
Interest in Bitcoin Grows on Wall Street - edward
http://blogs.wsj.com/moneybeat/2015/03/29/interest-in-bitcoin-grows-on-wall-street/?mod=WSJBlog
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patio11
_“The price of handling bits [of data]has come down by a factor of 10,000 fold
over the last generation; it’s high time that the costs of payments processing
fall by a factor of even two,” says former U.S. Treasury Secretary Lawrence H.
Summers._

Bitcoin's price advantage over traditional payment processing options is not
because it is cheaper at handling data. On a bit-for-bit basis, it is
_radically_ more expensive. (~$6k per megabyte at the moment?)

Bitcoin's price advantage is that Bitcoin declares out-of-scope the services
which contribute most of the price, which are a) collecting massive install
bases on both sides of a truly staggering number of markets, b) providing
trusted environments for commerce to happen and c) mitigating many forms of
risk within those environments.

You can, today, get a piece of plastic issued to you by an AI algorithm which
will judge your character in single-digit seconds. You can then take that
piece of plastic, _literally fly to the other side of the world_ , and buy
lunch with it, in the near certainty (in the first world) that there will be
many lunch options that will honor it. You can then leave the plastic in the
foreign country attached to a note which says "PLEASE STEAL ME!" You'll arrive
back home to discover your card stolen, canceled, and reissued, at no cost to
you.

This adventure will cost you the price of lunch plus about 5~8%, which will
shock you because normally (domestically) the magic plastic costs you
_negative amounts of money_ , since domestic use of the payments network and
dispute processing gets paid for entirely by merchants (whom it costs ~3%).

~~~
gojomo
A merchant's ~3% cost is passed on to the customers, one way or another. (It's
not costing the customer "negative amounts of money".)

~~~
akshatpradhan
They don't and it's a common misconception. Merchants need to stay competitive
and they'll lose business by not keeping prices competitive. That's why spicy
peanuts cost $.59 and only $.59 at every convenience store. The merchant fee
isn't tagged on and you'll notice this on most products when you compare
across stores.

~~~
treehau5
Don't all convenience stores put up a small handwritten sign that says
"Minimum Purchase Amount for Credit/Debit Transactions: $<whatever they need
you to spend to offset the cost>

~~~
Phlarp
My understanding is that these signs are more "polite recommendations" than
they are enforceable rules. My suspicion is that the card companies have a
clause against this in the merchant agreement and don't want their payment
method to be perceived as "costing more" to consumers.

------
Drakim
Disclosure: I own Bitcoins

While Bitcoin came out of our "own" community, and a lot of technologically
inclined people are enthusiastic over it and it's features, I wonder if
Bitcoin got planet-wide adoption, would it be a bigger boon to the man in the
street or the big fat rich cats? It makes hiding money a lot easier (akin to
the Swiss bank account but with less trouble transferring) and makes it a lot
easier for money to "disappear" and be impossible to take back.

These things strike me as things the man in the street wouldn't care so much
for (the government tracks his income so he can't whisk Bitcoins away, and
working black is, well, like working black for dollar bills, not that
different).

~~~
exo762
Disclosure: same here.

You can hide your money, but you can't hide your spending. If someone is
living beyond their means, it's a signal to IRS or (place name of agency that
taxes you) that you are worth their effort.

Also, government is not the only one who is abusing power. Rich and powerful
also do that. Bitcoin can at least prevent some of that abuse by being
censorship resistant.

~~~
sanoli
You can hide your money, and then you can launder your money. I don't know
much about bitcoin and about money laundering to know if it would make it any
easier, or even harder. I do know, however, that if it makes it _any_ easier,
the big fat cats will make _good_ use of it. But maybe there's no difference,
I don't know. Maybe somebody chimes in?

This book's author claims it is the third largest business(money laundering):
[http://www.amazon.com/The-Laundrymen-Laundering-Largest-
Busi...](http://www.amazon.com/The-Laundrymen-Laundering-Largest-Business-
ebook/dp/B001OI1YIY)

~~~
exo762
Fat cats and drug cartels are currently doing great job of laundering money
using banks. So the question is: was anything of value lost? Also - does this
mean that Bitcoin will democratize tax evasion / money laundering?

There is also a matter of complex tax codes. Today they predominantly used by
large businesses and wealthy people. With Bitcoin as a very democratic tax
evasion / money laundering mechanism, is there any chance that we will see
clear and simple tax codes in Bitcoin future?

------
sizzzzlerz
Wonderful. You think you've seen fraud in the Bitcoin market? Up until now,
its been strictly amateur night. Wall Street gets involved and now we're in
the Majors. All the money lost down the Bitcoin rat hole so far amounts to
basically tip money at the stripper bar to the professionals.

