Will Bitcoin Really Save Money?

[acoindr]

It may be surprising but the banking system wasn't built up to cater to the little guy. It was built up by stodgy, lazy, greedy financiers looking for any way to extract another penny profit from their privileged position.

But Bitcoin, unlike the banking system, is built up to cater only to the little guy, right?

Bitcoin is fundamentally about the little guy.

It's about empowering people to do for themselves what others do simply because they have a monopoly on moving money, like charging 10-20%, which some would argue is criminal, to move it from point A to point B.

Everyone in the Bitcoin ecosystem, from Mark Karpeles to Roger Ver, are saints and angels promoting Bitcoin solely for philanthropic reasons ... They can do no wrong. All of them are just trying to make the world a better place for everyone. It's all unicorns and rainbows ... And no one in the Bitcoin industry are "stodgy, lazy, greedy financiers looking for any way to extract another penny profit from their privileged position" ...   

No, Bitcoin exists openly in the world which is full of all kinds of people, including scammers, con men, altruistic people, etc. I certainly don't say there is anything wrong with seeking profit. However, I might question those whose actions toward the poorest people appear more predatory than anything else. Watch the following 5 min video and get back to me:

Bitcoin in Uganda - Empowering People

[BitPhotos]

i guess in a way yea but everyone has a different way of thinking

[franky1]

I was wondering whether Bitcoin, when adopted en-masse, will really liberate merchants from fees that are currently hurting them. Right now it's definitely cheaper, but won't the same necessary security-costs that are placed on the current system be placed on Bitcoin somehow? All these Bitcoin start-ups will need to make money somehow. That means they have to charge either merchants or customers for their services, no matter how innovative and frictionless they make the cryptocurrency use.

Here's a quote I read (from Goldman Sachs, I believe):

"Much of the cost of the current payment system is attributable to security and legal requirements that Bitcoin providers will eventually need to confront."

I'm an advocate for Bitcoin and crypto in general, but I want to tackle this from all angles and learn as much as I can

bitcoin in most countries are being classed as assets. thus the regulators don't need to get involved with licensing/regulating bitcoin. this is the big point people miss.. governments are actually doing a good thing by classing bitcoin as an asset.
due to this fact merchants can save alot of money
1. no licence/oversight costs just to accept bitcoin
2. no secured money trucks to pick up bank notes each evening/week
3. no cash counting each evening (save labour costs at end of shift)
4. no banking fee's or insurances.

so when someone pays a merchant with 100 bank notes the average auditing, secured transport costs are 1 bank note
so when someone pays a merchaint with debit cards the average processing fee costs 2.5%

but with bitcoins the average is less then 1000th of the transaction.

as for the guy saying that bitcoin is only for scammers, theives etc. the same was said in the wild west days of gold mining. anything of good value is always going to be a target..
for instance if hackers could break the protocol to mak bitcoin worthless, they would never want to use bitcoin due to the fact it can be broken. yet theives and hackers use bitcoin because they cant attack or get attacked, thus bitcoin is a true usefl and secure store of value.

so if a thief wants it and a hacker cant hack it. everyone should be using it. theives and hackers prov bitcoin is a good value store, and there are not as many nasty people using bitcoins as you think

[Cubic Earth]

There are at least three big sources where Bitcoin cost savings will come from, in comparison to the existing financial system.


1)  Bitcoin has a blockchain, which is a fundamentally more efficient financial backend.  Sure, VISA may be more internally efficient, but the blockchain wins hands down for any transaction that needs to cross both countries and companies at the same time.  If we all used one world-wide bank, with one currency, then bitcoin wouldn’t have this advantage.  But the fact is we don’t all use the same mega-bank and the global financial system is highly fractured.  Bitcoin will both fill the gaps and obviate the need to cross them at the same time.  To directly relate this to cost savings:  Sending money across the fractured global financial system involves many interfaces, and each interface introduces friction and cost.  Bypass and eliminate the friction, bypass the cost.

2)  Bitcoin is open and directly accessible to anyone or any company.  As the bitcoin system matures, competition to deliver a layer of consumer services will be fierce.  This will drive down cost.  Compare this to our current financial landscape, where massive amounts of money, permits, and political connections are required to participate at level of banks, insurance, and credit card companies.  More competition drives down costs.

3)  Bitcoin will face lower compliance costs than the financial incumbency.  The current set of laws and regulations surrounding finance is incredibly complex and expensive for payment companies to deal with.  Bitcoin currently avoids much of that burden.  While Bitcoin-specific rules are inevitable, they will most likely be lighter and easier for the new bitcoin companies to comply with than the current morass is for banks.  I am basing this assumption off of the U.S. Governments history with regulating new technology.  Less regulation will equal lower costs.

