Bitcoin is Not a Libertarian Project
The Economist magazine recently explained that Bitcoin's recent boom was in part due to the fact that, "basement-dwelling libertarians are not the only ones talking it up." Putting aside the derision towards libertarians, the comment is coming from a widely held perception that Bitcoin is, or was, a libertarian project. https://www.economist.com/leaders/2021/01/09/what-explains-bitcoins-latest-boom
It's not.
Keep in mind that I have no idea if Satoshi Nakamoto declared himself or Bitcoin to be fundamentally libertarian. It doesn't matter.
Supposing for a moment there was one person who we could credit with the invention of the hammer, which would be thousands of years ago. My guess would be that me and that person would almost certainly disagree a lot about how the world works and how society should be run. Just as an example, maybe the inventor of the hammer believed the world was created by a sun god.
When I use a hammer, I never think about what opinions the inventor had about anything. Couldn't care less. It doesn't matter, because a hammer is a thing, and you don't need to have a viewpoint to use a thing. I don't have to believe in a sun god to use a hammer.
Similarly, Bitcoin is a thing. It just gets used, or not. And it can be used by anyone, in any way. Just like a hammer can be used for construction, murder, or whatever else, Bitcoin can be manipulated to suit the aims of the people using it. There's nothing inherent in a hammer that compels people to follow the sun god, and there's nothing inherent in Bitcoin that will bring about a libertarian social order to any degree.
So far as I understand it, the main hope that libertarians pin on Bitcoin is that the degree to which it replaces fiat currency, it reduces a government's ability to regulate an economy. The value of goods will be determined by pure market forces and governments will be hindered in their ability to do things like print more money to pay for government projects at the expense of the value of the money in everyone's wallet.
Personally, I don't see that happening. On the most simple level, if Bitcoin was ever a legitimate threat to a country's ability to regulate its own economy to any degree they felt was unsafe, then it will simply be outlawed. All authority ultimately stems from who has the right to violence, and that's the government, not Bitcoin.
But I don't think it will ever get even close to that. I think governments will simply insist that anyone doing business within their borders always accept their fiat currency. You can pay in Bitcoin if you want, but the prices will be known in dollars or yen or whatever, and that will orient the economy around that metric.
On top of that, countries will likely issue their own cryptocurrencies, possibly as stable coins on an existing blockchain, or have their own home brew. Also governments will hold their own reserves of Bitcoin or whatever else, thus able to impact its value depending on how much they release or buy.
The future is always more complicated than one imagines, so I suspect the reality will be a big soup of many ingredients, with all these possibilities and ones we haven't imagined yet, all having their influence on each other, and creating results we didn't anticipate.
But what I am willing to bet on is that some general turn towards libertarianism won't be one of those results. Whether it's China or the US, North Korea or Bhutan, countries will have a relationship with Bitcoin and crypto, but continue on their merry way, doing things as they have done before Bitcoin came along.
All of which is to say, I don't think there's any evidence that libertarianism ensues from Bitcoin adoption, and so the association between Bitcoin and libertarianism is simply the hollow claims of people who really want their ideology to be manifest. But at the same time, if you want to pin your hopes Bitcoin bringing about a libertarian utopia, go ahead. One day we'll find out who was more right, only time will tell.
However, in the meantime, what you might consider is that there is a big world of people out there with all sorts of different beliefs who might want to adopt Bitcoin Cash, or even other cryptocurrencies. I, for example, am not libertarian, nor do I subscribe to any particular "ism," because I think they're all reductive. And yet I'm right here with you wanting to see cryptocurrency, mainly Bitcoin Cash, become a *de facto* part of daily life. I see all sorts of positive results from more Bitcoin Cash adoption, and none of them are libertarian.
There are definitely countless others out there who would also like to use Bitcoin Cash for their own purposes, within their own beliefs. But, if if you start talking to them as if Bitcoin and libertarianism are somehow intertwined, then you might be repelling them for no particularly good reason. The same way you would probably find it tedious to be preached to about a sun god when all you wanted to do is have a better way to bang nails into wood.
BallClub: A Comic Metaphor About How Bitcoin Cash Came To Be
Many newcomers to the world of Bitcoin are unclear on how BTC, Bitcoin, and BCH, Bitcoin Cash are related. One symptom of this confusion are the frequent posts on the Reddit community r/btc, where people ask why it's called "r/btc" if everyone there prefers BCH. https://www.reddit.com/r/btc/
I thought this simple comic metaphor might help people who are new to Bitcoin Cash grasp the basic concept of how it relates to Bitcoin, without having to go into any long histories, or technical details.
Was There Ever a Funding Problem?
I can sympathize with someone like Amaury, a BCH developer who was once revered as a savior of Bitcoin. There was a time when it seemed like everything that made Bitcoin great was going to be ruined by Blockstream. My possibly flawed understanding is that it was Aunery who was largely responsible for writing the code that split Bitcoin Cash off and preserved the fundamentals of peer to peer cash. I'm sure others were involved, and I don't want to deny anyone their credit, I'm just saying, I remember when people were excited about Amaury.
But that was three years ago. Recently, he has been villainized as an unscrupulous profiteer, trying to force changes that would line his pockets with an obligatory amount of money stolen from every block of BCH mined.
Is that view fair? Personally, I don't know the man, nor anything about him, so I have no judgment regarding him as an individual. More than that, I don't want to know him as a person, or any of the other names thrown about in the world of Bitcoin Cash. I wish the forces that influenced the value and utility of my BCH were nameless, boring, conservative organizations and algorithms, completely free from being buffeted by the quirks of anyone's individual personality. But that's not how it is. Maybe one day.
In any case, whether it's Amaury or any other developer, I can empathize with the frustration that mining rewards some people with consistent millions upon millions of dollars just for owning things. All you have to do to be a rich miner is be rich enough in the first place to start buying computing power, and then watch yourself get richer while the machines do the work for you.
Yes, I know it's not *that* simple. But it's true enough to be one way of looking at the situation.
The point is, those machines wouldn't be doing anything were it not for the code. Bitcoin, Bitcoin Cash, or any cryptocurrency, when it comes down to it, is code. It gets processed by machines and used by people, but without code, nothing happens.
And yet, so far as I know, there aren't any coders who are seeing their wealth rise in proportion to Bitcoin's value, the way, for example, Bill Gates became rich in proportion to the adoption of Windows. Maybe Vitalik Buterin mined enough of his own Ethereum at the start that he's set for life?
More generally, a guy like Amaury simply doesn't get rich by having made a code change that creates the fourth most valuable cryptocurrency. Well, usually fourth. As I write this, I think it's in fifth place. Usually it's fourth. But I digress. What's important is that Bitcoin Cash is a hugely valuable asset, it has incredible potential to become a true peer to peer global currency, and it may ultimately change people's lives.
Yet for all that, the coders who have in the past made Bitcoin Cash happen, and those who continue to make it happen, won't necessarily benefit from any of that unless they make some other kind of business model on top. Issue some kind of token, create some kind of killer app, appeal to some kind of funding program maybe.
So I can understand the feeling of looking at miners who seem to just turn money into more money without having to really innovate or advance anything. Yes, they provide a valuable service and they're just playing the game as was defined in the original white paper. No one is saying miners do anything unfair or wrong. But I think you, like me, can see how something feels a little off in the bigger picture. Miners buy machines and get paid. Coders create the very foundations of everything, and maybe get something out of it, or maybe not. It must be frustrating to be a coder and see all this wealth flowing around among people who mine and invest, all because of something that you arguably made, and none of that value comes back to you in any consistent way.
