Bitcoin is completely changing how people remit money. (And that's a good thing) \ stacker news ~bitcoin

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Bitcoin is completely changing how people remit money. (And that's a good thing)

2776 sats \ 34 comments \ @expatriotic 16 Mar bitcoin

My go-to setup right now is to buy bitcoins with Alipay via HodlHodl escrow. Then if I need fiat, I sell via Peach and get Euros into my Wise app. This lets me spend fiat when I go home to the US or if I need to send money (aka fiat) to someone. E.g., my grandma has been on a fixed income for decades and I've started sending her a few hundred dollars a month. This setup allows me to do that easier than if I wanted to send Chinese Yuan directly to her. I call my guy in China (actually I telegram chat him) and 5 min later I have my sats. Then it's as simple as sending some UTXOs to Peach for someone to buy with Euros. And Wise will help me send that home as USD.

Now, let's say you are a high-net-worth individual (HNWI) that wants to send millions or billions of dollars. Want to send $5 million from the US to your business counterpart in Japan? On a weekend? At night? On a bank holiday? You can do this for a few dollars. The fee would depend on network traffic and the number of UTXOs.

In the transaction below the sender sent roughly $1 billion for the price of a coffee. The transaction is visible here at blockchain.com Here's the tweet about it:

"112,027 BTC ($933,000,000 USD) transferred in a single transaction for the price of a cup of coffee (Tx fee = $3.89). #bitcoin https://t.co/7zFzSRItFf — Nejc Kodrič (@nejc_kodric) October 14, 2019"

Bitcoin is replacing an antiquated system. One where it requires bank tellers, forms, permission, working days, and wire fees to send money. Now you just need a cellphone with your bitcoin on it and a receiving address. Sending remittances (sending money from one place to another) is a huge industry today. It's projected to reach almost a trillion dollars globally by 2026. https://www.globenewswire.com/news-release/2020/05/05/2027690/0/en/Remittance-Market-Size-to-Grow-930-44-Billion-Globally-by-2026-At-3-9-CAGR-AMR.html

Yet in 2011, only two years after Bitcoin was born, someone sent 500,000 bitcoins over the Bitcoin network. At the time, this represented $1 million dollars worth of value. But today that would be worth a cool $14 billion.

Bitcoin is especially king if you are sending money home to family. Remittances are a primary source of income for many countries. In Tonga, money received from family accounts for over 40% of their GDP. In El Salvador it's in the low 20s. data.worldbank.org

And funnily enough, these are the types of countries--Tonga & El Salvador--that push for Bitcoin adoption. Why do you think that is?

El Salvador’s new bitcoin plan could cost money providers like Western Union and others $400 million a year, says President Bukele. CNBC

You can stop paying 1-25% on remittances (depending on country and method of payment) and pay a small fee to miners. Or use Jack Mallers' Strike app. With it you can send small amounts of money with very little fees to places like Vietnam, the Philippines, Nigeria, and Ghana. Family members can receive their local currency directly to their flip phones. And it's powered by Bitcoin's Lightning Network (A second layer solution created to help Bitcoin scale).

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235 sats \ 12 replies \ @elvismercury 16 Mar

In the transaction below the sender sent roughly $1 billion for the price of a coffee.

From time to time I wonder if we'll get to a point where miners will form cartels and charge a percentage of tx to include them in blocks. This seems absurd right now -- even paying any fees at all seems unnatural to many. And economic theory would seem to preclude it ('mining is a race to the bottom.')

But of course economic theory has profoundly failed to describe what happens in the real world for as long as economic theories have existed. And so I continue to wonder. I expect this will seem not absurd at all when a) the block reward has become negligible, and if b) real btc economic activity becomes substantial.

1034 sats \ 3 replies \ @Bell_curve 16 Mar

Economic theory says that collusion or cartels are temporary because one member will cheat

10 sats \ 2 replies \ @Undisciplined 16 Mar

And this is what usually happens. However, OPEC has been around for a pretty long time now. I'm sure some cheating goes on, but it hasn't been enough to dissolve the cartel.

With respect to bitcoin miners, it's so decentralized and relatively easy to enter that I don't see cartels being feasible.

If anything, I'd expect to see many operating at a net loss much of the time.

24 sats \ 1 reply \ @Bell_curve 16 Mar

OPEC today has more members yet is less powerful than in 1973 or 1979.

