But the way this is implemented is "credit card companies will take 3% of every transaction they perform, and then give back a very small portion of that to counteract fraud". The power we give these organizations - basically a 3% tax on every transaction - is mind boggling.
Compared to the spread and inconvenience on $ -> bitcoin -> $ transactions, that's quite cheap.
Keeping bitcoin online enough for convenient transactions carries the small but important risk of losing your entire wallet.
True, and there are benefits you get for that 3% (rental car insurance, reduced cost of a mugging, etc. etc.) but I still wonder if cash (not necessarily bitcoin) would be better for the system as a whole for everyday purchases.
Keep in mind that cash has costs too. It has to be counted and secured. You have to hire a security company to pick up deposits and most banks charge for cash deposits over a certain amount.
But then that tax gets selectively reimbursed via dividend to shareholders. Upward redistribution.