I think a lot of people who early on agreed in principle with the Infrastructure Funding Plan empathized with this problem. I empathize with it. I think the reason the IFP came to be rejected as a plan was partly because there simply is no way to objectively manage the money that would be generated.
The very thing that makes creativity so valuable also makes it ethereal. And real coding is creative, it's coming up with elegant solutions to difficult problems that no one has thought of before. It's unpredictable, it's sometimes hard to even know if it's real when it's front of you. There's no way to ensure that if you provide any particular amount of money to anyone to invent something for you, that they will come back with something that matches the value. You usually only know when something creative is valuable after the fact, after it's been adopted and appreciated and shared. If you knew in advance... you'd be too rich already to be reading this.
I don't see any way that a consistent stream of money flowing into some account somewhere wouldn't ultimately be the cause of huge disagreements and fights over who should get a piece of it and what they should do with it. The more valuable that stream becomes, the more vicious the fights over it become.
I would love for there to be a world in which the coders and developers of BCH get incentivized and compensated. There's just no way to do it objectively, systematically. If creativity were systematic, it would stop being creative.
Right now as I write this, someone that is so far anonymous has been "attacking" the BCHA blockchain that contains the IFP protocol that Amaury had hoped to build into BCH. Is it a petulant attack to get revenge on Amaury for having potentially negatively impacted BCH value? Is it a concerted defense to make an example of the BCHA chain and prevent potential future forks where coders implement spurious compensation? I don't know, I'm not qualified to answer that.
What I do know, though, is that it takes some amount of money to sustain the "attack" for as long as it has been going on. Somehow, in the world of cryptocurrency, as everywhere else maybe, it's easier for people to start throwing money around when they perceive enemies and feel a need to deal with them.
It would be nice to be in a world where whatever amount of money that is going into that sustained action against the BCHA chain was instead going to fund some developers to complete the tasks that make up the roadmap of BCH features. Or maybe that the miner who is attacking BCHA also made it clear how they are supporting development on BCH so that we know this attack doesn't come at the expense of making BCH as good as it can be.
I understand that in life defensive actions have to be taken, which is being generous in describing the attack as a defensive action, but if the unknown miner wants me to believe they have BCH's best interest at heart, then I'd like to see something proactive and positive as well.
I don't have any grand solutions for how funding should be done. Although I think maybe it should be more retroactive than anticipatory. What I mean is, you'll never know what developments really mattered, really worked, really shook things up until they've gone out in the world and proven themselves. Making funds based on people's pitches works okay, I guess, but often even with the best of intentions projects fall apart for all sorts of reasons. And by that time the money's gone.
What if there was some kind of system similar to an award ceremony where funding built up, and then people looked back on the developments that happened and compensated them? People could nominate ideas and vote for winners. Then you'd be giving money to the ideas that worked. Developers could nominate themselves, and voting done by miner consensus or something.
I don't know, I'm just spit balling here. All I'm saying is, I think, in a way, there is a funding problem, the same kind that plagues just about all open source projects. IFP wasn't the solution, but maybe something else could be.
A Proven Model for Adoption that Bitcoin Cash Should Use
A while back there was a project called the Bitcoin Cash Fund, where the aim was to raise money to support projects that promote Bitcoin Cash. Help designers and marketers to make infographics and videos and other methods for getting the word out. Note that I'm not talking about the recent Bitcoin Cash Ecosystem Fund being run by Bitcoin.com, which is a much larger project to invest in development as well as promotion. The Bitcoin Cash Fund I'm referring to was a grass roots effort that bubbled up out of discussions on r/btc and maybe elsewhere in mid 2018 or so. https://www.reddit.com/r/btc/comments/7fexya/the_bitcoin_cash_fund_website_is_now_live_go/ https://www.bitcoin.com/bitcoin-cash-ecosystem-fund/
So far as I know, the Bitcoin Cash Fund raised a few tens of thousands of dollars, maybe more, and I think they supported a couple projects. Unfortunately, as I remember it, the people running it got bogged down in trying to develop systems of governance to manage the money fairly. For anyone wanting to apply, it was hard to tell exactly how it worked, and the whole thing fizzled out. Their YouTube channel hasn't been updated in a year or so, and, as I type this, when I try to go to the Bitcoin Cash Fund home page, Firefox tells me it can't connect. https://www.youtube.com/channel/UC0NQCJDbECWg3jjkmsEDO-A https://www.thebitcoincash.fund/
To be honest, I don't think it really would have mattered much if the Bicoin Cash Fund had stuck around. I think it's fine if people want to come up with videos and infographics and other media to explain Bitcoin Cash. But I also think that there are diminishing returns on adding more and more different versions of the same examples and demonstrations.
Assuming for a moment you could do what the Bitcoin Cash Fund did and raise a little money for the purpose of promoting Bitcoin Cash, might there be a more effective way to use that resource? And is there any objective reason to believe in another method?
Fortunately, I think there's a real world case study we can turn to that gives us some guidance. I'm referring to the promotion and adoption of cashless payment systems in Japan. In recent years, Japan suddenly pivoted from a consumer culture that was almost entirely cash based, to using apps with QR codes as a matter of course for every day payment. There are dozens of different companies competing to become the standard every day payment system. I think you can see how this has a lot of similarities to the challenges faced by Bitcoin Cash.
Although there were dozens of companies trying to become the *de facto* standard, only a few rose to the top, and I think we can learn from one of those leaders, a system called PayPay.
Most people outside of Japan haven't heard of PayPay, so they often get it confused with PayPal. With just that one letter on the end being different, it's easy to get them mixed up. So, just to be clear, I'm not talking about PayPa***L***, the global payment company you've probably heard of. I'm talking about PayPa***Y***, an electronic cash service only available in Japan. https://paypay.ne.jp/ https://www.paypal.com
PayPay is the system backed by Softbank, which you may have heard of outside of Japan. They have a lot of investment money that they throw around, such as their recent investment into WeWork, which doesn't seem to be going very well. With Softbank behind it, PayPay had the benefit of a billion dollars, not figuratively but literally, for the purpose of promotion. https://www.softbank.jp/en/ https://techcrunch.com/2019/10/24/softbank-notes-it-has-now-invested-18-5-billion-in-wework-more-than-the-gdp-of-bolivia-which-has-11-5-million-people/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAGFiFoe9p_wzV2LsvrjwjM-Pl3vaMtqm8xsjZ9rZ5hWnvlvzi3pC8SYnC6KI79SMM9jaFLB-ux0plp-N5_sfHkRZBo2r4xlQpFtWj2RsgvZxVzptHR1mrlGJhjXZIBd8tQyeT3xO-1kIAtEiMyYYWU25n-JfOAsHwK95DF9GMtT6 https://www.japantimes.co.jp/news/2019/12/09/business/corporate-business/softbank-wework-investment/
It's easy to imagine anyone could succeed with a billion dollars, but keep in mind most of PayPay's competitors have as just as much money, and as much or more existing infrastructure and brand recognition.
