I realised that it was over ten years ago when I started banging on about mobile payments and tablet computing. It struck me particularly when I revived this video that I made back in 2000.
Some would say that video was / is visionary. I would say that it was just ahead of its time, but nothing that could not be foreseen.
Ten years ago, it was obvious that mobile, wireless technologies would fundamentally change the way in which we pay and transact and, today, it is obvious that the way in which social, consumer technologies will fundamentally change the way in which we pay and transact over the next ten years.
For example, my big theme today is focused upon the impact that social currencies will make, which will soon become as important as commercial currencies. It’s visionary according to some, but obvious when you look at developments with Facebook, Twitter, Zynga, Apps and more.
After all, we’ve been talking about social currencies for a long time.
They stem back to the WIR in Switzerland dating back to the 1930s, and continue through community currencies during the last few decades.
But the view of community currencies is that they don’t work.
This is partly because they don’t travel across borders – most are based upon social investment in local communities – and partly because they have no electronic infrastructure to support them.
Social currencies now have global connectivity via the mobile internet and a common infrastructure through platforms like Facebook and Twitter.
So I’m looking at social investment in global communities through Facebook, Twollars and Bitcoins. These developments play to the heart of these concepts of social currencies.
The difference is that it’s no longer airy-fairy social investing in sustainable business, but social investing via currencies that have as much value digitally as real money has physically.
In the very near future, I want to buy a flight from London to Rome.
The flight cost is £432 (it’s British Airways obviously).
When my flight payment options appear, I would find my payment options include Facebook credits, Twollars or Bitcoins, in the same way as we now see payments by Visa and MasterCard.
This may not seem that disruptive, but it is as we are now looking at several more global payments processors.
It will mean we move from Visa and MasterCard (and AMEX and China UnionPay) to PayPal plus Facebook, Twollars and Bitcoins.
Oh, and the final player is not a government controlled currency but a digitised global currency, which means it’s truly disruptive.
Bitcoin is like wikicoins … it means that no government could control or stop its usage.
So the US government can squeeze Visa, MasterCard, AMEX, PayPal, Facebook and Twollars to not take funding for Wikileaks, as all of these firms are head officed on US domestic soil.
Bitcoin is not.
Bitcoin does not sit in US, Chinese, Russian or any other soil.
That’s why it has the potential to truly disrupt.
From this week’s Economist:
Bitcoin was devised in 2009 by a mysterious figure known as Satoshi Nakomoto. It is the world’s first, and so far only, decentralised online currency. Instead of a central bank, Bitcoins can be issued by anyone with a powerful personal computer: it mints them by solving extremely difficult mathematical problems. The problems are automatically made harder to ensure that the overall supply of Bitcoins cannot grow too fast. They are traded online, with transactions cryptographically authenticated.
These curious capabilities make Bitcoins a combination of a commodity and a fiat currency (creating the coins is referred to as “mining” and they have value only because people accept them) …
One unit now costs $12, and the volume of transactions is increasing. Though the price still fluctuates against the dollar, it is less volatile than it was, which makes it a better store of value. Its use as a means of exchange is also getting easier: an increasing number of online retailers take the currency, and new smartphone apps make Bitcoins almost as easy to use as cash. A proliferation of exchanges means that it is relatively easy to swap Bitcoins for conventional currencies.
Tony Gallippi, the boss of Bitpay, which processes Bitcoin payments for retailers, says that his client list has increased from around 100 in March to 1,100 now. These are mostly e-commerce businesses, selling things like domain names and web hosting. But the list also includes a taxi-driver in Chicago and a dentist in Finland. “Credit cards weren’t designed for the internet,” he says. Bitcoin transactions cost less and cannot be reversed in the way credit-card transactions can be.
If you want to know more about Bitcoin, then listen to Donald Norman’s Financial Services Club speech earlier this year ...
… or read more about Bitcoin from the newly formed Bitcoin Foundation.
There’s a lot to love in Bitcoin-land, and a lot to be concerned about, too. There are botnet operators, hackers, and ponzi-scheme runners floating around our space. We occasionally hear threatening statements from government representatives that don’t seem to understand the law, much less how great Bitcoins are for the world. Our forums and community interaction have a certain uneven quality to them at times …
We can help solve or mitigate these problems as a community. My hope is that the Bitcoin Foundation will be the organization that focuses and unlocks all of your energy and talents towards promoting Bitcoins, protecting them, and increasing their legitimacy through standardization … (and) have set our eyes on accomplishing the following things:
- Run a payments-oriented Silicon Valley Bitcoin Conference in the spring (Bitcoin 2013)
- Publish a set of best practices for businesses transacting in Bitcoin, covering topics from accounting to physical and digital security
- Create an opt-in certification process for Bitcoin businesses
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...