Úno 02

My Bank App is Better Than Bitcoin for Payments (And That’s Fine)

The cryptocurrencies are faster and cheaper narrative has fizzled out as banks have embraced digital payments in recent years, improving customer experience and usability. Sure, buying a beer with a QR-code may give you a warm and fuzzy feeling, but it isn’t the problem Bitcoin solves. It is much more than that.


Banks Go Digital

An all-too-common narrative a few years back was that Bitcoin (and other cryptocurrencies) would outcompete the likes of Visa and Mastercard with speed and cheaper transactions.

“Won’t somebody think of the merchants” was an often-repeated argument in 2014-215 because credit card companies typically charge around 3 percent service fee to process payments.

Fast forward a few years and merchants haven’t budged. Nor are they jumping on payment-focused coins either like Litecoin, Bitcoin Cash, Dash etc. So why didn’t they stick it to Visa and switch to ‘crypto’?

Digital fiat payments have actually become not only more ubiquitous but also much easier and cheaper. Though the latter is partially due to costs being offset by selling customer info to advertisers (which is a topic for another article).

Banks have indeed upped their game as far as user-friendliness goes with mobile apps, contactless payments, in-app integration, you name it. In fact, it’s never been easier to part ways with your money than it is today.

contactless payment nfc pay to swipe card

My Bank Card Beats Your Favorite Coin

My card, given to me by my bank, is tied to an app on my phone so I can check my balance and track all my balance and transaction history. I was impressed when BTC wallets did this six years ago. But banks have caught up fast and are beating cryptocurrencies in this arena.

The card/app work seamlessly together enabling contactless payments in the store, on public transport, and pretty much anywhere Visa/Mastercard are accepted, which is literally everywhere.

Sure, discussing Bitcoin is fun and all. But sometimes I just want a quick coffee without proselytizing Bitcoin to a barista who obviously doesn’t care about censorship-resistance and decentralized consensus protocols.

I should also mention that my bank has excellent customer support. It knows who I am and will block anyone else from using my account with the press of a button on my smartphone. My bank will refund me any money lost due to fraud – which is very reassuring unlike that uneasy feeling of possibly sending BTC to the wrong address by mistake.

What’s more, I can send money instantly to my friends for absolutely zero fees. And why wouldn’t it be zero? My bank is using a good old database after all – not your blockchain that takes minutes to confirm.

In other words, big blocks, small blocks, medium-sized blocks – none of this can compete when it comes to the speed and efficiency of a centralized database for payments.

My bank app even has a QR-code option for in-person payments if I’m feeling extra Bitcoin-ish.

The Problem That Bitcoin Solves

Bitcoin, however, wasn’t meant to compete with Visa or Paypal. Digital payments were already gaining traction when Bitcoin spawned from the 2008 financial crisis.

Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model.

– Satoshi Nakamoto, Bitcoin Whitepaper

Bitcoin was instead designed as an alternative to the central banking system that has historically abused the public’s trust. One hyperinflationary episode is all it takes and the money becomes worth less than the paper it’s printed on.

Bitcoin’s monetary policy, on the other hand, is completely transparent, its supply and inflation rate is known, and it’s the hardest form of money to ever exist. Yes, even more than gold because mathematical scarcity beats perceived scarcity. 

These attributes make it a money technology that has never existed before – and more importantly, removes the need to trust any intermediary.

In an article titled The Problem That Bitcoin solves, economist and The Bitcoin Standard author, Saifedean Ammous, explains:

[Paul Krugman] seems, mistakenly, to assume bitcoin is competing with consumer payment networks like Visa or PayPal….that is not what bitcoin is best suited for. Rather, bitcoin is an international settlement network, one that competes with the central bank settlement systems that are the foundation upon which networks like Visa or PayPal depend.

Therefore, the ‘payments for coffee on the blockchain’ narrative is dying because paying for stuff and accepting digital payments today isn’t a problem for people.

However, the public is also slowly realizing why Bitcoin isn’t going away. Particularly as publications like Time magazine release articles titled ‘Why Bitcoin Matters for Freedom’ and places like Venezuela are demonstrating how Bitcoin is literally saving lives.

That’s not to say that payments aren’t important. This and other use-cases will be built as ‘apps’ harnessing the trustless Bitcoin blockchain (e.g. Lightning Network). But they’re secondary to what’s really at stake here in an increasingly authoritarian and cashless fiat system: financial sovereignty.