Among PayPay's competitors were JR East Rail and their Suica card system, which is slightly different than the others because it's an RFID card based payment system. But you have to include them because they compete for the same electronic payment market share. On top of having plenty of money of their own, and government support, many retail stores operate within JR rail stations or on JR land in general, so they have built in synergies to fuel adoption. Almost every store within a certain radius of a JR station accepts Suica. https://en.wikipedia.org/wiki/Suica
Of the systems that are closer to PayPay in terms of the technologies involved, there's ID, which might have rebranded as "d-Harai", I'm not sure. It's a little hard to keep up with the market because things are evolving fast. In any case, it's a system backed by Japan's largest cell phone carrier, DoCoMo, who can offer that you can settle payment with your phone bill. They also offer RFID payment if you use one of their phones. https://japantoday.com/category/tech/docomos-id-brand-mobile-credit-payments-to-be-accepted-by-mastercard-paypass-merchants https://service.smt.docomo.ne.jp/keitai_payment/ https://www.nttdocomo.co.jp/english/
Probably the biggest success after PayPay, though, is Line Pay, the payment system backed by Line, Japan's most popular text messaging app, with 80 million users. Everybody already had the app, it was just a new part of the interface to include a payment system. https://pay.line.me https://line.me/
It's worth also noting the huge players in this game who have not succeeded, such as Nanaco. Nanaco is backed by 7-11, Japan's largest convenience store chain. They had the option to launch with their payment system being immediately usable in all their existing stores. That's a *huge* advantage, and yet, they couldn't capitalize on it. Nanaco is around, people use it, but so far as I know, after two or more years of pushing it, you can only use it at 7-11, and *maybe* a few other places here and there. https://www.nanaco-net.jp/ https://www.sej.co.jp/in/en.html
Even Mizuo Bank, Japan's second largest bank and the 18th largest in the world, with plenty of resources, couldn't make their electronic cash system get traction. Ever heard of Jcoin? Pretty much no one in Japan has either. https://www.mizuhobank.co.jp/index.html https://www.mizuhobank.co.jp/retail/products/payment/jcoinpay/index.html
This game is being played by, and lost by, a lot of really strong contenders. PayPay was never assured success, even with its huge war chest of cash to fuel its ambitions.
All of which is to say that PayPay was in a similar position as Bitcoin Cash is now, where there are countless cryptocurrency projects, and other electronic payment systems, to compete with. And also, some of those competitors came with big advantages such as name recognition or advantageous infrastructure features. Most people outside of crypto enthusiasts probably think of Bitcoin Core when they think of cryptocurrency, and for a long time Ethereum had a monopoly on making tokens.
So how did PayPay overcome similar obstacles to rise to become the most widely used payment app in Japan?
Paypay's strategy was pretty simple and proved to be quite effective. First, they took some of the billion dollars they had, and went to stores and offered them some of that money to finance discounts for customers. How it worked was, let's say you wanted to buy a new phone or laptop. Which, by the way, I did. An electronics shop would offer a 20% discount. The difference in price was made up by PayPay, so for the store, they get full price. But the store sold more product because customers were incentivized to take advantage of the discount.
The 20% cash back was deposited into my PayPay app. So, at first, I didn't have to figure out how to put cash into PayPay, it was just given to me. I had to download the app, and then at the counter, the store would scan a QR code when I made my purchase. An amount equivalent to my discount was now in my PayPay wallet.
The next part is where I think there's some simple but clever strategy. Consumers didn't get access to the money they got from that 20% discount right away. If they did, they might have simply turned around, used that amount to buy something else in the store on that same day or soon after, to ensure they get their full value, and then forget about PayPay.
The amount that consumers earned from the in store promotions was not spendable until about three months or so after. They had a set date, I think the beginning of March 2019, where all PayPay balances would then be usable for purchase. What this meant was that at the end of 2018, when the first initial promotion ended, there were hundreds of millions of dollars worth of PayPay points sitting in consumer's phones. PayPay then went around to merchants everywhere and said, "hey, come March, there are going to be all these customers looking to unload all that money, don't you want to get in on that action?"
Many merchants did. And to just sweeten the deal a little more, PayPay used just a little more of their war chest to offer a little more discount to consumers who started paying with PayPay. These second stage discounts were not as big as the ones when they first put PayPay onto my phone, but still worth it. Especially since I was only paying with money from my previous kickback.
That approach turned out to be a huge win for Paypay. They rocketed up to being one of the top cashless payment systems in Japan.
So, how can Bitcoin Cash learn from PayPay's example?
I think the key learning point, the core of the winning strategy, is that PayPay did not rely, as many of their competitors did, and as the Bitcoin Cash community often seems to, on simply explaining their product. Yes, Bitcoin Cash is easy and cheap and fast. So is everyone else, so what?
I use PayPay almost daily now, and it's not because it's that much better than Line Pay, the other one I frequently use, or any of the two dozen other ones I don't use. I use PayPay because they gave me tangible benefits, things I bought at noticeably cheaper prices, that motivated me to start using it. By the time all their promotions cooled down and I'm now no longer getting significant discounts, using PayPay has just become normal for me.
Bottom line, people like getting stuff, not explanations. PayPay gave away stuff, while competitors tried to show how they were the better service. You can see who won.
Bitcoin Cash is unlikely to have anyone willing to pump a billion dollars into a promotion, but we have seen that people are willing to set up funds of at least a few thousand dollars in order to further adoption. So, the question is, how can that money best be used to emulate the success of PayPay?
I propose the following strategy, inspired in part by PayPay's, but modified to what Bitcoin cash could potentially do. There are some technical aspects to this that might need tweaking, but I'm fairly certain the necessary features all currently exist, it's just a matter of how they're presented in terms of interface.
First, assuming there's an available fund, give some amount of money to a shop that is, or willing to be, Bitcoin Cash friendly. For small shops, it only needs to be in amounts of hundreds of dollars, or maybe a thousand or two at the most.
Second, set up a token just for that shop. This is where there are all kinds of options, and I think people are likely to come up with a wide variety of creative approaches. I bet before you finish reading this, you'll imagine a few of your own unique ideas. For now, though, to keep it simple for the purpose of explanation, let's imagine a coffee shop. They create a coffee token, where each token is worth one coffee.
Using the money they've been given, the shop sells their token so that a customer discount is built in. For example, the coffee shop sells a set of 6 coffees for the price of 5. The price of the 6th coffee is covered by the fund, so the coffee shop is not losing any money. From their point of view, they've sold six coffees.
If a coffee costs five dollars, and you give the store even just a hundred dollars from the fund, that's twenty potential customers who might take up the offer, which is pretty good value for the money. I'm definitely sure that even twenty new users along would beat the amount of people who have started using BCH because they saw a "BCH accepted here" sticker at a cash register.
Now, the customer can go in and use those tokens back at the shop and redeem them for 6 coffees. Done and done. A little bitcoin cash went round and round a few different wallets, and that's nice, it's all transactions that boosts activity on the network. More importantly, a bunch of consumers now have a BCH wallet on their phone when they otherwise wouldn't have. And they're going to interface with that wallet at least a half dozen times to claim all their coffees, so they're easing into using the wallet. If they go into another store also using the same system, the familiarity with the app gets that much more embedded. It's all about just getting people to use the apps and the system over and over until it's normal.
Imagine that the price of BCH goes up significantly. That means the value of BCH the customer is holding in the form of tokens is worth more than redeeming them for coffees. That's fine, because the customer should be able to exchange for the BCH value of those tokens if they want. Ideally, in their wallet interface, they can "cash out" their tokens for BCH easily, and in the process, they'll be learning a lot about what BCH is by actually dealing with it. Way better than just having someone explaining how it's all so amazing.
