Let’s walk through a user story. I want to send $1,000 to a friend of mine in El Salvador:
* When I initiate the $1,000 payment, Strike debits my existing USD balance.
* Strike then automatically converts my $1,000 to bitcoins ready for use in its infrastructure using its real-time automated risk management and trading infrastructure.
* Strike then moves the bitcoins across the Gulf of Mexico where it arrives in our Central American infrastructure in less than a second and for no cost.
* Strike then takes the bitcoins and automatically converts them back into USDT (synthetic digital dollar known as Tether) using its real-time automated risk management and trading infrastructure.
* Strike then credits the existing user with the USDT to their Strike account.
It seemed like an answer at first, but actually this answers absolutely nothing and I'm not even sure how it's related to the topic being discussed:
* This guy starts talking about sending USD, but ends up talking about receiving USDT. USD != USDT. And while there are problems with sending USD across the border, there're absolutely no problem with sending USDT. And there's absolutely no problem buying USDT wherever you are. (But, what's important, there might be problems actually converting your USDT into USD.)
* Since we end up buying USDT with USD, the word "Bitcoin" in the middle of the story seems redundant and actually confusing.
* There's nothing about Lightning here. I mean, you can talk about how you use Lightning to transfer BTC inside Strike as much as you want, but if BTC is irrelevant to the user story, so is Lightning.
* I'm not sure how Strike and this user story are relevant at all. It started out about El Salvador accepting BTC as a legal tender, and how using it in actual transactions w/o lightning is problematic due to low TPS. How sending USD to El Salvador is relevant here at all?
Is Tether now backed by a reasonable amount of real dollars? I'm surprised to see it being used in such a serious application after years of hearing how it was a scam.
edit: looked it up, still looks like a total scam. I hope El Salvador is able to get through this without getting screwed and I guess I'll assume Strike (first time I've heard of it) is just as shady until I hear otherwise:
There is no bitcoin needed for this at all its does not even move on the chain for the transfer.
Both sides are Strike entities all this does is use bitcoin as a bridge for USD to USD which is completely pointless as both sides are USD.
You could just buy USDT (or another stabelcoin) and send it there.
Its a different story if there is actually a switch in currency needed.
There is this famous and from bitcoin people often hated company called Ripple that specializes on cross-border settlement using crypto as a bridge currency.
For that however the crypto must be actually moved and be sold locally for the local currency. And for that to work without risk due to volatility it must be fast. Hence they use XRP (4 sec) instead of bitcoin (10+ min). They call it ODL (On-Demand Liquidity).
Please somebody explain why it's downvoted. Ignoring digression about XRP, this is exactly what I read from the parent comment. Judging by the user-story above, all this talk about how BTC is being "sent" (which, as we all know, is a small lie on it's own, since unlike fiat, BTC is never really being sent anywhere) seems just to distract us from the fact that we just end up buying USDT for USD. No BTC involvement required.
Most of HN down votes anything about bitcoin and a few HN bitcoin fans down vote anything "negative" about bitcoin and certainly everything involving XRP. So to no surprise this is being down voted.
>No BTC involvement required.
Totally correct. Remittance over a bridge currency only make sense under very specific conditions, which include that the input currency and the output currency are different. And a direct exchange is not possible or not cheap.
The traditional banking system does this as well, they usually use USD as bridge. To pair every currency with every currency simply isn't feasible and the low volume pairs would have no liquidity anyway. Its basically the same as with goods if you have wood but want metal you use a currency as bridge because there is no market to sell wood for metal. Now if you also have a location difference between the market where you want to sell and the mark where you want to buy then you actually can use the bridge currency to move from one market (location) to another market (location).
Let’s walk through a user story. I want to send $1,000 to a friend of mine in El Salvador:
* When I initiate the $1,000 payment, Strike debits my existing USD balance.
* Strike then automatically converts my $1,000 to bitcoins ready for use in its infrastructure using its real-time automated risk management and trading infrastructure.
* Strike then moves the bitcoins across the Gulf of Mexico where it arrives in our Central American infrastructure in less than a second and for no cost.
* Strike then takes the bitcoins and automatically converts them back into USDT (synthetic digital dollar known as Tether) using its real-time automated risk management and trading infrastructure.
* Strike then credits the existing user with the USDT to their Strike account.
[1] https://jimmymow.medium.com/announcing-strike-global-2392b90...