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Even if you just rebuilt banks as they exist today on top of Bitcoin, you'd still get some pretty huge advantages, potentially massively increased security, spe

Even if you just rebuilt banks as they exist today on top of Bitcoin, you'd still get some pretty huge advantages, potentially massively increased security, speed, reduced costs, among others. Another big one is that these banks can service the entire global market, massively increasing competition among and hence quality of banking services.

CyberDildonics 12y ago
This is totally true I'm not sure where the down votes come from. HN seems to really hate bitcoin.
- majugi 12y ago
  Where do these massive increase in security, speed, and cost reductions come from in a banking system built on bitcoin?
  - mikeyouse 12y ago
    The irreversible transactions, 10-minute minimum verification, and wildly volatile spread obviously.
  - aianus 12y ago
    Banks become forced to compete with an (almost) free and instantaneous method of transferring value (sending bitcoin peer-to-peer without the use of a third party). It currently costs $40+ for a comparable fiat service (wire transfers).
    - querulous 12y ago
      this is only really true in the united states. the rest of the world has free or almost free instant account to account transfers
      - WillNotDownvote 12y ago
        "Rest of the world" is a bit of an overstatement, and even then it's only within certain zones. Inter-zone transfer on the global level is still slow and costly, where ever you are.
    - crm416 12y ago
      True, but there's a decent case to be made that (1) transaction fees will have to increase (in general) as the block reward decreases, and (2) transaction fees will have to increase (for these centralized services) if they want to eat the cost of fraud [1]. [1] https://freedom-to-tinker.com/blog/randomwalker/the-low-transaction-fee-argument-for-bitcoin-is-silly/ https://freedom-to-tinker.com/blog/randomwalker/the-low-tran...
    - majugi 12y ago
      Without the use of a third party? Bitcoin transactions need to be confirmed in the blockchain which requires third-party miners to exist. Mining costs are relatively high considering the value provided. The blockchain is not at all (and was never intended to be) an efficient way to transfer digital funds. It was created to be decentralized and it serves that purpose, but using it to back a centralized system would be self-defeating, hence this comment thread. Transferring value in the form of maintaining electronic accounts isn't comparable to wire transfers of fiat where the funds are made available in local currency. Banks don't just track numbers in accounts: providing liquidity and ensuring those numbers actually mean something is not trivial. If bitcoins were globally accepted it would be a more competitive service, but even then there would be the issues of fraud protection and compliance with money laundering legislation that bitcoin doesn't handle well.
    - Nursie 12y ago
      Only if you live in the USA. It's free for most people in Europe. And fast.
      - aianus 12y ago
        I live in Canada and the cheapest, fastest way to transfer fiat is to email a picture of a filled-out cheque. It's pathetic.
        sanswork 12y ago
        Almost every bank in Canada has access to interac transfers which are like $3 and complete in 30 minutes to an hour.
        aianus 12y ago
        Yes, but hilariously that's both slower and more expensive than the picture of a cheque method.
        sanswork 12y ago
        I've never tried mailing a cheque but do they not have hold times on not certified cheques for most accounts?
        aianus 12y ago
        Yes, but I'm able to access any funds on hold up to my overdraft limit immediately without paying interest so practically it's instant.
- jeremyjh 12y ago
  Bitcoin is capped at something like 7 transactions per second. VISA handles tens of thousands. I think "faster" is disputable.
  - aianus 12y ago
    VISA currently has higher throughput but Bitcoin has much lower latency. 10 minutes for Bitcoin vs days for VISA to get cash you can spend.
    - Nursie 12y ago
      Inter-account transfer in the UK seems pretty much instant these days, even between different banks.
  - CyberDildonics 12y ago
    Banks don't transfer money to each other through Visa, they use SWIFT. Transactions usually take 4 business days. The block size limit is in the process of being changed, but there isn't a rush since blocks are not being filled. If they do get filled, transaction costs will go up and tiny (0.01 USD) micro-transactions won't be viable until the block limit is increased. So the only thing that might happen is transactions of a few cents are temporarily not viable (the transaction cost is larger than the amount sent).
    - sanswork 12y ago
      If your wires take you 4 days you need to switch banks. I make regular international transfers and unless I miss business hours they are always in the receiving account the next morning.
  - shit_parade 12y ago
    This issue is being addressed via invertible bloom lookup tables. https://gist.github.com/gavinandresen/e20c3b5a1d4b97f79ac2 https://gist.github.com/gavinandresen/e20c3b5a1d4b97f79ac2
  - IkmoIkmo 12y ago
deleted 12y ago
[deleted]

