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Comment by mamon | Hacker News Reader

My conclusion about cryptocurrncies is: they can never take over traditional payments. People want payment methods to be:

- secure

- fast

- cheap

While traditional payments do relatively well on all three accounts Bitcoin cannot. Yes, we might argue that it’s (in theory) more secure, but it’s also slow and expensive. What’s worse, as the article just proves Bitcoin cannot fix those flaws because its security relies on mining (and therefore transaction processing) being slow and expensive - that’s the very concept of PoW.

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There's nothing secure about traditional payments. I have to give away the keys to my account (routing & checking number) in order to transact with my checking account. Similarly, I have to hand over all my information to a 3rd party to process a credit card transaction. The fraud and theft is merely subsidized by the banking institutions themselves, who more than make up for the costs in high interest fees.

There's also nothing fast about traditional payments. The actual transferring of money between banks and accounts still takes 24-72 hours, if not longer in some cases.

It's also not cheap. The hidden costs are rolled into the banking system, credit card interest and merchant processing fees (which are rolled into the price of products).

>> I have to give away the keys to my account (routing & checking number) in order to transact with my checking account.

What a strange country you live in! :) I do a lot of payments and I had to google what a routing or checking number even is because I never needed one for making a payment. Also, I can't see how giving up your account number would mean giving away control of it. But that might be because in Europe we do not use such a peculiar payment methods as checks.

All that's necessary in order to forge a transaction is routing & checking account number. Similarly, with credit card numbers. This is why cryptographically signed transactions make so much more sense and are much more secure.

Debit cards are nearly instant and quite cheap. There's no cryptocurrency on the planet that comes close. And good-old-fashioned cash scales practically infinitely.

They're not nearly instant. The transaction is registered as pending in your checking account nearly instantly, however, it settles later in the day when the merchant closes out their daily transactions. The actual transfer of funds takes 24-72 hours from your account to the merchant.

And no, paper cash is not very scalable at all.

You missed a fourth requirement.

- free of government influence

That's where the real power of cryptocurrency comes in. No longer are you tied to the decisions of your government with regard to your money. Venezuela, etc. Governments can't just print money for wars if the populace keeps all their money in cryptocurrency, which is borderless.

Quite the contrary - for the majority of people and businesses doing online transactions, it's very important that the transactions are reversible and can be overriden by their legal system in case of a dispute. Things like CC chargebacks and the ability to reverse fraudulent transfers are highly valued by most users. There definitely are some markets where this isn't the case, but those are niche markets not similar to most of our economics.

In order for cryptocurrency payments to be competitive, the full service has to include not only actual transfer of money but things like a reputable escrow service that answers to local contract law.

That isn't requirement for most people. Furthermore, ordinary people consider "government influence" a good thing, because they trust their government more than some random piece of technology such as Bitcoin.

With a layer 2 protocol like lightning network, we can have individual transactions be fast and cheap, and only the net settlement of a payment channel on the blockchain slow and expensive. Which is okay because it would happen infrequently.

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