Cryptocurrency: How We Hook the Masses

Cryptocurrency: How We Hook the Masses

Cryptocurrency: How We Hook the Masses

In this opinion piece, Svinkin argues that using cryptocurrencies for rewards schemes can demonstrate the value of the technology and ultimately help bring mass adoption.

Before the hype and before the price explosions of the past year, I sat down and looked at cryptocurrencies from a UX perspective.

That post, published on CoinDesk, offered a simple central premise: the entire bitcoin project was envisioned, designed, built and released as a peer-to-peer value exchange system. It wasn't supposed to be a standalone asset class or a messaging system for banks.

A year later, we're in the midst of a hype-ridden initial coin offering (ICO) explosion. ICOs are another use case in the UX quiver, one we can add to the progress of the last few years. The ICOs (I prefer to call them token sales) are a great engine of growth but they do not achieve our ultimate goal: adoption of cryptocurrency by the masses.

 

Looking back

Prior to Jobs and Wozniak, computers were the domain of engineers, hobbyists, large corporations and government agencies. The dominant framework for users to interact with these machines, the command line, ensured low user adoption.

As Neal Stephenson noted, however, the wizards who held sway over the simple cursor and text interfaces later built the tools to drive mass adoption. From the command line, we moved into something relatable and simple, and, in the process, we hid all of the piping behind wall after wall of abstraction.

I don't want to understate how big of a leap this was for my generation. You mean we can make the screen do what we want like an arcade game? We can "save" what we're doing and come back to it later? We can put stuff on a disk and put it on another computer? Wow!

After we were hooked, we started learning heuristics for the things we'd need to master to get more out of the experience. We started implicitly understanding what a KB meant. We grew to "kinda know" how much would fit on a floppy disk.

Some of us started learning how to make simple animations and games. The computer was at first a toy then a tool.

I argue that, in the crypto space, we're at the point in our evolution where the command-line is giving way to new and more generalized heuristics – with similarly explosive opportunities. Right now, the equivalent of the command line are things like wallet addresses, private keys, cold storage, and other obfuscating elements.

I wrote a year ago that I think we need a Steve Jobs in this space. No one has yet stepped up to the plate.

Crypto is no MacOS, yet


 

Even if regular people were to learn all the terms of art, master using the exchanges, grow comfortable with identity verification and currency exchange rates, and accept the long wait times in transferring fiat in/out, we'd still have a problem that would keep the bulk of the planet off the chain in a meaningful way: risk.

Modern operating systems mitigate risk immensely. Every program we use has some sort of backup system and now you rarely lose work. With cryptocurrencies, the existential threat of losing everything is still there.

The best way to deal with risk, at least at the start, is to try to eliminate it. We must not treat crypto like a competitive currency at least not now. Instead we must treat it like a reward, something new.

We must allow people to buy it, but also allow folks to earn it, with their time, effort, attention, with non-monetary capital. Don't force people to have to buy it with fiat.

Instead, let them earn it.
 

A user-first model

There are folks that are on a rewards-oriented path: Steemit, Brave, Bitwalking, Metal and others.

This is going to be a growing trend in the months and years to come. All of them want to reward you for something – Steemit for creating and engaging with digital content, Bitwalking just for walking. Brave is taking things to the next level: you get rewards just for using a secure browser and for engagement and attention.

Metal will reward you for converting, sending and spending.

All are trying to get to the same goal: they want the cryptocurrency they've issued to become valuable in the real world, to become the lifeblood of a new economy centered around a particular set of use cases.

The success of these products is dependent on ultimately hooking the masses via a rewards-based introduction – points, miles, cash back – these are notions we all get, just like I did 30 years ago with writing, drawing and reading on the Mac.

But the final step requires users to make that leap from rewards to currency for this revolution to get to the next level. And for that goal, I – a true believer – am very hopeful with this recent wave.
 

The big fear

That said, I still have one hesitation. All of these solutions make progress on the various complexities and issues surrounding adoption.

