silverpv wrote:Rodebaugh wrote:So fees for small transactions are to blame?
How do fees compare to the 0.5-3.5% credit card companies charge retailers per transaction? Who does this fee go to and can it be avoided? Why were some retailers so keen on acceptance early on dropping off now?
Fee's are simple depending on the currency used. Bitcoin is not good for smaller purchases, it is getting more expensive and slow. On the otherhand there are other currencies where the fee is only a few cents to transfer decent amount of cash, say a < $3k. This fee goes to the computer network processing the transaction, so the people running the 'supernodes' or 'miner' or 'validators' or 'stakers' depending on what type of incentive mechanism they are using. That goes towards the cost of electricity and server cost. This type of cost can't be avoided because there is a cost to run machines, buy them, and the internet. Most CC companies charge a std of 2.9% + $0.30 is enough. The $0.30 is the same thing but nearly 10x the cost vs crypto. Ethereum will typically move blocks at $0.05c or so for several thousands. You can choose depending how fast you want it to get confirmed. This is specifically for crypto to crypto transfer. If you do crypto to fiat, there's a fee for taking out liquidity.
The problem for retailers is when there's a network slowdown the costs to transaction goes up and the price of the currency fluctuates. Just like the internet in the early 90's. Sometimes retailers aren't ready for it because their infrastructure is not ready, it doesn't fit their model, or the cost to rebuild everything from scratch is too high. The cost over time comes down as experience gets better and the costs come down. For instance, in the 90's what was the cost of internet, a phone line for 56k? Now what do you get for the same price for VOIP phone and internet?
Currently there's a batch of blockchains that aim for business. Bitcoin is a volatile currency, Ethereum adds business logic on the public network, newer blockchains are focused for business problems. Ethereum requires you code everything from scratch in a new language where there's not a lot of expertise. The newer chains recognize this problem and built compilers in the blockchain to build "off chain", "side chain", "private chain" logic. If a company runs it internally there are no fees. Developers can use a familiar programming language they already know so and the complier translates that to blockchain code there is a move in this direction in the works and where i'm investing. The question i'm asking is who will be the top companies that execute on point.
Thank you. I appreciate the response and time taken to type it out. I learned.
I have a ton more questions for another day....or some independent research to do first.