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Comment by cporios | Hacker News Reader

According to this half the world's population is unable to get a bank account: http://mckinseyonsociety.com/half-the-world-is-unbanked/

Bitcoin allows for anyone with internet or even text-messaging access to hold, receive and send money. To me, this seems revolutionary. I don't know how the author can ignore this.

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There are things that the third world already uses for this purpose, such as M-Pesa. Money through SMS is already in wide use, for millions, right now. How can I send someone bitcoin through text messaging? http://en.wikipedia.org/wiki/M-Pesa

I wasn't aware of M-Pesa. Bitcoin transaction fees are still lower though.

Coinbase and other companies allow you to send bitcoins via SMS: https://www.coinbase.com/sms_service

Bitcoin transaction fees are lower currently because they inflate the money supply to reward transaction processors. This puts downward pressure on the price. Once the inflation is cut off, its not clear what will happen with the fees. If the hashing power stays constants or decreases while the user-base increases, then low fees might still be feasible, but its unlikely to pan out this way.

Speaking from a technical perspective only, there is no way that Bitcoin can process transactions at a lower cost then a centralized method. A distributed log backed by proof of work is necessarily more expensive than a trusted, central server. Most claims of cost reduction come from the elimination of features, such as chargebacks, which will then be implemented by third party, resulting in unbalanced comparisons.

Supporters also point to smart contracts as cost-reducer, but the surface area where smart contracts can be made to work without human intervention is low, and I doubt many of these hypothetical cost reductions will be realized.

Transaction costs on the order of $10 per transaction is not exactly cheap.

I suspect that the half of the word's population that is unable to get a bank account has a sizable overlap with the fraction that doesn't have internet or even text-messaging access.

I feel you suspect wrong, and your suspection with get wronger fast :)

http://data.worldbank.org/indicator/IT.CEL.SETS.P2?order=wba...

Nothing in your link actually speaks to the points under discussion.

Even if that's true bringing internet or text messaging to the third world is easier than expanding bank coverage.

> Even if that's true bringing internet or text messaging to the third world is easier than expanding bank coverage.

Bringing internet or text messaging to the third world has the net effect of expanding bank coverage.

The mobile phone operators are well positioned to offer payment services, and they do:

http://en.wikipedia.org/wiki/M-Pesa

(I don't know how many others there are, that's one of the big ones)

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