But, the one thing they all do not do, is obfuscate the currency exchange problem inherent in forging ahead with something new right away. It can show the value of the new currency in terms of fiat, but even currency earned through effort will be at risk of losing credibility and lasting power.

There will always be fear that the $398 I have in crypto will one day be $0, or in an hour will be worth $118.

Sure, we could be at the start of a fiat currency collapse and not even know it, as the market cap of crypto currency rockets up. This may even be good for the whole system. But, even if the crypto world supersedes the money we know, it will be the option with the most perceived stability that ends up winning. Not the ones with the most speculative upside or interesting "applications."

We’ll know we've "won" when a cryptocurrency becomes woven into the daily lives of the majority of people on earth. That people recognize finally that the fiat they know is also volatile and purchasing power is dynamic and ever changing, and cryptocurrency has many other benefits the analog doesn’t have. Or simply that a cryptocurrency finally becomes more stable so people run to it to escape losing all their value in government-backed money as a crisis looms or is underway.

Until then, it's hard to say what we’ve accomplished truly, but the goal is ultimately that we move belief in fiat money to belief in cryptocurrency.

To me, the best way to start that transition is to get people used to and interested in this new phenomenon by utilizing familiar bridges like air miles and minimizing fear and risk to allow for everyday use to come to bear – and even bring some fun to the strange world of cryptocurrencies.
 

David Ogden
Entrepreneur

 

Author:Richard Svinkin

David

Bitcoin Will Make Lots of Millionaires Before “Returning Down to Earth”: Economics Professor

http://seriouswealth.net/wp/wp-content/uploads/2017/06/Bitcoin-Will-Make-Lots-of-Millionaires-Before-Returning-Down-to-Earth-Economics-Professor.

Bitcoin Will Make Lots of Millionaires Before “Returning Down to Earth”: Economics Professor
 

Despite its price volatility, Bitcoin is likely to make more millionaires.

Panos Mourdoukoutas, chair of the department of economics at LIU Post in New York City, whose works are published by Forbes and The New York Times, thinks Bitcoin is likely to turn more individuals into millionaires before its price dives again.

Bitcoin recently reached an all-time high of $3,000 this June after a huge correction to $2,682 from $2,957 in the period of two days. This is after tech billionaire Mark Cuban reportedly called Bitcoin's recent price surge a bubble.

However, this is not the case since the cryptocurrency is showing an uptrend, based on its recent price of $2,831 and its continuing upward trend.

Mourdoukoutas shared a partially similar viewpoint to Cuban's. Both had similar claims that Bitcoin's price would drop after a substantial surge, however, he stopped short of calling Bitcoin a bubble.

 

Making more millionaires before it crashes again

Mourdoukoutas mentioned that the digital currency made many "overnight millionaires" – individuals who invested into BTC when it was worth just a portion of its current rate.

He also mentioned that Bitcoin will reach new highs, making more millionaires in the course of the action, before "returning down to earth."

Mourdoukoutas added that one of the reasons for the increased investment in the cryptocurrency is the "ultra-low” rate of interest environment, makings the trade of Bitcoin an enticing proposition.

In addition, there is a growing mistrust in the currencies of several nations, following government policies that have pushed more investors into the cryptocurrency.

 

Price restricted by policies and supply

Mourdoukoutas said that one of these policies is the act by federal governments to provide new treasury bonds at record low rates to cover the old financial obligations with brand-new ones.

For instance, Japan sells treasuries that yield nearly absolutely nothing for the state, however, the nation's debts amount to approximately 250 percent of the country’s GDP. The teacher mentioned that China's treasury yields "something," however, no one knows the specific quantity of the "informal financial obligation".

The fact that there is a substantial quantity of financial obligations linked to the Chinese Yuan and the Japanese Yen diminishes the confidence of investors. Given that there is Bitcoin, a cryptocurrency that has increased its worth by 125 percent in 2016, investors in Asia have taken advantage of the possibility to invest more into the digital currency.

 

The economics professor also highlighted another government policy which might decrease trust in a country's nationwide currency. This relocation is when governments wish to eliminate the old currency notes, as held true in India and Venezuela. Such incidents, according to Mourdoukoutas, is one of the reasons why Bitcoin price has risen.

