“One of the interesting things about Bitcoin is the contrast between how it is portrayed in the press and how it is understood by technologists. The press tends to portray Bitcoin as either a speculative bubble or a scheme for supporting criminal activity. In Silicon Valley, by contrast, Bitcoin is generally viewed as a profound technological breakthrough.”
Interesting he draws parallels to the HTTP/SMTP protocols. By themselves they are pretty useless — it is the apps built on top of them (the web / email) that make them valuable. The same is true with Bitcoin if you think of it as a protocol rather than as a currency or payment method.
I still think that people writing off Bitcoin as a scam or fad or pyramid scheme are missing the bigger picture. Looks like the big boys in Silicon Valley agree with me.[/quote]
The underlying technology is interesting, but I still don’t think it can interrupt the credit card company translation fees because it doesn’t offer the protections that those transaction have. Nobody works for free so in order to be able to dispute erroneous transactions have recourse when you wallet gets lost of stolen you need a central payment processor that’s willing to handle those type of disputes. Bitcoin doesn’t do this, so yeah you can transact in bitcoins and avoid the transaction fees but realize when you get ripped off it’s permanent. There no middle man to help you. That’s why it’s been popular in the black market because you accept those risks when transacting in that market.
The processing power of completing a transaction is what bitcoin mining is, so are people who are providing the resources to complete transactions going to continue to do that if and when bitcoin mining gets too hard or bitcoin values get too low. Can you even transaction in bitcoins without bitcoin miners. My understanding is no but maybe you have more insight into that.