Topic: Some comments on the Prague Talks - page 2. (Read 3354 times)

+1 agree.

I wanted to offer some thoughts and counterpoints on some of the talks at the Prague conference for discussion.

Bitpay - Tony Gallippi

Tony's talk was a welcome addition to the program. A really important, and poorly understood point that he emphasized was that Bitcoin's price (volatility) doesn't matter.

Some think we should just use Bitcoin's as a store of value and it will become that. It won't. Some think we should use Bitcoin as a unit of account and it will become that. It won't. Even with increased usage, Bitcoin will continue to fluctuate wildly and any Bitcoin balance must be regarded as a risky speculative investment. I'm happy to hold Bitcoin as such, but I can't tell my sister to open an account and keep 100 Bitcoin on deposit - it might drop in value by 50% the next day. I can tell her to keep a balance of 1,000 dollars with a service like Bitpay, and only make payments in Bitcoin as needed, insulating her entirely from the volatility. She might also expect interest payments on the balance, and a regulated bank with FDIC or equivalent deposit insurance. Those are points that Bitpay and other Wallet/Bank services should be looking at to escape the shadow of the MyBitcoin scandal.

Tony suggested looking at a number of types of people who might adopt Bitcoin in the short term.  He suggested some might use Bitcoin because of ideological reasons - libertarians, Ron Paul supporters etc. While these types of people will support the idea of Bitcoin, like anyone else, they won't use Bitcoin until it is mostly convenient and efficient method for them. Some other types were mentioned, but we're still in the very early adopter stage. A 2%, 5% or even a 20% transaction fee reduction is not enough to motivate comfortable users to make radical technology switches.  As indicated in 'Crossing the Chasm', prospects in this stage must be in extreme pain before they switch. Those who are excluded or disenfranchised from the current system. Those who cannot open bank accounts, or are rejected by Paypal. We've seen these kind of adopters in the Silk Road and gambling websites. Unfortunately there's a large overlap here with illegal uses. A challenge is to find those excluded from the current system for other reasons. Maybe those who are not profitable enough for Mastercard, or those whose rate of fraud is too high for Visa. I'm thinking we need to look outside the west. Small businesses from Botswana or consumers from Nigeria.

David Birch.

David opened by constructing a false dichotomy between mobile phone users and desktop PC users, insisting that the latter were dinosaurs and everything needed to be on the mobile phone to be relevant. From laptops, to netbooks to tablets, he ignored the wide range of popular devices in between.
 
My view is that the PC and phone are converging - the phone becoming more like the PC in power and features. Targeting the technology at the phone at this point is premature.

Very few people are using their mobile phone to do online shopping for example. A huge, and still increasing amount of Christmas shopping is done online, and the vast majority are using laptops, tablets and PCs to do it. In 5 or 10 years perhaps 50% will be using their mobile phones for this purpose, but only because mobile phones will increasingly offer the features of PCs. We'll see inbuilt projectors for bigger screens, maybe iris mounted displays, biofeedback and gesturing to replace the keyboard and mouse over the next 10 years.

Exclusively targeting the limited functionality of current mobile phones is an error. In my experience young people typically want mobile phones for status and social connectivity, but when it comes to using devices for a substantial solo activity, they want something with a bigger screen - a tablet or a notebook.

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In conclusion, a broader point I want to make is that there is too much focus on the consumer and retail payments space. This is an area that is already over served with fierce competition and doesn't play to Bitcoin's strengths. To find early adopters, we're better off focusing on payments which tend to be transnational, which require currency conversion, and which are poorly served by existing alternatives. The payment device doesn't matter so much as the trade that is newly enabled.