 

Still better hedge fund than traditional ones

Mourdoukoutas further commented that there are particular advantages which make Bitcoin a much better hedge than traditional ones, such as gold. He added that the millennial generation is one of the greatest supporters of the cryptocurrency as they understand BTC much better than the "baby-boomer generation.”

 

Mourdoukoutas shared:

"Unlike gold, for instance, Bitcoin is a hassle-free medium of payment around the globe.”

 

The economics professor expounded that Bitcoin's supply is anticipated to be restricted to 21 mln. Compared to gold, there is no deficiency of the mineral considering that when the rate of gold rises, it supplies more incentive for gold miners to mine for gold.

Finally, Mourdoukoutas specified that the financier buzz around Bitcoin continuously helps the cryptocurrency to go upwards, as a growing number of financiers are becoming familiar with the digital currency, and can utilize ETFs (exchange-traded funds) to "conveniently participate in the market."

 

David Ogden
Entrepreneur

 

Author: Charles Dearing

David

Move Over Bitcoin, These 4 Cryptocurrencies are Making Their Mark

Move Over Bitcoin, These 4 Cryptocurrencies are Making Their Mark

Move Over Bitcoin, These 4 Cryptocurrencies are Making Their Mark

 

Just a few years ago if you thought of cryptocurrency you thought of Bitcoin and Bitcoin only.

Bitcoin was propelled into the limelight back in 2013. Around that time The Silk Road was taken down and the U.S. government confiscated hundreds of millions of dollars worth of Bitcoin. Back then, cryptocurrency and Bitcoin was more of an underground thing used mostly for dodgy purposes. But today, the tech and entrepreneurial community has gotten their hands on blockchain and cryptocurrency with the creation of other coins and technology. And now cryptocurrencies such as Ethereum are being used and backed by the biggest companies in the world such as Microsoft, JP Morgan Chase and Samsung to name a few.

Ethereum is leading the pack of the new age cryptocurrencies. The big difference is that these 2.0 and 3.0 versions of digital currencies actually do quite a bit on top of the basic technology that Bitcoin introduced to the world via blockchain. Bitcoin was just the beginning.

Here are 4 cryptocurrencies worth watching this year:

Ethereum (ETH) got popular just a few months ago when the Enterprise Ethereum Alliance was announced. The biggest companies in the world are officially backing and utilizing the new blockchain technology that Ethereum provides, specifically their smart contracts, decentralized applications on the blockchain, the creation of decentralized autonomous organizations and so much more. Ethereum does for code, apps and programming what Bitcion did for peer to peer transactions. Ethereum could eventually, starting with the launch of it’s new web browser Mist, become a complete decentralized internet.

Stratis (STRAT) is a powerful blockchain development platform. They recently got the highest level support from companies like Microsoft. Their aim is to be the one-stop shop for all things blockchain, essentially becoming a Blockchain As A Service (BAAS) platform. They are similar to Ethereum in concept but also very different. Stratis runs on the Bitcoin blockchain. But, where Stratis makes itself unique is that it offers developers the ability to code in C# which opens up a ton of possibilities for app and other developers. Additionally, Stratis is soon to launch their breeze wallet that could revolutionize and redefine transactional privacy. Stratis has a very similar number of circulating supply as Ethereum. So if you wanted to guess where Stratis (STRAT) could be price wise in a short while then look at today’s Ethereum prices.

Ripple (XRP) is a very interesting technology that allows banks to interact with eachother directly without any central point of control or middleman. This could (and is) revolutionize banking. Ripple and it’s token XRP have been critized for not having the technology and the currency truly connected. They also do not currently have their own currency wallet so storing it becomes complicated. But if they were to solve those 2 problems it could be doing very well this year.

