While I appreciate the effort, I wonder why people think Bitcoin will gain mainstream adoption in the first place. Besides buying drugs online, what is really the killer app here?
With the Lightning Network, you could transport any amount of value, instantly, for very close to zero cost, allowing things like paying a random untrusted party for WiFi by the second, with incremental micropayments.
Only in a fictional world where my employer/clients pay me in bitcoin.
In reality I need to go to an exchange, convert to bitcoin, then go back to either the same exchange or a different exchange and convert from bitcoin, all in all I've gone through two intermediaries and paid two fees.
For one example if I did that on CoinMill they would charge me $2.59 over market for 1 bitcoin ($252~254 in value) and the same again when I convert it back to dollars. $5.18, that's approx. a 2% transaction fee. TransferWise by contrast (who really are super hassle free) charge $2.88 for one end-to-end transaction, so less than bitcoin(!).
So yeah, your argument is completely broken in the real world. Only in a fictional world where everyone uses bitcoin does it work.
The intermediaries are domestic exchanges in this case, meaning only domestic transfers of fiat need to be made. The international transfer occurs through Bitcoin. Fees for large Bitcoin exchanges range from 0.25% (Bitstamp) to 0.38% (BTCChina). Coinbase currently has no fees, but it's a temporary promotion. That means it's less than 0.8% in trading fees altogether, when using major exchanges. Assuming Bitcoin becomes a little more widely adopted, this situation will only get better.
I think the real opportunity is in the back end of the financial system. Banks can begin to use Bitcoin for international wire transfers, while enjoying much lower trading fees than retail clients when converting into and out of fiat currencies.
[0]http://www.coindesk.com/companies-paying-employees-bitcoin/
Why "everyone"? Wouldn't it be enough if a shop that has something that you want to buy accepts it?
There's a great many shops accepting Bitcoin today already.
Certainly doesn't result in: > You can transport value across the world instantly, with no intermediaries. This is a major efficiency gain.
Since (A) there is an intermediary and (B) it is not efficiency (which I'm assuming is a euphemism for cheap anyway).
There's scenarios where TransferWise, MoneyGram, WesternUnion etc. either don't work or ask for extremely high fees.
It can also be simply inconvenient to go to the physical pick up locations of MG/WU. Keep in mind most people in the world are not blessed with 3 different banks and a starbucks within walking distance.
Do you have an idea of the quantity of power Chinese bitcoin mining farms consume? That's only for the few transactions that the networks processes right now.
Here is a quick computation that shows that every transaction that goes through the Bitcoin network is equivalent to releasing 47kg of CO2 into the atmosphere: http://redd.it/2hiea4.
Other than the accelerating effect of transaction fees on mining resource consumption, which is on the order of 2 cents per tx, there is no relationship between number of transactions that the network processes and the power Bitcoin miners consume. In other words, the cost (both economic and environmental) per transaction will decline as transaction volumes increase.
The current Bitcoin network cannot handle that many (think an order of magnitude) more transactions without having to scale. See also the original link.
Almost the entire cost of mining is in running ASICs to produce proof of work, not in validating transactions. The cost to produce proof of work is not affected by number of transactions.
However... bitcoin does allow new insurance providers to pop up - the insurance provider no longer has to be the same entity that holds your cash (your bank) or provides payment processing services. They could experiment with new models - multi-key escrow until service delivered, an "approved store" model where they'll provide insurance on purchases from stores that they've checked out without ever having to touch the money themselves, or more. This could all be cheaper than what your processor + bank combination costs, potentially.
The thing is... that's not really good enough for customers. Nobody thinks enough about a few pennies per purchase to pick up a whole new currency.
At ~$30,000 a year in credit card spending I'm throwing that amount away in credit card fees every two and a half years. I'm perfectly capable of and would prefer the option to self-insure, thank you very much.
Ultimately insurance always has a negative expected value for the average consumer. It makes sense to pay the vig to insure against catastrophic events like a car crash or a house fire, but insuring my daily credit card purchases like takeout meals, groceries, and gas is stupid.
I also doubt that people who don't have bank accounts have private computers. So really the pool is "people with computers and bank accounts in countries so replete with fraud that Paypal and CC companies don't service them".
The argument is that they'd be paid in Bitcoin for goods/services in the first place. It is a currency, after all, just (perhaps currently, perhaps always) a very volatile one.
Bitcoin beats "Cash On Delivery" because it is trustless, but that's easy to address by having the delivery service allow a remit prior to the shipment.
Note that with CBD, a (cash using) recipient has to deal with 1 party, with bitcoin they have to deal with 2 or 3 (obtain, spend, receive).
Services would be somewhat different, but it still seems like quite an open question whether bitcoin would (in practice) be better than buying some credit from a payment provider (Paypal or Amazon or whatever).
But you could have said the same thing about email/the web in the past.
A global communication network and protocol without anyone using it is pointless. The same for a global value transfer protocol. It seems obvious _a_ protocol, probably blockchain based, will gain mass adoption eventually.