Re:Bitcoin's Shared Ledger Technology: Money's New Operating...
by 2drew3 on Sunday September 13, 2015 @02:33AM
(#10210546)
Like most disruptive technologies, it's not quite clear why Bitcoin / blockchain are better than incumbents, namely credit cards / centralized databases.
At Purse, we use blockchain escrows to unlock value from Amazon gift card balances. This was previously impossible (gift card exchanges can't transact Amazon), and the liquidity premium powers the discount. Escrows and other complex transactions are difficult using traditional payment systems, and we believe that they can be applied more broadly to many other markets.
Re:Bitcoin's Shared Ledger Technology: Money's New Operating...
by wpietri on Sunday September 13, 2015 @01:20PM
(#10212050)
Ok, so if I understand you correctly, there are some people who have gift cards and want cash. They're willing to take a substantial hit to do that. And a quick Google search shows that there are plenty of people in that business. But your unique angle is that other exchanges can't handle Amazon cards. Could you say more about why, and how Bitcoin makes that different for you?
https://en.wikipedia.org/wiki/Technology_adoption_lifecycle
Oversimplifying, the Innovators, a few percent of a market, will buy anything just because it's cool. An obvious example there is Google Glass. Or a personal example, I just bought an IR camera for my phone. [1] I have absolutely no practical use for this, but that stopped me for about three seconds before I clicked "buy".
The next group is the Early Adopters. They buy in because they have a significant need not addressed by existing technology and are willing to work hard and/or pay lots to solve the problem. Then after that, we have the Early Majority, the first half of mainstream purchasers.
Now the supposed market of Bitcoin is "people spending or transferring money", which is a large fraction of humanity. So my goalpost would be getting out of the 2.5% of the market that is Innovators and well into the Early Adopters. Let's say 10% of the total market. (I'd even be happy with 10% of some major submarket, but since the claim is that Bitcoin will change everything, I'm glad to run with 10% of everything.)
From that standard, the fact that somebody bought a pizza is not so interesting. Ditto your hosting company; what you folks take in via Bitcoin in a year is about 0.00015% what AWS takes in in fiat dollars, or about 47 seconds of their annual revenue.
Ditto the things you mention with purse.io. Either they are subsidizing that 20% Amazon discount or there are hidden fees; Amazon makes under 10% on what they sell. As we learned in Bubble 1.0, you can't evaluate a business by the amazing deals they are using to acquire customers.
My prediction is that Bitcoin will never get close to the goalpost of 10% of the market, because nobody has found a way to solve a significant problem. My current belief that Bitcoin is Segway for the wallet: a really cool technology that almost nobody actually needs.
[1] http://www.flir.com/flirone/display/?id=69324