No Mainstream Bitcoin without Merchants
If asked to characterize the bitcoin economy in one word “opportunity” would be the correct answer. Despite great startup activity and a very loyal community the few real-life applications of bitcoin have so-far failed to create any noticeable momentum towards mainstream adoption. Significant growth of the bitcoin economy is expected in 2017 due to the intersection of various technological, financial, and social factors. This Project X description is a virtual illustration of how to propel bitcoin into the mainstream. We suggest how to offer highly incentivized benefits for investors and other supporters who can help bring Bitcoin mainstream. Project X is a mobile-based ordering solution for businesses that accepts bitcoin payments for goods and services. The main goal of the project is to offer brick-and-mortar merchants an elegant and effective solution for increasing customer satisfaction and revenue without having to reorganize or make additional capital investment.
1. Unparalleled Investment Potential
1.1. Objective: Leverage Increasing Usage of Bitcoin
Bitcoin is the first widely used deflationary monetary base in history. It is so unique, yet remains undervalued and underutilized due to the lack of a “silver-bullet” — a bitcoin-related product for the masses. Underlying technologies are impactful, and even inspiring, but end-user products are how potential becomes actual. People don’t use “technology”; they use products that leverage a given technology to create an experience. Project X is the convergence of old and new and will deliver experiences that people have been waiting for in a way they never imagined possible. In addition to being a really cool product that offers unmatched utility for businesses as well as bitcoiners, Project X presents an exciting and lucrative investment opportunity for anyone willing to join the movement.
There have been several valiant attempts to create an application that would ostensibly motivate the general public to buy and use bitcoin. Some failed, some are in development now and many more will appear sooner or later. Sadly, none have been able to leverage this next-gen technology into anything habit-forming or make any significant breakthroughs in product design.
Bitcoin proliferation requires incentives for people to buy and/or hold bitcoins. Surprisingly, most bitcoin-oriented businesses don’t seem to be interested in creating these incentives. For example, debit card accounts integrated with bitcoin wallets and more sophisticated initiatives of this kind don’t create any additional demand for bitcoins; they are merely ways to make spending easier for those who are already onboard as bitcoin users. Such products do not create the conditions needed for “crossing the chasm” on the bitcoin adoption curve. Pragmatic people need to feel something real to compel them to switch or try something different.
Anyone who is more deeply involved with the matter understands that, regarding bitcoin adoption, it is not a matter of if but when. The breakthrough will take place, it is just not yet clear who will lead the charge.
Bitcoiners; estimated to number from three to five million worldwide, are waiting for this breakthrough. One might even be sitting on a bench in San Francisco wondering when she will be able to shop at Macy’s with bitcoins. That time is now! But, it doesn’t have to begin with big box retailers or with well-funded corporate chains. The transition to the bitcoin economy starts with small-businesses, entrepreneurs, and those consumers who simply want to transact in a more efficient and expedient manner.
1.2. Opportunity: The Perfect Storm
Bitcoin continues to improve thanks to a dedicated community of developers and visionaries, and investors. New technologies that improve transaction bandwidth are coming too. Also, some certified ETFs (exchange traded funds) are delayed but also inevitably coming.
Here, it is important to make a distinction between “blockchain” and bitcoin. Blockchain is the digital, decentralized, public ledger on which bitcoin is transacted. Despite unlimited funding from Wall Street the banking conglomerates and other related “blockchain-focused” companies are struggling to create consumer value or interest through their private blockchains which eschew the one and only proven blockchain star — bitcoin. This is because the blockchain, by itself, has yet to earn social acceptance, or demonstrate any relevant use-value for people.
Bitcoin, meanwhile, enjoys continued growth and daily active users number close to a million. “Blockchain” support, engineered by heavy investment and promotion from Wall St. and banking conglomerates, largely ignores the current momentum of bitcoin for reasons that are unclear. Eventually, we will see that these efforts to overlook (and in some cases even suppress) bitcoin in favor of the blockchain were fruitless. At that point, favor will shift back to bitcoin since it is the only viable consumer friendly use-case that currently exists on the blockchain.
