How Bitcoin Disrupts Payments

Payments is always a price war. One might argue price it is the primary variable to success in every market segment one might participate in, but it's especially true in payments. If virtual currencies like Bitcoin are destined to win the payments game, they will need to have a strategy for competing on this variable. 

Some will say they do, and it is because payments/transfers are free. Of course, they are only free if there is no need to factor in exchange rate. Obviously, they do. 

So how could the exchange rate issue be eliminated? We could do that if we created an environment where there was no need to transfer out of a currency. Enough people accept that currency and there is enough stuff that you want to buy through them at a price that both parties (buyer and merchant) like so that no one is converting out of the currency.  

Where are some places something like this could emerge? 

Local -- where we spend most of our money, have recurring customers, and have lots of liquidity. Because of density, cities are great for this. 

Online communities, where again you have the potential variables for a liquid economy. 

Marketplaces -- online malls, of sorts. Amazon is the ultimate example. 

From that genesis you have the foundation to build an economy. That is how virtual currencies create global prosperity, and give us the new world order we are destined to inherit. 
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