Bitcoin: An ideal medium for the frictionless exchange of value

 

While the two-year rise, fall and survival of bitcoin has captured the attention of cyberutopians, government officials and even mainstream journalists, its "killer app"--the use which will make its unique value apparent to everyone--has yet to be discovered.

 

Perhaps its ultimate usefulness will have less to do with its ability to conduct anonymous trade and more to do with the frictionless exchange of value.  Bitcoin could be enormously useful for systems that handle large numbers of small transactions.  One current example of a site that's trying to take advantage of this is Bets of Bitcoin.  It's an information betting service where users are free to make wagers on future events, such as who will win the 2012 presidential election.  While there are numerous sites on the web offering this sort of entertainment, none are using bitcoin as their defacto medium of exchange.  In fact, it's the only one offering to accept bitcoins as a form of payment.  If Bets of Bitcoin fails, it certainly won't be because of its transaction costs (that's because there aren't any).

 

Ideologi could use such a frictionless medium of exchange:  bitcoin could serve as the units of value transfered to and from participants in Ideologi while exchanging ideas.  That would give every idea in Ideologi instant intrinsic value, no matter how small and unknown it is to the world at large.