3 reasons global adoption of bitcoin is inevitable

Bitcoin 1

Before we start here’s a fact which is easy to forget: Currency is a form of technology.

Just like all technology, if an improved method comes along, there is a very good chance it will substitute what people where using beforehand. While it might not replace the alternatives entirely, at a minimum it will sit atop what is already being used. Another layer of technology. It is also worth remembering that new forms of currency have often arrived during a new economic age.

  • Commodity money such as Cowry Shells arrived with Barter Economies.
  • Grain Receipts during the Agricultural Era.
  • Ferris Coins during the Iron Age.
  • Bills of Exchange during the Age of Discovery.
  • Fiat Currency during the Industrial Revolution.

Now that we’ve entered the digital age, it is inevitable that a digital currency will emerge and gain mass adoption. But people make bitcoin sound more complicated than it really is. There are only 3 things you need to know as to why it (or a crypto currency) will eventually dominate global commerce.

  1. Nobody controls bitcoin. Not one person, not one organisation and not one country. It is a thing. And it is open for anyone to use it, yet nobody can change it, or alter it. It is fully distributed, via its public ledger (the block chain) and this is very unique to bitcoin. It’s also anonymous.
  2. There will never be more than 21 million bitcoins. This creates a level of scarcity and value protection that no other currency has had before. Even gold. (Gold has had a 2% extraction rate per year on average). To have enough currency, we simply divide by another decimal point.
  3. Bitcoins can be sent to anybody, in the world, in real time and for free. Up until now, this has been impossible. All forms of currency exchange up until now always needed physical transport or to trust some third party, such as a clearing house, a credit operation, a settlement house or a bank, who also skim margin. They are all inefficient and relatively expensive. Bitcoin is peer to peer.

In short bitcoin has all the things a successful currency requires. It has scarcity, durabilitydivisibilityportability, acceptance and it is quickly gaining trust. Though the last two points are where the currency needs to make some gains. It might take 10 or more years, (think back to what the internet mean to you in 1995), but it is going to do for money, what the internet did for information.

But if you’re still not convinced, here is some things worth considering: Currently 5 billion of the people on earth rely solely on cash economically and 3 billion do not even have bank accounts. A little over 1 billion people have access to credit cards, and less than 1 million merchants globally accept credit cards for payment. Most of the worlds population can’t participate in the internet economically, because of the money they use. In fact, the poor of the world are the worst effected by having cash as their primary currency. Bitcoin can reduce the risks of operating in a cash world, yet have all the benefits of cash. Close to 5 billion people will be using cell phones by the end of 2015 and in the developing world you’re more likely to have a cell phone, than a toothbrush, electricity or indoor plumbing. All anyone needs to use bitcoin is that cell phone…. this tells us what the possibilities are.

Bitcoin has a serious chance of playing Industrial Leapfrog and becoming a primary form of currency around the world – lead ironically, by the developing world. I’m not saying your should go and convert your land holdings, greenbacks, or gold bars into bitcoin, but at a minimum, anyone interested in the future, should at least pay attention, and maybe even hold some.

You should totally read my book – The Great Fragmentation.

One thing we must learn from Tinder to create a successful app

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The reason Tinder works is simple. It replicates human behaviour in the real world. The moment someone walks into a night club they look around at the faces of people and say to themselves, Yes, No, No ,Yes, No, No, No, No Yes, Yes. And the people they are looking at are doing the same thing back at them – assuming of course they are both looking to meet someone. But in the actual nightclub there is that awkward discovery process of trying to work out if the other party feels the same way. Which then becomes the business model of the nightclub – Sell people drinks for that few hours of the discovery process.

Tinder circumvents all of this. It takes what we do anyway, but makes it happen faster and on the couch, instead of at the bar. What tinder doesn’t do, is expect us to behave any differently. After all, the Human Operating System, or H-OS as I call it, is a very old one, 200,000 years plus since its most recent update. Which means that the best use of technology will be leveraging existing behaviour, not trying to change it.

Yet, another reminder that the digital world ‘is‘ the real world.

You should totally read my book – The Great Fragmentation.

