I have been following the Bitcoin phenomena since 2011, where I first posted the now legendary ‘What is Bitcoin’ YouTube video and the now infamous Satoshi Nakamoto PDF document on my private social network Bongorama [members only, sorry, ed.] with the headline: “This technology will be the end of banks and credit card companies as we know them”.
After moving to Berlin (from my home town Copenhagen), I discovered that the Kreuzberg area was one of the first to actually adopt this new technology in the real world. In local bars, you could buy hamburgers and beer with Bitcoin. I bought my first Bitcoin at the now defunct Mt. Gox marketplace in Tokyo, Japan and installed a Bitcoin app on my desktop and a wallet on my smartphone. Last year, I began hashing Bitcoin myself by subscribing to the collaborative service Cloudhashing.
This technology will be the end of banks and credit card companies as we know them.
In November, 2013, I launched a dedicated, experimental blog about Bitcoin. I called it BitcoinPeople without really knowing where exactly it would go. But the timing was perfect and in just a few months it became one of my most successful blog projects (I have several). I plan to make it a blog about the people behind the Bitcoin movement and the block chain platform and less about the technology and the economics. There are other media destinations for that.
With this brief experience but already voluminous material, I have recently noticed seven major trends within the Bitcoin community and the block chain framework:
- Startup boom in various product and service areas
- Professional organizations and exchanges
- VC interest in anything Bitcoin or block chain
- The fight for being first with regulation
- Installments of physicial ATM’s
- Bitcoin as a marketing platform
- Block chain as the next gen Internet technology
There have been three waves of Internet disruptions so far. First the initial e-mail/web services, then the blog/social media services and now we are in the apps/mobile era. Next up is Bitcoin and the block chain. It will change everything as did the other technologies before them.
Startups are everywhere and one of the interesting parts about it this time is that it is not Silicon Valley-centric. It is a truly global movement with new, important business everywhere. The most successful exchanges are in the East European countries Bulgaria and Slovenia, London is a communications hub, Berlin is the grassroots movement, Singapore is for the investors, Tel Aviv is there where technology and money meet and New York wants to be the first regulated Bitcoin state. Iceland and Poland already have their own ‘altcoins’. Bitcoin is everywhere.
After the Mt. Gox crash, sceptics thought it would be the end of Bitcoin. But quite the opposite happened. It got a boost and the community behind Bitcoin showed that it is not just another technology but a real people’s movement. The Bitcoin Foundation began to hire more professional staff, the exchanges consolidated themselves and not only the developers but everybody associated with Bitcoin banded together and took Bitcoin into a new phase.
When Marc Andreessen wrote a column in the New York Times, everything changed around Bitcoin in the financial and venture capital markets. Investors began to listen and to look out for investment objects in the new tech world. VC money is now flowing from old tech to new tech and the new kid in town is called Bitcoin and everybody wants to play with him all of a sudden. As with all early VC investments some will fail, but some will become hugely successful. Also, there are now M&A deals made as pure Bitcoin transactions.
There was always this big misunderstanding about Bitcoin created by an ignorant mainstream press that Bitcoin was about drug dealing and money laundering. It is not, of course (that would be the U.S. dollar and other fiats for you), but a new form of transactions among people and organizations. Slowly, the politicians and regulators discovered that this is actually a huge business opportunity. Again, everything changed. The regulation is not really about protection (it is, too, of course), but it is primarily about getting in on the act. The first regulated cities and states will be the first to attract the real, big Bitcoin businesses. That means jobs. A lot of jobs. And taxes. A lot of taxes. New York, London and Singapore are currently leading the races continentally.
The speed of which the deployment of ATM installments is happening is mindblowing. In the beginning, people made Google Maps with overviews over where to change cash to Bitcoin. In South Korea, the installed a two way machine. ATM companies worldwide are selling these like hotcakes. At this years SXSW there were several ATM’s including a mobile one and the most geeky moment of the nerd convention was backpack hipsters with Google Glasses standing in line to get Bitcoin!
There are always marketing opportunities when you are a first mover in a market. This got really explicit when the CEO of Overstock decided to accept Bitcoin. All of a sudden this brand became almost as popular as Amazon, the amount of press was staggering and they even added massive sales as in millions of dollars worth. From local bars in Sydney promoting beers for Bitcoin to huge corporations adopting Bitcoin, the marketing hype around the movement has only just begun.
If you thought Bitcoin was big, just wait for the next big thing. Bitcoin is built on the block chain. But it is just one of many new technologies that will appear on this platform. Basically, the block chain has the potential to disrupt everything as the Internet itself did. Already, new projects are appearing with Ethereum as one of the most exciting. Earlier this year, I wrote a blog post about the future of music that was a salute to the potential of this groundbreaking approach to open and shared technology.
And the interesting thing about both Bitcoin and the block chain is that it is not only about technology and economy. It is about people and it is about a movement.
It is also about human rights. I will write about that in an upcoming blog post.
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This article is also published on Medium here.