Sunday, March 2, 2014

If Someone Buys Bitcoin Today, They'll be Lucky to See a 300%+ ROI

There's significantly less incentive for someone to speculate on Bitcoin today. To see a return comparable to what we've been seeing over the last couple of years, the amount of capital that would have to be injected into the markets is exponentially more than it was just over a year ago. This is going to cause investors to really do their homework before buying Bitcoin, and recent news events are exactly the sort of thing that will deter new investors.

Next, the vast majority of merchants are using Bitcoin as a protocol, not as a store of value. Anytime we hear of a new merchant choosing to "adopt Bitcoin," what they're actually doing is two-fold. One, they're getting free advertising for themselves, especially local businesses that find themselves on the front of the business sections of their local papers. Two, they're not adopting Bitcoin, they're adopting BitPay or Coinbase. These merchants care about lower fees and irreversible transactions, not so much the value of a Bitcoin itself. There are a few exceptions where the merchants retain some or all of the Bitcoins, but they're the minority, by far.

Third, Bitcoin early-adopters are cashing out. When you hear about Overstock, TigerDirect, Fancy, and others doing hundreds of thousands, if not millions of dollars of business in Bitcoin, those are old Bitcoins that are being sold. No one is going out to buy Bitcoins so they can make purchases they could already make with PayPal. It's inefficient and expensive.

Finally, there are better protocols that are being derived from and have improved upon Bitcoin. If Bitcoin is more useful to businesses as a protocol, then why wouldn't a better protocol oust Bitcoin in the long run? The Bitcoin 2.0s of the world (Ethereum, Open Transactions, Ripple, etc) will eventually unseat Bitcoin. Some say that Bitcoin will remain an ideal store of value, and the other technologies will become the ideal "payment rails," but is Bitcoin really a good store of value if 35% of Bitcoins are held in only 500 addresses?

Anyway, suffice it to say that I'm not done in the crypto-currency space. I've divested into Bitcoin 2.0 technologies, and look forward to seeing the space grow. I expect to see better returns on those investments than I would if I simply held Bitcoin.


Please discuss here:

Saturday, March 1, 2014

I Sold All My Bitcoins

There are better ways to implement globally distributed ledgers that allow for instant payments, sans drama.

Feel free to comment on this post when Bitcoin hits $10,000 so you can ask me how "butt-hurt" I am!

Wednesday, November 20, 2013

Ripple's Director of Business Development: Major Players to Adopt the Network in Near Future

Ripple Labs has been on a massive hiring spree, recently boosting their payroll to 30 employees:

Occasionally they'll use their blog to profile a new hire; this time it was Welly Scully, their new "Director of Business Development."

When answering the last question, "what do you think will be the tipping point for merchant adoption," he dropped this bomb:
"Once merchants realize that the network is secure and stable, and that the value proposition is viable, there will be a race to join the network.
The signal will be clear when the first major merchants go live on the network. Based on the response we have received so far from some of the largest actors in the ecosystem, this event will be around the corner."
Just who is Ripple Labs in discussion with? Sounds like we might find out soon... and it could be big.

Who do you think it could be, and when Welly refers to "actors in the ecosystem," is he talking about banks, or is he talking about merchants? Please comment below!

Monday, November 18, 2013

This Will End Poorly

I don't care how awesome Bitcoin is; all signs point to a massive bubble:
You can't go parabolic forever!

Friday, November 15, 2013

"Bitcoin Black Friday" Parters with "Fight for the Future"


Energizing Bitcoin’s Second Annual Black Friday Event

Bitcoin Black Friday (formerly known as Bitcoin Friday) announced today a partnership with Fight for the Future, a digital rights advocacy group best known organizing the first massive protests against SOPA in 2011. Fight for the Future will be providing Bitcoin Black Friday with resources, viral organizing knowledge, and grassroots experience. Through this partnership, Bitcoin Black Friday aims to appeal not only to Bitcoiners, but to any internet user looking for a better way to pay for goods online.

“Before Bitcoin Friday, in early 2012, people were wondering whether Bitcoin could even exist as a currency, whether people would ever spend their hoarded bitcoins.” The founder of Bitcoin Friday, Jon Holmquist, remarks, ”Last year’s wildly successful event alleviated those fears.” The idea is simple: Bitcoin merchants opt-in for a free listing on the site and list their ‘deal’ that is only redeemable during Bitcoin Friday. Last year’s deals were wide-ranging from 20% off a WIKISPEED car to 25% off VPN services. Participating merchants saw anywhere from 2x as many sales to some merchants having their best single day of sales ever. BitPay, the largest Bitcoin payment processor, recorded their largest amount of orders placed in a single day during Bitcoin Friday, and other Bitcoin payment processors universally reported similarly high results.

This year, Bitcoin Black Friday is occurring on November 29th, the same day as Black Friday, and will include a much larger selection of merchants. Instead of being able to fit all participating merchants on one page, the website will now be split up into categories. About 500 bitcoin-accepting merchants are going to be participating.

New this year for Bitcoin Black Friday is a charity section. If Bitcoin consumers have a few bitcents in their wallets after their shopping sprees, they can donate directly to one of the many charities and nonprofits accepting bitcoin, such as the Internet freedom group Fight for the Future or Sean’s Outpost.

Bitcoin Black Friday is not only online. The digital currency Bitcoin is gaining an increasing amount of ‘meatspace’ businesses. To celebrate Bitcoin brick-and-mortar merchants, Bitcoin Black Friday Parties will be occurring around the globe at locations that accept bitcoin payments in person. In Berlin, Cleveland, Los Angeles, Amsterdam, and in other major cities, these parties will bring Bitcoiners in the community together, to bond over cocktails and love of cryptocurrency.

“We are extremely excited to be helping with this year’s Bitcoin Black Friday,” said Fight for the Future co-director Holmes Wilson, “Bitcoin is so close to mainstream adoption, and moments like this can help push it over the edge.”

Over the last year, Bitcoin has risen in value, popularity, and adoption. The growth of Bitcoin is being tracked by the massive growth in merchant adoption. Last year’s event drew in about 75 merchants. This year’s event will pull in more than 500. More and more people around the world are turning to bitcoin as an exciting, secure, and innovative online currency. Bitcoin Black Friday will help rally the growing bitcoin community and help merchants connect to a new vibrant and global market.

1 For more specific numbers: