I've used Western Unions in Morocco and a village in rural Laos where the staff couldn't believe I was a slightly lost passing tourist and invited me for dinner with them. Both of them were easy: the most difficult bit about the Moroccan service was using my UK bank's online banking service to set the transfer up.
I didn't see any Bitcoin ATMs in either place, or Vietnam for that matter, and can't imagine the process of turning Bitcoin into spendable currency there would be easier, especially not for somebody without a local bank account.
The inconvenience of existing services boils down mainly to issues such as ensuring that fraud and terrorism and such are prevented. Society intentionally added those hurdles.
A new technology that has ignored the regulatory structure is not apples to apples. Someone could ignore regulations with current tech and be just as "convenient."
None of that is required unless you can only send in cash. If you're in a third world country and don't have a bank account or a debit card, I'd assume you would speak the local language.
I'm in country with a cash economy, am unable to use my debit card in the local ATMs and don't speak the local language. I login to online banking on my phone or in a cybercafe and send a bank transfer in my currency from my account to WU. Within a few minutes WU confirms receipt of the funds. I walk down the street to the large WU sign, show a MTCN number and my passport to the teller, and collect equivalent cash in local currency, less a bearable-in-the-circumstances transaction fee. (This actually happened by the way.)
Let's for the sake of argument, assume I already have a large fortune in Bitcoins, access on all the major exchanges and private keys memorised and written down in a secure box, all in my possession. Trouble is vendors want local currency not BTC, and I don't have the language skills to convince them that actually BTC is a much better store of value or locate the local BTC enthusiast's group (if there is such a thing) and negotiate an informal money transfer with them. In the end I probably give up and use Western Union...
Your argument here doesn't seem to be that Bitcoin/etc. are bad, but that alternatives exist.
The issue with those alternatives is that they cost a lot. In your case, this additional cost was worth it in an emergency but that's often not the case.
Think of the vast number of people who send money abroad to support their families.
No, my argument is that Bitcoin is not a viable option for the average unbanked person to receive funds they can actually spend in the 99.999999% of the world that does not have Bitcoin ATMs or local vendors that accept Bitcoin. For almost all real world use cases involving unbanked people, crypto is either strictly inferior to existing solutions or impossible.
Even if I could have found someone in a small Moroccan town that knew what a Bitcoin was and how to use it, the daft exchange rate they'd have offered me to convert it into cash would have easily exceeded the cost of Western Union for the same transaction. The villages people send money to support families are not full of hackers playing around with blockchains, and the few people in their country with the knowhow and resources to exchange Bitcoins for cash are not going to be cheaper or easier to deal with than WU.
Sure, I can cash out crypto via my bank account and bankcard pretty easily, but I can cash out cash even more easily...
Each Bitcoin transaction costs the electricity to power a home for three weeks, and that's just the mining. If it were ever subjected to rigorous AML, exchange control checks, etc., it would also accrue the overheads which apply to fiat.
Consequently, WU's idiotic "risk management machine learning" has now taken your money, and is refusing to return it to you or send it to your destination without days or weeks of documentation and pain.
I would be interested in any use case that isn’t insanely extreme.
How much cash do you really want to walk around with if you have lost your wallet which likely included some Of your identification.
Normally, you just have to show Western Union the verification number and your name. You don’t need to chat up the front desk.
> If I had a bank account with balance, why would I use western union?
How often would you not have a bank account, not know the local language, and not be near people you know who would help with money in some extreme case?
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The other two sibling comments repeated more points. Really all of us are wondering what use cases you’re thinking of.
I don’t think you realize how easy services like Western Union are. I didn’t either until I used it recently.
>If I had a bank account with balance, why would I use western union?
Because sending money to people in the third world who DON'T have a bank account is almost impossible via a normal transfer. My understanding is that the vast majority of the Somali population in the US, for instance, send money home to friends and family via WU. They have a bank account in the US, their friends/family back home do not.
>What if I lost my wallet with my debit card, why would I know the language?
If you lost your wallet and debit card, why would you have thousands of dollars of cash on hand in a country you don't speak the language? That sounds both unlikely and extremely dangerous.
>You are making a TON of assumptions and not considering A LOT of use cases.
I've actually considered most of them, and I've yet to hear a situation that makes any realistic sense outside of illegal activities.
