Solana Pay
solana.com>Nine months later, the next version of her favorite sneaker drops. Her digital wallet has a new offer reminding her of their availability at your store, along with a personalized offer on new laces she can’t find anywhere else.
They're seriously pitching "ads get sent directly to your wallet" as a positive feature. This is so comically, tragically misguided I don't know whether to laugh or cry. This is future indeed. Because, after all, a major weakness in mere credit card transactions is you don't have a relationship with your customer. In our crypto-future, they won't have a choice! Isn't that what you want? Comforting your customer every time they have a bad breakup with an algorithmically optimized offer for some ice cream and emotional shopping? Maybe try to associate your brand with their good feelings by sending a couple messages about the smooth, refreshing taste of your soft drink at their child's football game? Without your customer offering you a contact method, how could you possibly target them so effectively and personally?
The more I learn about crypto the ickier it gets.
They're pitching the entire human existence will be nothing more than perpetual "waiting for the next sneaker drop"
>Before the customer leaves the store, two tokens appear in her digital wallet. The first is an NFT version of her new sneakers, usable in any game or virtual world she chooses. The second is an authenticated NFT receipt, which admits her into your exclusive online community of verified sneaker-lovers.
The first is an unobtainable, unrealistic goal that ultimately sours the idea of NFTs in the eyes of anyone that bought into them, thinking it was possible (or even viable to somehow encourage every game/world developer to put in the unpaid work to support arbitrary meshes, textures, mappings, animations, etc).
The second could have been an email, or even just a URL/code on the receipt.
> The first is an unobtainable, unrealistic goal that ultimately sours the idea of NFTs in the eyes of anyone that bought into them, thinking it was possible (or even viable to somehow encourage every game/world developer to put in the unpaid work to support arbitrary meshes, textures, mappings, animations, etc).
While "any" is doing a lot of work, there will be a gigantic secondary market for certain brands that will certainly warrant the time to have designers create assets for certain games. Supreme / Gucci / Louis Vuitton / etc. Buy the apparel and own it for free by selling the NFT to a perpetually-online goofball with a credit card.
I'm still dubious behind the economics of even high-value NFTs finding their way into _some_ games.
Assume I own a game studio and someone (say, Louis Vuitton) wants to convince me to add a purse NFT to one of my games.
Unless they pay me to do so, I'm not going to dedicate the several-person workload (between artists, shader techs, QA, and production) necessary to implement that asset into the game for a single user unless they pay me to do so. This seems like a reasonable requirement on my end (and although there may be a company or two that might warrant the "free" work, the vast majority will not).
Therefore, Louis Vuitton now has a "cost" for their otherwise-free value-add NFT -- which can now be multiplied by the number of game studios they need to convince to add their NFT(s) to their game(s). Obviously, this can't scale to "any" game in the current industry (e.g. literally thousands of incompatible engines in use during any year's new releases) and also increases in cost over time as more games come out and/or older games would get updated.
This is also also for Louis Vutton -- I'm even less incentivized to spend more and more manhours implementing NFTs for smaller and smaller brands, and every brand that requests their NFT(s) added to my game(s) is competing in a zero-sum game against eng resources being put towards, well, real work that generates ongoing revenue for the company.
In the current industry, there would be literally hundreds of thousands of manhours required (if not more) to add a single NFT to "any" game, and still a significant amount of that to add a single NFT to "some" games. The primary beneficiary of adding NFTs to a game is Louis Vutton (with a value-add on purse sales) -- not the studio that actually has to do the hard work to implement it. So... why would they?
Companies are already paying millions of dollars for advertising in games. You don't think there's value in Supreme selling a sweater and giving people an NFT with any purchase that they can redeem for a set of gear in Fortnite or Grand Theft Auto Online that they can then resell to anyone they want? You can create a smart contract that remits a portion of any sale to any address you want, meaning that all of their participating partners can get a cut of any NFT resale going forward too. And the best part is that unlike in-game merch which is meant to be consumer-grade and affordable, there's no reason to do this with NFTs. There are TONS of people with huge bank accounts who game and just need a reason to spend money.
Gaming is the perfect market for this because there are SO MANY people willing to spend money on non-functional items. How much money has Fortnite alone made for Epic despite the fact that everything they sell in that game is purely aesthetic? I wouldn't be surprised if The Elder Scrolls Online is making as much from their Crown Store purchases for people to decorate their online houses as they do from selling their monthly subscription.
Randoms on the internet became multimillionaires simply for selling and renting out CS:GO skins. It won't take "hundreds of thousands of hours" to add an NFT to a game. You check the blockchain when you load up the game to validate ownership of the asset type (or even just periodically) and you're done. The rest of the time is on art and production. You're talking maybe $10-15K worth of investments that will easily make 2-3 times that for the company when the NFTs change hands the first time.