Do you agree that Bitcoin’s primary role is to preserve financial sovereignty? Share your thoughts below!


Images courtesy of Shutterstock

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Dub 18

Japanese Bank Acknowledges Mijin Blockchain Infrastructure Test




Source: bitcoin

Bitcoinist_Mijin

Various financial institutions and blockchain providers are testing distributed ledger technology solutions these days. Tech Bureau Inc. provides blockchain infrastructure through Mijin, and their blockchain infrastructure was successfully tested by SBI Sumishin Net Bank.

Also read: Bitcoin Price: Stagnant or Satisfactory?

Mijin Blockchain Infrastructure Field Trial

It is worth noting this field trial of Mijin blockchain infrastructure was not a typical trial of securities system, but rather to see if the blockchain can be a viable accounting system for financial players. SBI Sumishin Net Bank was curious to find out of a customer blockchain can replace the centralized ledger currently employed by the bank.

As it turns out, a total of 2.5 million virtual bank accounts were created, and the Mijin blockchain infrastructure managed to process 90,000 transactions per hour. To ensure the system was stable enough, six different nodes were set up across Amazon AWS servers, and a stress test was conducted to determine system availability and fault tolerance.

Although many people suspect various banks around the world have been conducting similar blockchain experiments in recent times, very little information has been made publicly available. SBI Sumishin Net Bank is the first to acknowledge openly a successful ledger trial through blockchain infrastructure, as provided by Mijin.

Dragonfly Fintech’s Lon Wong stated:

“The outcome of the test shows that blockchain can be used for the core banking system. The Mijin/NEM Technology makes it easy to integrate with the core banking system. In fact, it should coexist with legacy core banking systems, run in parallel, and finally replacing them in the long term.”

Contrary to popular belief, blockchain technology might be more applicable to accounting systems rather than post-trade processing. Although the blockchain can be useful to various aspects of the financial sector, Mijin blockchain infrastructure has shown the world it is possible to use distributed ledgers in an accounting setting. After all, the majority of current mainframes have become a liability, which forces banks to come up with innovative solutions.

Last but not least, it does not look like the maximum capacity of the Mijin blockchain infrastructure has been reached yet. Tech Bureau Corp. CEO Takao Asayama feels the technology can achieve four-digit transactions per second. However, developers and engineers are working on a solution to increase this capacity over the coming months.

What are your thoughts on this field test of blockchain infrastructure in the accounting sector? Let us know in the comments below!

Source: Mijin

Images courtesy of PR Web, SBI Sumishin Net Bank

The post Japanese Bank Acknowledges Mijin Blockchain Infrastructure Test appeared first on Bitcoinist.net.

Japanese Bank Acknowledges Mijin Blockchain Infrastructure Test




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Úno 10

Australian Banks Indirectly Help Bitcoin By Boycotting Apple Pay

Source: bitcoin

Bitcoinist_Mobile Payment

The mobile payment sector is heating up, as every company and financial institution are scrambling to launch their platform in the near future. Over in Australia, it will not be smooth sailing for Apple Pay by any means, as the country’s major banks continue to boycott the popular mobile payment solution. NAB was among the first to launch their own mobile app, and now ANZ Mobile Pay is here as well. Bitcoin, on the other hand, is creating a far less fractured payment ecosystem around the world.

Also read: Diamond Market Meets Bitcoin Through Bitcoin.de

Apple Pay Battle in Australia Becomes A Lot Harder

Even when consumers might be preferring to use Apple Pay for their mobile purchases, they will be unable to do so unless their bank participates in the project. In Australia, the likelihood of being able to pay with Apple Pay is becoming is becoming much smaller on a monthly basis, as the country’s major banks keep boycotting this solution.

Similar to the struggles Apple is facing in Canada; bank participating remains a key issue in Australia. There is a lot of friction between all parties, only because the technology giant is looking to take a slice of interchange revenues in these countries. Needless to say, in this day and age of financial turmoil, banks are even less keen on sharing their revenue with other players.

Now that ANZ, one of Australia’s four major banks, has released their mobile payment application for Android users, things are looking even more bleak for Apple Pay. Making payments through ANZ Mobile Pay requires the user to tap their card against the phone, enter the date of birth and mobile number, and then choose their preferred payment option.

This process will have to be repeated for every individual card ANZ customers want to link to the mobile solution. However, with the wide variety of credit and debit cards that are supported, some customization is possible. Furthermore, ANZ Mobile Pay users can withdraw money using their phone at several ATMs supporting contactless withdrawals.

