Hard to know where this is all going to lead. But one thing is clear– we have added a very interesting new chapter in the history of money.Where it is going is toward a more streamlined payments system that is more efficient by reducing transaction costs. No brainer.
Econobrowser
Economics of Bitcoin
James Hamilton | Professor of Economics at the University of California, San Diego
3 comments:
But the credit card companies will fight hard to keep getting their cut of financial transactions.
Bitcoin is something of a scam, as I understand it, and will probably go the way of most scans...
Whatever happens to Bitcoin, what is important is the concept and the ability of that concept to increase efficiency by reducing costs. This guarantees eventual integration into the existing system, e.g., as global retail and small business trade increases, where small players have no negotiating power to reduce rents.
Bitcoin is just an intangible asset you can transfer with very little frictional costs. No middleman required, either to transfer or to verify the asset.
It's long run effect will be to reduce frictional costs - even more so than Ebay or Amazon have reduced frictional delivery costs. And that's because there is literally no middleman with Bitcoin.
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