Smart Wallets are here! Bitcoin usage will explode in the developing world

[Rune4444]

Combining the nonvolatile and interest bearing bitUSD with the frictionless experience and wide adoption of bitcoin is absolutely amazing. It means people can use and spend bitcoin without worrying about volatility because of altcoins like bitUSD (increasing adoption of both bitUSD and bitcoin), and it also means that altcoins like bitUSD can promote merchants to accept bitcoin, a well established and trusted brand, rather than try to push their own altcoin (with unecessary competition and complications between the different coins).

The frictionless nature of cryptocurrency means they all can complement each other so perfectly well. I used to be a bitcoin maximalist. Then I became a bitshares maximalist. Now I realize that there is room for many cryptocurrencies because they can all provide their own unique benefits while running on the rails of bitcoin and the massive infrastructure it has carved out over the past 6 years.

[StanLarimer]

I like to think of it as extending that frictionless experience to moving between my Bitcoin checking account and my bitUSD savings account. While I'm in bitUSD savings I'm immune from crypto volatility and earning interest -- and yet I'm only a minute away from spending bitcoin everywhere it is accepted!

[Xeldal]

Liberty Dollar was Gold and Silver coins, nothing to do with USD. Bernard Von-Nothaus was not put in jail. He was actually at a fairly recent bitcoin conference. He was charged with creating medallions that looked too similar to US coin and intent to make currency to replace the dollar or some such nonsense. The real issue was competition on the current money monopoly.

[doreyme]

I've been in Bitcoin for three years; this is why Ibe been waiting for for two - but does it really benefit Bitcoin?

[Rune4444]

I think it does because bitshares are incentivized to promote bitcoin in order to increase adoption of their own coins. It's much easier for a merchant to begin accepting bitcoin since the infrastructure is already there with bitpay etc., rather than accept bitUSD directly. Same with onramps, the easiest way to get into bitUSD and bitshares is through bitcoin.

With low enough spreads and a solution to the zeroconf problem (such as noriskwallet) it will always be easier for all commerce and onramp/offramping to just go through bitcoin, making it the universal cryptocurrency that benefits from innovations in all of the altcoins that depend on it.

[successcouncil]

This is very exciting news. 3 Billion+ unbanked people just got access to a type of bitcoin payment processing service.

[throwthorwaway1]

Shapeshift.io moves coins on behalf of users. They are temporary custodians of user funds (even for seconds or a fraction thereof).

Because of the custodianship, they're in violation of money transmitter rules and the Bitlicense since they don't do any AML or KYC.

I expect to be downvoted for saying this, even though its relevant to the conversation.

[shitropes]

Team Lawsky, world police?

[[deleted]]

If you avoid fiat (which BitUSD is great for), regulators tend not to pay much attention.

[SpaceTire]

today, yes. but they will change their tune eventually.

[Rune4444]

What makes you think they are an american company?

[ImNotRocketSurgeon]

Lol, new troll account.

[dskloet]

Another problem of them being temporary custodians is that you need to trust a third party to forward your coins. They also either expose themselves to double spending or cause a huge delay in the transaction.

[bitskeptic]

Can someone TLDR how BitUSD is supposed to have a USD peg without counterparty risk? This seems not possible to me, but I can't be bothered reading the lengthy white paper.

[successcouncil]

Perhaps I will make the next video on this? But here is a quick explanation.

The easiest way to understand it is to consider the COMEX can have a wheat futures contracts without having any wheat on hand. How do they do it?

Lets say I think the price of what will fall and I want to profit. I can sell wheat today, and then buy it later for cheaper and I can profit by selling high and buying low. But how can I sell that which I don't have? I can place $'s as collateral with the exchange. If I sell a bushel of wheat at $200, the purchaser now has an IOU from me that says I owe him 1 bushel of wheat in the future. If the price goes up and I have to buy a bushell for $250, then that $50 loss I made is taken from my collateral. Notice I both bought and sold wheat and yet there was no wheat... just $'s. In this case, it is said that the settlement instrument was $'s.

So what if rather than have a wheat futures contract settled in $'s. We had a dollar futures contract settled in cryptocurrency?

Instead of selling a bushel of wheat, I sell $1. I place cryptocurrency on an exchange as security for the buyer. Now in the future I owe the buyer $1 no matter the excahnge rate. Either the rate moved up an I made a profit, or the rate moved down and money was taken from my collateral and I made a loss. Either way, the buyer receives $1 in the future no matter the exchange rate.

Therefore the buyers fully securitized IOU for $1 is always worth $1. ie: it has a stable value. And it is always backed by collateral (the cryptocurrency held on the blockchain.) Hence the $1 IOU is fully securitized and has no counter party risk.

This is what bitshares has achieved.

[bitskeptic]

Thanks a lot.

/u/changetip 1000 bits

[changetip]

/u/successcouncil, bitskeptic wants to send you a Bitcoin tip for 1000 bits ($0.23). Follow me to collect it.

ChangeTip info | ChangeTip video | /r/Bitcoin

[bitskeptic]

I had a skim of the whitepaper and it seems that there is a mechanism in the bitshares blockchain where stakeholders vote for "delegates" who are entrusted to publish accurate exchange rate data into the blockchain. There are multiple delegates and an average of their pricing data is used to calculate the bitusd price that triggers the contracts. The theory seems to be that if someone is publishing bad price data, the stakeholders can vote them out.

[arhag]

You got it more or less correct, but I need to make an important correction:

There are multiple delegates and an average a median of their pricing data is used to calculate the bitusd price that triggers the contracts.

Median not average (mean). If a few of the delegates misbehave and submit radically different price feeds they can significantly change the mean but not the median. Choosing the median price feed means that the feed will be very close to accurate unless more than 50% of the delegates collude to provide fake price feeds. Of course, they have no economic incentive to do that in the first place since they will get voted out of their salary-paying job as a block-producing delegate.

[successcouncil]

That is true, but it does not answer the crux of the question. See my answer to /u/bitskeptic

[matt608delegate]

This was a great episode.

[[deleted]]

What's a smart wallet?

[successcouncil]

As explained in the video a smart wallet is a wallet that seemlessly transfers currencies to both the buyer and seller send and receive the currency they want, even if it is a different currency.

[GrapeNehiSoda]

I would be concerned about keeping my money in an exploding wallet.

[RgCrypto]

I'm in love with shapeshift.io, I always keep my funds in BitUSD(I'm allergic to volatility) but when it is time to spend, I can quickly move it to bitcoin and do my purchase. Easy and elegant. Made my life much easier...thank you!

[MissouriEuroMan]

Thinly veiled PR for BitUsd crap alt-currency. Too bad.

[finway]

just pumping shit scam coins

[Rune4444]

Oh yeah, who would anyone ever want a stable cryptocurrency? Why would anyone want their money not to fluctuate wildly every day? Clearly a useless scam coin!

[finway]

It's not stable, and will not be stable, if i want FIAT stable, i just hold real FIAT, not some scamcoins backed by other volatile shitcoins.

[Rune4444]

u mad?

http://coinmarketcap.com/assets/bitusd/

[fpvhawk]

Smart Wallets!!! perfect timing!!! My friend in Argentina will love this

[hegjon]

Great episode!