Great combination. You must have tons of entrepreneur friends. I'm just glad you weren't close friends of the Wright brothers or others like that because you certainly would have put a damper on their potential.
To be clear, this is my last comment attempt to explain the most basic of functions to you. I'll try to keep it simple enough for you to understand, since you're so immersed and invested in your Keynesian coursework.
We have a market. It's not a free market. It's facilitated by our central bank via their monopoly over currency in conjunction with our government and hiding behind a veil of government facade. They mandate that government related transactions are done in fiat dollars (FRNs) and through regulation, they can force companies who report where and how they spend money, to do so also in FRNs. They also manipulate virtually every single market via subsidies and tax rates and favoritism via lobbying and other such means. Both these entities wield great power over all our economy. This skews things tremendously and causes vast increases in costs because it completely shuts out the little start-up companies from competing with the entrenched multi-national conglomerates. The resulting cost to the consumer is rather hard to calculate accurately but could be estimated to range from an extra 10% to north of 50%. This is current and hopefully, we're still on the same page. If you don't understand that much or can't agree with the level of overhead, then stop reading now because the following hinges on this.
Given that 30% (mean number for brevity) is wasted on all products, this leaves lots of room for competition. The reason is simple but often missed by 'big picture' people such as yourself. Profit margins are rather small, percentage-wise, compared to the total retail price of a product. Knocking 30% off the retail price and not altering anything else means that all can go to the profit category. Magically, a company's profit just went from 3% to 33% (or so). This is a tenfold (back to brevity) increase in profits.
Corporations pay taxes on profit, not any other part of their revenue stream. If they keep those profits and don't offset them with additional expenses, their tax rate skyrockets. If they drop their price (e.g. pass the savings on to the consumer), the rate doesn't go up. Still with me? Good.
So if a BC payment option opens up which allows a start-up to cut expenses and operate without banking costs, they can pass along this savings and draw in customers from the bigger companies. Since they are not large enough to effectively play in the lobbying game, they don't have that cost but they do have the tax cost. But that tax cost is dependent on their profit. But that profit is not there because they didn't charge it. So the tax cost isn't any higher. Does this make sense?
How BC aids this process is that it allows a business to start as small as they want and keep operation under the radar, if they choose, until they get going. I can't explain this generically in layman's terms so I'll give an example. It' not specific to this industry but it is an actual working example with accurate real numbers for actual start-ups today.
Solar installation companies have tremendous up front costs to start a new company. One wouldn't think so but the subsidies are skewed horribly. They are competing with existing companies that receive 30% of the retail, installed cost directly back from the federal government. There is seemingly no way they can undercut the competition to begin in an existing market. In order to qualify for those rebates, they must install only government certified panels with certifies practices and by certified solar installers who are also electrically certified as well. These certifications test not only functionally safe practices but monopoly supporting ones as well. Deviation from them results in a loss of license. Still with me?
If a company wants to bring a game changing new solar system to the market, there are many costs to just doing that. The obvious ones are R&D, testing, quality and manufacturing rampup, etc. This is all funded from self, friends, family or by giving away ownership to investors. However, since the subsidies mentioned above increased the requirements, they now must fund a certification of the product. This regularly takes more than two years and nearly a million dollars and certification is dependent on who you know, not what the performance is. This is proven. The result of this process is that the 'little' start-up now must give away around 80% of his company to investors to fund an average $3 million start-up. He must also adhere to his new board of directors (the investor's people) who mandate that he go after those subsidies with a vengeance. (the "every last penny of profit" mantra) So in a nutshell, he now owns nothing new and can't compete like he originally planned (because he would never have gotten certified) and he's no different from the rest.
With bitcoin, he can keep large (over that pesky $5k transaction limit) transfers completely private. He can design and build his system FOR HIS FIRST CUSTOMER and test it in place (with some creative warranties for their risk). He can follow nothing more than the local electrical code (more than safe enough for solar). This can generate revenue early enough for him to begin on a shoestring. Sure his system won't qualify for those subsidies but there is at least that much waste in the big players' business model anyway, so he's still under them. As he gets going a little, he's essentially tax free (if he chooses) so he can buy factory equipment much cheaper (because it's not financed with stocks) and things take off from there. I'm not making any judgement calls on tax evasion but I am showing how the big corporations can be undercut.
There are thousands of start-ups stuck at this roadblock who would begin doing business asap if they had the opportunity. I know this because I have one and I personally know of nearly two dozen others. Their roadblock is funding and that relies on playing the government's game. However, with anonymous transactions they could start small and eventually self fund.
Was that in-depth enough and simple enough to grasp? I don't mean to talk down to you but I really can't believe you have been here for as long as you have and didn't know how badly subsidies skew every market toward the monopolies. I also can't believe you see things like wikipedia, wikileaks, Tor, Bittorrent, off-shore gambling, mesh networks, bitcoin, thingverse, craigslist, angieslist, etsy, kickstarter, indiegogo, kiva, prosper and still believe government power is increasing. That's so far from the truth, it's a face-palm. The government couldn't shut those things down if they wanted to. They have become entrenched in people's lives so much that if they tried, both defenses would come to their rescue. The people would raise holy heck and the coders would put it on the cloud where no-one, not even the government, could stop it.
Oh, and you can't possibly be so technologically inept to think a nuke in the sky will kill the internet, can you? You do realize that it's made of millions (billions??) of company networks that are just opened up to talk to each other. If you kill their power (because that's all the government could possibly do), you kill everything including food and oil flow and you only stop that piece of 'the internet' until they turn on their emergency generators. All data centers like google and such have spinning generators that wouldn't even see the power go down. And yes, they're EMP tolerant since more than a decade ago. But let's say you were right and they killed the addressing system. Those people with mesh networking software running (over 2-3 million now) would never even notice it because they would simply connect to their nearest cell phone and keep on going. But even if so, just the cell network would keep bitcoin alive so you missed even further than you thought.
Long story short, with what is already available and in use today, people can start and run a cloud based, floating, un-trackable exchange, business or service with their mesh connected laptop or cell phone even if the power and internet backbone is down. How long do you think it will be before this becomes so easy people don't even remember they included this security in their system? How long before someone runs an encrypted, peer-style exchange from uganda to offer instant and free service because they are selling ads on their site to make money? How can you not see this as both inevitable and coming in the very near future? I think you assume that everyone but you is in support of the government and their ways but I'm seeing thousands per day converting to being committed to ending that tyranny. ....at all costs to them personally.
Any more negativity, save it. I won't be defending innovation to you again. But if you want to ANSWER THE ORIGINAL OP QUESTION WHICH YOU WON'T EVEN ACKNOWLEDGE, jump in again. This post was supposed to be a exercise to show those who can't see what changes might take place if BC HYPOTHETICALLY took over just what is possible. By showing what might be different (from many perspectives, I had hoped, not just mine), more people could be inspired to figure out what we need to make the transition go more smoothly. And by showing how extreme we are being robbed by our fiat system, our debt system and our financial systems, I had hoped it would slap a few in the face who thought the world was currently as good as it could ever get. Guess you missed that part.
Want DP delivered to your inbox daily? Subscribe here: