"Cryptocurrency Should Focus Less on Profit" Says Vitalik, and my thoughts on this topic
Maximum profiteering vs Maximum adoption
My thoughts on this, the goal of maximum adoption vs profiteering is a matter of which demographics you want to appeal to. Maximum adoption is much harder because it requires embracing regulation, seeking legitimacy, and building for long term utility. This requires that developers ignore their own personal and political bias and focus on gathering feedback from the actual users of their product. Design improvements have to be based on use (use cases in practice) and not "political agendas".
Bitcoin in my opinion will not be able to do this because Bitcoin itself is a political instrument and the community around it will likely not focus on sacrificing the true Bitcoin for the mainstream Bitcoin. Mainstream adoption is in my opinion the result of society embracing a new technology and this in my opinion only happens when a technology appeals specifically to as many members of society as it can. This global appeal is easier for Ethereum than for Bitcoin because Ethereum is more open, has many more possible use cases, is more global in general, so it appeals to a different audience. Also Ethereum like Ripple appeals to legitimacy by working with large institutions like banks, big blue chip companies, academia, and governments.
To satisfy the user who must be put first if the goal is to achieve maximum utility, is to listen to what the users are asking for at all times and build out according to that feedback. Ethereum is slighly better at this than Bitcoin but not good enough so far to achieve mainstream broad appeal. Ethereum currently is known as a crowd funding and gaming platform, it does these very well but this is about all it is known for by the mainstream. The mainstream audience does not seem to care about Digix, or Augur, or Golem, as these are esoteric nerdy projects which most people don't even understand. What can be done to appeal to everyone else?
What can cryptocurrency do for you?
So far only making $$ has been found to have global appeal. This may change in the future if profit in terms of $$ can be replaced by ROI in terms of something else (such as time saved), but right now while Ethereum can do things decentralized it is not more efficient, and while Ethereum can support businesses in theory using some sort of decentralized cloud computer it is not currently replacing Amazon Cloud Services. So until they get their theoretical non-monetary forms of ROI, we are stuck with only being able to focus on fiat.
Ultimately ordinary people care about what a technology can do for them to make their lives easier. Bitcoin right now does not do this anymore beyond allowing people to make lots of money. If it were making people's lives easier it would be reflected in the adoption and actual usage patterns. The same applies to any other crypto including Ethereum, where real world use patterns can show whether it is making people's lives better or and easier.
The best quote I've read around is that "Bitcoin is a revolutionary technology packaged as a get rich quick scheme".. I think that rings with a lot of truth.. The 'nerds' are here for the tech and the possibilities of it, the money and eyes are on it because of the fiat gains.. but yes, the use cases haven't caught up to the potential, that is why I'm so excited for this year.
I agree with this quote and your outlook - the potential is great
Given the state of the global monetary and economic system, especially in developing nations, I'd say there is plenty of incentive for a sizable portion of the human population to start using cryptos.
Just look at how quickly crypto usage has grown in South American countries like Venezuela.
You have to understand that people already have barter without crypto. Not saying people cannot benefit from crypto but I think unless demand comes from the data then it's mere speculation. If the data from surveys, polls, actual feedback, shows that people are looking for something which crypto can feed then this shows demand exists.
Good point. Plenty of people are speculating to make money without knowing what they are investing in. Although this does give the funding needed to proceed and gives incentives for big businesses to take notice and get on board.
It is a catch 22 though. Some of us do want to improve society and it does require a lot of funding (trillions). So the idea that we could have the funding come in first isn't always bad but then the risk that maybe you will get funding and it will attract only those who want to make money just to make money without caring about improving anything in society.
I have nothing against Bitconnect for example, because I do know people who get rich off Bitconnect for the most part keep a lot of it in crypto and buy a lot of tokens. Imagine if they all cashed out into fiat and only made Youtube videos? Then Vitalik and even myself would have a reason to become concerned.
As it is right now, the Bitconnect and profit making cryptos are important for driving mainstream adoption around the globe. At the same time we have to solve real problems with the technology beyond just wealth transfer.
Wow. Great stuff and very insightful. I have spent a lot of time working with developers over the years (I kind of am one myself) and you have absolutely nailed it. Feedback and involvement from users is critical to the success and adoption of any software project, crypto included.
Thanks @dana-edwards. I was hoping to see where you yourself come down on the choice between the two targets of focus.
I believe that building trust and perceived utility in whatever you're offering is on the pathway to making big profits, and so it is a strategic error to start down the road with a focus primarily placed on profits. I feel that profits should be viewed as a hoped-for longer-term goal.
"But what if you need profits now to buy food and pay rent", you ask? Fascinating question. I'd love to do a survey across the world to see what proportion of those who are making profits now started doing so from Day One.