Also, contextual geopolitical and economic events like Brexit will continue to incentivize the use of bitcoin. In fact, the actual “exit” has yet to take place. Deutsche Bank is in trouble with no solution in sight. One doesn’t have to have an economics degree to see the bubble accumulating around central banks which presents unparalleled opportunity for alternative, low-friction currencies to shine.
Whatever the case, bitcoin will be there and Project X will support bitcoin payments. It’s already working, as a matter of fact — imagine if it were empowering the merchants with whom you interact on a daily basis. This is not abstract — real value in real time is already here.
2. Value Proposition
2.1. Right Type of Merchants
So, the establishment ignores and might even be actively fighting bitcoin? In this case, focus can be narrowed towards small to medium-sized brick-and-mortar merchants. The question then arises: “Why would a merchant want to add bitcoin into his business cycle?” Structural clarity of the Bitcoin monetary system means little to a venue manager using a point of sale (POS) system backed up by 24/7 support and multi-billion investments.
We suppose that the innate benefits as well as the additional flexibility Bitcoin grants should be bundled within a value-proposition that also answers conventional everyday business needs. Tax optimization techniques, savings on transaction costs, and other benefits will become apparent after merchants have found their place within the bitcoin economy. They will benefit from bitcoin because it solves small-business (e.g. food trucks, sole-proprietors, franchisees, etc.) pain-points related to: 1) operating time and 2) floor space.
2.2. Right Place; Right Time
Even the most well-run venue in an ideal location suffers from strain on resources during peak hours, or on weekends when tables are full and customers have to wait longer for an attendant to serve them. Adding additional labor to endure these busy hours leads to an over expenditure that becomes apparent during lulls. Of course, staff can be added/cut at will but this kind of improvisation is taxing on management.
We realize, however, that optimization solution proposals are rarely welcomed when addressed to this sort of audience. Smaller venues often don’t have management resources to properly evaluate a consultation or reorganization offers — that’s why Project X needs to meet the following criteria:
- Compatible with the existing hardware setup
- Deployable in a matter of hours
- Be free of any installation or start-up expense
The merchant solution must solve the above problems and do so at each step of the commerce cycle within a brick-and-mortar venue. These steps include:
- Goods/services selection; manual selection by customer or push-based if offers/coupons are available.
- Order/payment; notifies the business of your order and allows payment from smartphone without interfacing with an employee.
- Delivery of goods/services within the venue; includes order status tracking;
- Receiving post-sale services such as loyalty enrollment, discounts and other retention techniques.
Project X presents a complete, stand-alone ordering and payment solution that enables any internet-connected space to become a profit-generating venue. One way to illustrate how such a service can cope with the described time and space difficulties is to apply some geometrical thinking.
In the illustration below, the yellowish area represents the useful floor space of a venue. This could be a grocery store, a self-service cafe or a gas-station convenience store. The red “POS” icon next to the door is where the cashier operates various POS terminals. In most instances, the POS station cannot be moved due to spatial or connectivity limitations.
Statistics show that areas that are adjacent to POS spots sell more per square foot. So, we can consider the area furthest from the POS as useful but less-so compared to that which is adjacent to the cashier and POS station. That’s why managers place certain clearance, sale, or “impulse-buy” items by the POS.
The common answer to this challenge of floor-space involves increasing labor costs with additional service people, waiters, or sales agents. Another frequently used technique is to leverage available outside or sidewalk space, such as cafe tables, to attract passers-by. But, even if this technique is teamed with additional on-the-clock staff there is an unavoidable pressure added to POS. Furthermore, adding floor space and additional labor is limited in scale since a server cannot be expected to walk very far to an outside table and back again to the POS to complete a sale.
The bottomline is that an ordinary POS doesn’t have scalability and is limited by space, electrical outlets placement, and internet wire outlets. You can’t carry it out to the sidewalk; you can’t relocate it at will to the busy section of the shop. Even if you could find a place for it and the time to move it you still must reorganize the entire place, alert staff, and change work flow costing time and money.