The store also wins in that scenario, because if the customer trades away their tokens, then they no longer have them for use at the coffee shop. The coffee shop sold 6 coffees worth of tokens, but didn't actually have to provide all 6 coffees, so all unclaimed tokens now represent pure profit. Everyone's happy.
What if the value of BCH goes down? Well, the customer is fine, because they can still exchange their tokens for coffees, and they're still getting a deal, 6 coffees for the price of 5. And the store is no worse off because they got the value for 6 coffees from the customer and the fund, so it's just business as usual. The store is actually a little better off because these sales might not have happened if the customer hadn't been incentivized by the discount.
This would work way better than just going into a store and convincing them to have a little sticker on their cash register to say "BCH accepted here." Under my proposal, the focus for the consumer is, "get a sixth coffee for free." That's a way bigger incentive to download an app. That's how PayPay won.
Now, the technical details. One is, there needs to be an app that can trade in tokens with an easy enough interface so that a consumer can download the app, and have the store send them their coffee tokens, or whatever, without a lot of fuss. I've seen some apps are set up for handling tokens, but I haven't actually used or experienced that myself, so I'm not sure how user friendly they are. I believe that's mainly just an interface design problem, though.
The store needs a wallet of some kind with an interface so they can mint their own tokens on demand reasonably simply. It all needs to happen fast enough so that an owner can receive BCH and mint tokens before volatility rears it's ugly head and changes any fiat equivalent values. The value of what the store receives needs to match the discount they will be offering in fiat terms, otherwise they could potentially lose money. Again, I think this is more of an interface problem than anything else.
I'm pretty sure it's standard behavior of tokens that you can restrain who has the ability to mint coins, so that only the store can mint their own coins. You wouldn't want people making their own coffee coins.
Tokens could expire, like reward points, to ensure the store gets the business it's trying to generate within good time. However, unlike standard reward points, if they expire, the customer is still left with the value of the BCH contained in the token. Ideally, expired tokens automatically dissolve into BCH. In that scenario, the store wins again, because they sold a coffee they didn't have to provide. But also in this case the customer at least doesn't lose as bad as they might with a normal point reward system. An expired paper point card simply becomes worthless. Expired BCH tokens become BCH, and the consumer could still conceivably win in the long run if the price of BCH at some future time beats what they bought the tokens for.
Probably the biggest issue is ensuring that the store is actually offering the deals they were funded to provide, and not just taking in Bitcoin Cash and keeping that money. However, although you might be able to work out some tracking of the tokens on the blockchain to see what's going on, I don't think this is really a technology problem. It's more about vetting and trusting the store. Most BCH enthusiasts who convince a store to accept BCH have at least some personal connection.
And hey, we're probably only talking a few hundred dollars per campaign for any one store, so, it's a little too low level for anyone to really get into some kind of con game. If a store does takes some funding, but it's unclear if they're actually distributing tokens in a fair manner, then they lose out on potential future funding. A good way to set up funding a store would be to release amounts in increments, where they get a new amount upon successfully distributing past amounts.
On the topic of tracking, though, with this system in place, you would be able to actively see how many people actually used the tokens, giving you at least some idea of how much adoption might have been generated. I realize there are ways in which this system could be gamed or the metrics might not have direct correlations. It's not perfect, but it's something. As opposed to making an infographic or video that goes out onto the net, and there's no way at all to objectively measure if it's had any impact.
A system like this could even potentially work without anyone backing it with a fund. There's a place I go to for lunch, and a while back, they offered me a package of 10 lunches for the price of 9. Or was it the price of 8? I forget, but I did buy into it. Anyway, My guess is that they did the math, and perhaps the reduced profit on 10 lunches was worth the cash flow of having 8 or 9 sales right this moment. Or maybe it was a loss leader type of promotion. I don't know enough about the economics of that kind of business to guess at what the ultimate benefit is. But in any case, that kind of offer seems to be viable.
But, in terms of promoting Bitcoin Cash, some kind of financial incentive for the store is probably necessary, because otherwise, why should the store use BCH tokens and not, say, a paper card and an ink stamp? That's what the store I bought the lunches from did. If the store is going to use BCH as the basis of their points and rewards and promotions, in the short term, the Bitcoin Cash community has to make it more appealing than other options. Immediately financially appealing, not just appealing in terms of enthusiastic explanations.
Bottom line, if we're serious about wanting people to start using Bitcoin Cash, we need to recognize that describing BCH in ever more clear terms and pretty graphics only goes so far. If you want people to get excited, we need to offer up some kind of tangible incentive. It's a strategy that's been tried, and worked, and we should learn from it.
How Content Creators Could Solve Bitcoin Cash's Biggest Adoption Obstacle
There was a time when I was enthused about trying to help increase Bitcoin Cash adoption , so I went around to various shops I frequent to talk to them about accepting BCH. One of those shops was a great little Isreali restaurant in Tokyo, where I often go for lunch. The owner is quite progressive about accepting new modes of payment, so he's used to dealing with apps and QR codes.
I walked him through the whole payment process with my Bitcoin.com wallet, and he was fine with all of it. When I spoke about the minimal fees that are close enough to zero to not even think about, he thought that was great.
And then he found out how much the price of BCH fluctuates, and that's where everything came to a sudden screeching halt. Like many, if not most, if not all, small businesses, he's getting by as best he can with slim margins and simply can't afford the risk of any of his sales revenue suddenly losing 5%, 15%, or more of its value in the snap of a finger.
As far as I know, there is no system that would take BCH at the point of sale and immediately convert it to fiat. At least, not without service fees large enough to defeat the whole purpose. This means that any hypothetical brick and mortar shop dealing in BCH as more than just a novelty would have to hold some consolidated amount of BCH for at least some period of time before exchanging for fiat, and more time means more risk. In an ideal world, a business would be able to pay their suppliers and landlords in BCH and not worry about exchange rates so much, but we're a long, long way off from that.
I did manage to get one bar, Good Heavens in Tokyo, to start accepting Bitcoin Cash. Shortly after, the Tokyo Bitcoin Cash Meetup held one of their events there during the Satoshi's Vision conference in 2018. It was a smash success and the bar raked in tons of BCH. About a month after that night, BCH went up by about 50% and the bar owner was thrilled. https://www.facebook.com/goodheavensbar https://www.meetup.com/Tokyo-Bitcoin-Cash-Meetup-Group https://satoshisvisionconference.com/previous/tokyo2018/
Now, at the time of writing this, everything he made that night is worth a quarter of what he got it for.
Oops.
Fortunately, the owner isn't all that bothered about it, because his bar does well enough that he was willing to experiment a bit, and he's still curious to know where his BCH holdings from that night will go in the long term. And I believe that's the case for most, if not all, brick and mortar shops that adopt Bitcoin Cash.
The reality is that anyone with a brick and mortar shop who agrees to accept BCH isn't doing it because there's an undeniably sensible business model on offer. It has everything to do with how someone is willing to get involved with Bitcoin Cash as a concept, maybe because of their ideology, or their willingness to enter the casino of crypto prices, or some other reason. Whatever it is, using BCH is not a decision you would make because of cold, hard business calculations. If Good Heavens was getting most of its income in BCH, they might be out of business by now.