Eventually there will just be standard libraries created by a third party that gets slapped onto the loading screen just like all the different bits and pieces of the engines running the games people play.
I don't see anything good about this or Solana, it is still a centralised ponzi scheme like the rest of all the crypto coins.
How can Solana be the next Visa if it keeps going down every time. If this system is going down now, it certainly cannot scale when more people use it.
All of these fintechs (Solana, Paypal/Venmo, etc) are racing for relevance before the Federal Reserve's instant payment system goes live next year. Transactions will settle almost immediately, and each transfer costs a penny. Initially, the transfer limit will be $100k, with the eventual goal of $500k (with FedWire remaining as the product for transfers above those limits).
With regards to international transfers, [Transfer]Wise and OFX have shown the way forward (not just cost of course, but also UX), and from there it should be a race to commoditization of that model.
https://www.frbservices.org/financial-services/fednow
https://www.federalreserve.gov/paymentsystems/fednow_faq.htm
https://www.frbservices.org/binaries/content/assets/crsocms/...
https://explore.fednow.org/explore-the-city?id=3&building=ne...
What does this mean for credit card companies (no longer charging per transaction), checking accounts (does this help to further kill checks), Western Union (how does their business survive), Gemini/Coinbase (what is the impact of their marketplace), MetaMask (niche coins only), etc?
Thoughts and opinions are my own being adjacent in financial services.
Checks? Rapid decline with eventual phase out. Western Union will be forced to pivot to international remittance to maintain volume. Credit card companies will see a fate similar to checks but over a longer window of time (but will still maintain some volume) depending on consumer and merchant incentives (passing the credit card cost to consumers, for example, while not charging for Fed instant payments). Crypto? Stablecoins are looking like they'll be regulated by the gov and require a banking license to issue. See Matt Levine's latest Money Stuff "The Fed vs. stablecoins" segment on this [1] [2] [3].
[1] https://pastebin.com/VAPra5sY
[2] https://news.ycombinator.com/item?id=30167748
[3] https://www.federalreserve.gov/econres/ifdp/stablecoins-grow...
Here in India, the credit card business is booming despite UPI (i.e. better FedPay). The value proposition of credit card is unconditional short term credit. There is also the additional consumer protection through chargebacks. Popular credit card companies have moved to offering actual short term (<1 year) loans via the card. I don't think Credit cards would be going away anytime soon.
Consider Affirm and Afterpay in the US. This is what I believe the future of short term payment credit looks like when you have instant payment rails. You could even "overspend" your deposit account, with the negative balance being credit, dynamically managed by your deposit account provider's risk management system. The well off can do this with a margin account at their brokerage, but there's no reason this can't be done with your bank or fintech with personal credit. Several big commercial banks even underwrite your credit profile based on your deposit account cashflow vs your credit score (JPMC, for example).
EDIT: Check out https://cred.ai/ for an example of a financial product this might look like, from a quick Google search. No affiliation.
Credit cards aren't going away, but they're also no longer going to be the least worst solution for payments and transfers where assurances are needed. They're antiquated value transfer rails imho (and I'm aware the chief benefit of CCs are the 20-30 day float, longer with interest). In summary, the credit is the product, the rails are the utility, and there are many ways to issue and manage that credit.
While I agree with you, I like the improvement in Solana of verifying transactions on the GPU. I wish Bitcoin would do the same at least for signatures. We’ve reached the frequency scaling limit of CPUs, and the protocols we use should reflect the direction hardware improvements have taken.
> a centralised ponzi scheme like the rest of all the crypto coins.
How is a PoW coin emitting 1 per second with no financial reward of any kind for the developers, who wrote the software from scratch, a centralised ponzi?
Late to the party, but Solana is proof-of-history not pow. Not that it matters, or actually, kind of makes your argument even stronger.
> Nine months later, the next version of her favorite sneaker drops. Her digital wallet has a new offer reminding her of their availability at your store, along with a personalized offer on new laces she can’t find anywhere else.
Oh good, that's what I want - a currency that includes spam as a feature. That was really missing from cash.
> We believe this will pave the way for a future where digital currencies are prevalent and digital money moves through the internet like data – uncensored and without intermediaries taxing every transaction.
Chargebacks and anti-money laundering rules are features. "crypto is a tax avoidance scheme" is not a sales pitch, it's conspiracy to commit a crime.
> settling immediately with costs measured in fractions of a penny
So like an intermediary party charging a tax?
