What do You Think of My Answers to Ten Questions on Bitcoin and Blockchain Technology?
Next week I’m heading to Pubcon in fabulous Las Vegas, Nevada, USA to talk about Bitcon, the Blockchain, Ethereum, and steemit.
When Brett Tabke, creator and organizer of this sixteen year young conference, saw my slides, he was apparently interested enough that he asked me to answer any questions which Lisa Barone, CMO of overit.com had so that she could some pre-conference buzz about it. Here are the questions she asked and the answers I gave. I wrote these with minimal reference to existing info to try to convey my own thoughts on all of this. Would love to hear your feedback on my answers.
Q1) Lisa: Let’s start at the beginning, not many people are familiar with Bitcoin and blockchain technology. [Why do you think that is? ← added by me]
A1) Bryan: It's true that only a small percentage of the population uses Bitcoin. Even fewer people understand blockchain technology. It tends to be this way with a lot of groundbreaking technologies. This includes the internet and Google in the 1990's and social media and mobile phones in the early 2000's. A core group of early adopters usually learn about and explore these things before they are ready for prime time.
Q2) Lisa: How would you explain it to those trying to understand what it is and how it might benefit them?
A2) Bryan: This is a tough question because the answer depends on who is asking. I'll assume I'm trying to explain this to someone who owns an online business. I will explain Bitcoin and blockchain technology separately.
Bitcoin is a way to store and transfer value peer to peer online without the need for a third party such as a bank. You can start accepting Bitcoin and similar "cryptocurrencies" without getting approval from anyone. You can accept payments on your website or straight to your phone. Settlement happens in a matter of minutes, not days. There are no chargebacks and the fees are low (or even zero). You can get cash for your Bitcoin at ATMs and by using online services.
Blockchain technology is the fundamental innovation that enables Bitcoin to work. It is hard to explain without getting technical but I'll try. Imagine there is a worldwide database (blockchain) which anyone can access and add things to. Usually people use it to keep track of how many Bitcoins they have. They also use it to send Bitcoins by making special entries in the database. No one owns this database. No one can change or delete the information in the database. And no one can shut it down. That's Bitcoin's blockchain in the simplest terms I can come up with.
Q3) Lisa: Beyond payments, are there some other uses for blockchain technology that you believe marketers should keep an eye on?
A3) Bryan: Yes. Bitcoin micropayments for ads might be of special interest to marketers. The Brave Browser (brave.com) is experimenting with this. Social networks are also a big one. There is already a blockchain based social network called steemit.com. There are many other applications which are not ready for prime time yet so I won't go into them here. Let's just say it's exciting.
Q4) Lisa: Is this a stable currency?
Q5) Bryan: It depends on what you compare it to. For example, Bitcoin is more stable than the currencies of some countries, but less stable than others. In countries where inflation is common people sometimes buy Bitcoin to protect their net worth. In other countries, the value of Bitcoin may change faster than people are used to. Personally, I look at Bitcoin as being closer to Gold in terms of how it's value changes. In any case people should do their research before purchasing any cryptocurrency.
Q5) Lisa: Who is using Bitcoin and/or who is accepting it?
A5) Bryan: Many users are early technology adopters, libertarians, and people who don't have (or want) a bank account or credit card. As many already know, Bitcoin has also been popular among grey and black market users.
Nowadays many online stores accept Bitcoin. This includes Microsoft, Overstock.com, Newegg, and too many others to list here (see https://goo.gl/bzzlNe). People can also buy gift cards through sites like Gyft.com which enables people to spend Bitcoin at many stores online and in person.
It is worth noting that if your business is controversial or chargebacks are common, accepting Bitcoin may be a good (or your only) option. Maybe you have a business idea which you have chosen not to pursue because credit cards aren't a good payment method due to chargebacks, fees, etc. Maybe it's time to revisit that business idea.
Q6) Is this really the next generation of the Internet? Why?
A6) Bryan: It's funny that you put it that way because I think Bitcoin is a child of the internet. Bitcoin could not exist without the openness and interconnectivity which the internet has enabled.
There are a couple of things which the internet has needed but was always missing. A "native" form of money and an immutable way to store data. Bitcoin is both of these things.
Newer blockchain projects such as Ethereum and Steem (the blockchain behind steemit.com) do more. They enable things like decentralized computation, reputation, and rewards systems. It's also possible to use blockchains without relying on any website or even the domain name system. This means they are difficult if not impossible to shut down. Any technology that can do all this qualifies as "next generation" in my book.
Q7) Lisa: Where did you see this going?
A7) Bryan: First let's look at where we are.
I think Bitcoin has happened already. People from all around the world use it. Whether it will remain the #1 cryptocurrency remains to be seen. For now it is the top dog by far. Newer blockchain projects such as Ethereum and Steem have proven that blockchains can do more than store and send value. They can run code. They can enable social networks with immutable reputation systems and automated rewards for users.
What next? I hope blockchains and related technologies can enable decentralized data storage and retrieval. This is already possible for small amounts of data, but not for images and video files. Yet.
As excited as you should be, please beware of the hype. There is a lot of bullshit in this space. This is because the tech is both promising and complicated. Many applications lie far in the future. How can you tell if an application is real or BS? Ask to see a working beta (or at least an alpha).
That being said, it is possible that blockchains might - and I mean just might - help robots to take over the planet. So, yeah. Keep that in mind too.
Q8) Lisa: Why should people be excited (or interested) in blockchain technology?
A8) Bryan: The internet enabled a more free exchange of information and ideas. It empowered the individual by removing the need for someone to go through a TV, book or magazine publisher to share their ideas. Blockchain technologies push this frontier further by allowing a more free exchange of monetary value and data. Now is the time to learn more so you aren't caught unprepared later (possibly much later but still - it's time).
Q9) Lisa: Tell me why you’re excited about your session? What will attendees learn?
A9) Bryan: See above.
Q10) Anything else I should be asking?
A10) Bryan: Just keep asking good questions. Everyone should be asking how Bitcoin and blockchain technologies relate to their own business.
As a final thought, I would just like to say that although this all seems new, the first successful blockchain (Bitcoin) was launched in 2009. That's only one year after Google created Android (seems like a long time ago now, huh?). Bitcoin now has a market cap of nearly ten billion dollars.
This is not something you want to ignore. Technologies like this tend to creep up on the world and then explode into the mainstream seemingly overnight.
Be prepared.
Bryan Gmyrek, Ph.D.
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Excellent!
These are some fantastic answers. I enjoy how you tried to simplify how the blockchain works enough to explain to someone who has no familiarity with the concept. I've struggled to do so in the past, especially with friends and family members who I've tried to explain Steemit to. "But where does the money COME FROM?" they keep asking. Hopefully when I give them your answer they'll understand!
The "where does the money come from?" question is the one brought back again and again. In the case you have something detailed enough but not too technical to share, don't hesitate :)
I usually compare crypto mining to the way fiat currency is printed by central banks. It's an imperfect illustration, but the closest analogy I can find.
I agree. But for most people I talk with, the typical answer is "I can touch the bills, not the cryptocoins". This require some level of abstraction that many people do not have.
Yeah, though I've found it useful to point out how most of the time we don't actually touch physical money any more. It shows up in our bank accounts from direct deposits or other electronic transfers, and then leaves it through purchases made with debit or credit cards. I can't remember the last time I paid for something in cash. Pointing that out kind of helps people understand the whole "electronic money" thing a bit, I've noticed.
Indeed! That's true. Thanks for the hints ^^
Good Stuff way to inform our fellow Steemers about Bitcoin and the blockchain!