything unless they have €3000 in their account for a whole quarter. NI customers pay nothing but "Non-standard / unusual transactions may attract charges". UK is somewhere in between: "Customers who keep a minimum of £250 in their account in any Charging month* qualify for free banking"

Unsurprisingly, different countries(+) have different bank charging regimes. UK bank accounts are traditionally free and it's hard to attract customers by putting up prices. Instead banks push "advantage" accounts where you pay $10/month and get free travel insurance and other minor financial services.

(+) do not mention the Ireland Act 1948 and make this complicated

[aspidistra]

I'm not exactly sure what you are asking.

But almost all of the things on that page -- standing orders, direct debits, day to day banking, maintenance, transactions -- are free of charge at most UK personal current accounts.

The only thing I noticed that would have a charge is sending money outside the UK, even to EU countries.

[staunch]

The bank you use is in actual control of your money. They let you access your money on their terms. They reserve the right to revoke access to your money in many circumstances. You don't get to opt out of having a bank account in modern society. You get to choose from multiple banks that act almost identically. All of them record every thing you pay for. All of them store your data and make it available to thousands of employees and any two-bit hacker that ever breaches their security.

A massive increase in personal freedom and personal privacy is all it took to convince me. I doubt it's an American thing, but maybe it's an easier sell here.

[pjc50]

All of them record every thing you pay for

Unlike bitcoin, which records all of your transactions in a globally readable log?

Bitcoin pseudonymity is weak unless you're very careful, and if people work out your wallet address(es) then you actually lose a lot of privacy.

any two-bit hacker that ever breaches their security

The personal data is somewhat vulnerable, but the actual money is more secure. For almost everyone, the bank computer is going to be more secure than their home PC.

[nhaehnle]

The personal data is somewhat vulnerable, but the actual money is more secure.

This is very important. It is nice that a purely distributed system can essentially achieve non-reversible transaction, but that's not something that most people need. Most people need reversible transactions, where the reversibility is controlled by adaptable laws and regulations that are ultimately interpreted by other people.

[pjc50]

Exactly.

Distance selling is very hard, as money and purchase change hands asynchronously at a distance and the purchaser can't inspect beforehand. The potential for error and fraud (on both sides!) is high, and realistically this requires the intervention of third parties to investigate and arbitrate disputes.

[staunch]

> Bitcoin pseudonymity is weak unless you're very careful...

Compared with banks logging it all?

> The personal data is somewhat vulnerable...

That's the valuable thing! Money is a commodity that can be replaced. You can't undo a breach of privacy.

[aspidistra]

You might get a massive increase in personal freedom and privacy from using bitcoin. But there is a difference between Pure Bitcoin, so-to-speak -- everyone is their own bank -- and a bitcoin-based service.

On Circle's website, it states: "Keeping your money safe is our top priority." That suggests Circle, too, is in actual control of your money -- like the retail bank service they aim to improve.

So how do you know the things you write -- recording transactions, storing your data, restricting access, hacker susceptibility -- won't apply here?

My point is that faced between two choices where a consumer gives someone else control of their money, the traditional system in many places is so far ahead in terms of reach, convenience and regulation compliance that a startup has a lot of work to do.

[ZenPro]

I am not aware of many "two-bit hackers" compromising bank security.

Bank security systems are designed and administered by people of the same calibre who design and administer many startups, including crypto-currency products.

Do you think that an elite hacker cadre exists and those working in corporate environments suddenly are less effective?

Nonsense.

[staunch]

http://articles.latimes.com/2013/jun/13/business/la-fi-mo-ba...

"Hackers allegedly targeted 15 financial institutions, including JPMorgan Chase & Co., Citigroup Inc. and E-Trade...The other compromised banks and financial services providers were Aon Hewitt, Automated Data Processing Inc., Electronic Payments Inc., Fundtech Holdings, iPayment Inc., Nordstrom Bank, PayPal, TD Ameritrade Corp., the U.S. Defense Department’s Defense Finance and Accounting Service, TIAA-CREF, USAA and Veracity Payment Solutions Inc."

They're absolute shit at security and any suggestion to the contrary is pure ignorance.

[ZenPro]

I think you need to learn to read. None of these banks were hacked as the editorial misleads. The victims were actually part of a huge phishing and identity theft campaign.

>> In a criminal complaint, authorities allege that the defendants transferred money from victims' bank accounts to pre-paid debit cards. They took the debit cards to ATMs to cash them out or used them to make purchases across the country. Much of the money that was cashed out was wired to the two leaders.

>> Some of those debit cards were secured in the names of individuals who had their identities stolen by the defendants, the complaint says That allowed the group to file fraudulent tax returns in an attempt to obtain undeserved refunds.

Can you direct me to the part of the incident whereby the financial institution had it's integrity compromised due to superior penetration techniques circumventing internal bank security measures?

The compromise came about through bank customers disclosing personal information.

This is Hacker News - not Reddit. Claiming that banking institutions, who are in direct compliance with worldwide security standards are "absolute shit at security" is just juvenile ranting.

Post genuine case studies and security insights if you have them.

[staunch]

> This is Hacker News - not Reddit.