> Because sending money to people in the third world who DON'T have a bank account is almost impossible via a normal transfer.
Vs
> If you’re in a third world country
This is a different scenario.
There’s many people that send money back home. What they use varies. I know people that transfer funds to someone and they give the cash to the person minus an amount. The method will depend on the location. I can’t speak for everyone and won’t try to.
>If you lost your wallet and debit card, why would you have thousands of dollars of cash on hand in a country you don't speak the language? That sounds both unlikely and extremely dangerous.
Depends. What country?
And in that country, how much is a room? Where am I staying? How much is a ticket? What do I need to get my stuff replaced? Do I have anything planned? Is it a business trip or leisure?
You probably can’t carry cash around safely all the time. If Bitcoin was ubiquitous and easier ways to use it and carry it were in place, that wouldn’t be the safest thing either.
Western Union just needs the verification code and proof of who you are to give you money. I don’t see the big barrier with it.
Western Union is a nightmare to use. You need send and pickup in a physical location, sometimes the recipient needs specific forms of ID, and the fees are insane.
I once sent $100 to someone in South America and it cost me $13.
WU is a relic that targets and takes advantage of the less fortunate and those in 3rd world countries.
To be fair, the current average Bitcoin transaction fee is around $13 right now, so it would cost a similar amount, or even double if there’s two transactions involved (you -> recipient -> withdrawal exchange).
A lightning transaction currently costs $0.000432200 but you would have to have an existing channel open (which would make sense for a heavy user to have already)
The transaction costs are variable depending on the speed with which you want your transaction processed. Miners have an incentive to include transactions with the highest fees in the next block, so when the network is congested with tons of unprocessed transactions, you'll be paying more.
And that's only looking at on-chain mechanics. Solutions exist to remedy issues with scalability of the underlying blockchain.
Interesting. Does it mean Bitcoin is not immune to DOS attacks where basically me and my friend transfer 0.0000001 btc between each other repeatedly for giggles.
I once under estimated how much cash I needed in Germany. The easiest way I could find to fix that was to use WU to send myself cash. It was far easier than dealing with my own bank to fix the ATM card. Bitcoin was a non-starter.
I wanted to point out how using Bitcoin is in practice at least equally difficult as using Western Union. For any real use case you need to use an exchange, and AFAIK Lightning Network is not yet widely deployed.
> you need specific forms of ID to open an account
To start using Bitcoin, you don't need any ID. You can download, install, and use the normal Bitcoin client.
You only need ID to open an account on an exchange, and that's because exchanges have to follow Know Your Customer laws just like banks. But if you sell something for Bitcoin, you can accept it without an account anywhere.
You only need an account somewhere to convert between fiat and Bitcoin, and even that can be avoided if you find someone willing to sell you coins for cash.
Yes, any one can transact in Bitcoin quite trivially. But as soon as you want to use it for anything practical outside the tech bubble, you need an account on an exchange. At that point Western Union is probably easier for most people.
Now, I agree that WU is a bit of a nightmare, and preying to an extent on the poor, remittances, etc.; and that better fintech alternatives are required, such as TransferWise.
However, part of the costs of course arise from supporting
a) a branch network that also enables those without smartphone to use the service, and
b) all the pesky KYC AML measures that Bitcoin conveniently circumvents.
I just looked up the cost of doing a regular money transfer, and that adds up to that amount as well - plus extra for collection. International money transfer is expensive.
I just looked it up, for BTC you currently pay a transfer fee equivalent to $11, with spikes to $17 in the past month.
I don't know where you are but in a lot of places to use Western Union you have to physically go to one of their stores.
With BTC I can buy them via the internet, and the person on the other side can also convert to cash in their own account via the internet, then withdraw on any ATM.
It's worlds apart.
Edit: I guess if you only consider the parent's use-case where the other person went to a Bitcoin ATM it's not that different but my point stands as it's only 1 other layer in the process and it's an online one.
For now. Cryptocurrency is still in the 'honeymoon' phase where it hasn't been fully targeted by governments and regulatory bodies. That will change soon enough. You can't skirt AML regulations forever.
Have you ever used Western Union? The experience is horrendous, and they charge very high fees. Maybe they have improved lately with competition, but when I had to use it a few years ago, it was horrible and I ended up not having money for the rest of my trip because they messed up my papers. Bitcoin is orders of magnitude better than western union.
