The book on page 158 [1] investigates different types of efficiency in banking sector, it is a massive amount of work (and errorsome work) even to investigate something like that -- a hard inverse-problem at the best. Since there is no such middle-man as in traditional banking sector with bitcoins, I am now wondering of its implications (or well there are decentralized farms, I am not sure how one can make an analogy from them to traditional legal-tender-protected status quo). Anyway, I become to wonder a number things. I feel this kind of research could suppport some extremely important premises (for-or-against things, dunno).
Can Bitcoin make markets more competitive if resources are exchanged more efficiently?
What does efficiency actually mean here?
How can one measure efficiency with bitcoins? Velocity, capacity, lag, openness or in some other measures (the book used stochastic frontier approximation, not sure whether one could use something like that here)?
When you answer, please, define what you mean by efficiency, there are probably as many efficiency -types as people around. I feel one reason why some people have opposed bitcoins is due to the worry about the legal-tender -issue. Here, if one look closely, Bitcoins could make markets much more efficient (no manager -ineffiency or something like that). Of course, it may result in some odd power questions of which I am not asking but more the implications of possibly-increased efficiency with Bitcoins on the market?
References
[1]: Handbook of financial intermediation and banking, By Anjan V. Thakor, Arnoud W. A. Boot
