[jasonisalive]

Even if you just rebuilt banks as they exist today on top of Bitcoin, you'd still get some pretty huge advantages, potentially massively increased security, speed, reduced costs, among others. Another big one is that these banks can service the entire global market, massively increasing competition among and hence quality of banking services.

[CyberDildonics]

This is totally true I'm not sure where the down votes come from. HN seems to really hate bitcoin.

[majugi]

Where do these massive increase in security, speed, and cost reductions come from in a banking system built on bitcoin?

[mikeyouse]

The irreversible transactions, 10-minute minimum verification, and wildly volatile spread obviously.

[aianus]

Banks become forced to compete with an (almost) free and instantaneous method of transferring value (sending bitcoin peer-to-peer without the use of a third party).

It currently costs $40+ for a comparable fiat service (wire transfers).

[crm416]

True, but there's a decent case to be made that (1) transaction fees will have to increase (in general) as the block reward decreases, and (2) transaction fees will have to increase (for these centralized services) if they want to eat the cost of fraud [1].

[1] https://freedom-to-tinker.com/blog/randomwalker/the-low-tran...

[majugi]

Without the use of a third party? Bitcoin transactions need to be confirmed in the blockchain which requires third-party miners to exist. Mining costs are relatively high considering the value provided. The blockchain is not at all (and was never intended to be) an efficient way to transfer digital funds. It was created to be decentralized and it serves that purpose, but using it to back a centralized system would be self-defeating, hence this comment thread.

Transferring value in the form of maintaining electronic accounts isn't comparable to wire transfers of fiat where the funds are made available in local currency. Banks don't just track numbers in accounts: providing liquidity and ensuring those numbers actually mean something is not trivial. If bitcoins were globally accepted it would be a more competitive service, but even then there would be the issues of fraud protection and compliance with money laundering legislation that bitcoin doesn't handle well.

[querulous]

this is only really true in the united states. the rest of the world has free or almost free instant account to account transfers

[WillNotDownvote]

"Rest of the world" is a bit of an overstatement, and even then it's only within certain zones. Inter-zone transfer on the global level is still slow and costly, where ever you are.

[Nursie]

Only if you live in the USA.

It's free for most people in Europe. And fast.

[aianus]

I live in Canada and the cheapest, fastest way to transfer fiat is to email a picture of a filled-out cheque. It's pathetic.

[sanswork]

Almost every bank in Canada has access to interac transfers which are like $3 and complete in 30 minutes to an hour.

[jeremyjh]

Bitcoin is capped at something like 7 transactions per second. VISA handles tens of thousands. I think "faster" is disputable.

[IkmoIkmo]

Speed is not a function of capacity in this particular context. A car with 1 seat driving 500 m/h is faster, don't you think, than a car with 4 seats that drives 50 m/h.

I mean we can argue semantics, but if you want to send $100 from the US to the Philippines, bitcoin is generally a lot faster than your bank, even when you have to buy bitcoin and sell it in the Philippines because of international transactions taking much longer than local ones.

As for capacity, bitcoin's 'Chief Scientist' just wrote a blog post on scalability: http://gavintech.blogspot.de/2015/01/twenty-megabytes-testin...

To make a long story short, thousands of transactions per second (Visa averages about 2k) is certainly possible. I'd be more worried about bitcoin adoption (from an interest/tech/growth point of view) as a limit than technical scalability issues as a limit, especially with things like sidechains. (Look at Blockstream's Sidechains for example as a solution, just got a $21m investment.)

It's generally held that it can scale, whether it can grow and become popular and well used remains to be seen (I think it's likely but it's far from certain).

[CyberDildonics]

Banks don't transfer money to each other through Visa, they use SWIFT. Transactions usually take 4 business days.

The block size limit is in the process of being changed, but there isn't a rush since blocks are not being filled. If they do get filled, transaction costs will go up and tiny (0.01 USD) micro-transactions won't be viable until the block limit is increased. So the only thing that might happen is transactions of a few cents are temporarily not viable (the transaction cost is larger than the amount sent).

[sanswork]

If your wires take you 4 days you need to switch banks. I make regular international transfers and unless I miss business hours they are always in the receiving account the next morning.

[shit_parade]

This issue is being addressed via invertible bloom lookup tables.

https://gist.github.com/gavinandresen/e20c3b5a1d4b97f79ac2

[aianus]

VISA currently has higher throughput but Bitcoin has much lower latency. 10 minutes for Bitcoin vs days for VISA to get cash you can spend.

[Nursie]

Inter-account transfer in the UK seems pretty much instant these days, even between different banks.