Although it is a positive sign to see major banks focusing some of their attention on the mobile ecosystem, this plethora of different apps is creating a fractured world of payment solutions. In the end, the consumer will not benefit from all of these solutions, as they prefer a streamlined system without too much hassle.

Bitcoin is Streamlined And Globally Available

Unlike these mobile payment solutions requiring bank participation, the Bitcoin ecosystem is very much streamlined. In fact, it would be difficult not to streamline it, as there is no unnecessary mingling by third parties, banks, or governments. This is one of Bitcoin’s major strengths, as it carries on unencumbered by these woes.

Getting one’s hands on Bitcoin has become easier over time as well. Most countries have one or more Bitcoin exchange, there are Bitcoin ATMs, and even peer-to-peer trades are a possibility. Plus, with the limited amount of coins in circulation, there is a chance for a value increase down the line.

What are your thoughts on banks releasing their own mobile payment solution? Let us know in the comments below!

Source: ANZ

Images courtesy of Shutterstock, ANZ

The post Australian Banks Indirectly Help Bitcoin By Boycotting Apple Pay appeared first on Bitcoinist.net.

Australian Banks Indirectly Help Bitcoin By Boycotting Apple Pay

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Úno 09

Bitcoin ATMs Remain Safe From New Metel Bank Malware




Source: bitcoin

Bitcoinist_Bank ATM

Despite there being plenty of things going wrong in the financial sector, one of the biggest threats is not coming from the banks or other financial players themselves. Instead, a new breed of bank malware is making the rounds, spread by a Russian hacking group. Especially ATMs are the target of choice, and the implications could be very severe if no solution is found to counter this threat.

Also read: Tendermint to Unveil UI, Demo First Blockchain Apps

Bank Malware Remains A Big Threat

Throughout 2015, ransomware and malware have been claiming many victims around the world. But in the end, banks themselves remain the prime target for hackers, or to be more precise their ATM devices. A new type of malware has been identified, which could be a major threat to ATMs all over the world.

Based on the information provided by Kaspersky Labs, Metel malware was discovered during the summer of 2015. This situation came to light as a Russian bank reported millions of rubles in losses in one night. Apparently, the institution had a log of strange financial transactions originating from one of their ATMs.

What makes this story even stranger is how an internal investigation showed how cards belonging to customers of this particular Russian bank were withdrawing funds from other bank’s ATMs. Huge amounts of money were cashed out, even though the associated bank accounts of the card holders remained unaffected. Needless to say, this made absolutely no sense whatsoever.

It is not the first time Metel makes a name for itself in the world of traditional finance. This collective of Russian hackers is deliberately infected corporate bank networks via email, in an attempt to gain access to other internal systems. As a result, Metel managed to gain access to the bank’s ATM withdrawal system, which let them roll back the entire history of cashing out the device’s balance.

Further research by Kaspersky showed how the malware was present in over 30 financial institutions, although all of the networks have been cleaned up in the meantime. At the same time, another collective of Russian hackers has been identified, using similar techniques to infect banks with malware.

If that wasn’t bad enough, the Carbanak malware has been revamped and is making the rounds again as well. Rather than targeting banks, this malware is also trying to find vulnerabilities in accounting and budgeting departments of other companies. The financial world as we know it is facing a lot of threats all over the world, including Bitcoin and digital currency.

Bitcoin ATMs Remain Safe From Malware

Unlike traditional bank ATMs, malware has not been spreading throughout Bitcoin ATMs around the world. Not only does this bring more legitimacy to the popular digital currency, but it also goes to show that financial institutions could learn a few things from the Bitcoin ecosystem, other than how to use blockchain technology to their advantage.

Furthermore, the popular digital currency is gaining more attention from all over the world, while its market value is holding steady. With fiat currencies dropping in value on a regular basis and proving to be very volatile, Bitcoin is proving to be a far more stable investment compared to traditional means.

What are your thoughts on this new type of bank malware? Are Bitcoin ATMs vulnerable as well? Let us know in the comments below!

Source: Kaspersky Blog

Images courtesy of Shutterstock, Krebsonsecurity

The post Bitcoin ATMs Remain Safe From New Metel Bank Malware appeared first on Bitcoinist.net.

Bitcoin ATMs Remain Safe From New Metel Bank Malware




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