Curt Doolittle

Theme: Incentives

  • Why Is It Many Times Cheaper To Send Physical Mail Across The Ocean Than An Electronic Money Transfer?

    Because the government subsidizes and insures physical mail that is hard to steal, and less desirable to steal, using low skilled labor when handling mail, while private industry absorbs risks and the cost of semi-skilled manual labor to manually process wire transfers that are unprofitable, and easily fraudulent, and highly desirable to steal, but without which they cannot continue business operations. 

    In other words, wire transfers are both more desirable and easier to steal than physical goods, and once stolen are unrecoverable. And they don’t want to process them so they keep the cost as high as possible.

    The cost of wire transfers is due to the insurance cost of theft by retailers.  Imagine instead that the post office shipped and delivered envelopes of money, and how the behavior of the post office would change. 

    That is why it is cheaper to send hard-to-exchange goods, than exchange goods.  And why it is more cost effective to steal money than stuff you have to sell or pawn.

    This is why Bitcoin (BTC) are better and cheaper means of wire transfers.  The intermediaries in the chain of handling are not exposed to risk – just you.

    Everyone argues that BTC is helpful for the high end of the market, and I totally disagree. The primary virtue of BTC is in its application to solutions for the poor – who pay high costs because the marginal value of each unit of currency is more expensive for them than for everyone else.

    https://www.quora.com/Why-is-it-many-times-cheaper-to-send-physical-mail-across-the-ocean-than-an-electronic-money-transfer

  • Why Is It Many Times Cheaper To Send Physical Mail Across The Ocean Than An Electronic Money Transfer?

    Because the government subsidizes and insures physical mail that is hard to steal, and less desirable to steal, using low skilled labor when handling mail, while private industry absorbs risks and the cost of semi-skilled manual labor to manually process wire transfers that are unprofitable, and easily fraudulent, and highly desirable to steal, but without which they cannot continue business operations. 

    In other words, wire transfers are both more desirable and easier to steal than physical goods, and once stolen are unrecoverable. And they don’t want to process them so they keep the cost as high as possible.

    The cost of wire transfers is due to the insurance cost of theft by retailers.  Imagine instead that the post office shipped and delivered envelopes of money, and how the behavior of the post office would change. 

    That is why it is cheaper to send hard-to-exchange goods, than exchange goods.  And why it is more cost effective to steal money than stuff you have to sell or pawn.

    This is why Bitcoin (BTC) are better and cheaper means of wire transfers.  The intermediaries in the chain of handling are not exposed to risk – just you.

    Everyone argues that BTC is helpful for the high end of the market, and I totally disagree. The primary virtue of BTC is in its application to solutions for the poor – who pay high costs because the marginal value of each unit of currency is more expensive for them than for everyone else.

    https://www.quora.com/Why-is-it-many-times-cheaper-to-send-physical-mail-across-the-ocean-than-an-electronic-money-transfer

  • Question: —“Curt, does Bitcoin meet this Criteria? Is Bitcoin superior to Gold

    Question: —“Curt, does Bitcoin meet this Criteria? Is Bitcoin superior to Gold in terms of means of exchange?”—

    Steven,

    Interesting question. Lets look at the list.

    1) Scarcity (no. as long as people want them we can create more of them at a constant rate – the problem is actually the opposite: requiring constant adjustment to the weights to require enough work to maintain consistent value. Otherwise we could produce them infinitely without cost.)

    2) Commodity Utility. (no. it has no intrinsic use.)

    3) Non-perishability (no. because like the stock market they require infrastructure for redemption.)

    4) Volume and weight to value ratio (yes)

    5) Nearly universal convertibility (not yet, and until we get to 10 second blocs, which kind of defeats the purpose, I suspect we wont get there.)

    6) Functional unit of account, store of value, and medium of exchange. (not yet. Not enough volume).

    UNDERSTANDING THAT BITCOIN ISN’T MONEY – IT’S FRACTIONAL SHARES OF THE BITCOIN NETWORK.

    A bitcoin consists of a fractional share of stock in the bitcoin network. What separates the shares of stock in bitcoin from shares of stock in other publicly and privately traded stocks, is (a) that one need not go through a clearing house (anyone with a wallet can clear an exchange), and (b) that one can sell a fractional portion of a share of his stock (a bitcoin).

    Just as any other business can fail, so can the bitcoin network. It is fully open sourced, fully transparent organization, operated by pretty good incentives, but that does not mean it cannot fail, and that those shares cannot be worthless. (In fact, it’s just as likely as not.)

    BItcoin provides low transaction costs. And I suspect that it will result in a lower cost means of transferring money, rather than as money itself.

    Now, I know a lot about the subject of what is money and what isn’t. Technically speaking, bitcoins are fractional shares of stock usable under some conditions as a money substitute that we call token money, for the purposes of decreasing transaction costs.

    It is an ingenious way of funding a business. It is however, not ‘money proper’. Or, in classical language ‘money in the narrow sense’.

    (Of course, that won’t stop a zillion imbeciles from spewing nonsense at me but that’s the reality of it.)

    It is very unlikely that anything will surpass gold as a currency of last resort. And in truth, the currency of the reigning world powers will except under shocks, always be a better store of value than gold because prices are harder to manipulate than the price of gold, since governments work hard to insure that they are the exclusive manipulators.

    Source date (UTC): 2014-08-22 14:21:00 UTC

  • Entrepreneurship. Identify and satisfy demand. 🙂

    Entrepreneurship. Identify and satisfy demand. 🙂

    Source date (UTC): 2014-08-22 07:21:00 UTC

  • When Might Apple Begin To Decline?

    When the profitability of the iPhone is sufficiently diminished that a new income stream must be developed, yet Apple execs are unwilling to conquer the desktop market that is sitting there for them to just take away from Microsoft on a scale not seen since Microsoft did the same to IBM.

    https://www.quora.com/When-might-Apple-begin-to-decline

  • Why Does Corporate Governance Emerge?

    Necessity of decision making under the pervasive influence of the principle agent problem.

    https://www.quora.com/Why-does-corporate-governance-emerge

  • Why Does Corporate Governance Emerge?

    Necessity of decision making under the pervasive influence of the principle agent problem.

    https://www.quora.com/Why-does-corporate-governance-emerge

  • When Might Apple Begin To Decline?

    When the profitability of the iPhone is sufficiently diminished that a new income stream must be developed, yet Apple execs are unwilling to conquer the desktop market that is sitting there for them to just take away from Microsoft on a scale not seen since Microsoft did the same to IBM.

    https://www.quora.com/When-might-Apple-begin-to-decline

  • language of human behavior is that of economics

    http://mic.com/articles/82899/this-animated-video-shows-the-wild-economics-of-sexThe language of human behavior is that of economics.

    Source date (UTC): 2014-08-20 00:02:00 UTC

  • Nike Store. London. Oxford Circus. Terrible staff. Should have videoed her. Acti

    Nike Store. London. Oxford Circus. Terrible staff. Should have videoed her. Acting as if we are privileged to have her attention. The man next to her waiting on three different customers at once. This one, making us queue up and using her little order machine to make sure that no one asked questions, so that she handled as few customers, and as few questions as possible. Starting tomorrow I will video lousy clerks in London shops. I mean, my experience with this country is that ‘work’ is no longer part of the conceptual or behavioral inventory. But at least honestly still is.

    Source date (UTC): 2014-08-17 15:01:00 UTC