Names mean something, and unfortunately, the name ‘Bitcoin’ is a bit misleading, since it refers to a few things. (That’s what you get when techies are in charge of naming protocols: they work with zeros and one – you do the math.)
Rik Willard is founder and CEO of MintCombine, a think-tank, virtual incubator and product lab designed to develop decentralized media platforms worldwide and produce best-of-breed products and projects in the emerging and exciting Bitcoin/Altcoin space. This includes setting ethical standards and creating transparency and best-of-breed applications that leverage the use of dynamic digital value services for the benefit of all. Housed at Cowork.rs, we decided to ask the literal resident expert for his list of what one needs to know in order to understand the very basics of Bitcoin:
1) First, what is Bitcoin, exactly? It is:
a) A digital currency
b) A peer-to-peer network
c) A distributed accounting ledger
d) An open source software
e) A software development platform
f) A computing infrastructure
g) A transaction platform
h) A financial services marketplace
…so Bitcoin means different things to different parts of the tech and financial sectors. For the sake of this article I’ll speak of Bitcoin “the currency,” which is what people know best right now.
2) Bitcoin can be viewed as a market entry brand of natively digital currency, meaning one that has not been issued by a government, a corporation or a community. Note to self: Rarely does the first brand in a space dominate forever.
3) Alternative coins (Altcoins) are digital currencies other than Bitcoin, and are on the rise — we are now beginning to see coins for specific use-cases.
4) Altcoins will forever change the dynamics of brand engagement. Seth Godin got it right when he talked about permission marketing over a decade ago. Very soon, we will see brands paying consumers for engaging with their content.
5) There are many services needed to facilitate the Bitcoin economy but not all of them are businesses, and hence not all should be funded in the traditional ways. Services like trading come to mind, where existing trading platforms will have the edge once Bitcoin stabilizes and margins become thinner.
6) That said, there is great potential in using digital currencies to fund projects and companies separately from traditional stock or share purchases. “Coins” change the very nature of equity itself. Think of it as a cross between crowdfunding and ecommerce. You’re transmitting value, but not for a stake in the company itself per se, but as a bet on future success that provides financial returns without equity exchange. In other words, you don’t necessarily have to be a broker dealer.
7) In the near-enough future, Altcoins could run parallel to government-printed fiat, providing heightened efficiencies in places where traditional capital won’t – or can’t – go.
8) Hopefully, we will stop using old taxonomies to explain Bitcoin and Altcoins. We have done so up to now in order to educate people through concepts they can connect to. Once education reaches critical mass, I hope that we can drop all this “coin” stuff and move into new ways to explain totally new situations. Right now, we’re like the early days of any preceding technology. In the beginning cars were called “horseless carriages” so that people could understand the main benefit of the changeover. Early internet sites were referred to as “online brochures” so that clients could understand the promotional benefits of the new medium. We use words like “coin” and “money” to identify with the stored value part of digital currencies.
9) Bitcoin is at the stage where the Internet was in 1993. There is growing interest, but people don’t yet fully grasp the importance of the concept. Like the early Internet, the use-cases of Bitcoin will subsume the currency itself, and it will continue on an iterative path for the next generation or so. One such recent iteration can be found in the Ethereum movement, sometimes referred to as Bitcoin 2.0.
10) Bitcoin needs applications that are more accessible. We in the sector tend towards arrogance, supposing that everyone knows what we actually do. It’s our responsibility to educate non-technical people (that is, most people) and to create truly egalitarian use-cases so that everyone can realize the benefits of what is nothing short of an economic evolution. Without pickup from the average person, this movement has no legs whatsoever, and becomes just another tool for those who already have more than enough. If we don’t get this right, realities like financial exclusion could become much worse rather than better.
5 Things You Might Want to Know About Rik Willard (context is everything):
1) I started in digital out-of-home (big outdoor screens)
2) Had a successful dotcom in the 1990s (Mediamerge)
3) Pretty much all of my professional life has been developing technology for brands, and I continue to do so through digital currencies
4) Past clients have included Calvin Klein Cosmetics, pre- and post-IPO Lucent, Dictaphone, MGM Resorts and others.
5) Founded MintCombine in 2013 as a Bitcoin-startup incubator, but as the sector matures, I have moved more into the Altcoin space, creating new use-cases and parallel economic opportunities for brands.
Image credit: CC by Jonathan Waller