Bitcoin Is an Expensive Way to Pay for Stuff

I'm not really that into Bitcoin but I do like me some financial innovation. A cruel generalization you could make about financial innovation is that it consists in large part of disguising transaction costs. Because the product provided by the financial services industry basically is transaction costs, sheer efficiency-based cost reduction can't really be the goal of the people in that industry. But you've got to compete somehow. So if you can find a way to charge for something but call it "free" then that's pretty much the ideal.1

Anyway a claim that is sometimesmade about Bitcoin is that it is a way to send money without incurring transaction fees. This strikes me as mostly false, but in an interesting way, and I had a fun conversation about it on Twitter today; let me share it with you.