Bitcoin is a very new technology, even though the concept underlying it already exists decades. The problem of double spending has been solved, and this means that you can use an electronic certificate to control your money account and be sure that while you control it, no one else can spend this certificate. This is an unprecedented paradigm shift, the consequences of which have not yet been fully understood and for which no tools have yet been created to fully utilize all the advantages of this new idea.
When it comes to business development,built on its basis, it turns out that the solution to this problem requires some new thinking. The first email providers misunderstood the service they sold for many years. The same is with Bitcoin: in order to fully realize its potential, it is necessary to develop a new and correct thinking about it.
Hotmail used familiar technologies (browserand email) to create a better way to access and deliver email; the idea of using a mail client such as Outlook Express has been replaced by web interfaces and storing emails in the cloud, which offers many advantages compared to a separate client that stores mail locally on your hard drive.
Bitcoin that will change the way you forwardmoney should be perceived as an independent phenomenon, and not just another form of electronic money. To perceive Bitcoin as money is just as absurd as to perceive email as another way to send letters by regular mail; email not only replaces old mail, but completely changes the way people send and receive any kind of message. This is not just a replacement or one-dimensional improvement of a long-existing idea or service.
As I said, Bitcoin is not money, it isprotocol. By treating it in this way, based on the right assumptions, you can begin to gradually enter Bitcoin in the right context, which will allow you to make more rational assumptions about what services based on it can be beneficial.
If Bitcoin is a protocol, not money, thenthe creation of cryptocurrency exchanges that imitate forex brokers, stock and commodity exchanges to trade it is not the only way to determine its price. You wouldn’t start organizing a commercial exchange of emails to determine the cost of email services. So it is with Bitcoin.
Continuing this analogy when you open inyour Gmail account window and type in it text, you write a "letter". Then you click “send”, and this data is transmitted through your Internet provider, via the Internet, to the Internet provider of the recipient, and then displayed on the monitor of the final recipient. The same is true for Bitcoin: you enter money through a service from one end and send bitcoins to the recipient, without an intermediary processing the transfer. After Bitcoin does its work by moving the value you have deposited to the recipient’s email address located anywhere in the world, you need to “read” it, that is, withdraw back to the money - about the same as when your letter is displayed on the recipient’s monitor.
In the case of email, after youwe read the received letter and the transfer of information took place, it remains for you nothing more than a record of the fact of the transfer of information, and you archive this record. Bitcoin maintains this archive account for you on the blockchain, and a good service based on it will store for you advanced information about transactions completed locally, but what you need as a recipient is Services or services, not bitcoins themselves.
The true nature of Bitcoin isto serve as an instant payment method (although not being money at the same time), available anywhere in the world. This is not an investment, and storing bitcoins in the hope that they will increase in price is the same as storing old emails or PDF in the hope that in the future they will gain some additional value. This makes no sense. Of course, you can hold on to Bitcoins and watch them grow in value (and they will be), but then you need to have strong enoughnerves to calmly relate to episodes of a sharp depreciation, of which there will be many more on the way to accepting Bitcoin. Companies that need to store bitcoins may also be worried about the cost of BTC if their business models are open and subject to market influence. Closed-model companies have full control, and they don’t need to worry about exchange rates. They can arrange processes to move an unlimited amount of fiat with very few bitcoins.
Even with the impossibility of double spending andthe uniqueness of each bitcoin, they have no intrinsic value, unlike a book or any physical object. They cannot become more valuable. The erroneous approach to Bitcoin has spread because Bitcoin behaves like money due to the fact that it cannot be spent twice. Behind erroneous ideas about the true nature of Bitcoin, it has already become difficult to discern its dual nature, which is simultaneously digital and eliminates the double spending of an instrument.
Bitcoin is a digital product with allqualities of information, which makes information not scarce. It occupies a special place somewhere between the goods and services of the physical world and the infinitely rich digital world of information, which belongs exclusively to the digital world, but at the same time has the characteristics of both worlds. This is why Bitcoin was misunderstood by a wide circle of people and why a new approach to designing a business around it is needed.
All this partly explains why the purchase priceBTC on exchanges does not really matter to the consumer. Even if the purchase price of BTC drops to 1 ¢, this fact does not affect the amount of money entered by the sender or the recipient. If immediately after the transfer you exchange bitcoins for goods or fiat currencies, then you will receive at the other end the same amount that you sent, regardless of how much BTC was at that time.