> this is about a vision where all currencies – including U.S. dollars – are on-chain
Convenient for tracking people! Also terrible for the environment.
> When a customer buys something, it’s a vote of support. A merchant should reward that support with personalized offers, on-chain loyalty programs, and unique virtual goods to accompany physical purchases
I'd really settle for just getting the widget I bought and not being spammed. Really. I promise. Please stop spamming me.
> Merchants should benefit from all of the advantages that on-chain decentralized payments can provide, such as network cost savings, DeFi yield generation, zero fraud liability, instant settlement, and ownership of the customer relationship.
Merchants should have fraud liability. If you are enabling fraud and money laundering, you need to pay for that - potentially with jail time.
> Help us bring to life a decentralized payments network that will define this next era of payments.
Another clueless middleman who wants a piece of the pie by helping others commit crime and avoid liability for their actions. Adding funny new words does not make your thing not a security. Ignoring regulations does not make you immune to punishment. Lofty ideas do not make you a hero.
> Also terrible for the environment
Solana published a report on the energy usage of their blockchain:
https://solana.com/news/solana-energy-usage-report-november-...
"By the end of 2021, the Foundation plans to introduce a program to help make Solana’s validator network carbon neutral and offset the footprint of the ecosystem."
Does anyone know if they've accomplished this yet since the report states by the end of 2021?
If you count carbon offsets:
https://solana.com/news/solana-foundation-carbon-neutral-202...
Maybe it's a silly question but I don't know the answer and I'd love some pointers/links.
How is Solana so much less energy than eth2? and how is that less than eth1, and that less than btc? I'm guessing it's not just "bad coding" or "it's electron so it's feeding on ram" or something. or is it?
It's due to different consensus mechanisms.
Bitcoin and Ethereum in its current implementation uses Proof of Work, which is a very energy intensive process, and the energy used helps protect the network by ensuring its very costly for bad actors to attack the network.
For newer blockchains like Cosmos, which uses Proof of Stake and Solana which uses Proof of History, they have other mechanisms to protect from a 51% attack, and so does not need the validator/miners to consume energy like the Proof of Work consensus systems.
Proof of Stake protocols typically use variants of BFT consensus, which support only up to 33% malicious voting power. So no, they do not protect against 51% attacks like Nakamoto consensus protocols do.
Solana is pretty centralized, it was designed to be an efficient version of a blockchain. So, it works more like a traditionally engineered HA service would, but with some blockchain bits attached. This makes it fast and cheap, but it isn’t very decentralized as a result.
"if you have nothing to hide then you don't need privacy" --every government everywhere.
> Convenient for tracking people! Also terrible for the environment.
Can you explain the environmental critique a bit?
A Solana transaction consumes about as much energy as two Google searches. Where exactly would the environmental damage come from?
There are < 1500 validators on Solana at the moment. That is about a single row in a datacenter. If Solana wants to continue avoiding a majority attack, that node count will have to scale. Solana is PoS which is better than PoW but still has way more power usage as it's still a blockchain than Visa.
Sometimes I forget that the Gell-Mann amnesia effect exists, which is concerning given how much weight I give to HN's comment section. I implore you to read the article for yourself at least if you haven't yet.
I literally quoted the article as I responded to it. What part of it do you think I missed? Are you sure you read the article?
All you did was sarcastically reply though, with a dismissive/pessimistic lean on basically every point. Given that there isn't a character limit, why not try and provide a more nuanced perspective? This isn't Twitter.
Even if you just really fundamentally dislike the project, I think it'd be to your benefit in convincing people by expanding on your commentary.
I, too, have disagreed with vorpalhex before, but:
1) Sarcasm is a nuanced perspective. (It's also all that hucksters deserve, and Solana Pay is hucksterism.)
2) Is pessimism something to be intrinsically avoided? Particularly when it concerns the unironically-made promise of "on-chain offers".
There is no nuance to provide. Let me explain.
Let's say this sales pitch is one we believe. We actually, totally think the things being promised here can be achieved by Solana.
Do.. you actually want stores to be able to push ads to you through your wallet? Please take a moment and open your email and check your spam folder (or your inbox if you're unlucky) and see how much junk you get. How many of those offers are actually "valuable?" They are of course extremely valuable to the business - they might get you to spend more money - but they are of no value to you as a consumer. They are spam.
Have you ever watched Youtube and thought "I wish this had more ads! What about those valuable offers I could be missing!?" No. No, you have never thought that. Why do you think your wallet is any different?
Given "the middle men" who "take taxes". I'll redirect you to this explanation of interchange: https://bam.kalzumeus.com/archive/how-credit-cards-make-mone... and https://bam.kalzumeus.com/archive/debit-cards-are-hidden-fin...