Siacoin (SC) is a cryptocurrency and technology that was innovated at MIT at a hackathon in 2013. Siacoin’s blockchain has a technology that allows smart contracts to be created for digital storage. Essentially this could spawn the next Dropbox or Amazon AWS. But instead of Siacoin doing that directly they allow other partners like hosts to connect and compete for the business of consumers via their technology. It is a little early for Siacoin but big developments are already happening. Once they have a few more big use cases things could really take off. Their technology could be backing the next Dropbox or Amazon AWS. And if you have ever paid Amazon AWS hosting or storage costs, you know that needs to be distrupted and made cheaper. Siacoin’s blockchain technology could be the solution.

 

There you have it. These are the 4 cryptocurrencies that I and many others in the community have their eyes on to make big movement in 2017.

Author: Brian D. Evans

 

There is another coin Infinity(XIN) standing in the wings which you will be hearing more about this month so watch this space.

David Ogden
Entrepreneur

David

Billion Dollar Cryptocurrency Club Swells to Six Members

Billion Dollar Cryptocurrency Club Swells to Six Members

Billion Dollar Cryptocurrency Club Swells to Six Members

Bitcoin’s market cap surpassed $37 billion today when the price hit $2271.16, commanding more than a billion in trade volume in a 24-hour period, according to coinmarket.com. The total value of the coin market is now at $81.3 billion, as the last two days added more than $10 billion to the capitalization.

Bitcoin’s value has almost doubled in the last month, even while its market share has fallen below 50%, thanks to the gains of other cryptocurrencies. Bitcoin’s gains have been steadier than most of the altcoins, but collectively, altcoins are rising at a faster pace.

Asian Trading Remains Key

Rising demand for bitcoin by Chinese and Japanese investors combined with falling stocks and other factors to push bitcoin to new heights. Because the Japanese yen holds the largest share of bitcoin trading, Asian trading pushes the prices higher.

The Nikkei Asian Review today reported, “Bitcoin going mainstream as Japanese business signs on,” signaling bitcoin’s growing popularity in Japan, which recently recognized bitcoin as a method of payment.

Asian interest in bitcoin increasingly carries over to other currencies, as indicated by the gains for Ripple and NEM, the two most popular altcoins in Japan in terms of demand and trading volumes.

Japanese regulators also decided to abolish the 8% consumption tax on transactions of bitcoin bought from exchanges, which is set to go into effect in July this year.

Progress On Scaling Continues

Today’s announcement that a majority of bitcoin miners have reached a consensus to deploy the Segwit2Mb protocol upgrade for bitcoin also bodes well. Bitcoin’s rise has benefited from an alleviation of the fear that a “hard fork” will be needed – dividing bitcoin into two currencies – to improve bitcoin transaction times. A successful deployment of an alternative scaling solution indicates the hard fork that would have resulted in two separate currencies in order to speed up bitcoin transactions may not be required.

Wences Casares, CEO of bitcoin wallet Xapo and a member of PayPal’s board of directors one bitcoin would hit $1 million before the next ten years while speaking at the Consensus 2017 conference in New York.

Ethereum Continues To Amaze

Ethereum, the largest altcoin, hit more than $16 billion market capitalization with a $179.68 price, followed by Ripple at more than $13 billion. The top three cryptocurrencies — bitcoin, Ethereum and Ripple — are the only players to boast more than $10 billion market cap.

Ethereum has witnessed the fastest growth of any digital currency ever. Not even two years old, the platform is now worth more than $16 billion with its trading spaces consistently attracting more online active users than even bitcoin’s.

Ripple, designed for enterprise use and can be used by institutions for on-demand liquidity for cross-border payments, also continues to post rapid gains. Banks and payment providers that use XRP will secure better access to emerging markets at lower settlement costs.

Ripple recently committed to placing 55 billion XRP in a cryptographically secure escrow account at the end of the year, addressing concerns that it will eventually sell its 61.68 XRP as it seeks to strengthen XRP’s exchange rate against other currencies.

NEM, number four commands a $2.299 billion cap, followed by Litecoin at $1.575 billion and Ethereum Classic at $1.02 billion.

There are now six cryptocurrencies with more than $1 billion market caps.