Until BCH volatility is reduced to a level no worse than major fiat currencies, businesses with fixed expenses are going to find it hard to justify using it on rational economic grounds. At the end of the month, suppliers expect payment at fixed fiat rates. If your income is all in a cryptocurrency that's dropped by 30%, you're screwed. Sure, given enough time, it might go up again or even out, but most businesses don't have the time it takes to find out.
Volatility is a known problem, and I think the solution most people have in mind is to build a "stable coin," which is a token on top of BCH where the value is tied to a fiat currency, usually the US dollar. Which sounds great, and I hope one gets made. As of writing this, I don't know if there are any stable coins available that are definitely reliable. Please let me know if that changes.
In any case, the problem with a stable coin is that it's a very top down solution. By which I mean, it relies on having some large entity hold on to millions, if not billions, of dollars in reserve. And that requires over sight, security, regulation, and trust. In my experience, most cryptocurrency enthusiasts are very wary of any kind of centralized power, and not without good reason.
It would be great if there were a way to reduce the impact of volatility without having to rely on some large, central corporate body.
I think there is a solution to the volatility problem that isn't being exploited enough, and that's to get more content creators on board with Bitcoin Cash.
A content creator's costs can be close to zero, and are often uncorrelated to the product they create. A writer's buy in is close to zero. A modern day digital artist or musician can have some significant upfront costs in terms of computer hardware or instruments, but from that point on, they have a nearly potential infinite output. Unlike, for example, selling beer, where every beer sold has to be replaced again to make a future sale.
What this means in terms of volatility is that an artist who sees their income drop by 30% because of market fluctuations is definitely going to be bummed out about it. However, this won't affect future output. A brick and mortar shop might find themselves suddenly unable to buy next month's stock.
Of course, artists have life costs, like rent and food and utilities, that's why they're selling their art. So it's not that they have zero expenses, just much less than a business owner who has both a home and a storefront.
In any case, this brings us to the second reason volatility does not matter as much to content creators, which is that most income from a BCH revenue stream is not a replacement for other income, it represents revenue they might not receive otherwise. As opposed to selling a beer, where at the point of sale a customer is going to buy a beer in dollars or BCH, but not both, and once the decision is made, that beer is gone.
A content creator can post the same content on multiple sites, and get revenue from each one. So an artist does not have to give up their revenue on Patreon or Medium or Twitch or wherever else in order to also be present on a site that deals in BCH. Once they are making that BCH, it's a whole new revenue stream that they didn't have otherwise. So, when their Bitcoin Cash holdings drop in value, that's not good, but, every Satoshi they're holding is more than the zero they would have from not being on that site that deals in BCH.
As more creators make content that people pay for, then that transfers a lot of BCH into the hands of people who are going to want to find ways to spend that BCH. Nature abhors a vacuum. Knowing that there are people sitting on stockpiles of currency they want to move in exchange for things like food and things and maybe even rent and utilities, services will find it more appealing to move toward that demand.
That's an optimistic prognosis I know, but, at least it makes sense in terms of the economics involved. Everyone in the cycle is winning.
What I feel is missing at this time is an active recruitment of content creators. Consider that with every post on r/btc where someone says, "Obscure coffee shop in the outback of Australia now accepts BCH! #Winning!", that post represents some Bitcoin Cash enthusiast going into that shop and talking the owner into using BCH in spite of it's dubious benefits.
I don't know if I've ever seen any post saying anything to the effect of "Local writer's group sold on the benefits of BCH and convinced to start using Read.cash! #ActualWinning."
I'm not accusing anyone of a lack of proactivity in that regard, I'm just saying maybe it hasn't occurred to many people yet that there would be more overall value in promoting to the writers group than the coffee shop.
Going out and getting brick and mortar shops to adopt BCH is fine, I would never say not to do it. But, for brick and mortar stores the economic sensibility of accepting BCH at this time are debatable.
On the other hand, enabling content creators to get paid makes financial sense for everyone involved. Shouldn't that be how adoption is driven? By sound economic principles, not by ideology?
The Best Way to Promote Bitcoin Cash is to Not Talk About It
Read.cash is a clone of Medium, and I post things I write there, too. But if you were to take a look at the articles I write there and here, you'll notice a big difference. Here, I'm writing exclusively about Bitcoin Cash. On Medium, I write a bunch of random topics. https://medium.com/ https://medium.com/@davegutteridge
Like many, if not nearly all, content creators, I go where the heat is. The reality is that on Read.cash, contributors are rewarded for writing about Bitcoin Cash. On Medium, Bitcoin Cash is a topic with barely any traction at all.
To make sure this wasn't just a perception, I got in touch with one of the owners of *Read.cash* for some hard numbers, and was provided with some interesting stats.
*(Note, I reached out to the owners of this site just before the global plague hit, so these stats are a few months out of date, but I don't believe it's to a degree that changes my central premise.)*
There are over 5000 individual articles on Read.cash, of which about 3000 are placed into categories. Of those categorized articles, a third of them are about Bitcoin Cash.
The average tip amount across Bitcoin Cash related articles is $32.17. Compare that to a mere $0.89 USD for all other topics. The numbers are skewed a bit by the fact that there are some individuals who give extremely generous tips exclusively for Bitcoin Cash articles. But even if you strip out any tip above a hundred bucks, the Bitcoin Cash average tip is still far higher than other categories, at around 8 dollars.
If you're interested, the category on Read.cash after Bitcoin Cash with the highest returns is the "Charity" section, with an average tip of about four dollars. I suspect that's probably because of overlap in terms of charity projects that are funded with Bitcoin Cash.
The lowest tipped category on Read.cash is "Food and Recipes", with an average tip of sixteen cents. And about 40% of articles across all sections get no upvotes at all.
It's not just about tips and upvotes. Bitcoin Cash related articles get an average of around 160 views per article, everything else gets about 60.
Kind of interesting to see the stats, but what does this teach us about how Bitcoin Cash is promoted? Note, I'm assuming that you, like me, want to see Bitcoin Cash become a *de facto* world currency, something used in every day life like any major fiat currency. If that's not your goal, if you just want to see Bitcoin Cash only used among Bitcoin Cash enthusiasts, then we can agree go our different paths.
Anyway, imagine if you went to Medium, and the top trending topics were all about how convenient the US dollar is, or how the Federal Reserve could be improved, or blog posts about new stores around the world now accepting US dollars. You'd probably assume it was a site for economists. Even if there were article about some other topic you were interested in, like, say, dating advice, it would feel like dating advice from economists, and no one wants that.
Too much of Bitcoin Cash marketing is built around the concept of explaining BCH to people. As if understanding it will make people desire it. I don't think that's true. I think people come over to using a system of exchange because of what they perceive it gives them access to. People are interested in what is behind the door, not in how the key works.
So how does this get solved? I don't think there's anything wrong with, for example, crypto enthusiasts wanting to read about Bitcoin Cash on a site where they can support writers with BCH, like this very site, Read.cash.
But, I do think it's detrimental for the ultimate goal many of us proclaim to have, which is to make BCH a world currency, if we leave the algorithms unattended so that BCH driven sites become hotbeds of BCH discussion. That will alienate people who are trying to find their fix of whatever topic they want to find. And keep in mind, those other people, the ones who don't care about BCH or how it works any more or less than they care about how the US dollar works, those are the vast, vast majority of people in the world, and always will be.
