2013-02-22 thefinanser.co.uk - A new currency payment system is about to explode

[Stephen Gornick]

The latest virtual currency is Bitcoin, which may or may not go the same way as the Linden Dollar, Beenz and Flooz.

The main difference with Bitcoin is that is has a regulatory structure – it is open sourced and transparent to all -  whilst being fully digitally secure.
[...]
When Amazon and AMEX are playing in this space, something serious is happening.
[...]
This means that in our world which is moving faster than many of us can think, any new virtual currency has a potential to be The Big Thing.

To be The Big Thing comes down to looking for three things to happen:   

A virtual currency to become a serious player in value exchange;

A payment system to emerge to support this virtual currency which can be used on multiple platforms both inside and outside the core reason for the currency’s existence; and
An ecosystem of commerce to form around this structure, such that the currency is used as a de facto standard for purchasing and selling across the ecosystem.

 - http://thefinanser.co.uk/fsclub/2013/02/a-new-currency-payment-system-is-about-to-explode.html

[Mike Christ]

Are they still mistaking Amazon Coins to be in line with Bitcoins?

[justusranvier]

It won't be the the Next Big Thing if the network stays artificially limited to 7 transactions per second...

[Raoul Duke]

It won't be the the Next Big Thing if the network stays artificially limited to 7 transactions per second...

You wish you had 7 tx/s in the bitcoin network...
Even with the cancer satoshidice is, it's very far away from the 7 tx/s limit.
7 tx/s would mean 4200 tx's each 10 minute block.

[Stephen Gornick]

It won't be the the Next Big Thing if the network stays artificially limited to 7 transactions per second...

You wish you had 7 tx/s in the bitcoin network...
Even with the cancer satoshidice is, it's very far away from the 7 tx/s limit.
7 tx/s would mean 4200 tx's each 10 minute block.

To be fair, mobile payments through M-PESA in Kenya (a country with about 0.6% of the world's population), is choking on 270 transactions per second.
 - http://www.nation.co.ke/business/news/Safaricom-gets-vendor-to-run-M-Pesa-platform/-/1006/1691548/-/cnls9gz/-/index.html

[Raoul Duke]

It won't be the the Next Big Thing if the network stays artificially limited to 7 transactions per second...

You wish you had 7 tx/s in the bitcoin network...
Even with the cancer satoshidice is, it's very far away from the 7 tx/s limit.
7 tx/s would mean 4200 tx's each 10 minute block.

To be fair, mobile payments through M-PESA in Kenya (a country with about 0.6% of the world's population), is choking on 270 transactions per second.
 - http://www.nation.co.ke/business/news/Safaricom-gets-vendor-to-run-M-Pesa-platform/-/1006/1691548/-/cnls9gz/-/index.html

We have a long way to go to get to M-PESA scale.

[Ari]

To be fair, mobile payments through M-PESA in Kenya (a country with about 0.6% of the world's population), is choking on 270 transactions per second.
 - http://www.nation.co.ke/business/news/Safaricom-gets-vendor-to-run-M-Pesa-platform/-/1006/1691548/-/cnls9gz/-/index.html

That is a lot.  That would be more than 1.5 transactions per day for each of the 15,000,000 users.  That's higher than the per capita volume of credit/debit card purchases in the United States.  I think I use bitcoin more than most people, and my average number of transactions is still under 1 per day.

Maybe that is peak volume and not average.

[Stephen Gornick]

Maybe that is peak volume and not average.

Yes, that was the level reached when they could no longer handle demand and had to block access for "maintenance", which is really disruptive for its users who cannot buy anything or get cash out when the service is down.

But that's why cases like Kenya with M-PESA are so interesting to follow.  With mobile payments being ubiquitous, an individual can use the service a half dozen times in a typical day.  It might be used to pay for the ride to work, then once for lunch, then a couple times for shopping, then again for the return ride, maybe yet again for the grocery trip to make dinner and maybe later another purchase for evening entertainment.   Now that's on the high-end usage pattern but that's not going to be entirely uncommon either.  If the M-PESA fees weren't prohibitive for small transactions (e.g., a transaction under $5 might cost something like $0.70) it might see even wider use.

[markm]

Sounds like all the more reason not to clutter the blockchain with all that penny-ante stuff.

Send their lunchmoney provider their paycheque in bitcoins and let the lunchmoney provider (M-PESA or whoever does lunchmoney in their neighborhood) handle the 270+ transactions a second the paycheque gets spent on.

Bitcoin is a currency, not a [ lunchmoney / pocketchange-convenience / changepurse ] provider / service.

-MarkM-

[Technomage]

I feel Bitcoin scaling should be thought of in relation to PayPal. Bitcoin is an Internet currency and payment system, there is pretty much no sign that it's becoming anything significant in the brick & mortar space. So thinking about M-Pesa, or Visa, is not that relevant right now.

[markm]

Maybe call it a currency and final settlement system.

Payment systems differ from final settlement systems largely in deliberately not providing final settlement for some six months or so. It seems to be a feature, might be important in getting spenders to use it, but whyever it is there payment systems seem to be deliberately putting off final settlement, not providing final settlement as irreversibly as possible as soon as possible for as large a transaction as possible, which is where bitcoin shines.

-MarkM-

[twolifeinexile]

I feel Bitcoin scaling should be thought of in relation to PayPal. Bitcoin is an Internet currency and payment system, there is pretty much no sign that it's becoming anything significant in the brick & mortar space. So thinking about M-Pesa, or Visa, is not that relevant right now.

Somehow I feel future always expand in an un-expected way, so trying to model any existing payement network will not work and may hinder the real opputunities.

[markm]

Yeah who knows what new thing will be out?/ It took long long time before Ripple finally got actually implemented.

It is something more like Ripple that is our competitor / plug-in-replacement for Paypal; Bitcoin is our competitor / plug in replacement for the units of account themselves, the fiats, not for the apps that play with them / use them.

-MarkM-

[Technomage]

Yeah who knows what new thing will be out?/ It took long long time before Ripple finally got actually implemented.

It is something more like Ripple that is our competitor / plug-in-replacement for Paypal; Bitcoin is our competitor / plug in replacement for the units of account themselves, the fiats, not for the apps that play with them / use them.

To me the promise of Bitcoin has always been that at least to an extent, it can be both. Sacrificing the other side of it is a major compromise and it destroyes many benefits that a universal currency has. Any currency exchange that is needed, is in fact waste. The less of it is needed, the better. Obviously the market will decide what this universal currency is, but the real promise of Bitcoin, to me, has been that it could actually function both as a store of value and a widely used medium of exchange.

Not that the store of value capabilities aren't important, but if it only leads to that Bitcoin will be nothing more than gold 2.0. What I've had in mind for it is gold 2.0 + cash 2.0, and it can't be cash 2.0 if you can't use it conveniently for small amounts.

Obviously if this turns out to be impossible in the long term, to combine the two, then a compromise is needed. I just don't think it's impossible at all.