Now, maybe you hate Visa and think they don't deserve their $0.30, but also I bet you've either: 1. Had your credit card stolen and/or 2. Had a company refuse to refund/cancel a service and you needed to call your card operator.
The whole reason why businesses give some semblance of at least pretending to let you cancel services, of giving you returns and not hassling you too much, is that if they don't, Visa will fire them. They will lose the ability to accept credit cards (or get charged a really high rate ala Porn companies).
This is good. You, alone, as a consumer who spends maybe $300/year at some random online shop can't do anything if they screw you over. Visa however can get the problem fixed in a very permanent way.
Cutting out Visa (and Mastercard/Amex/etc) is really saying, "Well, we don't think consumers should be able to have recourse. If we want to abuse customers, we should be able to do that".
So, let's recap:
Solana is great because you can spam customers, and if you rip them off they can't do anything about it.
And remember, that is the SALES PITCH. That's the point we are supposed to be cheering and saying "hurrah" at.
What our dear article author is also saying is that payments shouldn't be censored. Now, sometimes credit card companies do bad things and make it hard for legitimate (but maybe controversial) companies to get paid, like OnlyFans and Pornhub. That is bad and undesirable. However, if payments have no controls, that is a great boon to people like the Taliban who enjoy blowing up markets with women and children, Mexican cartels who engage in murder and rape in bulk, and so on.
Now, it could be that the author of our article just genuinely does not understand why anti-money laundering laws are thing. They are so naive they literally just don't understand that bad people exist and use money to do bad things.
Yeah right, get real. I don't believe there is actually a possibility that a CEO of a major financial company with a history of working at other financial companies doesn't understand the basic underpinnings of anti-money laundering law either. Which leaves us with the alternative: they either are morally ok or don't care that bad things like that happen. They are totally fine with criminal gangs that kidnap women and forcibly prostitute them washing their money and continuing to fund their efforts. Even if they were critical of anti-money laundering law ("this hurts a lot of innocent people by association..") then they'd push for reform but not bypassing it.
You may start to understand why this gets such a scathing response. This is not merely tone deaf or a bit naive. It is selling features which are directly harmful. This would be like you going to the supermarket and getting a box of brownie mix advertising "now contains more lead!" The harm is literally what is being sold and advertised.
Let's try to provide a defense.
"Well, maybe those offers might be useful if they are personalized! And, you can choose your own wallet software - you could ignore the spam. And, consumers might get ripped off once, but they could make their own lists of bad businesses and choose to not do business with them. This would get sorted - and without the centralized and sometimes bad choices that companies like Visa make. Sure, some money will go to bad people, but it would mean innocent people aren't being harmed by sanctions and there are other ways of dealing with bad people."
We have to ask ourselves, is this actually better than the current world?
Let's analyze from a third direction. Why was this written? I mean, what beliefs does this CEO have that would cause him to write this? Even if we think the ends here are evil, people don't usually intend to do evil - they have some good they think they are achieving.
This kind of analysis means I am trying to determine someone elses mental state. People, myself included, are categorically bad at this. Let's give it a shot anyways.
"Threading the needle on a cohesive payment experience that rewards loyalty, drives repeat visits, and doesn't cost an arm and a leg simply never happened. " and from a few paragraphs later: "This embeds loyalty, offers and rewards in the same messaging scheme and become true building blocks for the future of commerce. "
Please imagine my face staring at your screen and whispering "enhance".
"Merchants have long sought an opportunity to leverage deep engagement with their customers, but multiple intermediaries involved in e-commerce or brick-and-mortar transactions makes that difficult."
Enhance.
"When a customer buys something, it’s a vote of support. A merchant should reward that support with personalized offers, on-chain loyalty programs, and unique virtual goods to accompany physical purchases. "
Enhance!
"...and ownership of the customer relationship"
Do you see it? In case not, let me translate. I bet the store you shop at has a loyalty program - you type in your phone number and you get a few cents off. Why? Why do stores do that?
It's so they can sell your data. They link up all your delicious, delicious data like your purchases, when you purchase, what you buy, the prices you paid, etc, and then they sell that. That works best when.. you buy repeatedly from the same store. For lots of reasons, it's hard to glue together disparate records from different stores. When you force everyone to buy through you, it's real easy! That data is valuable - like, _real_ valuable. I mean, not for the customer, you don't get that money, but it is for the business.
Solana pay would like to be that business. Solana pay would like to have your delicious, delicious data. Solana pay would like to sell that and become Solana rich.
