Quote from: gendal on March 27, 2013, 08:14:12 AM

OK - so there's several things there then, right?

1) Belief/assertion that middlemen are bad. Not sure I buy this... any system that can bring together two large groups of people (customers and merchants) is going to be valuable --- users of the system get value from the "middleman" service MC/Visa provide... it saves them having to worry about sorting out multilateral links/contracts/relationships, etc.

2) Claim that Visa/MC are anticompetitive / duopolostic. I think this is probably accurate but also unavoidable... and it's hard to see how to fix it.... the card network business has huge scale efficiencies and network effects... a small number of large players is what you would expect to see. This makes it really, really hard for small players to operate profitably. Not sure how to fix it since it's a fundamental property of the market structure from what I can see

3) Ability to refuse some transactions. This strikes me as a really good argument - they have this power as a result of 1) and 2) and it would strike me as being abusive.... as you suggest, however, it suits law enforcement bodies since it provides them with an easy way to stop transactions they don't like..... I just wonder if this would be enough to enable the creation of an entirely parallel network (especially one that would presumably also benefit from the effects of 1) and 2)!)

I'm not saying middlemen are necessarily bad, It's just that if we have middlemen that add no value then they should be done away with, in the UK we have a bloated service sector with everybody cutting hair or doing book-keeping, nobody is doing real work and this creates poor growth. Anyway MC and Visa add value in the current system because they facilitate customers transactions for money they hold in banks, they have massive overheads and lose vast sums of money to fraud. Now that bitcoin provides individuals with there own personal electronic bank account (in effect) We may not need these services in their current form.

As we are our own bankers we can send money to anybody else with a wallet or client, so the question is: not why do need to get rid of MC and Visa, rather it's: why do we need to keep them? (I'm thinking long term obviously).

The problem we have now with bitcoin is slow Transaction confirmations, even with the appropriate fee and transaction priority confirmations still take minutes, this is no good if you want to pay for fuel in a garage and have to wait around, Maybe MC & Visa types will find a business model in handling payments and taking the risk for the time between confirmations?