Bonpay - yet another attempt to make a cryptocurrency payment card
Cryptocurrencies obviously have their problems when it comes to everyday, face-to-face transactions. The point-of-sale infrastructure just isn't there yet. So, naturally, a lot of people would love to create a payment system that utilizes the existing point-of-sale network while drawing funds from a cryptocurrency wallet.
But building a payment system is hard. And the existing players have erected high barriers to entry, because they don't like competition. Which means if you want to use their network, you have to play by their rules, and you'll probably have to fork over some of your earnings to them.
The earliest attempt I can recall to create such a payment system was BitInstant. I knew their CTO and co-founder, Gareth Nelson, from Second Life (no, not Linden Lab; I knew him in Second Life. I just happened to be working for Linden Lab at the time). Fun fact: before BitInstant, Gareth and his wife tried to build a competitor to Second Life based on OpenSim, an open source implementation of parts of the Second Life simulator. Anyway, BitInstant folded, but not before getting lots of attention and money.
From reading Bonpay's white paper, I'm not seeing a lot to convince me that they have anything that BitInstant didn't have back in 2012. Sure, they plan to support multiple cryptocurrencies. But the white paper is not very professional and, while they say their token is not intended to be a security, I'm not sure what you call a token that represents rights to a certain percentage of customer transactions. Sounds like dividends. Their white paper also doesn't strike me as being particularly professional. They're supposedly located in the UK but they apparently couldn't find a native English speaker to proofread it.
I could be wrong, of course. I'm not a financial advisor, lawyer, or really anyone who should be giving any kind of advice about this sort of thing. But I certainly won't be participating in their ICO, and I would bet good Bitcoin that they won't be making significant improvements to crypto payments.
My main concern with crypto is that the banks are the real government, and therefore the government controls:
It's a serious concern. Also, governments have unlimited processing power and "free" electricity. They are certainly mining. Crypto is the opposite of Gresham's Law too. Good crypto will replace bad crypto. Well, we never know when a better crypto will be created.
Worse, the government can simply shut down the fiat to crypto transfers using banks. What would the value of BTC be if that happened? I suspect it would be a lot lower.
Hey there, just came across this post and i'm curious - which Linden were you at LL?
By the way, it was Litesim, not OpenSim - a fork of OpenSim for the simulator code, and completely from scratch on the server side. That's how I did stuff like inter-grid teleport to and from any grid with full inventory etc. Good times.
About the "payment system" you mention - BitInstant wasn't a payment system as such, it was a means of buying and selling bitcoin quickly. We did try to get going with paypoint in the UK and that never worked out, but the cash deposits in 7/11, CVS and walmart etc worked beautifully.
Anyway, would love to keep in touch somehow for nostalgia reasons. Drop me an email at [email protected].
Hey, Gareth! Long time no see! I replied via email.
Listening to Emma Channing talk about token sales, I've realized that the regulatory situation is actually much worse if a token is NOT a security. This is why people say that crypto is not really legal until it's regulated: because there are already a ton of regulations that apply to what crypto does, so without specific regulation you're not protected from whatever any given local or regional government throws at you.
Channing gives lots of good advice for people considering ICOs. In my opinion the most important bit of advice is that, to be qualified to give advice on ICOs, a lawfirm really needs to have a global perspective.
Once there are decentralized exchanges not under control of any entity that can be targeted by governments, perhaps it will become possible for a DAO to have an ICO that is completely immune to regulation. For such a thing to be valuable, that means the DAO will have to be able to exert control over other things of value. Real estate won't work because it's unlikely governments will allow real estate to be owned by unregulatable entities. But purely virtual resources like storage and compute power in a peer to peer network might. And a DAO could potentially issue contracts in a decentralized "work exchange" for, say, programming jobs.