A big reason is greater oil production in non OPEC countries such as USA.

China tried to ban bitcoin mining ⛏️ in 2021 but miners relocated elsewhere.

A similar attempt to ban mining in USA with a 30 percent energy tax proposal.

10 sats \ 0 replies \ @Undisciplined 16 Mar

The US ramping up production is the other reason cartels tend to fail: an inability to prevent outside competition.

58 sats \ 2 replies \ @TwoLargePizzas 17 Mar

When we assume the block reward will become negligible what we're actually doing is projecting out today's purchasing power of the reward and concluding it's tiny.

I think that's the wrong way to think about it. Even though the reward will eventually be measured in sats. Those sats should be worth a lot more in purchasing power terms.

Currently the reward is 6.25 BTC. Using the fiat price as a proxy for purchasing power we can conclude that's worth about $400k. Compare that to the cost of electricity and we get the purchasing power.

What happens in a few halvings when the block reward is only 0.78 BTC? If we assume the purchasing power remains the same we conclude the reward is negligible. But it's a different story if 0.78 BTC can still buy the same $400k worth of electricity (in today's terms)

0 sats \ 0 replies \ @elvismercury 17 Mar

Agreed, this is a crucial question.

0 sats \ 0 replies \ @expatriotic OP 17 Mar

Genius. Although this doesn't solve the problem of, "it's cheaper to buy spot than to mine", but still good to remember

37 sats \ 4 replies \ @positronic_bot 17 Mar

Not sure I understand. There are already fees to get your transaction into a block. That's how the system works. It's not percentage though. Also that would be considered an attack on the network.

128 sats \ 3 replies \ @elvismercury 17 Mar

You can imagine a miner saying "Oh, you want to move a billion dollars? That's going to cost you more than $3." If there aren't many miners, collusion to enforce price floors does not seem infeasible. It occurs in other industries, like oil and pharmaceuticals, for instance.

10 sats \ 2 replies \ @positronic_bot 17 Mar

Just like you could imagine whoever needs to move 1 billion dollars would have a decent hashrate so as to not being taken hostage.

10 sats \ 1 reply \ @elvismercury 17 Mar

It's an imaginable thing; but having to own your own hashrate to transmit money would be a wholly new paradigm, and is nearly isomorphic to simply paying the ransom.

37 sats \ 0 replies \ @positronic_bot 18 Mar

Agreed, this is a new paradigm. My prediction is that nation states, corporations, central banks, high net worth individuals etc will all participate in mining, in order to avoid censorship or attacks on consensus rules. Increasing decentralisation further as a result. Like clockwork.

130 sats \ 10 replies \ @DarthCoin 16 Mar

People should demand to be paid in Bitcoin. STOP using fiat by any means. For more we prolong the use of fiat, more painful will be.

20 sats \ 9 replies \ @expatriotic OP 16 Mar

Well my grandma is 80. ;)

154 sats \ 0 replies \ @Bell_curve 16 Mar

Good excuse

Only 80? She is younger than president Biden

230 sats \ 7 replies \ @DarthCoin 16 Mar freebie

Why people always bring up the grandmas? Grandmas will die soon anyways. Exclude them from Bitcoin. Take their money and convert into Bitcoin. Do not try to teach them Bitcoin, is NOT gonna make it! Focus on young ones... Done. https://m.primal.net/HhyU.mp4

35 sats \ 6 replies \ @expatriotic OP 17 Mar

Because my grandma needs money and she can't accept bitcoins. So your argument is invalidated. There ARE use-cases for fiat. I save 100% in bitcoins. And I was just able to buy my planetickets with BTCPay using CheapAIR. But the school I work for will absolutely NOT pay me in bitcoins, nor do I expect them to...

Fiat sucks, and that's why 100% of my savings is in bitcoins... But sometimes we spend in fiat... it just happens.

E.g., my wife is Indonesian. They have a law that you cannot use bitcoin to purchase things, only rupiah, the national currency. So unlike the US where you can use bitcoin to buy something but then need to (if you pay taxes) consider the cap gains taxes, in Indonesia there are ZERO vendors willing to take bitcoin for goods and services. So what do I use to eat at a restaurant or go to the market? Fiat...