Think of it this way: Suppose you want to send someone a large text file. You can either send it as it is, or compress it in zip. The size of the compressed text file can be 87% smaller than the original. Transposing this idea to Bitcoin, the compression ratio is the BTC exchange rate. If BTC costs $ 100 and you want to buy something from someone in India for $ 100, then to send this amount to India, you need to purchase 1 BTC. If BTC costs 1 ¢, then to send $ 100 you will need 10,000 BTC. This corresponds to compression ratios of 1: 1 and 10.000: 1, respectively.
You send the same $ 100, no matterDo you use 10,000 or 1 BTC for this? The price of bitcoin is not related to the transferred value, just as the zip-files “do not care” what information is contained inside them. Both Bitcoin and zip are simply protocols that do their job. Until the price of BTC is equal to zero, it will be used in the same way and will be as useful as if it was very "expensive".
Given all this, it becomes clear that forIn order for Bitcoin to function in accordance with its true nature, we need new services for faster and easier conversion of money to Bitcoin and vice versa.
Business models of existing exchanges do not matchthe true nature of bitcoin. They use the model of stock, currency and commodity exchanges of the twentieth century, simply transferring it to Bitcoin. Interaction with these exchanges is non-trivial and for the average user can be a frightening prospect. In some cases, it takes up to seven days to wait for the transfer of fiat money when withdrawing it from your Bitcoin wallet. Although there is no fault of the exchanges, this is a very real obstacle to Bitcoin being able to be used in accordance with its nature and to reach its full potential.
Imagine this situation: you receive an email from another corner of the world and see a notification about this in your browser as a line with the subject line. Then you send your Internet service provider a request for delivery of this letter, after which you are forced to wait seven days until it is physically delivered to your mailbox.
This is a complete absurdity, and yet, this is exactly what happens with bitcoins, and without any technical reasons.
Clearly, we need to rethink what we are creatingaround Bitcoin, services, as well as how we understand its very nature. Rethinking services is a normal component of entrepreneurship, and we should expect that business models will fail, and the first participants in new markets will be pushed to the sidelines as the market develops and new iterations constantly appear.
With all this in mind, focus on the stock market.I’m aware of Bitcoin, using a business model that is not suitable for this new software product - this is how to place a canary breathing methane into a mine mine full of people (breathing oxygen) as a detector. The bird is dying, although there is nothing wrong with the air, the miners hastily evacuated, throwing gold veins, thinking that all this is about to fly up into the air, when in fact there is no problem.
Bitcoin and its underlying ideas have comeseriously and for a long time. With the growing number of people who install and use client programs - as in the case of Hotmail - Bitcoin will eventually reach a critical mass, after which it will exponentially spread across the Internet. When this happens, the right business models will arise spontaneously, they will simply become obvious, just like Hotmail, Gmail, Facebook, cell phones and instant messaging have long seemed something completely natural.
But this will happen in the future. I think that now quite a few people are willing to speculate on the cost of bitcoin, because, although it is probably even profitable, much more money can be earned by providing convenient services that use all the advantages of Bitcoin.
One thing is certain: speed will be critical to any future Bitcoin-based business models. Successful startups will be able to provide instant satisfaction to all participants in the transaction. Even though the price volatility of Bitcoin will inevitably stabilize, since it alone does not make sense, instant conversion to money or goods will remain a sought-after feature of any business built around Bitcoin.
The needs of bitcoin business create manynew challenges in terms of performance, security and new thinking. In the process of overcoming these challenges, new practices and software will be developed, on the topic of which we can now only dream up.
Finally, when there’s no more fiat money left,and the chaotic transition zone between fiat and Bitcoin will be eliminated, then all prices will be nominated in bitcoins and there simply will not be room for volatility, because only bitcoins will be used to buy and sell something. If you know chemistry, it will be like reaching equilibrium with reagents: you can shake them and mix - after the reaction is complete, an inert product will remain. Now, amid the amount of fiat money in the world, the relatively small capitalization of Bitcoin can expand and contract very quickly and in a large range. It can grow to unimaginable for many sizes, and then shrink again. As it becomes larger and accumulate mass (price in fiat terms), these fluctuations will become less and less. At the same time, Bitcoin will remain the same - it is its users who publish some numbers as signals and themselves react to them.