This seems pretty stupid. Is my understanding that Bitcoin txns are no/low-cost and fast incorrect?
No cost is not accurate, because to get fast, you need to pay. Low cost is debatable but possibly accurate compared to current payment methods (though CC charges are mostly borne by the vendor, an important distinction).
I do think these criticisms strike to the heart of why Bitcoin will not be successful - it doesn't compare well to other payment methods, and because of the nature of its distributed consensus and proof of work, it never will. It has some interesting ideas but also embeds some ideas about transactions which make it impossible to satisfy the requirements of most vendors/customers.
We will probably see a digital global currency supplanting government-backed currencies, but it needs to have very low volatility, a transparent guidance structure, a credible backer (probably corporate in today's world), verifiable identities to prove both sides of a transaction took part and prevent fraud etc., fast and low cost transfers (BTC has the low cost bit at least at present), and most importantly of all regulated central institutions like banks or exchanges which normal people can trust to carry out business, because most people do not have the time, resources or inclination to secure their servers/computers against determined intrusion and fraud.
Personally I think the concepts of mining, a distributed block chain, and unique tokens which are hoarded and passed around like gold coins are fundamentally flawed and will prevent Bitcoin taking off long-term and are the cause of many of its issues like volatility. It is full of interesting ideas though and has triggered a renaissance in online payment, so I see why people find it interesting.
>paypal
So accepting risk of a chargeback counts as "completely reliable" to you. In that case, one can accept 0-conf.
What about in between banks? My bank still offers this for free, but I know that that's not the case for everyone.
If you want to receive money for anything on the internet or pay for services on the internet, that means international transfers becomes the most common use-case because there is no way to guarantee that the sender and recipient resides in the same country.
I'm constantly amazed by the amount of people who completely disregard this scenario as something "esoteric" and which doesn't need to be addressed. This is the core requirement* for a universal payment-solution in a internet-enabled world. Quite frankly, just talking about "banks" and in-bank transfers makes you look like something out of the 1920s.
My bank will do international transfers, but at a considerable fee. This is where even "evil" actors like PayPal completely trump banks and this is why PayPal and its likes are very popular, at least on the internet.
Bitcoin gives you all the internet-based benefits of PayPal (low cost) with none of its evil. I don't think calling it low cost is misleading or false advertising at all.
Sure, most of the speed is because of timezones, but still. It works, it's reliable, and if something goes wrong and the money doesn't show up on my US card, I know exactly who to complain to.
For now.
A block size stuck at 1MB as transaction volume grows will result in a fee market, eventually making Bitcoin impractical/not so competitive for daily use as P2P cash...
...resulting in transactions being pushed off-chain onto centralised and regulated payment hubs (lightning, sidechains) which will most likely turn out to be just as "evil" as PayPal.
Meanwhile in US/Canada people still write cheques to each other.
Effectively, all the transaction costs up front and applied once. The problem with existing financial transactions is that they take a cut every time a transaction is made. In fact, they take little cuts every time a transaction passes through their system/network/etc.
Start with one dollar and send it through enough "transactions" and you end up with nothing. Bitcoin effectively solves this problem. No middle-man scum sitting between a financial transaction ever "adds value" (how a I hate that term). They just leech off the capital of the people. This is why I want bitcoin to succeed.
(Ended up a bit ranty there at the end. Sorry.)
Wrong! ;-) You are misunderstanding and implying, once again, that transaction costs are somehow "adding value." Bitcoins, like all financial instruments, exists _because_ of the transactions. The transactions _are_ the thing that makes financial systems live. Only parasites live at and leech off the system at the transactional level.
Miners don't mine because of any arbitrary value in a product. They mine because the results of mining is going to be transacted. Putting all the costs, at the point of the miners means the "most fair" deal for everyone. (You can read that as Socialism if the word sticks in your craw. ;-) The costs go up-front at the point where the bitcoin goes into the system. It doesn't mean the miners get less overall so much as it mean everyone gets less but effectively only one time.
As time goes on and resources become scarce and mining costs go up, transaction "costs" are subsumed into mining to a vanishing small amount. Transactions are effectively free which means that the market is open to everyone, regardless of wealth, without siphoning off capital into the hands of the 0.1% and out of the pockets of the rest of the people.
> Bitcoin gives you all the internet-based benefits of PayPal (low cost)
You mean the benefit of being a hosted service, handling payment cards, processing complaints and funding item returns, integrating into bank payments, contacting other side for dispute resolution? How do I access those features in bitcoin?
As for the actual fees, for example lloyds uk will max out fees at 10 GBP and I guess for frequent / large amounts you'll find out what that "promotional code" field is for. For once-every-few-months international transfer 10 GBP is not a huge amount either. In general: depending on your usage pattern bank transfers averaged over months may not be bad at all.
Hardy says in the comments that he feels that the current wording is misleading for newcomers and could cause them to leave when the fees do inevitably rise.
He also questioned saying it was fast as, from a users perspective, it isn't always compared to other transactions.