This article is relevant if you are making assessments about Bitcoin’s Market adoption.
Background
I belong to a great Los Angeles CTO group, led by Tony Karrer, called the LA CTO Forum. I highly respect the members and have learned much about the latest in technology innovation and how to bring software leadership to organizations. I consider the group a source of power for making market assessments and to understand new capacities in the computer science domain.
Since my practice is about NetSuite Systems Integration, I would speak mostly about the power of the NetSuite Platform and how it can be used to integrate CRM, Accounting, Order Management and eCommerce operations into products and services that my fellow CTOs were leading in their respective organizations.
Approximately 18 months ago, or March 2013, I proposed having a meeting to discuss the Bitcoin and the Crypto Currency breakthrough and how we have produced leadership by integrating Bitcoin into the NetSuite system (if you are interested, have a look at http://www.btc4erp.com). But to my surprise, the CTO members quickly discounted (effectively laughed) at the idea. I knew at that time that it was simply too early — all things Bitcoin were “too early”.
Recent CTO Enthusiasm
While our team members quickly kept their heads down and focused on how to help NetSuite customers accept Bitcoin in their respective business, I received an email from fellow CTO, John Shiple, that the August 2014 CTO meeting was on Bitcoin! He had invited another respected CTO member, Mark Jeffrey, to give a talk to the group. Apparently, I had missed a couple of previous meetings and members have been enthusiastically looking to learn about Crypto. Mark published a book, “Bitcoin Explained Simply” to help many understand Bitcoin’s nature and he was in a great position to make the offer for an educational talk.
Mark did a great job helping the members understand Bitcoin. Given I have been tracking Bitcoin since March 2011, and enthusiastically since June 2011, I supported Mark by offering clarifications on some of the finer points. The meeting helped me reflect on the current state of Bitcoin adoption:
- Most technology oriented people have heard of Bitcoin and now are open to understanding it. The laughing has died down and the “Oh Wow!” is more frequent.
- The regular public may have heard about it but they are still confused about it. Joe Six Pack is noticing that Bitcoin comes up in the news frequently but he doesn’t know how to act with it. Meanwhile, Bitcoin adoption grows at a fast and steady state worldwide.
- Leading organizations are watching others, like Dell and Overstock, accept Bitcoin with success and are interested in learning how to also accept Bitcoin in their respective businesses.
What’s Next For Bitcoin Adoption?
In my mind, I am preparing for expanded Bitcoin adoption. So long as the technology continues to be reliable, then I believe we will see continued adoption — perhaps at a faster state. I believe we are moving into another wave of new Bitcoin offerings as many technology enthusiasts have been and are gearing up to bring new capacities to disrupt old world practices. It’s an exciting time!
Marty Zigman
Holding all three official certifications, Marty is regarded as the top NetSuite expert and leads a team of senior professionals at Prolecto Resources, Inc. He is a former Deloitte & Touche CPA and has held CTO roles. For over 30 years, Marty has produced leadership in ERP, CRM and eCommerce business systems. Contact Marty to set up a conversation.
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Marty,
There are three remaining barriers to the widespread adoption of Bitcoin.
First and foremost is the inability of “Joe Six-Pack” to obtain an income in Bitcoin. Overstock’s Patrick M Byrne has recognized this, and is now offering bonuses to his staff in Bitcoin.
The second barrier is the lack of incentive for an average consumer to even use Bitcoin in the first place. Why would someone who is paid in fiat (see above) go through the trouble of buying Bitcoin only to spend it again at a merchant who would have happily taken cash in the first place? To buy Bitcoin through an exchange like Coinbase can take four days. Thats a long time to wait to just look cool down at the independent coffee shop.
Third is the propensity of those merchants to exchange their Bitcoin immediately back into fiat. Currently merchants are just providing a way for Bitcoin miners to “launder” Bitcoin back into fiat and creating a steady selling pressure on the Bitcoin themselves.
Until more companies like Overstock start paying employees in Bitcoin, the slump in the price of Bitcoin will continue, and the adoption rate in the general population will stall out.
Mike
Thank you Michael for your thinking. While these are good observations, what I notice is that the concepts are less foreign now to most leaders at senior levels of organizations. This is an important milestone to the acceptance of a distruptive technology.
What’s different about Crypto compared to most all other payment technologies is that it is bootstrapping a new currency. That’s difficult when background listening is that money comes into existence via government fiat. So far, I would say Bitcoin is the most successful to date. I continue to be bullish as the reasons for using Bitcoin are compelling for a sufficient number of people on any side of the trade.
Marty