Project X is an elegant and effective solution to the above problems that also satisfies all of the mentioned conditions. It is a hybrid shop-n-pay software for brick-and-mortar venues featuring an online smartphone (or tablet) POS terminal. Project X increases effective floor space and reduces operational strain during peak times.
2.3. Leveraging Power of Customer Smartphones
What’s one thing that every shopper, restaurant-goer, or traveler has in their possession? A smartphone! These ingenious devices on which our lives now depend can be understood as a super computer. Why not take advantage of the free processing power that is literally attached to every single customer instead of investing in expensive, limited, and stationary “tech solutions” like incumbent POS systems. Project X leverages the power of customer smartphones and Bitcoin to improve experiences and increase sales. Browsing and paying are simplified while Project X analytics tools provides all the data your business needs to grow and retain customers.
Project X POS can be deployed anywhere inside a venue or even down the block in a nearby office space to make to-go or delivery options easy for your regular patrons. Bars, restaurants, lemonade stands, salons, food trucks, juice bar… anytime, anywhere. Project X on-boards customers with ease and guides them through the four stages of purchasing mentioned above. And most importantly — bitcoin payment processing is built-in.
Order points can be scattered all over the place, effectively making every square inch of the venue and surrounding area function as if a POS terminal was sitting on each of the tables (when in fact it is since the customer’s phone is the POS terminal within the Project X system). Meanwhile, actual serving staff can remain at full attention to delivery orders, attend customer needs, restock goods, clean, etc.
3. How Project X Works
Project X is a disruptive tech-solution for businesses. It improves business efficiency while creating better user experiences. Here are the main components of Project X and some of the technological processes that make it all possible:
- User engagement: identification and location awareness
- Product delivery: goods preparation, packing, and releasing
- Bitcoin payments and credit card and cash payments
- Other tools: inventory management and more
3.1. User Engagement
In the effort to monetize as much space as possible within a venue Project X is faced with the task of precisely positioning POS clients to best serve customer needs. The existing passive technologies (where customer doesn’t have to do anything to share their location) are not quite ready, yet. Of course, one could use bluetooth beacons but the technology is still expensive and buggy at times. Wireless triangulation is also not really established as a service yet.
There are other unique technologies like Philips LEDs; but, until such technologies are commonplace, users must manually share their position with merchants. To this end, Project X utilizes coded locations with which users interact “on-demand” to let the Project X system (and the venue workers by extension) know their location as well as their desired order. This is called a “QR code” and is ubiquitous within bitcoin communities as well as in certain international markets, notably Greater China and parts of Europe.
3.2. Product Delivery
Regardless of the venue or business type, orders and delivery-of-goods can be operational bottlenecks. Imagine trying to receive, process, and deliver remote orders at a restaurant — e.g. five hamburgers, one with cheese, two without onions, three sodas, one without ice… etc. Project X removes the possibility of human error in wait staff and provides end-users with a customizable order template. Orders are instantly translated into an easily processable ticket for providers to fulfill. Ordering and delivering is streamlined and both parties enjoy the benefits of this value-added service.
Bitcoin is catching-on all over the world. The incredible speed, security, and low transaction costs make the coming ubiquity of bitcoin payments only a matter of time. The beauty of bitcoin payments is the fact that there is no central authority to slow-down transactions or to charge high fees. Bitcoin payments are fast, cheap, secure, and getting better all the time. Furthermore, bitcoin can be easily exchanged to fiat currencies or traded on exchanges. Legacy payment methods, such as credit cards, (and in some markets cash) are also readily accepted with Project X.
3.4. Summary of Project X Modules
Project X also includes excellent management tools for merchants to track sales, inventory, and the effectiveness of each staff member and more. These tools feature interfaces that maximize functionality without being too complex. One will not need to be a “tech-wiz” to utilize the Project X manager dashboard.
