Comment Middlemen actually provide a service in this case (Score 3, Insightful) 56
so many middlemen, so much percent
In this particular case the middle provide a valuable service, they keep a merchant's accounting simple and the middlemen take all the risk.
Using something like coinbase, a merchant never sees or touches a bitcoin. The merchant does all their pricing and accounting in fiat currency (dollars, euro, etc). If a customer wants to use bitcoins the merchant sends the fiat price to the exchange, the exchange returns an equivalent bitcoin amount and a bitcoin payment address (the exchange's), when the coins are received the exchange informs the merchant and most importantly credit the merchant's account for the exact fiat amount originally specified. regardless of the coin's current exchange rate. The merchant's accounting is not complicated by new IRS rules regarding bitcoins (its an asset not a currency) since they never touch a coin, nor do they care about coin price fluctuations.