The payment provider layer is the part that ordinary people worry about when they're looking at transaction fees, security, censorship, and privacy.
If Bitcoin isn't a payment provider, then why should I care about it? It's more expensive and slower than ACH is. It's being converted into normal currencies and tracked by the same companies that are making payment providers today. What is it solving?
All of these payment providers that are being built on top of Bitcoin are going to have the same regulations, restrictions, and problems as the payment providers that exist today. If Bitcoin isn't capable of replacing them (and there's every indication that it is not), then it's not going to have a tangible impact on how and where I can spend money online.
I* think the average person probably shouldn't/wont care about Bitcoin. Bitcoin will become something that only the sort of entities who directly interact with the ACH system are worried about.
If Bitcoin succeeds, I don't think it is likely the average person will ever touch Bitcoin: it is technically complex to handle it securely. However, many of the Venmos and Squares in this future would likely be using Bitcoin to settle flow disparities behind the scenes.
In terms of what it's solving:
- Bitcoin has a much lower barrier to entry. It is very expensive and slow to get direct access to the ACH system (vs having your bank make transactions on your behalf).
- Bitcoin is apolitical. Banking and finance is still very much an old-boys network of after hours handshake deals. Bitcoin lets you swim with the big fish without having to worry about kissing the right asses. Similarly to claimed noble benefits of public markets, Bitcoin has a democratizing effect by not having a mechanism to favor entrenched players.
- Bitcoin is insulated from US monetary policy. This tends to appeal to gold-bug types who believe inflation is being underaccounted and will get worse.
- Bitcoin is permissionlessly auditable. I wish there was more development in this space, but I think bitcoin could be very powerful for non-profits and other organizations which want to be as transparent as possible with their finances. If an organization wanted to prove holdings or transactions, Bitcoin is arguably better than bank-money because Bitcoin txns cannot be forged, while documents being alleged to be coming from a bank could. (Similarly, I think it would be really cool for a bank to make an option for fiat accounts to have their balances and transaction history published publicly online)
* I am certainly not speaking for all Bitcoin advocates
> All of these payment providers that are being built on top of Bitcoin are going to have the same regulations, restrictions, and problems as the payment providers that exist today.
It creates a separation of concerns: If the layer 2 service providers you are using today become abusive/untrustworthy, it would be easy to switch to different ones.
If Bitcoin isn't a payment provider, then why should I care about it? It's more expensive and slower than ACH is. It's being converted into normal currencies and tracked by the same companies that are making payment providers today. What is it solving?
All of these payment providers that are being built on top of Bitcoin are going to have the same regulations, restrictions, and problems as the payment providers that exist today. If Bitcoin isn't capable of replacing them (and there's every indication that it is not), then it's not going to have a tangible impact on how and where I can spend money online.