Bye Bye Visa and Mastercard?

[bluefete]

Interesting perspective but Visa and Mastercard are behemoths and will not go gently into that good night.

Maybe Chamath has some serious investments in altcoin.

Billionaire Chamath Palihapitiya says Visa and Mastercard will be the biggest business failures in 2022, losing out to altcoin-linked projects
Shalini Nagarajan
Fri, December 31, 2021, 5:36 AM



(CLIFF NOTES: Visa and Mastercard will lose out to Web3-based payment projects in 2022, Chamath Palihapitiya said.

Both companies are a "completely contrived duopoly that doesn't need to exist," he said.

He cited Amazon's decision to ban Visa credit cards in the UK due to high transaction fees as one reason for his view.



Billionaire investor Chamath Palihapitya has boldly predicted that Visa and Mastercard, two of the biggest payment processors, will be overthrown by emerging blockchain and DeFi projects in 2022.

"My biggest business loser for 2022 is Visa and MasterCard and traditional payment rails and the entire ecosystem around it," he said in an episode of the "All-In Podcast" released Wednesday.

To him, the long-standing payment systems used all over the world are a "completely contrived duopoly that doesn't need to exist."

Palihapitya, a former Facebook executive who runs the venture capital fund Social Capital, shared what he thinks will be the "most profitable spread trade" of his lifetime in the coming year.

"Be short these companies and anybody that basically lives off of this 2 or 3% (transaction) tax, and be long well-thought-out, Web3 crypto projects that are rebuilding payments infrastructure in a completely decentralized way," he said.

Without being specific, he predicted at the same time that "a lot of these scammy crypto projects will go to zero."

"If you read the whitepapers of these crypto projects, and you systematically put together a framework, I think you can be long those and you can be short Visa/MasterCard, because I think this is their peak market cap," he added.

A spread trade is a market order in which a trader simultaneously carries out a purchase of one security and sale of a related security in a single unit. Investors execute this trade to attempt to profit from the spread, or difference, between the buying and selling prices.

Palihapitya based his opinion on Amazon's decision to ban the usage of Visa credit cards in the UK, because of high transaction fees, last month.

"The canary in the coal mine here is pretty significant," he said. "Amazon is not going to do something like that, in my opinion, unless it's a test of what they can do all around the world."

"There really is no need today for all these small businesses to sit on top of Visa, MasterCard, and AmEx rails. It's unnecessary."

He also predicted the first movers for the adoption of this emergent technology will be in the developing world.

"This is why I think focusing in markets like Nigeria to me are way more exciting than talking about these fading Western European countries. This is where this stuff will happen," he said.

"We'll look back in 10 years and (traditional payment processors) market caps will be materially lower."

Visa and Mastercard have been underperformers in 2021, with their stock prices roughly flat year-to-date, compared with a roughly 27% gain in the S&P 500.

https://www.yahoo.com/finance/news/bill ... 16853.html

[pugboy]

easy to say
and he prob trying to cause the change

[Dizzy28]

Unlikely!!

[Redman]

He is right.
Maybe early but right.

V and MC live off their fees buiuut provide a service that is relevant...other than the raw processing.

It will be a while but they will be fighting a rear guard defensive retreat.

Look at the financial services sector since the mid 90s.

Adapt fast, learn to live on less, change your value proposition.

[neilsingh100]

Web3/blockchain technology has some legit use cases but too early to see where it will get traction and how it will be regulated. In the end all we may get is central bank digital currencies (CBDC). For the average person, blockchain technology is not very user friendly and has a lot of maturing to do before wide adoption. I believe BTC has out lived it usefulness and when that bubble burst a lot of novice millennial and meme stock type investors will have to learn the fundamentals of investing the hard way.

[Dohplaydat]

No, I disagree.

Firstly, I love crypto but it's far from mass adoption until they resolve some issues.

Secondly, fiat currency is not disappearing anytime soon, and may never. Just too entrenched and also has real legitimacy which crypto does not have yet.

His predictions might be right in the long term but not in the timeframe he is suggesting.

Also he is a hypeman behind this, so he's trying to push and popularize his agenda.

Lastly, visa and MasterCard have huge research departments and have acquired companies involved in crypto, they're not slow moving dinosaurs, they will hedge their bets with crypto too, just like oil companies investigating into renewables.

[DMan7]

Yuh know when a 1% proposes something, it's the poor that gonna get jook.

[0rb1tz]

Sounds like he has some skin the in the game and using his publicity to do some public perception manipulations. I bet he even has his own e-currency mining somewhere under several ghost corporations. His predictions will eventually happen.

But it's simply not going to happen in 2022 on the scale that he is describing. For one, the world does not have enough computational power and energy right to commit to that number of blockchains for the approximately 1 billion daily transactions on credit card platforms worldwide. And we don't have the global internet bandwidth either to perform all those blockchain transactions at once from each point of sale to the processing centers. 5/6G may solve that someday. Creating blockchains is very computer power intensive to generate and then verify each step. It's like prime number calculations and encryption on a huge scale. It takes time to create a unique blockchain for every transaction, and thus it is also energy intensive like bitcoin mining. So it's impossible right now for that concept to take over the world in 2022.

Then you have to consider government regulation which will take a long time to understand the technology and then draft domestic and international laws to regulate a new transaction method, which again must be as sure and guaranteed by law as having a gold coin in your hand and exchanging it for goods. Anyone can create an e-currency. It's not regulated and like bitcoin, easy to lose everything to huge scams, and can even potentially collapse a country's economy.

So we are facing a dual problem right now:
1. the computational power - Current chip shortage and current physics problem of the gap between atoms. Right now Intel is struggling with a 10nm lithography, but hope by 2023 it will be in full production and start replacing most older lithography processors. This will be a real boost in the speed of the technology of chips. AMD and Samsung has a "7nm process," but it's not a true 7nm distance when measured with a SEM and is just a marketing term. Intel's Q2-2021 chip available on the market i9-11900K is still at 14nm which shows the real world struggles of taking the next step in this technology in the industry right now. They've now started making the true 10nm Intel 7 12th generation chips in Q4-2021 which you probably haven't even heard of yet on the market.

2. Power: Where all those watts are going to come from immediately available to the world grid? We all know we are facing a global warming and energy production crisis and will be present and real in our lives for the next 30 years. It will not end until we take the step to produce more wind and massively scalable clean energy production, or invent the technology to take advantage of the almost unlimited solar energy reaching earth's orbit that will not be affected by the atmosphere and regional climate conditions. Solar still inefficiently relies on the limitations of the physics of semiconductors and power conversion efficiency.



But a genius billionaire knows all this, so back to the top where it's now more than likely that he has skin in the game and pushing his stocks.

[ProtonPowder]

Sounds like he was just trying to short the stocks for a quick buck.

[88sins]

Sounds like he was just trying to short the stocks for a quick buck.

THIS is what he trying to do, and failing miserably at it.

[Redman]

People speak their book.

Doesn't mean he is wrong

The threat to V and MC has nothing to do with BTC but the tech in general.

BTC is under the same threat.

Tech enabling others to do what they do only faster,cheaper and yes using a minute fraction of energy per transaction.

They will put up a fight, but they on their way down.

[VexXx Dogg]

Just another cryptobro doing cryptobro things.

[pugboy]

they may even use blockchain tech to replace card tech eventually

just change the regular card into a crypto card wallet