If we both join set up accounts at a regular bank like RBC, we can exchange $1B for free.
The point I'm making is that fees are not bitcoin's strong point. Any financial network can undercut it. What is unique about bitcoin is that not everyone can get an account at RBC, but anyone can join the more expensive bitcoin network.
If somebody breaches your Canadian bank account you get your money back. If somebody steals your money from your bitcoin wallet you start all over again.
Canada’s banking industry avoided the Great Recession only because Canada did not have a housing market reset. Prices continued upward unabated, along with household debt which is now among the highest in the world. They kicked the can down the road, but didn’t avoid the issue permanently.
The border was controlled by corrupt Russian guards that would steal things of value. You could pass the border occasionally to visit family on the other side, but it was risky to take anything.
He put all his wealth into bitcoin, memorized his wallet seed words like his life depended on it, crossed the border with nothing, and then regenerated his wallet on the other side.
I thought that was pretty cool.
You're not always able to do that with the traditional banking system. Scammers were able to steal millions from corporations using wire transfers, and they weren't able to reverse them.
If you have a billion dollars, you have very little incentive to work outside the system. The system will work for you.
Insurance in this example has two functions:
1. Protecting you from losses
2. Applying standards to Bitcoin exchanges etc to help prevent losses. A good example of this is fire insurance. An insurance company will require a potential customer to have fire alarms, use specific materials etc before they decide to cover that company's building.
Example: https://www.clickorlando.com/news/2018/05/24/central-florida...
Try sending $1B around the world to your Nigerian uncle and seeing what happens.
Let me give you an example which I know exists: EU airliner buys an airplane at Boeing. How do you transfer the money?
This is how they do it today: They are at Boeing where the transfer needs to go through. The money needs to be transferred then and there. So airliner calls their bank to transfer the money. But there is a 9 hour difference, so they need to wait when EU bank opens, but before the US bank closes. Call the bank, transfer first to UK bank (I can't remember why they had to do this :(), confirm money is there. Then transfer from UK to US, confirm that the money is there. This all before the US bank closes of course. Very cumbersome and James Bond like.
And I'm not an expert in international money transfers, but I'm guessing it's not 0.
As for the transfers themselves, they are typically free. You’re such a big customer to the bank, and so is the recipient to their bank, that the banks are earning their money without taking transfer fees.
The most important part, and the reason things like bitcoin will never replace old school banking, is that you can roll the money back or cancel if you decide to walk away from the deal like Norwegian just did for 90something Boeing aircraft that they can no longer afford because of corona. Sure you’ll spend a few years in legal, but that’s besides the point.
Except for the fact that this is exactly how it works today.
So you are in the airline industry? You know first hand how airliners buy airplanes. Please explain to me how it happens at your end.
Because what I explained is first hand knowledge on how it actually works. (Boeing 787 Dreamliner)
You assume, I know.
When you buy a plane, perhaps you have already payed months ahead, perhaps you'll pay five years later, perhaps you pay on a monthly basis, perhaps you don't pay at all but transfer the rights do to something
it is all contractual obligations, sometimes money does not even trade hands
etc.
the idea that you would need to wait for a bank to open to transfer money while watching the timezones is completely unrealistic
So you are in the airline industry? You know first hand how airliners buy airplanes. Please explain to me how it happens at your end.
Because what I explained is first hand knowledge on how it actually works (this was a Boeing 787 Dreamliner)
You assume, I know.
$50 + a few basis point spread if using a different currency, but you don't know exactly what that spread will be from the sending bank and what the spread will be at the receiving bank, so you can lose anywhere from .001% to 4% with major currencies.
Do have any proof of this claim or is it extrapolated from the fees for sending $200 to another RBC account?
Source: I've worked in banking and seen this even on the personal level (not at the $1B level of course).
I mean if I transferred a billion and my bank made a mistake, I would not lose any money. Make a typo in your bitcoin transaction, and you're screwed.
I think that they are making the point that they actually are free of charge. Fees for moving money at banks are negligible. They might not actually be entirely free, but wire transfer fees are ~$20, and I've moved a million dollars this way before. I don't know if there's much of a difference between a million and a billion in this context.
That's right.
An "on-us" transaction, one that simply requires RBC to update its database by debiting funds from RBC customer A and crediting them to RBC customer B, is free. (If your bank is charging you for that, switch banks!).
A wire transfer is more complex than an "on-us" transfer because it involves two bank database. RBC has to debit its database, and Bank of Montreal has to credit its database, and the central bank is usually involved as an intermediary. This often involves a wire transfer fee.
There's a billion dollars difference between a million and a billion. You can't just plop a billion dollars into your checking account. It's part of a hugely complex context (how would you even accumulate a billion dollars to deposit?)
Not really, bitcoin addresses have checksums.
And, barring a collusion of miners, virtually noone could have prevented or reverted that transaction.