Why petrol cars will not exist in 10 years

tesla charging

If you haven’t already realised, cars are no longer machines, but rolling computers. This also means that cars will move from being powered by fossil fuel engines to electric motors. It’s already started, and it is going to happen much more quickly than we anticipate. I’d go as far to predict that there will hardly be a petrol car on the road in 10 years. Here’s why:

When cars transition to rolling computers, the Law of Accelerating Returns applies. Innovation goes from incremental and factory-based to curve-jumping and technology-driven. You’ve probably heard of Moore’s Law – the maxim that states that computing power will double roughly every 18 months while prices halve. This maxim and many other accelerating technology laws will apply to the production of cars, laws which make the end product better and cheaper by significant degrees. The revolution which transformed smart phones, cameras, laptops, solar panels and flat screen TVs is about impact the auto industry.  Let’s take the pricing example of the Tesla Electric car range:

1st car – Tesla Roadster:  $109,000 (released 2006)

2nd car – Tesla Model S: $75,000 (released 2012)

3rd car – Tesla Model 3: $35,000 (projected – release due 2016)

Not only has each model been progressively cheaper, but also far better in terms of range (distance per battery charge), safety and features.

It’s the same pricing pattern we saw during the personal computing revolution. Here is where we get an entire curve jump. The Tesla model 3 is so cheap that an electric car is no longer a plaything for Silicon Valley types, but a viable new car option for everyone. This is because the switching costs get very close to zero. Why? Because the running costs of having a Tesla Electric car does not include the cost of petrol. (Tesla already have 453 free super charging stations and the cost to fully charge the battery at home is around $3). This means the average consumer can use their saved petrol money towards acquiring a brand new car without increasing their weekly expenditure. For example:

Model 3 Tesla

  • Cost to buy = $35,000
  • Avg petrol p.a. = $3,120
  • New funds available = 8.9% of purchase price.
  • Avg Cost new car finance = 6-7% unsecured interest rate.

When the Model 3 arrives, it only takes some creative financiers to change the landscape of the auto industry virtually overnight.

Want a new car at no cost?*

*Just give us your weekly petrol bill and drive away in a sexy new high tech Tesla!

It’s when this happens that we transition to an all-electric car world. The transition will be as swift as the smart phone – in a few short years, non-electric cars will be a lot like feature phones.

This is exactly how disruption happens. It’s not the product itself, but often the change in the business model around it which leaves industry incumbents blindsided. When there’s an opportunity for consumers to get into a superior product with low or no switching costs, they will always take it.

Buckle your seat belt.

The hidden asset base

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I was speaking with a friend about some of the great quotes from long gone captains of industry. J.D Rockefeller, Henry Ford, Andrew Carnegie, Benjamin Franklin and cohort. One quote that got me thinking was this:

“If I went broke, just give me my 5 best people, and we’ll be double the size in 5 years.”

I searched Google, Wikiquotes, Brainyquote and all sorts of places to find who it was with no luck. My buddy said it was JD Rockefeller, but I can’t confirm it is, or even find the quote. In the end it doesn’t even matter. What I do like about it is the layers it carries. Some of which are pertinent in an age of technology disruption.

  • The people around us are more important than ourselves.
  • The business is the people and the culture, not the infrastructure.
  • Business is ephemeral, skills are enduring.
  • It’s easier to grow with a fresh start, than with legacy constraints.

But above all it reminds us that our most valuable asset is what we know. Something which can’t be taken away from us, even when a business falls apart.

Yes, the robots will take your job, but…

Bison Hunter

…there are not that many bison hunters any more.

This is a very short way of saying that all jobs eventually get replaced by technology. Technology will take the role of many white collar jobs, just like machines have taken away many blue collar jobs, just like the plough took away many farming jobs. Technological Unemployment will always be a fixture in human existence – and always has been. It just so happens that it doesn’t sell newspapers (or provide click bait) to tell the truth that new jobs will be created. But it seems like a week doesn’t go past without a new report flagging the end of millions of jobs. So here’s a counter mind jam of some new jobs recently created that no one is writing economic reports on:

UX Designer, App developer, Drone Pilot, Crowd Funding Advisor, Smart Phone Game Developer, Blogger, Podcaster, Social Media Specialist, Wikipedia Moderator, Content Curator, Community Manager, Uber Driver, Airbnb Host, Web Videographer, Youtube Content Creator, Vine Artist, e-Book Publisher, Bitcoin Trader, Bitcoin Miner, E-Commerce Consultant, SEO Specialist, Genetics Counsellor, Sustainability Advisor, Citizen Journalist, MOOCs tutor, Big Data Analyst, Cloud Services Specialist…

And this list is just small sample set from my perspective. I’m sure your industry or worldview could make the list much larger. In fact, there are currently more than 500,000 app developers in the USA alone. A job that didn’t exist pre smart phone.

