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Comment by superquest | Hacker News Reader

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.

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> 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.

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