You can't separate the currency from the ecosystem for anything but academic purposes. The ecosystem is a mess. A commonly cited benefit of crypto-currencies is that they'll eliminate friction and fees in the system, and I think this is only because the systems don't exist. People want security, verifiability, and reversibility when dealing with money. There has to exist companies to do this whether they are Citibank or Coinbase, and they're going to charge money.<p>So you can take the Gov't control out of the equation, but I still have yet to hear a scenario that crypto-currrency itself makes better than fiat - it's always about the cost, complexity, and regulation of the services on top. Eventually, those will reappear because people and business want them.
The new title is worse than the first.<p>Sure, it's easier and cheaper to wire USD to another country than it is to exchange USD for BTC, send BTC, and then exchange BTC to USD. Just like it's cheaper to wire USD to another country than it is to exchange USD for <i>literally anything</i>, send that literally anything, and then exchange that literally anything to USD.<p>If you insist on using BTC as a transfer mechanism for USD, you're going to incur most of the fees and risk you would if you used GBP, CAD, AUD, Yen, or any other currency as a transfer mechanism for USD. I'm not sure why anyone would expect anything different.<p>However, if you compare apples to apples, transferring BTC which is denominated in BTC throughout the transaction is much easier and cheaper than transferring USD which started is denominated in USD throughout the transaction.
He is missing 55 cents because WB21 appear to be miscalculating the fee. They add 1% to the transfer amount ($5500) to get a total ($5555), and then take 1% from that ($55.55) as their fee.<p>In other words, their fee is really 1.01%. If the author can be bothered he should explain this to them and ask for his 55 cents back.
I don't think USD -> Bitcoin -> USD is really the way to go on this. If you are trading in USD, why would you move it into bitcoin and back again? You already had it in USD.<p>If you need to buy some groceries in the US, you wouldn't trade your USD for CAD (Canada money), then bring CAD to a grocery store that also accepts USD. You would only bring CAD if you already had CAD.
Interesting article. But none of the problems described are actually with bitcoin. I see criticisms of CoinBase, WB21, TradeZero, Bitpay. All the problems were due to issues with exchanges & intermediaries and with handling USD. It seems the actual bitcoin part worked fine.
Sounds like someone hasn't tried to buy a pound of meth with a bank wire!<p>No seriously, though. Who knew that the libertarian cyberpunk dystopian future would be full of people trying to scam a nickel off you every couple of seconds...oh wait, everyone ever. That's the market, man. Don't taunt the market. Don't even look at it funny. It's sentient and can hear your insults.
I found this article after the author argued against my post <i>How to Pay Freelancers in Upwork with Bitcoin, Ethereum, or any other Altcoin</i> [1]. The problem with his argument is that it is based on his very tiny vision of the world based on the country where he lives. This is not the "user experience" the rest of the world currently have and that's why cryptocurrencies offer an alternative, even with a lot of limitations.<p>[1] <a href="https://medium.com/@sondre.kolaautomat/how-to-pay-freelancers-in-upwork-with-bitcoins-or-any-other-altcoin-8f5b39ca9745" rel="nofollow">https://medium.com/@sondre.kolaautomat/how-to-pay-freelancer...</a>
The article illustrates a number of issues with services on bitcoin. One issue with doing things with any cryptocurrency is that it takes awhile for a transaction to occur. I had the preconcieved notion it would be as fast as sending an email but it really takes 30-40 minutes sometimes. Also, it seems the author is treating bitcoin as cash when its really more like you buying gold with cash and then transferring it back into cash to the other account that you want to transfer.
$236 is small change compared to how much bitcoin I've personally lost in the various hacks - MtGox and others.<p>Even so, I still think bitcoin is a brilliant tech and valuable experiment.<p>It is wrong to think of bitcoin as a direct competitor to fiat.<p>Just like mp3 / bittorent did not destroy the music / movie industry, bitcoin isn't going to replace fiat currency.
Not now and not in it's current form.<p>But it's going to be around as an alternative to the centralised banking system and as a very interesting social experiment and self-governance technology.<p>In time, both techs are going to merge - meaning that banks will implement all kinds of 'blockchain technologies', while virtual currencies will implement all kinds of services which the banks currently provide.
The things that will determine whether Bitcoin "wins" or not will not be the use cases where Bitcoin is supplementing existing infrastructure, but rather whether or not it can sustain and grow use cases where it replaces it. Even if those are fringe or even sketchy, that is what matters.<p>"Blockchain" initiatives at banks are just about implementing cryptography as part of solving larger technical challenges they have. Using Bitcoin as "rails" isn't there yet. Using Bitcoin in places where only Bitcoin makes sense will make it a cockroach, and open protocols that survive tend to become important.