In the past on HN (I've been here slightly longer than you) I doubt anyone would even consider challenging the idea that banks can't secure their user's data. It used to be a bunch of very technical people who have seen inside the various sausage factories.

The fact that you think banks being "...in direct compliance with worldwide security standards" means they are able to secure their customer's data is truly laughable. I mean that literally, if you said it to any credible security expert they would probably think it was sarcasm and laugh with you.

If you want to set a standard of proof we can actually debate this. What would it take to convince you that banks don't do a good job of protecting the privacy of their customer's data? I can generate like 3 links every 10 seconds on Google.

http://www.computerweekly.com/news/2240208933/More-than-half...

http://www.huffingtonpost.com/2013/09/20/barclays-bank-cyber...

http://www.nytimes.com/2011/06/14/technology/14security.html...

[ZenPro]

Well if you can find links to content on Google your hypothesis must be sound. Your comment is exactly the kind of elitist, generalised nonsense that should have no place on HN.

A few clarifications to help you out and keep you from ranting -

[1] Your current username has been slightly longer than my current username. Whether one or the other of us has been here longer is unknown.

[2] If being compliant with ISO 27001 is laughable to you then I await your superior system for the baseline of Information technology; Security techniques; Information security management systems and their Requirements, accredited by the International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC).

[3] If you have empirical data to back up your assertions post it. Huffington Post articles and LA Times articles which are technically illiterate are not empirical evidence.

[4] The majority of all technical accreditation and training programs including SANS, EC-Council, CISSP, CISA et al all utilise the ISO suite as a baseline.

[5] Your entire post reads as if you hate banks, you hate 27001 and you know of better established security practices than are currently in use by the worldwide banking industry.

A few facts for consideration -

[a] Assets of the largest 1,000 banks in 2008/2009 financial year were US$96.4 trillion. 96 Trillion.

[b] The United States alone has an estimated 82,000 banking branches spread across 7085 institutions.

[c] As of Nov 2009, China's top 4 banks have in excess of 67,000 branches (ICBC:18000+, BOC:12000+, CCB:13000+, ABC:24000+) with an additional 140 smaller banks with an undetermined number of branches.

[d] Japan had 129 banks and 12,000 branches.

[e] In 2004, Germany, France, and Italy each had more than 30,000 branches—more than double the 15,000 branches in the UK.

Is your hypothesis really that banks have laughable security? Not a specific bank or a specific department of a specific bank but banks?

An industry worth a 96 thousand billion dollars (96,000,000,000,000) does not know how to secure customer data?

Interesting viewpoint you have and ludicrous. It is right up there with the sort of people that say things like "I hate all wines from California" or "All Microsoft products suck."

IE - Juvenile comments submitted to HN with no regard for accuracy, clarity or discernment.

[jnbiche]

>Bank security systems are designed and administered by people of the same calibre who design and administer many startups, including crypto-currency products.

Then why is it that I have frequently run across banks requiring a maximum 6- or 8-character password, and have never run across a startup -- Bitcoin or not -- with such poor security requirements?

[ZenPro]

Which banks specifically secure online data only using a 6 character password?

Most banks, if not all, have BSI ISO27001 security certification and are accredited and administered by the pinnacle companies of the security industry.

For comparison; HN has a multitude of threads listing the outrageous security practices of many crypto-currency related companies, some beyond start-up.

You seem to think banking security is simply a bunch of guys in suits simply having a crack with a copy of ZoneAlarm and Kaspersky. Classic them v us ideas with a touch of Dunning-Kruger thrown in.

[pjc50]

Yes and no; while the banks have avoided widespread compromise they often have weird password requirements or ham-fisted attempts to secure user's PCs with crapware like Trusteer Rapport: http://www.pcpro.co.uk/realworld/359617/is-hsbcs-security-so...

For a while Santander's login system redirected my wife's account to a page with an expired HTTPS certificate.

Then there's fun things like playing tetris or MITM attacks on the Chip and Pin terminals: http://www.saardrimer.com/sd410/pres/showandtell08.pdf

(Obviously mtgox is worse, but my point is that banks tend to a proceduralist cargo-culty approach to security).

[ZenPro]

That is a nice link to the chip and pin compromise although APACS did cover it

>> We believe that the risk remains very low. [This attack] is significantly difficult to industrialise to the numbers of devices that would gain criminals the return they would expect and, therefore, not economically viable to criminals.

I am not saying banks are perfect, no organisation is, but they are certainly not just old men in conference rooms wondering what the little 1's and 0's mean. Some bank security consultants are the best penetration testers in the world.

[jnbiche]

Where did I say anything about bankers sitting around with a copy of Zone Alarm? That comes entirely from your own imagination, as did your ad hominem attack.

The only thing I mentioned was the verifiable fact that some banks limit passwords to 6-8 characters, also detailed in a multitude of HN threads.

[icebraining]

Often the problem is legacy systems. Startups usually don't have big and old mainframes dealing with huge volumes of transactions, they can just build the authentication system from scratch or use a modern library.

[nhaehnle]

A 6-character password is only insecure if you have unlimited attempts to guess it. If an attacker is blocked after something like 10 attempts, a 6-character password really provides all the security you need.