Now if you're trying to avoid income tax or something like that that's a different question, but then using Bitcoin doesn't magically make that disappear either.
Sales or gift taxes could apply. So could import /export taxes depending on the endpoints. Could it appear as income/gains to one party or another? etc...
of course it can often be structured to avoid such taxes, but it requires forethought.
I wouldn't even think of making a $multi-million move without first consulting a very high end attorney in the appropriate field.
If it was an efficient way to cut on fees, everyone would do it. Yet almost nobody does.
Making capital transfers easy while restricting the movement of real people ghettoizes and traps people for corporate convenience and cost savings.
Capital doesn't put a drain on the social welfare systems of the country you're sending it to.
And I'm definitely not saying that the current generation of crypto has figured this problem out, but I am hopeful for the sake of SMB that they won't always have to pay 3% fees on cashless transactions.
Want to order food online? That’ll be 30% on top of your order, please.
Oh, you wanted to pay for some bits through our app on your iPhone? Apple will take 30% of that too, thank you very much.
We just switched HOA management companies and they had the audacity to charge a three dollar convenience fee if you pay your bill online! So I will just continue to pay via paper check and make life miserable for them because that incurs no fee.
All I see is hypocrisy and more hands in my pocket wanting my money, not less.
Filecoin (the currency) exists on top but is completely independent and unnecessary to make use of the underlying utility of IPFS.
While bitcoin is a bit of a monolith even it has utility beyond currency as you can write information along with your transactions. An example is [ION][1] an identity service pegging state to transactions wiring to the blockchain and so long as bitcoin holds value you can have high certainty this information will not go away or be modified.
There are trade-offs to everything but often the benefit of crypto projects is lost when they’re viewed as currency rather than utility. Look at the forest not the trees.
[1]: https://techcommunity.microsoft.com/t5/azure-active-director...
Rich people don't have to care about a 20$ fee. Poor people do though.
There’s no way it’s then suddenly a cost effective way for normal currency billionaires to move money around. Converting that amount to BTC would require serious fees and resources.
So this point is largely moot to any wider discussion.
So stop caring and move on to whatever it is you want to do with your life.
Cryptocurrency's obsession with fees is baffling. Fees are not why moving money is hard.
Satoshi intended for bitcoin to scale to hundreds of millions of transactions, all paying sub cent fees. All those fees would add up to millions of dollars per day. The fees are what secure the chain when the block reward runs out. Around 2014/2015 some devs who worked with blockstream started campaigning to keep the block size limit at 1mb. They succeeded and now bitcoin can only process an average of 350k transactions per day.
In order to provide the same financial incentive to miners when the block reward gets too small to matter, the minimum fee on the network will need to be $25 per transaction.
But ye, horray, this whale got to send big cash for a "low fee"
Running a full node is the only way to assure the integrity of the currency. Increasing the block size decreases the number of people that run full nodes. It's obvious to anyone who works on Bitcoin that a linear increase to blocksize can never scale, while maintaining an open and decentralized environment.
Another method is to use cryptographic proofs to demonstrate the validity of a blockchain state. A lot of newer projects are taking this approach, such as the project I work on, Mir Protocol.
Granted, it doesn't seem like a realistic option for Bitcoin. The community doesn't seem very open to major protocol changes, and even if it were, cryptographic proofs for Bitcoin might be prohibitively expensive since the protocol wasn't designed with that in mind.
where is the evidence for this? complete bullshit. How much fewer people would run a full node if the block size was increased from 1mb to 2mb?
Doesn't completely de-anonymize you but it does reduce the set of people who have uniquely identifiable information to 1
Anonymity - the quality of the user being unknown
Privacy - the quality of the user's actions being unobserved
Authenticity- the quality of the user's actions being certainly the user's
Bitcoin provides pseudonymous transactions, which may approach anonymity if the user is careful. It does not provide true privacy as all transactions are public. But the purpose of the transactions is not communicated, though may be inferred if the parties are identified. If I transfer $20 in BTC to a pizza joint, you can guess that I bought a pizza, but it's just a (well-founded) guess. It provides a high degree of authenticity in that it is a hard problem (in the mathematical sense, unless your keys have been obtained by an adversary) to fake a transaction.
We're having a discussion about an unknown account - which may or may not be an individual person - moving specific amounts of money around anonymously, not privately.
I get what you mean, the transaction is public, but that's the point of bitcoin / cryptocurrencies.
Also, even the fact that we're discussing the existence of this transaction implies that Bitcoin is not anonymous.
Your house has to be registered to someone and you have to declare who lives in it, if it's yours.
Anonymity is not about being a private person.
I don't think this is true in every jurisdiction. You can certainly have a property registered under a corporate entity, and there are jurisdictions in the US that allow for anonymous corporate ownership. Further, I'm not aware of any requirement where you must declare who is residing in a property. I've had family members from abroad reside in my house for over a year without informing any authorities, for example.
