Disintermediation

“The removal of the need for middleman or intermediaries between the producers of goods and services and their customers.”

Bitcoin Equals Disintermediation.

Bitcoin

“Bitcoin is at its core a tool for the transmission of value.”

Bitcoin Equals Disintermediation.

Bitcoin is also an alternative to the current system for the storage and transmission of value. It is an alternative to banks, credit cards, checks, cash, coins, bearer bonds, cashiers checks and transit cards. All elements of the current system of payment for goods and services involve three or more persons: one is a producer of goods or services, the second is the buyer of goods or services and the third person is an intermediary. An intermediary is a person, or persons, who don’t produce goods or service. But they have figured out how to position themselves in-between the producer of goods or services and the buyer of goods and services, then extract or get paid a fee from the transaction. Additionally, depending on the system, there may be more then one intermediary, each extracting a fee from the transaction, which is inevitably added to the cost of the transaction. This is not a judgmental statement, it’s an observation of reality or fact.

Bitcoin Equals Disintermediation.

Bitcoin, as a protocol or tool, when used for this same transaction, allows the transaction to occur without the use of or necessity for an intermediary. This has two effects, it lowers cost, it reduces time and it creates freedom.

Cost Lowering

Removing the intermediary removes the fees that normally go to the intermediary and are usually passed on to the consumer, as increased price of goods. Remarkably, some transactions have more then one intermediary, each extracting a fee and raising the cost of the transaction. Bitcoin Equals Disintermediation.

Freedom

Removing intermediaries also removes their influence and control over a transaction. When a transaction between buyer and seller goes through an intermediary, the intermediary has the power to delay the transaction, or reject it completely. In this situation an intermediary has an inordinate amount of power. This power is used both to enrich the intermediary and allows the intermediary to control the producer and the customer. This one way the money and the people who have lots of power. Bitcoin removes this power and with it, this control. Bitcoin Equals Disintermediation.

Bitcoin: The End and the Beginning

Bitcoin is an efficient tool for the transmission of value between entities. Bitcoin is also an alternative to the current system for the storage and transmission of value. Bitcoin removes the need for intermediaries. In doing so, Bitcoin lowers transaction costs and removes transactional control control by the intermediaries by eliminating the need for intermediaries. Bitcoin is disintermediation.