Altcoins Keep Shifting Position

Aside from bitcoin, the rotation shifts fairly frequently among the billion dollar players. A day ago, Litecoin, Monero, and Dash displaced Ethereum and NEM, with gains of 15%, 20%, 25%, respectively.

NEM, number four, commands a $2.299 billion cap, followed by Litecoin at $1.575 billion and Ethereum Classic at $1.02 billion. There are now six cryptocurrencies with more than $1 billion market caps.

NEM has also made significant gains over the past few months. A major factor that has allowed NEM to transform into one of the most popular altcoins in Japan is its development team and company composed of Japanese founders and talents. NEM was initially developed and introduced in Japan by Makoto Takemiya, the co-founder and CEO of Soramitsu, the company that has also introduced the Iroha blockchain project to the Linux foundation’s Hyperledger Project.

Litecoin, one of the oldest altcoins, gained visibility this month because of its successful activation of SegWit, a scaling solution that circumvents the need for a hard fork.

 

David Ogden
Entrepreneur

 

Author Lester Coleman

David

Cryptocurrency Inflation V Deflation

cryptocurrency inflation v deflation

Cryptocurrency Inflation v Deflation
 

In the world of cryptocurrency, there are two main types of ecosystems. Either a cryptocurrency is inflationary – with new coins generated by mining or staking – or it is deflationary. A lot of people claim bitcoin’s deflationary status is a problem, and how minor inflation could alleviate these concerns. However, there are different aspects of either concept that need to be taken into account first.
 

1. DEFLATION
 

Most cryptocurrency enthusiasts are well aware of how bitcoin has a fixed supply cap of 21 million coins. It is expected the last bitcoin will be mined around the year 2140, even though a large portion of the available supply is in circulation already. Some financial experts claim bitcoin’s capped coin supply is a problem, as it makes the popular cryptocurrency deflationary. Since no additional coins will be brought into circulation from that point forward, there will be no more inflation for bitcoin.
 

Deflation in the traditional financial ecosystem is a bad thing. Then again, cryptocurrencies such as bitcoin cannot be compared to any other currency in the world, thus making it a rather moot point. It is also a clear indication of how most economists are stuck in their old ways of thinking. Deflation is often associated with economies that not performing all that well. In most cases, deflation leads to falling prices. If that were to happen to bitcoin, things could go from bad to worse rather quickly.

 

One thing to keep in mind is how during times of financial hardship, consumers are not investing but flocking to liquid currency. For bitcoin, that could be a good thing, as it may even lead to future prosperity. From a long-term perspective, deflationary currencies are by far the better option. In bitcoin’s case, deflation will – probably – cause a rise in value. There is no real reason to think deflation is bad for bitcoin by any means.

 

2. INFLATION
 

Every major traditional currency known to man is inflationary. There is no hard limit as to how many US Dollars, Euros, or Pounds Sterling there can be at any given time. Central banks can use a technique called “helicopter money” to introduce more bills and coins to an ecosystem if they see the need to do so. With more money to go around, they hope to improve the financial situation for their specific region.

 

Inflation also has a nasty side effect that most people tend to overlook. As the supply of an available currency continues to grow, it makes the previously existing supply worth a bit less. In the world of cryptocurrency, there are two types of inflation: proof-of-work and proof-of-stake. The first option makes bitcoin an inflationary currency until all 21 million BTC have been generated. Proof-of-stake allows for a virtually unlimited coin supply even when there are no longer mining rewards to be distributed.

 

Although a lot of people see no harm in inflationary cryptocurrencies, it provides a bit of a problem when it comes to estimating a coin’s value. Since there are more coins every day, inflationary cryptocurrencies cannot be labeled as a store of value per se. Interestingly enough, some of the major cryptocurrencies have decided to take the inflationary approach, including Ethereum – switching to proof-of-stake soon – and Dash. Other currencies, such as Litecoin, have taken the same model as bitcoin, effectively limiting their supply. From a store of value point-of-view, deflationary cryptocurrencies are the better option, by the look of things.

David Ogden
Entrepreneur

 

Contributor JP Buntinx

David