If you have tons of illegal money it's not the worst thing to live in a ~~ 'moldy' apartment and eat SCSI every day and know that you _really_ have a __ton__ ___of___ ____money____
Learn to be a criminal, theoretically of course
The fun bit is that the signer can backdoor transactions, and that part isn't something that can be verified by anybody who doesn't have the private keys.
Can you explain this? This is contrary to my knowledge of reviewing the details of a pre-signed transaction.
This is only detectable if you have multiple signers signing the same transaction using the same private key and the same method for generating the nonce, and you compare them before broadcasting. So perhaps using hardware wallets from 3 manufacturers which all implement bit-identical implementations of the signer (with RFC6070 deterministic signatures), and treating the signed transaction as a private key leak until you've verified they all match.
For ECDSA a single bit bias in the nonce, or a single bit leakage of the nonce through other methods is enough to completely break the cryptography. So we could have hardware wallets that produce otherwise impeccable transactions and signatures, but leak a bit of the nonce in the ordering of the outputs, the lock time, the sequence numbers, and that would still be enough to steal all of the funds.
This stuff is trickier to get right than most people imagine.
And if you fat-fingered the transaction, you could have transferred $0.48 for $1B in fees with no way to reverse that.
2. In all likelihood this is someone manually crafting a transaction. It's not going to happen to your typical user (eg. your granny). A better analogy to this situation would be someone's trading bot going awry and losing thousands/millions on the market.
https://learnmeabitcoin.com/guide/checksum
The thing to be really aware about is insidious malware that detects valid bitcoin addresses being copied and modifies them in place, sometimes even to the point of including the same first/last alphanumerics to a certain degree.
You'd hopefully be using a bootable linux distro and multisig for transferring such amounts.
But, bitcoin is free of oversight or centralized control, which was the exact point of the system.
Yeah I’d rather have bitcoin. Bitcoin removes the need for banks altogether. I don’t want the banks and government in control of my money.
High fees are, in fact, part of the security model. The reward for "mining" a block will eventually dry up, so "miners" will be funded more and more by fees. Unless people are paying billions of dollars a year in fees, the financial incentive for "miners" will be too small to protect from bad actors.
Bitcoin can only have low fees if it both remains unpopular and dies before the block rewards dry up. Recommending Bitcoin because of its low fees is trying to sell it by predicting its failure.
Now if they can hammer out the volatility, figure out a simple UX, encourage adoption at most places of business, and increase trust in exchanges for USD conversions, I'm on board.
Maybe it's different for higher amounts of money, but it doesn't matter.
Bitcoin is a solution to a problem nobody has figured out yet.
We have a rough idea of which coins belong to Satoshi, based on when and how they were mined.
Satoshi's coins are continuously monitored and have never moved.
I'm sure it's one of those tasks that'll cost a lot more than all the available energy in the universe kinda scale though.
Edit: A lot of people here are saying "I do not pay for it so it is free". Just because you don't pay does not mean it is free for everyone. The law just states that fees must be the same for domestic and EU transfers, not that the transfer is free and, there are countless examples of regions where there are no banks that charge nothing (especially regions where a lot of intra-EU immigrants come from).
If your bank is charging differently for transfers to euro denominated accounts in other countries, complain to the regulator. This isn't allowed.
B) The "target" bank can still charge you independently of your bank.
E.g. (and I do this kind of transfer very very often so I am 100% sure it is so and I am also 100% sure this is legal): A transfer from Germany to Germany is free. A transfer from Germany to Greece is not as the Greek bank charges a fee.
Yes, miners can read the metadata of a transaction, in transfers that includes the amount being moved, miners do not care about that.
It is important to understand that "transactions" in this context is the same as a database transaction. There are many kind of transactions, some of which include the movement of bitcoin from one address to another.
(Seems I need to review bitcoin transaction mining. Suggestions for a good resource on that?)
The transaction fee isn't set by the amount but the size (a large and small number take the same space). A larger transaction can for example be created by combining many inputs (spending from multiple addresses in a single transaction).
The fee isn't set by miners, but by the user who makes the transaction. If there's competition in the block, which there usually is in Bitoin, then you need to guess a large enough fee and if you get it wrong your transaction can get stuck and not confirm for a while.
Transaction value is known to everyone, which is one of the whole primary points of Bitcoin.
Them being visible seems to raise interesting attacks, such as an individual being doxed and then unable to have their transaction verified/accepted.
A sibling comment suggests Monero have addressed this.
Edit: If 51% agree not to process any transactions for accounts holding >$1M worth of Btc can they steal financial value? Like a stock buyback but you pay zero to the holder and get the stock anyway.
Well, that depends. If there is extra space in blocks, then yes the fees tend towards zero (or very low costs, at least, zero is not exactly accurate, even in cases where there is extra block space)
If blocks are "full" and there is more demand for this space, than there is extra space, then they do not tend towards zero, as transactors are bidding on a limited supply of space.