You can keep shouting "demand to be paid in bitcoins..." but 🤷🏻‍♂️

Also, arguing that my grandma will die soon isn't the way. We live in the world we live in, and we fight to turn it into the world we want our children to live in. But we ain't there yet friend.

100 sats \ 5 replies \ @DarthCoin 17 Mar

They have a law that you cannot use bitcoin to purchase things.

Laws... That's how they keep people in fear. This way we will never gonna make it. These are the people that will be first in accepting CBDC and then.. game over. People nowadays are just obedient slaves. I don't even know we are struggling so much. Just saving in btc but still using fiat is worthless. FIAT DELENDA EST

10 sats \ 4 replies \ @expatriotic OP 17 Mar

Right but if zero vendors accept bitcoin because of the law... It still has an impact.

That's where regulatory arbitrage comes into play.

Moving to the place that has the least bullshit law.

No offense but your whole, "laws don't exist if you don't give consent" is a bit rubbish.

Try moving to North Korea and telling them you don't consent and want to use free internet and not be oppressed

100 sats \ 3 replies \ @DarthCoin 17 Mar

I survived 20 years of communism. I know very well what is tyranny and oppression. That's why I am so against it. I fought all my life for freedom and nobody can take it from me. It is freedom or death. I will nevef obey any law imposed on me except the natural law. I was kidnapped I was forced but I never give up. Obedience is not the way. Is a duty. If you choose to obey it's your problem, not mine. But don't complain. You lose the right to complain if you obey the master.

35 sats \ 2 replies \ @expatriotic OP 17 Mar

I feel like you're not understanding me. Zero vendors in Indonesia accept bitcoins as payment. Full stop. Do not pass Go, do not collect $100. This isn't about obedience to fiat overlords. This is about the adoption curve, and the ability of scared politicians to leverage their power to make the environment more difficult for Bitcoin to succeed. How are you going to tell an Indonesian or expat in Indonesia that only buying and holding bitcoins is not the way, they need to spend it for everything when, literally no one (because of a law) accepts it as payment. The only solution for someone with your ideals is to run away to somewhere where people can't tell you what to do, but that isn't a solution for everyone, to run and hide. Some people find themselves in a country where Bitcoin adoption is extremely limited. Whether due to laws or not, and so they end up needing access to some fiat for spending for basic needs. Things like power, food, gas, hospital bills etc efc.

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119 sats \ 3 replies \ @justanumber 16 Mar freebie

The MP in Tonga (Lord Fusitu’a), who was pushing for Bitcoin adoption, sadly died last month. He was very young. Not sure what this means for Tonga now.

https://www.rnz.co.nz/international/pacific-news/509958/tonga-s-lord-fusitu-a-laid-to-rest

https://www.kanivatonga.co.nz/2024/02/lord-fusitua-dies-in-auckland/

https://en.wikipedia.org/wiki/Mata%CA%BBi%CA%BBulua_%CA%BBi_Fonuamotu

100 sats \ 0 replies \ @DarthCoin 16 Mar

In fact he was just a grifter, looking for his personal gains from DeFi scams and shitcoining. Not at all a bitcoin fighter.

https://m.stacker.news/21123 https://m.stacker.news/21124 https://m.stacker.news/21125

0 sats \ 0 replies \ @gmd 16 Mar

Damn I used to follow him on twitter and heard him on clubhouse back in the day... Sad to hear he passed. Cancer sucks.

0 sats \ 0 replies \ @justanumber 16 Mar

https://www.nasdaq.com/articles/bitcoin-and-tonga-with-lord-fusitua-2021-07-06

127 sats \ 1 reply \ @DiedOnTitan 16 Mar

Good write up on remittances.

El Salvador’s new bitcoin plan could cost money providers like Western Union and others $400 million a year,

That's ~2% of their GDP. That is a huge savings. Major head winds for Western Union - taxing the least privileged. And that's a good thing.

10 sats \ 0 replies \ @expatriotic OP 16 Mar

Thanks!!

31 sats \ 0 replies \ @KLT 16 Mar

Great read!

21 sats \ 1 reply \ @cryotosensei 17 Mar

Lovely read. I loved how you extended your personal experience to give a broader perspective of the role of Bitcoin in various countries. Keep writing 👍

0 sats \ 0 replies \ @expatriotic OP 18 Mar

Thanks!!

21 sats \ 0 replies \ @Bell_curve 16 Mar

Impressive use of apps to send money