3.5. Feature List
Project X has many cool features — let’s highlight several of them:
- Payments: bitcoins, all major cards
- No surcharge for payment processing
- Order points: QR code stickers; free venue URLs
- Service App for Staff app: Android, iOS
- Inventory integration: SAP, Oracle
- Accounting integration: SAP, Oracle
- Maximum number of staff: 100
- Maximum number of items: 1,000
- New order points inside your venues increase ingress availability with no extra costs.
- Order points can be placed anywhere in or outside of your venue to effectively increase your sales area or to bring in take-out sales. Spaces like sidewalks or parking lots can be incorporated into the primary business within a matter of hours.
- Project X tags can be placed anywhere in the vicinity: on signs around the block, stickers at bus stops, in the local press, social media, etc.
A smartphone provides its owner a safe-zone of increased psychological comfort that merchants can leverage:
- A smooth process of goods selection, immediate ordering with any mobile OS, automated payments, the elimination of errors by personnel, order status notifications.
- Various upselling techniques increase average check significantly. People tend to accept add-on offers easier when buying stuff on their own within their trusted devices without the outside pressures from waiters or salespeople.
- Project X brings the efficiency of online and mobile commerce to a brick-and-mortar spot. Project X customers are not anonymous; their individual needs can be more easily targeted to increase brand loyalty.
3.6. Competition and Related Business Segments
Project X versus the competition
Project X is easy to deploy; can be fully set up operational without any technical assistance. Competitors are complicated, heavy, and require technical activation.
Project X is browser-based — it’s not an app. Customers need only have any of the many generic QR reader apps to use. Competitors have venue-specific or proprietary applications.
Project X does not require user registration. Project X uses a simple approach to location and customer identification. Competitors apply registration and complex locating technologies.
The profitable execution of “guest-facing” technologies is the number one goal of the retail and hospitality industries. More and more venues are experimenting with new ordering and loyalty-building technologies. One of the important factors here is the development of these applications in anticipation of innovations in “big-data”. Currently, venues, payment processors, and new tech providers are storing relevant but separated sets of data. The merging of different sets of user-behaviour-data will open new horizons for the development of this industry sector.
Merchants are confronted with many options when it comes to managing all the tech that empowers their business, e.g. mobile payments, online ordering, and customer loyalty services. Smaller merchants have an especially tough time wading through the complexity of these multilayer offerings and finding out which ones can suit their business best. The services are not complementary and it is often not clear what is needed and what is not. That makes it hard to cover all stages of the business cycle without total dependence on one service. Moreover, even after careful examination it becomes clear that the currently available “cyber stuff” for merchants is far from perfect. It is not obvious that any of it actually increases profits at current high fees and the thin margins of merchants.
Project X is designed to be uniquely positioned in this extremely chaotic and competitive environment. Project X improves operations at no extra cost. Project X does not invest in promoting a catalog or any other such “listings services”. There’s no fundamental reason for Project X to charge much because there is not much overhead, hardware expense, or need to milk customers of their hard-earned profits.
3.7. Helping Merchants Build Competitive Advantage
Project X leverages the processing power of customers’ phones and puts it to use for businesses. Think of it as physical e-commerce or a shopping cart CMS designed specifically for brick-and-mortar businesses. Project X brings the same convenience and fun of ordering online to any business, anywhere. Many franchisees and sole-proprietors find it difficult to compete with online e-commerce giants. Adopting Project X gives brick-and-mortar stores some fancy online weaponry of their own.
Project X venues also increase customer convenience which easily translates to improved loyalty for the current generation of “on-demand” patrons. Customers are more likely to return to a business where they feel well-served or where “things go smoothly”. Using Project X decreases wait times and improves order tracking so you can always know the status of your orders.
Project X effectively increases the reach of your retail space without having to rearrange any existing layouts or furniture. Even optimally organized businesses that are staffed in order to answer the usual flow of customers plus additional surges during peak times overspend on personnel, POS stations, and other issues. With Project X, you can always serve more customers exactly when and where there’s a need. Project X-enabled businesses never have long queues and getting the attention of assistant, servers, or managers is as easy as pushing a button on their phone.
Update: April 5 2017, Bitcoin Could Soon Be Accepted at 260,000 Stores in Japan