We really need to stop clamoring for regulation. It is like asking permission for doing something that we don't need permission to do. Trusted and transparent entities will emerge that will resolve many of these issues

What about the merchant? The merchant receives a chargeback and eats the cost, which means cost indirectly does get passed back to consumers. Also victims of credit card and identity fraud can suffer damage to credit history which is tedious and sometimes impossible to recover from.


If you read my earlier post you'll see my emphasis is on technology evolving. The way Bitcoin was experienced in the previous five years will not be how it's experienced in the next five. One thing I think we'll see is hybrid solutions like BitGo where the user essentially partners with an online service to manage their coin security. Such companies, being based completely on technology, don't need much to operate; even less than Amazon.com, for example, which while building physical warehouses absolutely destroyed traditional brick-and-mortar retailers.

As for regulation/compliance that is still shaking out, but things are not as arduous as you make out. For the U.S. at the federal level, a business only needs to register with FinCEN which is simple. Individual states are slowly making their positions known, but Texas for example says no additional regulatory burden applies, so long as no fiat is involved. Previously two other states (I forget which, something like WY and MT I think) had no MSB licensing which remains the same for Bitcoin. California recently adopted Bitcoin favorable legislation and NY is working on a 'Bit license'. So we may find completely above board business compliance for Bitcoin is quite workable for enterprising entrepreneurs, especially funded ones, after all.

They will do it the same way companies do it now. They will pass any business cost along to the customers in the form of a markup. Bitcoin isn't free to use right now. In fact it's relatively expensive. If you mine them there is a heavy equipment cost that you may never ROI. If you buy them their are exchange fees on both sides of the transaction plus a fee to send the transaction quickly if you're using "fresh" coins.

The reason is because technology itself makes things so much more workable and efficient. That results in cost saving which can be passed directly to users.

As for tech company profitability it goes a bit off the subject of Bitcoin, but currently volume (eyeballs) alone is enough to result in exceedingly high valuations. For example look no further than Twitter. How much are users charged there? Yet Twitter recently IPO'd at 24.9 billion. Similarly, the WhatsApp chatting application was bought by Facebook for 19 billion. These services boil down to publishing text, for the most part, on the Internet. By the way does Facebook even make a profit yet?

Yet, with Bitcoin you're dealing directly with money, people spending money to be more precise. It would be harder to believe popular Bitcoin services couldn't be valuable.

So the less educated pay a premium. Whether it is being talked into a loan they can't afford or having to hire an accountant, this is always the case. Why should it be any different with bitcoin. The difference is that those that care to can bypass these third parties. This isn't possible or at least advisable with most other systems.

As with most things it isn't an either or situation. There can be third party services and their costs for those that want the ease or simplicity. And those parties can be bypassed for those that would rather control their own matters. That isn't possible with credit cards or banks.

I see your point. I've never paid for a single email, but the companies behind my email accounts do make money... I can see how a brand new technology like Bitcoin (much like email back then) will somehow allow for this to happen again but for finance instead of communication...  but I'm struggling to understand how Bitcoin can avoid the costs that banks have to pay for protecting users, legal stuff, etc. That's what makes up the costs of the current system, isn't it? How will this not apply to Bitcoin if it were to become mainstream?

Somehow, my brain says, the cost of all these new services need to be paid by someone.

I think if Bitcoin becomes really popular, it will become an expensive niche product like Wire Transfers (mainly due to scaling limitations).

I think Bitcoin will eventually force the legal requirements to change. For example: whether or not you have to report a transaction often depends on whether or not you are dealing with a "foreign politically exposed person". However, Bitcoin obeys no borders, so such requirements do not make much sense when applied to Bitcoin. Heck, bitcoin does not even require that you are human to work (unlike the traditional banking system where you must prove you are a non-terrorist human)..

It's not like banks are constantly looking to reduce user fees. A typical wire costs $25 or $45 internationally, and can take days to clear. In 2012 ABC News reported bank overdraft revenue rose 3.6% to $31.5 billion. Bank of America was planning to charge users to use their own debit cards until a wave of backlash turned them from it.

It may be surprising but the banking system wasn't built up to cater to the little guy. It was built up by stodgy, lazy, greedy financiers looking for any way to extract another penny profit from their privileged position. There is much a fresh crop of tech entrepreneurs can do. If you don't see how a worthwhile impact on finance can be made with cryptocurrencies you don't have to. Just sit back and let the free market (for as long as it can remain that with Bitcoin) do its thing.

But Bitcoin, unlike the banking system, is built up to cater only to the little guy, right?
Everyone in the Bitcoin ecosystem, from Mark Karpeles to Roger Ver, are saints and angels promoting Bitcoin solely for philanthropic reasons ... They can do no wrong. All of them are just trying to make the world a better place for everyone. It's all unicorns and rainbows ... And no one in the Bitcoin industry are "stodgy, lazy, greedy financiers looking for any way to extract another penny profit from their privileged position" ...   

someone with 50k btc could transfer $28500000 worth of value for only some cents in transfer costs. i'd say that could save some money.