As you know, in our business world a substantial proportion of profit makers started out with having a friendly banker or other financial backers in effect providing the money to buy food and pay rent while they were waiting for profits to arrive.
You make a fascinating comment here: "So far only making $$ has been found to have global appeal." I say this because what I have learned from the history of $$ is that the worldwide appeal has come about in part due to some rather Machiavellian moves made by powerful people. I'm sure you know that story.
Cheers!
Ask the average person, and a lot of people just want a job. If they have a job, a lot of those who have a job want a better one. If people can earn money form the blockchain that is an example of something globally appealing. Steem has that global appeal.
Bitcoin has the problem of someone always asking others to buy it. People don't want to buy a product they can't understand. People who don't have money don't want to buy a new money they barely understand. It is still very hard for most people to earn crypto. I would think making it easier to earn is globally appealing because if people need to pay bills, taxes, or whatever, then easy to earn combined with great store of value is a double win.
Thanks, and your remarks resonate with me, especially "It is still very hard for most people to earn crypto.". I cringe every time I see these "ra ra Happy Days" videos about how to earn crypto profits; because I have "been there" as an experienced options trader.
Yes, the early adopters have done great; but there are few of them (despite the hype). Even 5,000 is few, and I doubt the number s that large.
For the rest of us coming on board later, we had better develop some trading discipline and skills fast! And for every winner, there is likely to be a loser. And a very big winner might be associated with a large number of small losers (that's the story in the stock market.)
Cheers!
Seems to me it's really a double-edged sword: As long as cryptos are only seen as an investment vehicle to make lots of money, they are less likely to be adopted as a functional currency. I love the idea of major cryptos being a true global peer-to-peer currency I can walk into any store in the world and use to buy a cup of coffee and a shirt.... but the volatility is too extreme and besides... why should I spend my tokens on a shirt when it could double in value by next month?
Do people need more a store of value or another currency? If most people are satisfied with fiat but more concerned about store of value maybe they don't need a better fiat. Maybe they need yield for their retirement fund.
P.S. I have up-voted and am now following you.
While for some the making of money is a factual scope, for others the freedom of expression and getting recognition for that is more important. The cryptocurrencies broke the countries barriers and allowed developers and visionaries to share with the entire world their concepts. Built on trust, different cryptocurrencies were born and only those will remain in the end and will finally get adoption from everybody. Is like a stone thrown from a mountain, once it starts moving down, nothing can stop it.
If you already have enough money then of course other aspects of life become much more important than money. The homeless person on the street who begs is someone who clearly needs more money. What can blockchain do for that person?
I see your point of view, but I still think that the money are a meaning to an end, but are not the scope of it. And there are people that live with little or nothing, they see the life more freely, living at friends couches until they get that one big thing out there. They are not thinking at that as an escape or money accomplishment, but rather a sense of doing something great. And I have some examples I'm speaking of, they might be the exceptions from the rules...but still... those are the pillars of revolutionary changes...
Could we say, @cryptorg, that people want access to goods, services and relationships that are meaningful to them, and that for many the routes for that access do not hinge greatly on money as we understand money in the West? While for others money is a pre-requisite to gain some fo that access?
Right on that, most of us we are in the cryptocurrency for money, other they are just to express a vision they have and be recognize as the leaders they are to (money for them is just a result, not the objective).
Thank you, @cryptorg, for a wonderful summary that reflects my motivations.
I first learned about bitcoin in 2015, and then studied books, watched educational videos etc. From that time until August 2017 my only interest in acquiring bitcoin was to participate in the now failed program of “small cross-border payments to relatives”; because I had become sick of Western Union fees. However, I never bought any because the people to receive my payments had no way of converting bitcoin into fiat at their end.
I have the intuition that this matter of receiving crypto transfers and making use of them to purchase goods and services remains a major issue around the world today among people with modest means. I would love to see an international survey of the capability to make use of crypto payments received, with breakdowns by country, and socio-economic category (the latter including education, of course).
Anyway, only after I saw the big price run-up of 2017 did I say to myself “OMG, you could make some money with this thing”. Then I did the research to build my crypto portfolio. Even today, the amount of fiat money I have invested is so small that I have already written it off as a total loss (which means I will ignore the portfolio except to occasionally pick up some more “good stuff” when I see people throwing it out the window).
So, when Mr. Buterin expresses his concern about the relatively high proportion of people who are in the crypto space and who are excessively concerned about profits, he's certainly not talking about me.
Truly said Dana. There has to be an ROI demonstrated by the cryptos. Lot of theories are in place. However user adoption is the essance.
Regards Nainaz.
#thealliance
Make it simple Dana. Ethereum and Bitcoin are both still in their infancy. Bitcoin to Ethereum is like fuel and an engine.