Bitcoin is faster than credit cards, SWIFT and Western Union

9 comments

  1. BobWantsWhatBobWants - Reply

    Bitcoin isn’t faster than credit card. Bitcoin is going to require on average 10 minutes for 1st confirmation. Someday with more powerful computers blocks can be mined much much faster and blocksize can be increased to clear out hundreds of thousands of transaction in each block. For now, bitcoin takes 10 minutes for 1st confirmation.

  2. BerZB - Reply

    Talking about “settlement” when it comes to Bitcoin is a bit of a misnomer. Bitcoin has no inherent concept of settlement, unlike traditional banking. Rather, bitcoin operates off levels of cryptographic trust.

    When you send out a BTC transaction, you have to wait for confirmations. The more confirmations you have, the more likely it is that your transaction is valid and irrevokable. Past a certain number of confirmations, it is mathematically unfeasible for a transaction to ever be revoked — it’s at this point that most would consider the transaction “settled” in the context of traditional banking, but there is no magic “settled” switch (and some merchants consider 1 to be adequate, some want 6, some could arbitrarily want 100).

    So on average, Bitcoin reaches the point of irrevokability far faster than any traditional payment system. But while this may be useful for exchanges, banks, international wire transfer systems who use BTC to send currency across borders — it doesn’t matter at all to consumers or merchants.

    When a buyer goes to a store with a debit card and slides their card, from the merchant’s perspective the transaction is essentially guaranteed (there are chargebacks, but that’s another matter) and the buyer knows the money is gone. The VISA/MasterCard network may take longer to finally settle the transaction on the backend, and the money may take a bit to reach the merchant’s bank — but that isn’t what either side care about. They care that the transaction is near-instant, and for all intents and purposes irrevokable due to guarantees by the card issuer and payment network.

    Bitcoin doesn’t yet have this level of service. For buyers and merchants, bitcoin /sucks/. You can sit and wait for confirmations, or just let the buyer go and hope they don’t screw you somehow.

    LN will fix this (Real Soon Now (TM)) by providing an extra layer that does provide the realtime irrevokable transactions that existing payment networks already provide, which will give us the best of both worlds and like see a much more widespread adoption of bitcoin transactions at local and online merchants. But we’re not there yet, by any means.

    *EDIT: To help some folks who are unsure of the parallels between Bitcoin and traditional banking…*

    * BTC = Currency (USD, EUR, GBP, etc)
    * Blockchain = Transfer Network (ACH, Wires, SWIFT)
    * Lightning Network = Payment Network (VISA, Mastercard, Discover, AMEX)

    Those are the closest analogies I can think of. Often times people think of sending bitcoin as making a “payment” but the reality is that the closest thing to traditional banking is a bank transfer. LN will provide an actual payment network, and in the spirit of competition I hope many others eventually sprout up as well.

  3. BTCMONSTER - Reply

    excuse me? this is the most ridiculous article i ever read lol, im not anyone’s side but please be neutral and transparent.

  4. cryptohazard - Reply

    I just disagree on Western Union. It might depend onthe country but if you can send the money online, it is very very fast. Less than 10 minutes.

    Also, I don’t see why they speak so much about fees since theyare comparing just the speed.

  5. varikonniemi - Reply

    Yes, only systems that function inside one entity are faster, like banking between accounts in the same bank.

    Bitcoin is completly revolutionary in that it allows everyone on the planet similar speed, and with lightning identical speed.

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