The irony is, that to a certain degree, the best way to get people to adopt BCH is to not talk so much about Bitcoin Cash. I think for example, that on this site, the best thing would be to sequester BCH topics in such a way that it does not appear to be the primary focus of this site. I don't think the volume of BCH discussion needs to be regulated in any way, just that it shouldn't be always at the top, above other topics, which it will be if the algorithms aren't finessed.
I know engineer types generally think there's a beauty and rationale in pure algorithms, free from human meddling. However, algorithms are just as prone to vicious cycles as they are to virtuous ones, and I don't feel any internal conflict about getting in there and trying to get results that suit the market I'm trying to reach.
The problem with unattended algorithms, in this case, is that a site like this is initially mainly of interest to BCH enthusiasts. They vote BCH topics up, which give those topics prominence. Which attracts more people enthusiastic about BCH. Who then support BCH content, and off the cycle goes, at the expense of attracting people who want to read other topcs. If the goal is to expand BCH beyond enthusiasts, which I think it should be, then this model is an obstacle.
It's not just a problem with the sites that provide content and their methods, it's also the content consumers. If you're a person who wants BCH to succeed, you may think you're helping by tipping that article which talks about BCH. But consider how every BCH spent contributing to some non-crypto topic makes BCH have value beyond internal naval gazing. I'm not saying you should stop reading or supporting BCH related topics. I'm just saying, if you really want BCH to grow, consider that your contribution has more mileage outside existing BCH enthusiasts when you tip or support non-BCH content.
It's a weird irony, but Bitcoin adoption can be hampered by too much discussion about BCH. It's like talking about how movie tickets work instead of showing movie trailers. If you had the right movie, you wouldn't have to explain or push the idea of movie tickets, people would be rushing to out to get them.
Bitcoin Cash shouldn't be trying to solve anyone else's problems
There's a movie called *The Sure Thing*, which is largely a forgettable comedy from the eighties, but it has one scene that I think Bitcoin Cash enthusiasts could reflect on. https://en.wikipedia.org/wiki/The_Sure_Thing
Without going over the whole plot, there's a woman named Alison who has an overly uptight boyfriend named Jason. Alison was also quite uptight, but over the course of the movie, she has learned to loosen up a little. So, she wants to go to a wild college party. She takes her boyfriend Jason with her, but he's clearly uncomfortable. He looks around at all the frat boys and sorority girls downing kegs of beer and dancing and making out and acting wild, and he completely disdains their frivolity.
"Look at these people," Jason says. "They probably *think* they're having a good time."
Hopefully the delusional arrogance of that line comes across in text. Who is he to say that anyone is enjoying themselves the wrong way?
I thought about this scene in relation to Bitcoin Cash because as I've been writing about it and getting feedback, I learned there was a fundamental disconnect between what I'm trying to advocate as the route to success for Bitcoin Cash, and the point of view of a lot of Bitcoin Cash enthusiasts.
I proposed, for example, that it would be fantastic if there was a version of Reddit where upvotes were tied to BCH. It's not that people disagreed so much as it felt like comments immediately went in directions that I didn't see as relevant to my point. I got a fair amount of people telling me how projects like Member were already working to make a "better" Reddit. "Better" because it would record posts on the blockchain, so it could not be censored, and thus improve on how Reddit handles perceived censorship and whatnot.
This is where I felt there was a disconnect. Just as they seemed to be wondering why I seem to be oblivious to the efforts of existing projects, I was wondering how censorship resistance mattered to the adoption of BCH. It certainly doesn't matter to the growth of Reddit.
Reddit has 430 million users. I'm not sure if that number accounts for users with multiple accounts, dead accounts, bots, and whatnot, but in any case, there's definitely a huge amount of people enjoying Reddit *as it currently is*. https://techcrunch.com/2019/12/04/reddits-monthly-active-user-base-grew-30-to-reach-430m-in-2019/
There are sometimes grumblings about how Reddit is possibly censoring content that is negative about China, because, as far as I understand it, Reddit is at least partly owned by a Chinese company. There are complaints by various groups about how certain subreddits get shut down for having content that is not well liked by advertisers. And, of course, r/btc is nearly constantly complaining about how the moderators of r/bitcoin are removing any posts that go against their agenda. https://www.reddit.com/r/btc/
There are lots of people, it's hard to sure how many, who care about privacy and censorship issues. Whether or not they would agree that a BCH based solution is the answer is the gateway into a deeply complicated debate.
What I can be sure of, though, is that the vast, *vast* majority of posts and activity on Reddit has nothing at all to do with censorship, or Reddit policy in general. Hundreds of millions of people are happily using Reddit to look at pictures of cats, complain about the latest *Star Wars* movie, discuss the never ending American political farce, and so on.
"Look at those Reddit users. They probably *think* they're having a good time."
They have no problem that they want to see solved by some system like BCH or blockchains or whatever else. Offering them a Reddit alternative that solves issues like privacy or censorship might, only maybe, win over a tiny percentage of that user base.
What I believe will definitely entice them to use a new form of Reddit is one that offered payment for good content or comments. Everyone likes getting paid.
The difference between what I am proposing and what BCH enthusiasts I've heard from want to do is that I want to see BCH grow for it's own sake. I want BCH to become a world currency, and use the most probable routes to get there. I don't care if BCH makes Reddit "better", I care that we take Reddit's user base and make them all users of Bitcoin Cash.
Whereas, many enthusiasts want to "fix" things, like Reddit or Twitter, with BCH. They see problems on these other sites, and solutions that could be achieved with Bitcoin Cash and its blockchain.
Solutions to problems almost no one is having, in my opinion.
There's nothing stopping any developer from making a system that happens to be more secure or censorship resistance or whatever. Those are *good* features. But good features aren't necessarily *popular* features. And it doesn't matter how good your system is if it isn't popular.
I believe the way forward for Bitcoin Cash is to use it for what it was built to be, peer to peer currency. Not a security or censorship solution, but simply currency. It works fine now as currency, so exploit the hell out of that central function. Take everything popular, and add to it by injecting monetary value on top of the utility people already find in things like "likes" and "upvotes" and followers and shares.
The goal is to make Bitcoin Cash an undeniable universal currency, one that everyone knows and as familiar with and uses as a matter of course. When BCH has that status, it will have a lot more leverage and familiarity, from which it can then start to demonstrate its power in terms of censorship resistance and security. If you care about that kind of thing.
Besides, should the Bitcoin Cash community really be thinking about "fixing" other people's problems when it has problems of its own?
Problems like the fact that almost no one is using BCH?
The key to success for a BCH Based Reddit Clone
Imagine you're with some friends and walking down a downtown street, looking for a place to eat. One of your friends sees a sign for a place that looks interesting. As you approach, you look inside the large windows into the dining area, and see a table of men who are clearly neo-Nazis.
Do you go in to eat anyway? I wouldn't.
There are a lot of variables at play here, but for the purpose of the analogy, imagine you have no doubt that those dudes you are looking at are straight up racist garbage. For me, even if the restaurant looks like it has decent quality food and the atmosphere seems enjoyable, the presence of this group of people who I have zero respect for raises so many questions in my mind about what kind of establishment the place is, that I'm going to tell my friends we should keep looking.
A similar kind of thing happens online. Have you heard of Voat? It was, maybe still is, a contender to rival Reddit. I'm not sure of Voat's current status, because it seems that if you go to the site, you are directed to a login page without any option to look at any content before having an account. Something I can't be bothered to do right now, because when I checked it out a few years ago, it was like looking into that restaurant with the table of Nazis. https://voat.co https://www.reddit.com/
There was probably a lot of other content on Voat that wasn't gross, but I don't know. Certain content is like one tiny drop of petroleum in a cup of water. Very little makes the whole thing undrinkable. I saw enough garbage to kill my motivation to find out how much was not garbage.
