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Comment by highd | Hacker News Reader

This is secondary to there being no benefit to the average user for transacting in crypto vs Visa. What incentive is there for an end user to use even a hypothetically optimal crypto system? Then is that incentive sufficient to overcome network effects?

The appropriate and interesting applications of crypto seem to be totally leaving p2p cash behind - it just doesn't seem like a good fit.

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The hypothetically optimal crypto system would be cheaper for merchants, correct? So it would have wider adoption than Visa, at the very least.

I do agree that crypto keeps drifting away from p2p cash ... that's a good observation. But I hope people keep shooting at that target.

> The hypothetically optimal crypto system would be cheaper for merchants

Incorrect. Decentralization is always more expensive and slower than centralized system(both hypothetically optimal) due to extra sync cost.

You're mixing cost and price. Let's say the cost of a Visa transaction is 0.1% and the price is 2.5% while the cost and price of a MobileCoin transaction are 0.2%. It costs more but it's still cheaper for merchants.

Cash is cheaper for merchants, but people have only continued to use credit cards more. Further, if crypto becomes attractive from a cost perspective Visa will just be forced to bring down fees and stay competitive. It's pretty near impossible to imagine crypto with costs less than Visa's database.

A wire transfer fee to China would cost me ~$45. Sending it in bitcoin would cost ~$17.

While you take on a huge amount of risk. Congratulations on "saving" that $28.

Not to mention since you can't really spend bitcoins you'll have to pay more for conversions to national currencies on both ends.

This is a great example of where crypto would be useful. But it's not the same as paying for pizza.

Actually, even less than that. To get an avg sized txn sent within the next 14 hours it would cost:

226 * 100 * 0.0000001 * $17761 = $4.01

https://bitcoinfees.earn.com/

How much was the exchange difference?

No idea. I just went into the bank and said I needed to send money to China.

Cash isn't necessarily cheaper for merchants once you account for handling, security, and theft.

There's a shop near me that has had its card payments out of commission for about a week. They are having to bring in staff for additional hours due to the fact that the transactions typically take longer and you have the cash to handle at end of day. I doubt it's a negligible additional cost.

Credit cards are more convenient than cash. If crypto can be equally convenient (which I think it can -- see venmo), I imagine people will use it. Are the savings of centralization really enough that Visa will be able to stay competitive and profitable?

I don't doubt Visa will continue to be used, but I imagine it will be for fraud protection rather than cost.

What's the benefit of using email over equivalent closed systems?

Pseudonymity/anonymity, for one. You can freely transact across borders, for another.

That's really only useful to a small number of users, relative to the overall size of the economy, and many of them are doing things that aren't legal. Not a market I'd probably target if I was going for mass adoption.

Gambling and porn are both quite popular.

Anonymity is something people give up without knowing. If all cryptos opted for default privacy, things would have been different.

With bitcoin, merchant you make payments to can potentially find your wealth, or another can deny transaction to you bwcause you donated somewhere.

These are not doomsday scenarios, this happens today and will happen more if we do not choose privacy.

For me, it is privacy. Cash is too cumbersome to deal with, that is probably the only reason i use credit cards.

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