[euank]

>more efficient way to transfer money

In addition to your stated issues (which actually are probably fixable), there's the computational power requirement. That cannot be fixed. Bitcoin requires thousands of times (or more) more computational power to do a single transaction than any centralized currency system I can think of.

I remember before bitcoin people would say "Oh, I have a couple spare computers... I just threw folding@home on them for now". Now, people are going out of their way to throw cycles at this currency instead of problems that help scientific progress, and thus humanity.

Bitcoin is a cool idea and well implemented for what it is, but I think attention should be drawn to its exceedingly inefficient use of computational resources.

[dllthomas]

"Bitcoin requires thousands of times (or more) more computational power to do a single transaction than any centralized currency system I can think of."

Is that really the case? I'm quite sympathetic to the view that it might be, either presently or in the long run (an arms race where attackers and defenders are on the same footing can't get cheaper due to improved technology), but there are expenses in the current system that bitcoin avoids (and a lot that it doesn't, for sure). I've seen various analyses making various claims, and I'm really not sure what the answer is.

[nhaehnle]

there are expenses in the current system that bitcoin avoids

Which expenses would that be that are genuinely avoided while maintaining feature parity, rather than merely avoiding the feature that is bought by those expenses in the traditional system?

For example: Of course not having to worry about chargebacks and related fraud makes Bitcoin potentially cheaper than the existing credit card system. On the other hand, fraud protection is a useful feature, and adding it on top of Bitcoin removes any cost advantage that Bitcoin might have started out with.

This example provides a template that, as far as I can see, applies to every so-called cost saving aspect of Bitcoin (except possibly the fact that Bitcoin might make the whole banking system more competitive; that would undoubtedly be a good thing).

[VMG]

Customers will have the choice to buy fraud insurance and might save by deciding against it when dealing with a reputable sellers. Also fraud insurance can be cheaper thanks to the protocol's escrow capabilities that are unavailable with traditional payment systems.

These are only the advantages compared to national transfers, when looking at fees and regulations in the world of international transactions, the advantages are even greater.

[dllthomas]

If you wish to actually move reserves in the current system (be they in the form of stacks of USD, gold, T-bills, &c), you need to secure them in transit. Securing BTC in transit may cost more than billing a credit card, but it costs substantially less than hiring a Brinks truck.

[VMG]

> That cannot be fixed. Bitcoin requires thousands of times (or more) more computational power to do a single transaction than any centralized currency system I can think of.

Bitcoin's goal is not to allow financial transactions, it's goal is to allow financial transactions without having to trust a third party.

This is impossible in a centralized system, this is why Bitcoin is the most efficient system of making secure digital transactions without relying on a trusted third party.