CyberDildonics 12y ago

This is totally true I'm not sure where the down votes come from. HN seems to really hate bitcoin.

majugi 12y ago
Where do these massive increase in security, speed, and cost reductions come from in a banking system built on bitcoin?
- mikeyouse 12y ago
  The irreversible transactions, 10-minute minimum verification, and wildly volatile spread obviously.
- aianus 12y ago
  Banks become forced to compete with an (almost) free and instantaneous method of transferring value (sending bitcoin peer-to-peer without the use of a third party). It currently costs $40+ for a comparable fiat service (wire transfers).
  - querulous 12y ago
    this is only really true in the united states. the rest of the world has free or almost free instant account to account transfers
    - WillNotDownvote 12y ago
      "Rest of the world" is a bit of an overstatement, and even then it's only within certain zones. Inter-zone transfer on the global level is still slow and costly, where ever you are.
  - crm416 12y ago
    True, but there's a decent case to be made that (1) transaction fees will have to increase (in general) as the block reward decreases, and (2) transaction fees will have to increase (for these centralized services) if they want to eat the cost of fraud [1]. [1] https://freedom-to-tinker.com/blog/randomwalker/the-low-transaction-fee-argument-for-bitcoin-is-silly/ https://freedom-to-tinker.com/blog/randomwalker/the-low-tran...
  - majugi 12y ago
    Without the use of a third party? Bitcoin transactions need to be confirmed in the blockchain which requires third-party miners to exist. Mining costs are relatively high considering the value provided. The blockchain is not at all (and was never intended to be) an efficient way to transfer digital funds. It was created to be decentralized and it serves that purpose, but using it to back a centralized system would be self-defeating, hence this comment thread. Transferring value in the form of maintaining electronic accounts isn't comparable to wire transfers of fiat where the funds are made available in local currency. Banks don't just track numbers in accounts: providing liquidity and ensuring those numbers actually mean something is not trivial. If bitcoins were globally accepted it would be a more competitive service, but even then there would be the issues of fraud protection and compliance with money laundering legislation that bitcoin doesn't handle well.
  - Nursie 12y ago
    Only if you live in the USA. It's free for most people in Europe. And fast.
    - aianus 12y ago
      I live in Canada and the cheapest, fastest way to transfer fiat is to email a picture of a filled-out cheque. It's pathetic.
      - sanswork 12y ago
        Almost every bank in Canada has access to interac transfers which are like $3 and complete in 30 minutes to an hour.
        aianus 12y ago
        Yes, but hilariously that's both slower and more expensive than the picture of a cheque method.
        sanswork 12y ago
        I've never tried mailing a cheque but do they not have hold times on not certified cheques for most accounts?
        aianus 12y ago
        Yes, but I'm able to access any funds on hold up to my overdraft limit immediately without paying interest so practically it's instant.
jeremyjh 12y ago
Bitcoin is capped at something like 7 transactions per second. VISA handles tens of thousands. I think "faster" is disputable.
- aianus 12y ago
  VISA currently has higher throughput but Bitcoin has much lower latency. 10 minutes for Bitcoin vs days for VISA to get cash you can spend.
  - Nursie 12y ago
    Inter-account transfer in the UK seems pretty much instant these days, even between different banks.
- CyberDildonics 12y ago
  Banks don't transfer money to each other through Visa, they use SWIFT. Transactions usually take 4 business days. The block size limit is in the process of being changed, but there isn't a rush since blocks are not being filled. If they do get filled, transaction costs will go up and tiny (0.01 USD) micro-transactions won't be viable until the block limit is increased. So the only thing that might happen is transactions of a few cents are temporarily not viable (the transaction cost is larger than the amount sent).
  - sanswork 12y ago
    If your wires take you 4 days you need to switch banks. I make regular international transfers and unless I miss business hours they are always in the receiving account the next morning.
- shit_parade 12y ago
  This issue is being addressed via invertible bloom lookup tables. https://gist.github.com/gavinandresen/e20c3b5a1d4b97f79ac2 https://gist.github.com/gavinandresen/e20c3b5a1d4b97f79ac2
- IkmoIkmo 12y ago

deleted 12y ago

[deleted]