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Mikejcasey30 karma

Huge potential. Starting point: $80 trillion global economy. If you just save 3% in fees on that, you start with $2.4 trillion in savings. That's about 16 times the total global development aid budget alone. But of course, the savings on remittances and the many hidden fees are even bigger. You do away with cash, you save on massive security costs. If you remove escrow agents, trustees, stock exchanges, lawyers and other intermediaries who simply play gatekeeper roles in global finance, you get even bigger savings. And what happens if we integrate 2.5 billion "unbanked" into the global economy? You think the integration of China into that economy was big. This could be even bigger. It could spur a whole new wave of decentralization in supply chains. And to your straightforward but vital point: speed is critical. As the old adage says, time is money. If we can clear and settle money without two-day time lags, that frees up trillions of dollars in capital that can be re-deployed. The global economic implications are indeed profound. Hence the subtitle to our book.

Mikejcasey24 karma

It's an understandably common question. I like to take a few steps backward on it. First to say that ALL currencies ultimately derive their value from a shared community view that the currency in question represents a token of value that all agree on and that it is widely accepted. Bitcoin has some ways to go in that regard. But it is no different from other currencies in that it has no intrinsic value -- the idea of a currency's intrinsic (or commodity) value, even for gold, is a myth in our mind. But the next point is what are the kinds of things that lead communities to come to such conclusions about a currency. And that comes down to trust. In the case of gold-back, it's that people trusted that the gold behind it would retain its value because that commodity happened to have some good qualities as a currency: durability, divisibility, fungibility, transportability, et. In the case of fiat money, the trust lay in the idea that the government would stand behind it. And while that's in itself a flimsy notion -- what can a government back a fiat currency with other than currency itself? - it is still a worthwhile basis for trust because a trusted functioning government is one that successfully collects taxes. And it can promise to honor taxes in its currency. So what about bitcoin? Here, the trust (and therefore the value) comes down to math. You trust that that mathematical algorithm behind it is irrefutable, more trustworthy than a human. And it's also secure: the bitcoin algroithm, decentralized and distributed as it is, can't be hacked, and there is so much money invested in the mining hardware that runs that system that's difficult anyone to take it over. (That's akin to the infrastructure that a government brings to the table, though much less.) Finally, there's the fact that bitcoin is simpy incredibly useful. Far more effectively than dollars and gold you can send it anywhere, cheaply, without a fee-taking middleman. It makes digital commerce so much more effective and efficient than non-digital currencies. All of that goes into the mix that gives bitcoin its value.

Mikejcasey23 karma

It seems that low-hanging fruit is in the wallet and exchange businesses, because these are the basis infrastructure of a functioning digital currency ecosystem. You need those tools to make it function. But Holy Grail for now seems to be in developing apps that make international remittances feasible. The savings for immigrants and their back-home families from digital currency transfers could be significant. Other cool things being built on the blockchain: copyright certification tools, database management, decentralized memory sharing, decentralized Uber-like ride-sharing, crypto stock exchanges... a long list. All these in some way are challenging the various institutions that sit in the middle of global commerce.

Mikejcasey19 karma

It depends on what you define as the world. I think bitcoin, or at least some decent cryptocurrency clone, will take over the world of financial payments and value exchanges. It will work in the background, just as the Internet does. Will it take over the dollar? That's more of an open question.

Mikejcasey10 karma

OK. That's it for now, folks. We have to get back to our day jobs. Thanks for all your carefully thought out questions. It was fun. Goodbye!