-----BEGIN PGP SIGNED MESSAGE----- Hash: SHA1 At 6:55 PM -0700 on 5/11/02, Morlock Elloi wrote:
> Also let's not forget that person A givin person B cash is > zero-cost untraceable transaction. Oh, but it's not. Try to carry around a good merchant's daily receipts in cash every day, see how much you end up paying for guys in armored cars instead. Credit cards are the cheapest way to get paid anything over, say, $1000 a day, and you probably couldn't be in business these days unless you're grossing $10k a day. That's why transaction costs are so important. They not only reduce merchant cost, but they also reduce firm *size*. That's Coase's theorem, the fundamental theorem of microeconomics. If we really could reduce risk-adjusted transaction cost by, say, three orders of magnitude or more over a credit card by using anonymous instantaneously-settling internet transactions, then, frankly, we would eventually reduce firm size to the device level. *That* would be cool... Cheers, RAH -----BEGIN PGP SIGNATURE----- Version: PGP 7.5 iQA/AwUBPN3/8MPxH8jf3ohaEQLEOACgpykd302Usxcqpnt/rkqM6g8T5oEAn0Ey kADSPWXv9cTzqjZRY7ah7akQ =PevE -----END PGP SIGNATURE----- -- ----------------- R. A. Hettinga <mailto: [EMAIL PROTECTED]> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'