Some examples are:

Email = less regulated than postal mail
Voice Over I.P. = less regulated than copper phone lines
Internet Retailers = Less regulated than brick and mortar or even catalog mailing merchants
YouTube, Etc. = Less regulated than traditional television

[SlipperySlope]

IHere's a quote I read (from Goldman Sachs, I believe):

"Much of the cost of the current payment system is attributable to security and legal requirements that Bitcoin providers will eventually need to confront."

Goldman Sachs is wrong and is spreading FUD because part of their business model is threatened by Bitcoin.

What makes the current payment system expensive is that transactions can be reversed and the system accepts a certain amount of fraud from customers and merchants both. The current payment system has a pre-Internet legacy workflow.

Bitcoin is non-recourse. When Bitcoin becomes the common currency, there will be less need to exchange it into fiat to make or accept a payment.

[The Bitcoin Institute]

I know countries where fees of 5-10% to get money into your account is business as usual. I think that many bitcoin companies will go bakrupt when they realise they can't print money like the real banks, and fees will in general become painfully visible. But still a lot of money will be saved.

[acs267]

It'll depend on what the Bitcoin cost will be.

Anyway, I don't think companies with Fiat have made a difference. For instance, did you know that the department that makes the most at Wal-Mart are from the Bank fees at the store? And don't forget the loan, check, and credit card fees.

[Beliathon]

someone with 50k btc could transfer $28500000 worth of value for only some cents in transfer costs. i'd say that could save some money.

That is accurate. By comparison to any fiat transaction, sending BTC is relatively free.

"Will bitcoin save money?"
Short answer yes, with an if. Long answer no, with a but.

[khme88]

"Will bitcoin save money?"
Short answer yes, with an if. Long answer no, with a but.

Your short answer is longer than your long answer. 

[Beliathon]

"Will bitcoin save money?"
Short answer yes, with an if. Long answer no, with a but.

Your short answer is longer than your long answer.  

I personally believe cryptocurrency is the last stage of capitalism, the transition economy to the end of this neo-feudal society. Toward a better, more just, more humane, more open, less deceptive world.

[SOEHARTO]

example you got today . maximum change to dollar in btc-e . dont save in wallet . just worry hacker come and raped

[yatsey87]

I think bitcoin will save people much money in many industries as well as personally, and maybe even save entire countries from economic collapse caused by banks printing money on their own whim.

"Will bitcoin save money?"
Short answer yes, with an if. Long answer no, with a but.

Your short answer is longer than your long answer. 

I personally believe cryptocurrency is the last stage of capitalism, the transition economy to the end of this neo-feudal society. Toward a better, more just, more humane, more open, less deceptive world.

I like your thinking and hope you're right.

[Jesu]

Will it save money? Sure, but I'm hoping it will actually be the savior of money

[acs267]

example you got today . maximum change to dollar in btc-e . dont save in wallet . just worry hacker come and raped

I doubt anybody would be that stupid to transition their 10,000BTC all at the same time.

[Ron~Popeil]

"Will bitcoin save money?"
Short answer yes, with an if. Long answer no, with a but.

Your short answer is longer than your long answer.  

I personally believe cryptocurrency is the last stage of capitalism, the transition economy to the end of this neo-feudal society. Toward a better, more just, more humane, more open, less deceptive world.

Solid trust worthy currency is the key to that. A truly free market changes everything.

[Yeah?]

It's already saving businesses money and also people in the remittance market.

[TheTruth4]

Hope all the pluses that are came out from decentralization will outbalance all the money spending for security etc.

[Brangdon]

I still don't understand what costs you are talking about.

Some people like that when they buy online with a credit card, and the merchant doesn't deliver, they can ask for their money back from the credit card company. Those people would like a similar service if they pay with Bitcoin. I expect there will be Bitcoin cards that provide it. Someone will have to pay for the implied costs and overheads. Similarly people like knowing that they can store their money in a bank, and be sure of getting it back even if the bank goes bust. Those kinds of guarantees cost money.

What I hope is that these services will be available, but they'll be optional, and it will be the consumers choice whether to use them and pay the fees.

It's also worth noting that Bitcoin fees are currently low because miners currently get paid by the block reward. As the block reward halves, the miners will get less revenue from that source. They may want to increase the transaction fees to compensate. I don't think anyone really knows what is going to happen to fees over the next 5 years.

[Unpopped]

Yes, definitly!!!

[ShakyhandsBTCer]

Don't use a service if you don't like its fees. People are always going to want their cut but it's about how much they take. If companies start getting greedy what would the point of using them? People can still send bitcoins amongst themselves freely anyway and that will never change.

Often times people are forced to use a certain service as it is the only one available to their situation.

One reason that payday lenders can charge so much interest (besides the high risk level involved in payday loans) is the fact that mainstream lenders will not lend money to these types of people.