I didn't know about these services and it's great that they exist. What makes bitcoin different is that it eliminates the need to trust a third party such as a bank to handle the transaction.
Except that it doesn't. You still need someone to put up and maintain ATMs, apps, exchange-sites etc. that allow for quick and easy transfer and exchange of bitcoin. People think this is all easy until things go wrong: Who do you appeal to if you get scammed? What do you do if you pay someone online with bitcoin who then just doesn't deliver what you've ordered? Who do you call if someone attached some kind of skimmer to a bitcoin ATM?
Don't get me wrong, there's so much wrong with the current banking system, and I really hope someone or something manages to disrupt it, but Bitcoin is no solution to that.
this is not a leading question. what do you see as wrong with the banking system? It has taken 600 years to evolve, roughly. what does the next banking system look like? and do you really mean monetary system?
people are constantly conflating bitcoin the currency alternative with some kind of new way do banking, finance, monetary policy, and never explain what needs disrupting and what the new world look like. is it just better, faster, cheaper? or some fundamental disruption, not just incrementally less costly.
I think people have more of an issue with the rampant criminal financial sector than with banking itself. The problem is that banking has intermingled more and more in the last 30-40 years with finance, not sure if it's been overall positive for people's wellbeing.
> What do you do if you pay someone online with bitcoin who then just doesn't deliver what you've ordered?
This is the big problem with crypto. Trust moves around. But there is one solution: escrow backed by smart contracts - see here for one implementation [1]
Personally I think what we'll see in future is people being offered the option of going through existing institutions as a form of insurance for the reasons you mention, but an alternative on offer for people who just want to minimize fees or who don't think they'll need those conflict resolution services.
TBH I imagine developing smart contracts is clunky right now, like developing using AWS Lambda frameworks was a few years ago. But the tooling will improve. Perhaps it could be possible to digitally sign a smart contract's version, linking it to some proof of automated test coverage, or some other open way of verifying that it works as intended - e.g. attach the test suite and test results to the contract somehow and sign them. If you weren't happy with the quality of tests or their coverage, etc, you could decide not to use the smart contract.
Potentially. Or for sellers of particularly high value goods where buyers and sellers both have to put up the same amount again as a deposit. It still seems like a novel approach and I'm curious how it'll pan out.
Ten+ years ago we were all told that the decentralised cryptocurrency would enable the unbanked masses to make micropayments to one another — and indeed, we could do that in the first few years. However, the mining fees are so exorbitant these days that micropayments end up being very expensive, at least percentage-wise. I didn't have any expectations about the bitcoin exchange rate ten years ago, but the “cheap micropayments” expectations were blown to pieces a long time ago.
Bitcoin Lightning, is that so simple that even my mother could use it without my help? For me that's the acid test.
How do we know that the Bitcoin ATM actually spit out cash?
We can prove that A transferred BTC to B thanks to cryptographic signatures. But what if the ATM machine (turning BTC into USD or whatever) on the other side fails? You still have to trust 3rd parties whenever you do an "off chain" transaction.
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As long as BTC has huge volatility, it fails as a store of value. Swings up, or down, will incentivize "games" to be played with regards to any BTC / USD exchange.
I wasn't sure whether the snark was for the size of the logistical hurdles the much-hyped "trustless solutions for the unbanked" face or the proposed solutions invariably involving some sort of bank, but it's always worth underlining the latter part...
How do you buy Bitcoin without going through a trusted third party? How do you cash out? Do you read the source code of your wallet software and scour the bitcoin source code for security breaking bugs?
Thank you for sharing, I never knew that was a thing. If you don't take the comment at face value there's obviously differences between the two systems:
Bitcoin is well known globally whereas Hawala in a subset of countries.
In OP's example he has to trust the Bitcoin ATM whereas for Hawala you'd have to trust the honour system (thus at least 2 parties).
Bitcoin is digital whereas Hawala requires exchange of money in person. In OP's example this gives him the flexibility of not having to prearrange a transaction.
«send money to your relatives back home» → I suggested to the recipient we use Western Union, but he had been banned from WU. Thus demonstrating the censorship-resistant value of Bitcoin. Other services we briefly considered seemed like I would have to first go through a verification step which would have taken ~24 hours, so not a solution. Remember our transaction was made in under 1 hour.
«SMS banking» → Non existent in our situation (US recipient)
«Hawala» → Maybe, but unworkable in our situation. None of use have used Hawala, we wouldn't even have known WHERE to look for Hawala providers...
Thank you for demonstrating my point. Nothing could have beaten Bitcoin/crypto in this instance.
Apart from any "send money to your relatives back home" service, sms banking in entire continents, or Hawala.
https://en.wikipedia.org/wiki/Hawala