A while back, there was some issue with Reddit's CEO changing or some other issue that Reddit fanatics thought was important. Lots of Reddit users were talking about how there needs to be another, less censored version of Reddit. That's when I heard of Voat and decided to check it out.
It wasn't that I was experiencing any problems in using Reddit, but I'd like to have eggs spread out into multiple baskets if possible. I don't like that Reddit is largely a singular player in the kind of service it provides. But I gave up, because Voat was not the alternative I was looking for.
The reasons why are worth thinking about, because I feel like there is a gap in the world of Bitcoin Cash based online services, and that is a decent BCH based Reddit clone.
I think a BCH based Reddit is a no-brainer in terms of taking services people clearly want and making them better with BCH. With respect to the makers of this very site, a Reddit clone would be have even more potential impact than how Read.cash clones Medium. Medium already has a model of paying contributors, so Read.cash has a slightly harder time differentiating itself on the benefits of BCH over other payment systems. https://medium.com/
One time, on Reddit, I posted a comment in response to someone asking about why people laugh. I wrote a book about my own theory of how the human brain processes humor, so it's a topic I can dive deep into. I ended up answering a bunch of peoples questions, and racked up a few thousand Reddit upvotes. https://davegutteridge.com/ymiaft
Which means just about nothing.
Sure, there's some tiny value in getting upvotes in that it gives you a vague sense of validation, and a minor amount of credibility.
But how much more awesome would it be if each of those votes was worth 0.1 cents? An amount so trivial that everyone feels it's no burden to press the upvote icon, but in aggregate the people getting upvoted get a nice little kickback for having provided content people want. That would be incredible.
Almost nothing else needs to change. Just have Reddit as it is now, except that votes have objective, real world value. If such a site existed, then it could very well be a challenger to Reddit itself. I think we can all see that if you could convincingly tell people, "Do everything you do on Reddit but you can also earn from it," then that would be very enticing.
Of course, there are challenges specific to BCH that make it hard to make that happen. In addition to the very important issues of BCH price volatility, there's also the difficulty of buying it in small enough amounts. https://read.cash/@dave_gutteridge/bitcoin-cash-and-the-24-beers-problem-af71f1c5
But those are technical issues, and I believe they are solvable. Exactly how is a topic deserving its own article. But, just so that the question isn't distracting by a lack of any answer at all, I think they're solvable by creating a token so that people don't vote in BCH, but vote in increments that obscure the volatility. I intend to write about that sometime soon.
The point I want to get to here is that a third, slightly more murky obstacle to creating a BCH based Reddit clone has to do with the ideologies of the BCH community.
There is a project of creating a BCH based Reddit, called Member. I haven't looked at every aspect of its technical merits, so I can't tell you if it's good or bad in terms of the underlying code. I'm going to assume it's fine. https://memberapp.github.io/
But I don't have much confidence it will get anywhere, and that's because, from what I can tell, the underlying philosophy behind its construction is not geared towards making it popular.
Going by what I've read about it on r/btc, the posts themselves, or some record of them, are somehow stored on the blockchain. And this has to do with keep things provable and verifiable and safe and all that. This probably has a lot to do with how many people on the r/btc subreddit feel that the r/bitcoin subreddit unfairly removes posts and controls the narrative to push a certain agenda. Coming from that background, you can see how some people might be motivated to create a form of Reddit where posts have a sort of permanent record.
The goal seems to be to build a system where there is enough transparency and accountability so that no one can be censored. Unfortunately, this is likely to kill any chance at adoption.
Voat also aspired to be "censorship free." Without getting bogged down in the details of what exactly "censorship" means and how it manifests, the intention was to try and create methodologies in how the site works so that no human can come in and seize the position of a moderator with too much control and have too much influence in any one community.
It's a noble aim in theory, but in practice, it's a huge Achilles heel.
The first people who sign up to something marketed as "censorship free" are the people who have not found a home in other, more generalized communities, where they were rejected for their gross ideas. Their bigotries, their exclusions, their biases, their hostility.
So what you get is Voat. A place that quickly gets a reputation as a home of the incels, the racists, the hateful, the gross. If you think Voat is not a good example because it never reached enough critical mass, consider 4chan. 4chan had years to establish itself, has a fair amount of traffic, but nonetheless still has to contend with a reputation as being a hotbed of problematic viewpoints that inhibits its mass adoption, market appeal, and profitability. Is it even profitable? I don't know. http://www.4chan.org/
Censorship is a bad thing, but it matters how you define censorship and at what level you fight to keep things free.
The internet itself should be censorship free. Everyone should be allowed to make a website. But within individual websites, the people who run them should be able to cultivate their communities. Censorship is fought on the level where people should be able to choose to go to other websites.
Similarly, Bitcoin Cash itself should be free to use by anyone for any purpose. But any one buyer or seller can choose for themselves what business they want to engage in.
For a Reddit clone to work, someone has got to take the reigns and impose community standards so that users who enter feel it's a safe place where they can look at pictures of cats or whatever without feeling like they might get attacked by some angry incel for some random reason.
Moderating a site is an art, not a science, and there's also some luck involved in terms of which content providers and consumers show up. The only way to really deal with those unavoidable variables is for a few different groups to launch their own Reddit clones with slightly different approaches to community building, and see which ones get the best response. In an ideal world, there would be two or three good Reddit clones, a healthy competition that keeps any one of them from monopolizing that category of service.
There is a heavy ideological slant in the BCH community to view any inhibition on freedom of speech as fundamentally problematic. They want to get human intervention out of the way, and make technological constraints that are objective and dispassionate. With the right constraints in place, you can set it and forget it. Build it, and they will come.
But it matters who comes first. Later when you have critical mass, you might be able to have a strong enough community that general attitudes push out unwelcome extremes.
But to start with, someone has to keep the Nazis out of the restaurant. If they don't, no matter how great a Reddit clone based on BCH could be, most people won't come in to find out.
Bitcoin Cash has already lost at the cash register
I've personally helped a couple brick and mortar shops start accepting BCH, so it's not that I think it's a total waste of time. To the degree that anyone happens across that store and sees a little sticker saying, "BCH Accepted Here," it helps to normalize the existence of BCH in this world.
But, that's about the extent of it. In terms of demonstrating any particular advantage of using BCH over cash or credit, BCH is too late.
There might have been a brief window where the QR code payment system that you use in almost all BCH applications was more convenient than fiddling around with cash and coins, and you could make a case it was easier or faster than a credit or debit card.
But while crypto is constantly developing, cash hasn't stopped evolving either. Now, every advantage that BCH had in practical terms is spread out among lots of competing fiat based services. And those services come with significant advantages that make them much more appealing to use than any BCH wallet.
I say that as someone who supports and believes in BCH. But I don't use it for buying anything at the cash register.
I don't know what it's like where you live, but where I live, right now, in Japan, regular money is decidedly better than BCH for day to day purchases. At least, it is if I use one of the many competing services that are vying to become the defacto electronic money. Here in Japan, they call them "cashless" services, meaning you aren't using paper and coins, even if technically you're still using cash by proxy.
