Bitcoin Business Borders

Of course, 1 bitcoin will one day be worth USD 1 million. “But when?” We should question whether measuring bitcoin on the USD basis will have any relevance by then.

Bitcoin “price” and its currency safe-haven status are — in the long run — weaker in terms of new business tools generation capability when compared to the knowledge of bitcoin’s mass adoption pattern. Buying and storing is fine but a real business with turnover is based on everyday people’s activities, buying patterns, and brand loyalty.

Can bitcoin adoption be called a “mass adoption” without myriads of merchants accepting bitcoin directly, bypassing various centralized account holders, conversion services, and POS adapters? No. Can we exclude brick and mortars from the equation? No again. Bitcoin will be rightly called “mass adopted” when you actually scan a merchant’s bitcoin address QR code with your regular wallet. Not earlier than that. That is what the whole thing was meant for. Bitcoin’s founding fathers did not foresee lightning network or payment aggregator providers to offer you and your next-door grocery store a “great service with wonderful UI”. Bitcoin is and has always been a person-to-person model and idea.

Thousands of people — honest miners put aside — make money on our desire to have and use bitcoins. Is that right? Isn’t it even worse than central bankers making money on us by printing real-value-unsupported, i.e. “fiat” cash?

Imagine yourself sitting on your butt in a dirty wet trench waiting for the next skirmish to kick-off. You have your enemy clearly identified: they also wear dirty and shabby albeit different uniforms, they speak another language you don’t understand, and they sit in an opposite trench half a mile to the east getting ready to attack. Those two groups are obvious enemies, their goals are clear and they don’t match your goals.

Now imagine quick dudes in clean clothes darting about trenches and selling you ammo for a good buck. And you can’t use your nation’s supplied ammo because “Segwit is not yet implemented”. WTF?! Who is a traitor and an enemy here?

Is there a bitcoin-moral way for business to even exist in the bitcoin field? Are centralized exchanges bitcoin-moral? Well, maybe necessary but definitely not moral, not even including their role in blackening the bitcoin images due to weak hacker protection and routine reporting to tax authorities. Are payment processors bitcoin-moral? No, if they charge for pure bitcoin payments because the only source of the fee is themselves. Would the promised-but-not-till-future-coming lightning network provider be a bitcoin-moral business? Definitely not, because they cash-in on a native blockchain weakness, i.e. block size limit, which itself has many signs of being created artificially.

A bitcoin business has the only bitcoin-moral way to earn money if it charges on stuff not connected to bitcoin (e.g. a wallet which charges only in third-party services like fiat-btc exchange). Bitcoin services should either be free or should not have the ability to emerge. But, how can the bitcoin-associated activities get developed in the first place if there’s no incentive for businesses to make money there?

Amazingly, brick and mortar venues provide a perfect base for businesses to be both bitcoin-moral and profitable.

Retailers, hotels, restaurants provide a lot of business opportunities for whomever can optimize their familiar yet ancient sales flows. Here’s one example. Imagine you’ve got a successful next-corner 24h grocery store or pizzeria. If you are successful, there are time during a week [or a day] when customers crowd in and wait in line, sometimes even outside your tiny premises. Familiar picture, isn’t it? The reason and the cause get mixed here and it is not clear whether you lack trade floor space because you are successful or you are so well off because of the luckily positioned floor-space. Anyhow, you’ve got a space problem.

Imagine a service now, that solves your problem, at least partially, at least sometimes. The service shifts the burden of sales to customers’ smartphones so they order and pay by themselves, online, destructing a shop stuff to only pick up the goods already paid for. Isn’t that cool? Yes, it is.

Now, continue to imagine a store owner — a regular guy from China trying to make his living in San Francisco — installing that service to support physical points of sales and — surprise! — by the end of the day he sees some bitcoins on his account in addition to the rest of the fiat payments. Cool!

So he starts researching. What does he to find out? Two things:

  1. Taxes on that turnover are “questionable”. Let’s leave that to his own ethical compass (or let’s assume he’s not in the US). Would that raise his interest in bitcoin? Hell, yes!
  2. He is likely to find out the fiat value of those payments have risen few percent since they were accepted. Well, at least according to current trends. So, where does that take us?

Closer to true bitcoin adoption!

Let us do the classifying job again. What can we say about such a service:

  1. Offers some substantial value in the legacy world
  2. Charges directly for economical transitions made in the fiat currency sphere
  3. Charges zero on bitcoin transactions whatsoever
  4. Does not hold or even touch customers nor merchants bitcoins; neither before the transaction nor after it
  5. Invokes some noticeable interest in bitcoin drawing attention to the fundamental advantages it can offer, e.g. growth of value and flexibility in dealing with authorities
  6. Builds a solid supportive audience in the form of real world merchants who tend to approach their financial freedom with some over average creativity
  7. Initiates the movement where brick and mortar merchants would proactively motivate their customers — whom they know personally in most cases — to use bitcoins as a primary payment vehicle for their everyday needs.

These seven qualities mentioned above seem so aligned that their actual existence in a usable product seems yet unlikely.

© Alex Kontegna