"Everybody talks about PayPal...
'It's like PayPal, but free!' ...etc.
But I've come to realize that PayPal is a poor analogy.
Skype.
Why did Skype take off? It was because families sundered by borders could talk to each other for free. The largest percentage of Skype early adopters were South Americans with family members who immigrated to the U.S.
By the same token (and somewhat depreciating the silliness of Silk Road), I think cross-border and cross-currency transfer of funds is what will - sooner, rather than later - prove to be the killer app for Bitcoin.
Just as with Skype, there's nothing even remotely in the same ballpark. The technical know-how and hardware requirements for Bitcoin are really pretty analogous to what Skype was, at its beginning. The usefulness of Bitcoin is roughly the same as Skype.
There are certainly valid and important political uses for Bitcoin: donations to disapproved organizations (Wikileaks, OccupyWallStreet, etc.), donations in anonymity, cheat-proof donation recording, and many others.
But sending fifty bucks back to grandma in the old country (or vice versa) is where more effort should be applied. Because that's what people are going to be using."
-Anonymous
Sunday, October 16, 2011
Bitcoin is the Next Skype
An anonymous comment was left on one of my posts, but vanished, for some reason. I'm going to re-post it here (I still have it in my email), because I think he/she made an excellent point:
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I was wondering what happened to that. Thanks for re-posting.
ReplyDeleteIt was only a few days ago I realized - due to one of your posts, GoWest - what a ferocious price difference there is in getting money from the U.S. to (for example) the Czech Republic; between Bitcoin and regular bank transfers (with exchange fees, transfer fees, etc.).
And how those who need a service like that are generally those who can least afford a 20% (or so...) hit.
BTC > MtGox = 0%
MtGox > CZK = 0.6%
CZK to Czech bank = NotMuch (depending on how quick)
Somebody should put an App together to automate that process.
It would get used...
Let me expand on that. Here's the App:
ReplyDelete[Assumptions: 1.) You have some Bitcoin 2.) You have an account at MtGox 3.) You have enough of grandma's banking information to have MtGox transfer money to her bank account]
The App has this information stored: your Bitcoin Wallet info, your MtGox account info, MtGox's money withdrawal fee schedule, and grandma's bank info.
It has three input windows:
1.) A drop-down that allows you to choose either "Take this many BTC from my Wallet", or, "Take this many BTC from my MtGox account".
2.) SEND TO: A drop down list of addresses from which you pick grandma.
3.) PAY FEES/TIME: A drop down list that lets you pick how fast you want the money to get there: faster equals higher fees. Slower is pretty cheap.
Click 'SEND'.
I've got to believe that - for Android anyway - people would pay $1.99 for that App. Probably a lot of people.
And the exchange rate doesn't really matter much, does it?
It turns out that the spam filter caught your post, probably because of the word "PayPal" appearing twice in close succession.
ReplyDeleteThe app you describe would definitely be killer. It makes you wonder why the rest of the world hasn't figured it out yet. I think it's a combination of negative media-coverage and plain old skepticism.
At some point, there will be enough users in the game such that any general feelings of skepticism will be outweighed by the realization that if millions of people are doing it, it must be good. This is called a tipping point, and it's coming...soon.
You actually wouldn't save any money by sending money internationally through Mt.Gox.
ReplyDeleteIf you look at the non-USD spreads, they've actually integrated the 2.5% currency-exchange fee.
For example, I just got these numbers all at the same time:
Bid 2.22 USD
Ask 2.23 USD
(a 0.2% spread)
Bid 13.84619 CNY
Ask 14.57984 CNY
(a 5.3% spread)
So, if you were to deposit funds, buy BTC, and sell them into a different currency, you would be paying 0.6% + 2.5% (or more depending on the spread). Then you pay whatever wire fees are associated with the withdrawal method.
The Mt.Gox people are smarter than they look! =)
Skype extended and embraced the open and standard world of VOIP in a Microsoft-esque fashion. Later they were purchased by Microsoft. A poor comparison IMHO.
ReplyDelete