All this to open a day trading account in the Bahamas with a company so flaky that they can't offer accounts to US persons or even to Bahamas persons. It's one of those "trade offshore with high leverage" companies. "High leverage" means high interest charges, which means the return on investment drops. (Their site is vague about interest charges. Not a good sign.) For day trading, the "house edge" is improved. This racket is more commonly seen in foreign exchange and in "binary options" (which are a total scam).
While I agree that those fees are extravagant and the underlying process should have been much easier, it probably would have been prudent to investigate the process first, before starting it. I can't imagine being unaware of fees associated with using Coinbase before perusing their services.
It's falling apart even more than anyone cares to admit:<p>* Blocks are now so full that transactions have stopped flowing and there's no solutions that will address any of this without forcing any of the thousands of systems already built on top of Bitcoin to migrate = slow confirmations = massively higher fees<p>* Slow confirmations for every day payments = credit card use-case somewhat ruled out<p>* Double-spending is now a feature of Bitcoin = 0 confirms are now less secure (I understand the logic but its black and white. Instant payments should be possible but obviously zero confirms aren’t the way to do it.)<p>* Horrible black and white thinking for seemingly everything in Bitcoin -- especially security -- whereby nobody can imagine a fail-safe system and the community blames anyone who loses their coins even though the Bitcoin protocol is inherently unsuitable for building fail-safe wallets.<p>* Terrible user-experience on the protocol, infrastructure, and application levels. So much so that Bitcoin will likely never experience mainstream adoption for this reason.<p>* Community has become a toxic circle jerk of investors who ignore any of Bitcoin's problems in favor of its myopic benefits in the hope that they can still ride the blockchain to the bank (somewhat literally.)<p>* A hostile dev community that is so utterly clueless when it comes to real world business that their choices have managed to cripple the entire system.<p>* Community is an echo chamber of ignorance that blindly believes that all advances outside of Bitcoin are traitorous, incorrect, and not worth knowing about; Outright hostile towards new users with an air of technology snobbery that makes the Linux community seem like a welcoming party at an Apple store.<p>* The technology is inherently unscalable -- in fact, the only currently good plans for scaling Bitcoin involve not using it (No, I'm really not joking, that's literally what “off-chain” means) But the real problem here is really the fact that the development team have refused to increase the block size even though this was always intended in the design of Bitcoin by Satoashi and even though there are plenty of resources to do it.<p>* Bitcoin is now more centralized than any dictatorship -- the development team have become controlled largely by a single corporation (meaning a single CEO -- we all know who) and mining pools have become so large that at any time the miners can collude to reverse recent transactions.<p>Bitcoin has failed at every goal that it set for itself and the biggest issue out of all of this is the fact that the system can be so easily controlled by standard social engineering. If a decentralized system can be circumvented through moronic human and political means then it loses any advantage that it might have had by being decentralized. So philosophically and practically – Bitcoin has failed as both a consensus system and as an idea.<p>In fact -- probably the biggest advance that Bitcoin made was in the use of smart contracts to enforce agreements which actually already existed prior to Bitcoin. So I think going forward banks will end up using Bitcoin-inspired technology but they will ignore its consensus system completely (which frankly sucks) and instead use what is now being referred to as "smart signatures" (or programmable signatures) as a way of enforcing complex agreements between institutions.<p>Tl; dr; Bitcoin was an experiment that proved that certain things could be done better but it failed at a lot of things. It turns out that Bitcoin probably won't be the next Internet but it did make for quite an interesting ARPANET ...
Bitcoin is useful when you already have it. There's no point to go and buy it solely for purpose of transferring it (via some weird wb21). Neither you nor tradezero use it properly.
> $85 + $95 +$55 +$0.55 +$0.45 (still in WB21) = $236 in fees<p>Bitcoin has been around for 8 years, and general awareness has really only kicked in over the last 4. These Bitcoin companies are the first generation. I think it's reasonable that in the next 10 years the tasks you performed will be more seamlessly orchestrated, and greater competition will drive the price down. It would take an order-of-magnitude improvement to undercut the wire fee ($35) which may well happen.
I used TransferWise last time I had to move some money internationally, and had a good experience. Significantly faster and cheaper than wiring the money.
On one hand there is a global focus is on reducing energy waste. On the other we have hundreds of thousands of people merrily wasting electricity mining bitcoin and other assorted crypto currencies. This is a bit of a dissonance.<p>To make matters worse crypto currencies like bitcoin appear to incentivize early adopters to act in bad faith like a pyramid scheme. That they are open to monopolization by those who have disproportionate access to cheap electricty and resources can't help build trust.<p>So the early adopters have every incentive to spin it and on cue they talk it up deceptively on decentralization, anonymity and control as if the protocol develops itself and is not under the control of an inner cotorie.<p>Aren't governments and financial systems supposed to work for us and if they aren't is the solution to make sure they do, or a flawed technology workaround that benefits early adopters and concentrates power and influence in the hands of a few? The cure seems worse than the disease.
