[reshmakh]

There are a couple cases of underserved merchants based in the US where Bitcoin would compete with CC in a first world market.

The first is marijuana merchants in CO and WA. Marijuana is legal at the state level but not federally. These merchants have a hard time using the banking and credit card systems and transacting in BTC would help them do e-commerce.

The second is very low denomination transactions (like 10c). It may become profitable for compensate people at scale for doing some very small amount of work. Like giving someone who finds a typo some small amount of compensation. Credit cards are very poor for this.

As for replacing CC, that is a tall order. They are expensive and inefficient, but accepting credit cards does increase top line revenue if a merchant accepts them. If a payment method is going to get adoption it needs to grow revenue (vs. reduce cost) for a merchant if the merchant accepts it.