The Bitcoin Tsunami
Over the last 18 months the price of Bitcoin has ranged from $1,200/BTC to $150/BTC. I consistently get the question:
“Why is Bitcoin not performing well?” (Sometimes not in nice words)— Everyone
I try to answer this question the best I can in the allotted attention span of people, but really all they are trying to find out is whether or not I am still enthusiastic about Bitcoin. I am more enthusiastic than ever.
Right now Bitcoin is going from a fun toy to a useful tool. And that transition isn’t “sexy” but the community is building the groundwork to make the technology successful. Over the last 5 years we have had this experimental piece of technology, and early adopters got excited about what it might mean, and that lead to a Hype Cycle of usage, which generated a lot of press and a much larger market cap for Bitcoin. The hype cycle was an important transition for Bitcoin. The Hype Cycle did multiple things for Bitcoin:
- Shrunk the education gap on Bitcoin (People have heard of Bitcoin)
- Got more entrepreneurs excited about its potential, and more people got into Bitcoin (Human capital increase)
- Attracted a lot of Venture Capital money ($400m last year)
But, the “Hype Cycle” also brought about an unrealistic expectation of what “Bitcoin Success” looks like.
Sam Schillace, CTO of Box came in to Boost and spoke about technology on a high level. He talked about the adoption of a new technology. At the beginning of his talk he walked up to a white board to explain his thoughts on the adoption of a new technology, using Bitcoin as an example:
“People think linearly, but technology gets adopted hyperbolically.”
In this chart the green is the linear or “expected” impact, and the orange is the “actual” impact.
This concept is called “Amara’s Law” a concept created by Roy Amara, explaining that people generally overestimate the initial impact of a specific new technology and underestimate the impact in the long run.
The Tsunami is coming. 90% of a tsunami wave is built up beneath the surface of the water before it hits land. So much work going into the Bitcoin space right now. The Bitcoin space has been flooded with the smartest entrepreneurs working on real world problems and the space has attracted vast amounts of venture capital interest and investment. The global financial markets are about to be hit by a tidal wave of change. It takes time for quality products and infrastructure to be created and add value, but when these well funded projects do, the world is going to change. We will all be transacting with Bitcoin.