Re:Bitwage
by yen223 on Thursday July 24, 2014 @08:23AM
(#8079193)
The existing banking system, for all its warts, is a proven, secure system for exchanging fiat1 -> fiat2. Bitcoin's use case has to be a lot stronger than merely being a substitute for TTs.
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If you're willing to deal with delays and exchange rate fees, sure.
Bitcoin transactions won't be free forever.
The incentive for me to verify your Bitcoin transactions using my electricity and my processor cycles, is that I might get a free Bitcoin in return. This is the basis of Bitcoin mining, and it's a rather elegant solution in my opinion.
However, once this supply of mined Bitcoin slows down, where's the incentive for me to continue processing transactions? That's right, transaction fees. https://en.bitcoin.it/wiki/Transaction_fees
Transfers of a certain size were never free, the fee however is tiny (0.0001 BTC) and doesn't compare to transfer fees or other international money transfer service fees.
Don't forget that there is a cap on the number of transactions that the blockchain can process in a given amount of time (IIRC it's like 7 transactions per second). That's what we call a scarce resource, which will eventually lead to rent-seeking. I guarantee there will be payment processors that spring up as a result of being able to guarantee priority on your transactions because they have agreements with multiple large bitcoin mining pools. I'm also willing to bet that this fee settles out close to the transfer fee for existing international money transfer services.
Re:Bitwage
by FatalLogic on Thursday July 24, 2014 @11:53AM
(#8080219)
>Don't forget that there is a cap on the number of transactions that the blockchain can process in a given amount of time (IIRC it's like 7 transactions per second).
7 transactions per second is an arbitrary limit that was imposed to keep things manageable, because Bitcoin is a beta, an experimental system. Transaction fees may rise for the reasons you've described, but referencing the '7 TPS cap' as if it is a real limit makes the situation look far worse than it is.
Of course there will be transaction fees if Bitcoin sticks around long enough. There are already optional but de facto transaction fees for certain types of transactions. I'm pretty sure those fees are still significantly cheaper than doing equivalent transactions through the traditional banking system.
You mean with Bitcoin?