[Karunamon]

No it isn't. Bitcoin's killer feature is anonymity. It has no underwriting, no risk prevention, and worst of all, no ubiquity.

Once you pay someone with BTC, your money is gone. It's that simple. Unless you involve a third party of some kind, and then it's PayPal all over again... though I assume it's a great deal easier to become a BTC middleman than a middleman of any established currency, due to lack of idiotic government red tape to jump through.

[ihsw]

Actually Bitcoin's killer features indeed includes removing banks/other intermediaries from the transaction process, in addition to making state-sponsored inflation impossible.

Bankers hate BTC because it removes them from inter-mediating people and their money, statists hate BTC because it nullifies their socialist dreams of gathering funds at will (printing money). Anonymity is just a nice bonus.

[pnathan]

Actually, BTC isn't really anonymous. The record of of transactions is part of the record... all you need is to tie a person to the BTC address.

[oleganza]

Both physical goods, cash and bitcoins once transferred are hard to get back. But this does not invalidate property rights and prevention of fraud. If two parties cannot resolve a conflict by themselves, they turn to a third party. This has nothing to do with bitcoins, paypal or any money system.

Bitcoin is valuable because it gives you a choice: you can either have third party to resolve issues and insure risks, or you can go by yourself. In case of paypal/visa/wire transfer you do not have such choice.

[mrb]

From a merchant's viewpoint, once you receive coins, NO ONE can take them away from you, which actually solves the exact problem the guy have.

[Karunamon]

From a customer's, it means you have precisely zero assurance once you've paid that the other guy will follow through. It's just like sending cash through the mail, except with no chance it won't get there.

[mrb]

It is much easier build merchant rating services/databases than customer rating services/databases. Proof: compare (1) buying from a high-rated eBay seller which is pretty much riskless, to (2) the complex consumer credit rating industry which is doing a poor job at maintaining fraud at constant levels (fraud increasing year over year, small merchants going out of business, etc).

Therefore I assert that the Bitcoin model is superior: solving the fraud risk for merchants is more important than for customers. If a merchant start delivering poorly (or not at all) with purchases, he will quickly receive poor reviews and go out of business, hence self-correcting the fraud problem.

Of course another option with Bitcoin which you are not thinking about is to use escrow services as third party between buyers and sellers.

[Karunamon]

state-sponsored inflation

..which is just replaced with built-in inflation. At least the rate is predictable and static.

[mrb]

No. Bitcoin is deflationary, not inflationary. (The value of a coin increases much faster than the coin supply. About half of the 21M coins have already been generated.)

[Karunamon]

Err, deflation, right. Not sure why I conflated the two there.