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Comment by jonny_eh | Hacker News Reader

He totally skipped over the best argument for Bitcoin, the reliance on middle-men when exchanging money online. You either have Paypal or some other kind of credit card processor that takes %3 or more of every transaction.

If only the value of BTC would settle down a bit, it would make a great way to facilitate micro-transactions.

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> So do we need a new form of money? I guess you could make that case if the money we actually have were misbehaving. But it isn’t. We have huge economic problems, but green pieces of paper are doing fine — and we should let them alone.

The point of the article was not to inform, but to denigrate Bitcoin (and Gold) in the reader's mind. Both Bitcoin and Gold are a means to measuring the value of paper money over time, as well as a potential store of value. Krugman is not going to write anything in support of Bitcoin because he likes the status quo and doesn't want things to change.

Why do you need an alternate currency to do that? Companies like Dwolla are hard at work trying to make credit card processing payment fees a thing of the past. Last time I checked, it cost only 25c to move money between bank accounts on Dwolla.

Are they international? If so you can bet someone (such as a bank) is taking a cut somewhere on the offered exchange rate.

EDIT: I just looked and Dwolla is US only.

I mean, there's a % taken from every bitcoin transaction as well, it's just a question of which fee is lower, BTC or dwolla.

I think the bitcoin fee is optional? or at least doesn't apply in many cases?

peers may offer to process bitcoin transactions for free, and the original paper posits there are always going to be participants who will.

What if I wanted to transact 25 cents?

Transactions are free under $10.

From what I understand about bitcoin, it has a history of transactions hashed from previous transaction, therefore every transaction is tracable, and every bitcoin is identified throughout this process. I don't understand how the author got the information from, but it is definitely wrong

Aren't the miners in effect middlemen who take about 2% of the bitcoin economy?

http://techcrunch.com/2013/04/13/the-cost-of-a-bitcoin/

back of the envelope calculation: $2B market cap in its heyday a few months ago, and the $150k x 365 = $57M a year in "fees" which is about 2.8% of the entire bitcoin economy

remember, the banks also spend the fees back into the economy, such as paying their employees :)

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