Jim Duffy comment: Bitcoin – moving to iPhone-style mass adoption?

Consumers are still not up to speed with how it will change their lives, says Duffy. Picture: Ian Howarth.

Incorporating a stonking new camera system, calculator, telephone, comms apparatus, apps, geo-locators and so on, it offers so much power and utility built into one device. All one needs to do is remember the old Commodore 64 or BBC computer at school to really appreciate the awesome vibe of this new technology. Notwithstanding that Apple cross-sells and knows so much about us via our data, this device is indeed a game-changer. But, when the iPhone was introduced, like all new tech, consumers were wary and it needed app developers to make it all worthwhile. And this analogy is exactly what is happening with Bitcoin as while it exists, consumers are still not up to speed with how it will change their lives.

Bitcoin, love it or hate it, is here to stay. Perhaps you simply do not understand it and what it does. Therefore, you give it a wide berth. A bit like the iPhone when it was brought to market. Ask a 60-year-old if they would rather have £10,000 in cash or one Bitcoin and the answer will likely be cash. Good old fiat currency. But ask a savvy millennial the same question and they will bite your hand off for Bitcoin. Why? It is all about understanding how Bitcoin operates and where it will go over the next ten years.

As a global currency, which has a built-in store of value, Bitcoin can be used around the world immediately. Say you own a Coinbase account. Coinbase was one of the high-tech start-ups to emerge from the Y-Combinator tech accelerator in the USA. It is a tech unicorn that has the likes of Tim Draper as one of its early investors. With your Coinbase account you can stick in dollars or pounds sterling or euros and buy Bitcoin. Or Ethereum or other cryptocurrencies. Your account operates with virtual wallets built in and functions as an app on your iPhone. You can move your cryptocurrency around in the app trading fiat currency for Bitcoin instantaneously. It is a terrific piece of tech, albeit a bit pricey to use, but, hey, they have to pay back investors somehow, right? You can travel around the globe using your Coinbase card to pay for anything – no need to worry about local currency exchanges, credit limits or theft. It is seamless.

And this is why Bitcoin will grow in use as more countries adopt it. Draper, a successful venture capitalist as well a big Bitcoin advocate, was interviewed recently for BlockTV. He shared an anecdote that highlights the potential use cases for Bitcoin especially when even better apps and tech are produced to make it easier to use and understand. In Argentina just now as the currency collapses and the US dollar has been banned, many entrepreneurs and business-owners have lost a lot of money and value. However, if they had been using Bitcoin to trade, the value of their businesses would have remained the same. And as more people in countries like Argentina adopt Bitcoin, then the use case accelerates and there will be more mass adoption.

Draper has stated that by 2022, Bitcoin will reach $250,000 (£200,000) as it holds 5 per cent of the currency market globally. This is a result of countries such as India, African states and others using Bitcoin on their phones to hold money and pay for things. Really, it’s just like a credit card without the lender. That day may indeed come, but until then, developers like Coinbase and a multitude of other tech firms are busily preparing technology to make it easy for the 60-year-old to understand and use their Bitcoin.

Bitcoin is like the iPhone 1 or 2G just now. It is on offer, a bit clunky and the early adopters are first to use it, while the rest of us watch from afar. But over the next five years as “new models” come out, Bitcoin will become more user-friendly, while more widespread in adoption and offer better use cases.

Perhaps Draper saw more than just an investment opportunity when he invested in Coinbase. Perhaps he saw the future…

Jim Duffy MBE, Create Special.