So, let's recap:
1. Consumers lose their protectors for things like.. canceling recurring payments or getting a refund 2. Businesses aren't confined anymore by pesky things like anti-money laundering laws, or financial sanctions 3. Solana pay gets sweet, sweet money by selling all your purchasing habits so you can get more spam (on top of the extra spam you are already getting by using their product)
Do you feel like this is a product that respects you as a person? Do you get an overwhelming sense that this is "good" for you or your fellow people?
There is nothing in crypto that fundamentally makes it a scam. I truly, genuinely believe it started from a true hacker ethos. Just like how every neat political movement ever gets hijacked by crappy politicians, crypto gets hijacked by discount scammers hoping to make a buck off the unweary by stripping their protections, taking their money and data, and leaving them confused and unable to get help.
Frankly, I'm tired of it. I'm tired of seeing crypto scams on every bus stop and billboard. I'm tired of ads that target people who don't understand banking or can't get credit cards because they're easy targets. I'm upset that intelligent people who should be better stewards get swept up with common conmen and discount thieves. It is the duty of every capable person to call the spade plainly.
> people like the Taliban who enjoy blowing up markets with women and children
men like to live, too
I feel like launching this comes with a really fundamental misunderstanding around the role of a platform. If Solana is just going to launch products why would developers build on top of it knowing the platform owner (de-facto) controls the roadmap? This works for existing systems like Visa only because Visa is already large and the most accepted network (and in fact, Visa was initially a consortium of banks, as was Mastercard) -- and even then, Visa faces pressure on all fronts from ACH, p2p, and crypto networks which developers will flock to if integration is easier and user-accepted. I would be just as shocked/skeptical if Visa believed it could build an enduring supply of Visa-specific apps and developers in a way that mimics e.g. iOS/Windows.
When a platform has a hard supply-side to build out (in this case, developers and apps) making the platform owner a competitor seems incredibly short-sighted. IIRC, Intel famously refused to get into end-user devices like calculators because of this exact dynamic.
Appreciate the insightful comment. I also wonder why this is a Solana-developed product. Imagine if Ethereum launched EtherPay, or Bitcoin launched Bitcoin Pay. Seems strange to compete with your own developers like that. I'm not familiar with the details of Solana. Anyone more familiar with the project who can explain?
Why Solana over a zkSync / Starkware based solution? Payment networks cannot go down and Solana is going to continue to buckle under high load (or now just drop your transaction in QoS).
I guess this project was started before discovering Solana has massive stability problems.
> Before the customer leaves the store, two tokens appear in her digital wallet. The first is an NFT version of her new sneakers, usable in any game or virtual world she chooses. The second is an authenticated NFT receipt, which admits her into your exclusive online community of verified sneaker-lovers. She’s now a customer for life.
What comes after jumping the shark?
This fan fiction was hard to read, but it really catches the atmosphere of dystopia, 7.5/10
> Before the customer leaves the store, two tokens appear in her digital wallet. The first is an NFT version of her new sneakers, usable in any game or virtual world she chooses. The second is an authenticated NFT receipt, which admits her into your exclusive online community of verified sneaker-lovers. She’s now a customer for life.
This leads me to wonder: Why would I want an NFT of my sneakers in a game or virtual world, rather than just, say, a representation of the sneakers themselves, minus the NFT? I suspect it's because this introduces scarcity into the virtual world. There's no technical reason why every character in the game couldn't have the same pair of sneakers modeled on a real-life sneaker. But if you need an NFT tied to a physical purchase, now that virtual pair of sneakers costs you $99, and you can walk around that virtual world knowing that your fashion can't be easily (or inexpensively) replicated. This definitely has classist implications.
As for the exclusive online community of verified sneaker-lovers, note the words "exclusive" and "verified." It's a gatekeeping method so you don't have to associate with the hoi palloi who might love sneakers just as much as you, but don't have the cash to buy enough to get into the exclusive community. And who's going to build or maintain this community? Solana is enticing you with visions of an ecosystem, but it's not actually going to build that ecosystem.
> Solana is enticing you with visions of an ecosystem, but it's not actually going to build that ecosystem.
Indeed, it will only make sure to get a cut of the profits.
Seems pretty hard to connect those claims to the docs https://docs.solanapay.com/spec
"A standard protocol to encode Solana transaction requests within URLs to enable payments and other use cases"
I can’t wait for this future nightmare cyberpunk world straight our dystopian sci-fi warned us of.
virtual or fabricated scarcity is dumbest notion I've ever came across
Seems like I get to be the first to post the standards meme: https://xkcd.com/927/
Except that this standard comes free of charge with the Pandora's box of crypto applications. Lovely.