[Cryptography] What has Bitcoin achieved?

[ianG]

On 23/06/2014 09:20 am, William Muriithi wrote:
> 
>>
>> Cash issued by anyone except the government is beyond most people's
>> minds, but it works and exists, it has existed for a long time, and you
>> don't have to go far to find it.
>>
>> The point I think that you're missing here is that people accept that
>> which works.  In Kenya they have a thing called mPesa which is mobile
>> money on the phone.  It works.  It is issued by a telco.  Nobody there
>> really questions it (except the banks) ... because it works.
>>
> 
> I wouldn't say that mPesa is issued by telco (Safaricom). Its based on
> Kenya shillings.  One just open an account and put the Kenya currency on
> the account. Its this currency that Kenya use for trading.


Well, the term 'issue' is generally to imply that one stands behind the
contract, in the sense of 'issuer.'  In this case it is Safaricom that
is the issuer of the unit, and they stand behind their contract (to the
extent they do, never really looked at those aspects).

The fact that the contract is a one-to-one derivative of the KSH doesn't
make it not-an-issue, but rather a derivative issue.  It's still a
separate issue, because or perhaps indicated by the escrow fund they
place with one of the banks.

The question then might arise, who is the issuer of Bitcoin, and what is
the contract?  Well, Bitcoin is like fiat in that there is no contract,
only demand factors.  Who the issuer is, is more like gold; there is
none, although one could claim it was NS and now Bitcoin dev team, who
can adjust the t&c by means of software.  This is an arguable claim
though, mostly specious.


> I like to look at it more like moneygram - a mean of transferring cash -
> unlike bitcon which is a currency by its own right in my opinion. I
> doubt it would be that widely used if its more like bitcoin.


Right, moneygram/WU is a form of transferring bank money.  mPesa however
is a separate issue.  You can transfer mPesa only from phone to phone
(actually, SIM to SIM).  To get bank money you have to convert or redeem
your mPesa.  To get mPesa you have to buy it from one of the many
agents.  Once bought, you can then take it to anywhere and sell it (buy
something) as long as your counterparty has a phone.  You can't do that
with moneygram.


>> If there is any mystification, it surrounds why Kenya has it and few
>> other countries seem to.  But that doesn't matter, not to them.
>>
> I think its due to the banks not being available to most people.  They
> used to have so many requirements that below average Kenya's wouldn't
> meet. For example, a minimum balance.


Average Kenyans don't do bank accounts, right.  Last I checked, the
price for a bank account is about the same as for western banks, so no
surprise there, about $5 per month, which is 1.5 days average pay.

Oddly, the banks in Kenya have enjoyed a surge in accounts, essentially
riding the wave that mPesa generated.  They should not complain.


> Then there is safaricom near monopoly. This and duo sim phones mean
> nearly every Kenya has safaricom sim card even when they use other telco
> for daily communication.  Its very hard for mPesa model to take hold if
> none if the telco has more than 2/3 of the market.


But that suggests why it succeeded in Kenya ... not why it was so hard
to push into other countries.

The reason is the banks.  Once they saw what had happened in Kenya, they
made darn sure it couldn't take off in other countries.

Coming back to Bitcoin, the same resistance will be seen with banks.
Same thing happened with other 'alternative' currencies before they
muscled into becoming mainstream (PayPal, mPesa).  It's a strategy, not
an accident.



iang