A simple economic fact is that if a person has $100 in their wallet, it still gets spent. In 1995 $10 of that $100 might have went into getting filmed developed. Now it goes elsewhere, maybe towards the cost of a smart phone monthly fee. The money always gets spent, saved or invested. The allocation just changes. And so do the jobs around those expenditure allocations. If you want to be future proof, I suggest you pay close attention to what your friends are spending their time and money on. It’s always where tomorrows jobs and startup opportunities lie.

The crazy thing about all those ‘new jobs’ above is this: They are all learnable, and mostly for free. All you need is these two assets: (1) The ability to read. (2) A connection to the internet (I’m guessing you have these). But yes, they all take effort. And no, the Government or your Boss won’t save you, or pay you to learn any of them. No one can do your push ups for you. But if you’ll make the effort, the rewards are there. The new jobs, and more importantly ‘business opportunities’ around them are ripe in these realms and they often pay more than job X did yesterday. Guess who earns more: A small screen UX Designer, or a Graphic Designer doing page layouts for a print magazine? Same realm, but a different iteration and attitude to learning. It’s really just a choice between taking advantage of the opportunities, or wishing the world was like yesterday.

Yes, the pace of change is scary. Yes, things are changing at a rapid pace, but it’s never been more possible to up-skill, re-skill or new-skill in the history of humanity. So next time you read a report on the impending doom of your industry, job or financial future, just remember that it is your decision on how it will affect you.

New Book – The Great Fragmentation – out now.

The leadership secret no one ever talks about

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And it is this simple maxim:

If you want to be leader of many, then you must first be faithful with few.

One of the most important sentences I learned from the late great Jim Rohn. And it matters in all walks of life and business regardless of our ambitions. The picture above is from an after dinner talk I did recently at a local Rotary Club. One of the things I have done a lot lately is deliver speeches on the technology revolution we are all living through. This is mostly the result of my book. Sometimes I get lucky and get paid to do it at a conference. But often I am also asked by local community groups who are interested in some of my stories. Which is what happened with Essendon North Rotary. It’s events of this size where I first got asked to share a few ideas and learn the craft of public speaking. In the startup community many times I’ve shared some lessons with new entrepreneurs. For more than 10 years I did unpaid speaking with tiny audiences… that is, the few people who had enough faith in me to give me their time so we could both have a valuable exchange. If it wasn’t for this, then I’d never be able to present in larger audiences like this. But on the flip side, we should never forget the few, even if we have the attention of the many.

It raises a few question of how we might behave in a startup:

Do you love the customers you do have? Are you faithful with those who gave you a try before you have any scale? And if you have many followers, do you still take the time to reply to the few who reach out? Do you still support the low profile few who made what you do possible, or just gravitate to the high profile few who you now have access to?

An easy way to test this is to tweet a famous person or brand and see if they respond. If they don’t, then they should be clear they won’t on their profile. I’m not saying every web tool can scale, I’m just saying we should be clear with our audience on what to expect. If you think it isn’t possible, I can tell you that Seth Godin still answers every email himself (he doesn’t tweet). I can also tell you that Cory Doctorow advises in his twitter profile of better ways to reach him. I can also tell you that Skype answers every tweet you send to them.

In the end leadership is about giving thanks and paying homage to the trust you’ve been granted by those prepared to take the journey with you, from the start. But it’s also about not be too ‘big’ to engage with those who helped you get there once you’ve arrived. It’s not easy, but the real job of leaders in the pre and post success era is to bethink both the few, and the many.

One thing in tech every business or entrepreneur with global ambitions should remember

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While only 39% of the global population currently have access to the internet, 73% of the global population (5.2b people) are already mobile phone users.

This means that the majority of the adult population will never use a desktop computer. They may never use a laptop. And that their world will inevitably be a small screen, wireless one. With the law of accelerating returns on our side, we must assume that within probably 2 years, all of these phones will become smart phones, and the number of people with them over 90% of the population. Already, many mobile subscribers are still yet to have access to running water, indoor plumbing and other technologies we’d falsely assume ought to come first. The order of things in the past, is not always the order of things in the future.

If there was ever a case for a business strategy which is So Lo Mo Me…

Social / Local / Mobile /  Me (as in the end user)

… then that time is now. Add to this the change of the Google search algorithm to mobile friendly and the pattern is clear. The small screen rules, even if it seems to be growing!

If the aim in business is to go global, it’s more important than ever to be mobile oriented, as the developing markets we seek to enter know of no alternative. Mobile is not only first, it is the only. If you want to see the state of the internet which includes these stats and more, I can’t recommend highly enough the annual state of the internet report by Mary Meeker – here.

New Book – The Great Fragmentation – out now.