[tveita]

Yes? Going either by volume or number of transaction, Bitcoin transactions are currently ludicrously expensive, though this is somewhat hidden by subsidizing the miners.

I don't know why you mention paper currencies and gold when most money today is transferred electronically, in a far more efficient way than Bitcoins.

[jacquesm]

I'm not sure if by the time you factor in all the costs of banking (including bail-outs) bitcoin is still ludicrously expensive.

And one block will include a whole slew of transactions, that's fixed overhead with economies of scale built in.

[VikingCoder]

> economies of scale built in.

You've chosen a particularly odd phrase here, since BitCoin mining was fundamentally designed to get computationally more expensive over time.

So, no, an economy of THE OPPOSITE OF SCALING was built in.

[dllthomas]

The cost of mining blocks is designed to remain roughly consistent as technology advances. The "economy of scale" comes in when you use one block (which costs about the same regardless) to secure more transactions.

As an aside, "economy of THE OPPOSITE OF SCALING" is probably better termed "diseconomy of scale" (http://en.wikipedia.org/wiki/Diseconomies_of_scale).

[danielweber]

Purely in an accounting sense, the bailouts are not a negative, since the government made money on Wall Street bailouts.

(If you wish to say they encourage unhealthy behavior, that's another argument.)

[bduerst]

Quid Pro Quo: Bank bailouts had positive returns.

Mt. Gox collapsing was a worse wealth loss than bank bail outs, by far.

[adventured]

The bank bailouts had a huge negative return in real terms, just not in nominal terms.

They required the devaluation of the dollar via Fed 'printing.' The Fed had to take trillions in nuked assets off the balance sheet of Bank of America, Citi, and others.

The primary bailout was not the Treasury program TARP, but the Fed programs.

That stole purchasing power from everyone that uses the US Dollar. That purchasing power will never be returned. Trillions in real wealth were destroyed, that is gone. Even if you supposed all assets returned to their previous value, the time cost, wrecked credit ratings, debt accumulation, etc. that was involved in that loss of wealth is still massive when it has to do with tens of trillions in total asset value.

The collapse of Mt Gox isn't even a rounding error compared to the real wealth destroyed by the Fed in the last five years through dollar devaluation. It's equivalent to about ten hours, from one day, of QE the past year.

Not to mention, any bitcoins lost in the collapse of Mt Gox, increases the value of all other bitcoins over time due to the reduction in supply. To be like the bank bailouts ala the Fed, Mt Gox would have had to create a lot of new bitcoins in the process of being destroyed.

[baddox]

> Bank bailouts had positive returns.

Compared to what? You can't compare it to the results of not having done bailouts, so the comparison is largely a matter of economic prediction, and economic prediction is obviously very controversial. The only non-controversial part is that the bailouts were certainly very good for the banks receiving them.

[dllthomas]

In an accounting sense. The government received more money back then they put in - even, IIRC, adjusted for inflation. I agree that this is not actually a great metric, but then "bailouts" aren't actually a great example of the costs of dollars vs bitcoin - they mostly had to do with debt, and you could certainly still issue debt in a world run on bitcoin.

[bduerst]

Compared to adding to the transnational cost of USD, which is the context of this entire comment thread.

The bail outs stabilized the currency in lieu of massive wealth loss (e.g. toxic debt), while not adding to transnational costs because the returns were positive.

Most bitcoin evangelists fail to grasp the negative impact that volatility has on currencies, and instead think of bitcoins like assets, even hording them.

[dllthomas]

"I don't know why you mention paper currencies and gold when most money today is transferred electronically, in a far more efficient way than Bitcoins."

Revenues of Brink's alone, sayeth Google, are roughly $4 billion. My understanding is that a substantive portion of that represents cost of transporting cash and gold, and of course they are only one of several such companies.