Bitpay and other payment processors exist to buy and hold Bitcoin in the event of mainstream adoption and price explosion; that is their entire investment thesis. They also happen to spend a little time performing activities that purport to make Bitcoin useful and appear like they are building a real product and business.
With a title like "The Disaster that is Bitcoin" we really shouldn't feed the trolls. It's true bitcoin doesn't compete with traditional fiat for many purposes. Calling bitcoin a disaster for it is trolling people who see potential in the technology. The disaster that is clickbait.
The only people really interested in BitCoin are only interested in the "untraceability" of it.<p>Consequently, nobody really cares about the fees as it's all about the ability to move your money around while avoiding government scrutiny. And these fees are what they are willing to pay to accomplish that.
> Look, it’s the whole ecosystem that is fucked. All these fees, complicated steps — it just doesn’t work for the normal Joe.<p>Yeah, cooperative/reversible financial fund transfer systems that interoperate with bitcoin are at enormous risk during these transactions, so they charge large fees and create red tape to avoid/mitigate fraud. It's probably been bitcoin's biggest stumbling point since forever. I don't think that it's a disaster though.<p>> The Bitpay invoice has a 15 minute timer. So I wait and wait ... last few minutes on that timer so I start to get a bit nervous.<p>This problem could've actually been one to blame on bitcoin. It might be due to bitcoin's low transaction throughput. I haven't followed the blocksize debate but IIRC there have been lots of talk about slow transactions.
Transferring bitcoin when all relevant parties are using bitcoin is more efficient than transferring USD when all relevant parties are using USD. If people are presenting bitcoin as a good alternative to wire transfers then they are being misleading.
Using Bitcoin strictly as an intermediate to transfer between two US dollar accounts is not the most typical usecase. The fees and waiting times are due to the US dollar transfers and the companies involved.<p>There is however, valid criticism of the various middlemen that have propped up to take advantage of the hype surrounding Bitcoin.
Or rather "The Disaster That Is Bitcoin Services Around Bitcoin". I'm wondering if there would be the same kind of article that dollars is very bad, because bank wants some money for wireing them e.g. to Europe, and the exchange rate between dollar and euro could change overnight.
Bitcoin transactions are not easy enough for general consumption.<p>I think in the Bitcoin lifecycle a number of these early services exist at the pleasure of serving pioneering Bitcoin users / miners who have a lot of digital currency already.
"Look, it’s the whole ecosystem that is fucked."
Should have been the title. This post actually makes me replan a bit of my investment plans.
The future is now but it is expensive.
Comparing with Bitcoin is easy. I'd want to see a comparison between FIAT and an advanced cryptocurrency, something like Monero, DASH or Ethereum.
Misleading title. Its easier and cheaper to use bank wires when sending USD. What he did just seems foolish to me.<p>I have had people from across the globe send me BTC in minutes with a few button clicks and no additional parties involved.
Excuse me, but how much is it a Bitcoin problem as opposed to being a Bitcoin ecosystem problem? You can't blame Bitcoin for every problem with each exchange.
This article should be titled "The Disaster That Ensued When I Forgot to Look Up Fee Schedules." And this is from a self-professed day trader?<p>I'm guessing this also makes me a "Bitcoin defender."
What an ignorant article. It's unrealistic to expect cryptocurrencies to behave as flawlessly as wire transfers. The technologies need to mature. But for those with patience, they're pretty awesome.
There seems to be a trend in articles claiming some technology is bad/a disaster/dead when really it's just someone uneducated in the platform trying to use it incorrectly or with misinformed assumptions.<p>Bitcoin is still an emerging technology. You can do things with it you can do with _anything_ else. You can create 100 wallets <i>right now</i> and start receiving bitcoin to them. Please show me how to do that without interacting with anyone with traditional bank accounts.<p>Bitcoin is here to stay and we're going to continue to discover interesting use cases for it. Sorry this guy is bailing before he learns what it's all about.
Incidentally, if you're like me, and know nothing about stocks, but still want to get rich off companies you believe will succeed, I highly recommend Robinhood. It's like stock trading for chimpanzees. Install an app, fill out a brief profile, click a big shiny button to deposit money, select your stock, and click another big shiny button to buy.<p>I don't have any affiliation with them. I just always thought trading stocks was schleppily difficult, and was delighted to discover it was not so. I believe some company will do well; I'm not interested in understanding spreadsheets or hiring anyone; here's my money; how do I buy shares? What is the Uber-like, magic-button product here? Robinhood, it turns out.<p><a href="https://www.robinhood.com/" rel="nofollow">https://www.robinhood.com/</a>