On the aptly titled website Thoughts on the future of finance, Richard Gendal Brown looks at the recent single Bitcoin transfer of circa $150 milions and uses it as an example to explain how money moves around the banking system.
There was much comment about how expensive or difficult [transferring almost $150m in a single Bitcoin transaction] would have been in the regular banking system — and this could well be true. But it also highlighted another point: in my experience, almost nobody actually understands how payment systems work. That is: if you “wire” funds to a supplier or “make a payment” to a friend, how does the money get from your account to theirs?
In this article, I hope to change this situation by giving a very simple, but hopefully not oversimplified, survey of the landscape.