I use two of them regularly. Technically, I use three, but the third one, called Suica, is just an RFID based cash card for storing yen, and the details of how it works aren't so important for this discussion, so I'm going to leave it to the side.
There are two services that I use every day that I want to draw attention to. One is called PayPay, the other is Line Pay. Just like my Bitcoin.com wallet, they use QR codes for sending and receiving. In terms of speed, interface, and ease, it is exactly the same as the Bitcoin.com wallet or any other BCH app.
Better than my Bitcoin.com wallet, though, is that I can charge up PayPay or Line directly directly from my bank account or credit card with the press of a button. Or even set it to automatically recharge if I wanted. Also, I can charge them with physical cash at any convenience store. Without any service fee, either. If I take 5,000 yen from my bank account, then I have 5,000 yen in my PayPay app. No service fees. No trading on online exchanges.
Further, I get discounts, promotions, and incentives to use my PayPay and Line wallets. PayPay ran a campaign that I did very well by, getting up to 20% off all my purchases for a period of about six months. I also won a contest they ran. I still get very minor discounts. The Line Pay app offers similar points back all the time, plus they send me so many coupons that I can't keep up.
This all may change. Right now, in addition to the two I've chosen to use, there are literally dozens of similar "cashless" apps competing to become the standard in Japan. So, all the companies backing them are offering deals to both consumers and merchants in order to push adoption. But, when the market determines who the winners and losers are, there's no reason to suspect at the moment that there will be any significant drawback that makes these services any worse than a credit card, debit card, or any crypto.
And, of course, one huge advantage these "cashless" apps have over BCH is the absence of the volatility of BCH price. Any time I purchase anything with BCH, I partly have an eye on whether or not I'm effectively paying more or less than the price I'm seeing in front of me, because the value could change literally within hours.
Which takes us to the most important point.
Even if the volatility were no longer an issue, then the best BCH can hope for is that it would be the same as how cash works for me now. That's it. No better in any way except maybe some esoteric concern about privacy.
Look, I take my privacy seriously. I use Tor and VPNs and have multiple email accounts for different purposes, so I'm right there with you when you say that people should be mindful of their privacy . But at the same time, I don't give a shit if the CIA knows I bought an oat milk latte from Starbucks to drink while I wrote this. Good security isn't about being constantly militant, it's about knowing what trade offs matter.
At the moment, unless some upcoming feature that I don't know about changes the game, the best BCH can aspire to is to become just one more face in the crowd of payment options. No worse or better, and therefore nothing to drive it's adoption. You don't beat anyone by just being the same as them.
One way to get around this is to try and think of ways that BCH could be better at handling payments at the cash register. But I think that's solving the wrong problem.
I think the better question is to ask, where can BCH naturally win where current payment options struggle?
The answer to that is, and always has been, micropayments online. Banks will always have institutional overhead costs that will make it hard for them to be cost effective at online payments under one US dollar. Cryptocurrency's near complete lack of middlemen can fascillitate payments in fractions of one US cent.
If someone develops a killer app or game using BCH for transactions in some way or another, BCH could rocket into position as the defacto online currency, taking over space that other payment systems don't have any ability to compete with. That's where I believe BCH's future success lies.
Every few days I see a post on r/btc about some restaurant in Australia or Tokyo or somewhere now accepting BCH. Usually in the caption they'll say something about how this means BCH is "winning". I guess it is a small victory, and that's nice. https://www.reddit.com/r/btc/
But if I see people making apps with micropayments handled by a token built on BCH, then I'll know we're really starting to play the game.
Bitcoin Cash and the 24 Beers Problem
Imagine you're a beer connoisseur, always on the lookout for new flavors. At a new bar featuring imports, the woman behind the counter says they have an amazing craft beer, brewed in a hidden monastery in Tibet, using exotic ingredients brought in from all around the world.
"Sounds great, I'll try it," you say.
"Okay," the woman says, "But the minimum order is a case of twenty four bottles."
Are you still interested? I wouldn't be. I'd want to try it out first, see if I like it.
Bitcoin Cash, and most cryptocurrencies, face a similar problem. Looking around, it seems to me that if I have a credit card and I want BCH right now as I'm surfing the web, the cheapest option is to buy it on Bitcoin.com for about twenty US dollars.
On Memo.cash, a Twitter alternative built on the BCH blockchain, a test post I just wrote right now cost me 0.000003 BCH, give or take, which is around 0.1 cents in USD, at the rate on the day I wrote this. If I was thinking it would be neat to try Memo.cash, and bought BCH with a credit card to do so, the minimum amount of BCH I would have to buy in order to give it a whirl would be enough for about 20,000 posts on Memo. That's a post a day for 54 years. By many measures, that's a considerably heavier buy in than 24 beers when I only wanted one. https://memo.cash/
Of course, I could buy 20 bucks of BCH, make one post on Memo.cash, and keep the remainder for other stuff. But, I have in mind here a person who doesn't necessarily know what BCH is. They're being attracted by a specific service they want to try, not a generalist sense of interest in cryptocurrency.
Which is how I think people are more likely to be drawn into using something like BCH, or possibly any other crypto. Telling me I should buy some BCH on the off chance that somewhere out there is some purchase I might want to make some day is a very vague value proposition. Especially when I already have regular money and I'm confident in how it works. The circumstances in which I'm more likely to buy into BCH is when I have a specific service or product that's right in front of me, and it seems like BCH is the way to get it.
This is the heart what I'm calling "the 24 beers" problem, where people can't try out BCH services because the minimum amount they can buy isn't small enough to be trivial, and therefore low enough risk to try out just for the heck of it.
You could buy BCH in smaller amounts by buying in person, but, that means you have to know someone willing to sell. Most people don't. You, a person interested enough in crypto to be reading this, like me, probably know lots of people using BCH. But we are very much the exception in today's world. The average person on the street, if they even have a vague notion of cryptocurrency, an echo of when it was making the news in 2017, they almost certainly don't have a personal connection to get some. They are even less likely to want to go through all the hassle of using an online exchange with all it's KYC requirements, assuming they even understand the concept. And a faucet is an insurmountable learning curve for someone who just wants to start using a service they're looking at right this moment.
The model of using your credit card to buy things is familiar to just about everyone on the internet, and that's the model BCH needs to access. It's common practice to buy points, credits, or even just store money inside a walled community for distribution later.
For example, recently, kind of as a test, I bought some "bits" on Twitch. Bits are an internal point system in the Twitch ecosystem that you can give to streamers to support them. Which, just as an aside, you can buy with BCH and other cryptocurrencies via BitPay, but at the moment it makes no difference in terms of cost or ease compared to using a credit card or PayPal. https://www.twitch.tv/ https://bitpay.com/
I was able to buy about 300 "bits", which was was around $2.50 USD, plus about the same amount in fees, for a total of $5 USD. If I had bought 3000 bits, I would have paid the same service fee, so, as is often the case, it's far more economical to buy in volume.
But I didn't want to do that. I didn't want to buy 24 beers. I wanted to try this whole Twitch "bits" thing out. If I decide that supporting Twitch streamers is something I'm interested in, then maybe I'll buy in bulk next time. But for just a taste of how it works, I'm fine with the extra overhead because the overall cost is so low.
For BCH to succeed, there needs to be a way for people to give it a whirl, without committing in a big way up front. By "give it a whirl," I don't mean just having BCH so much as I mean they will want to try out a service or something that they feel they need to use BCH to access. And do it online, and purchase right at the moment of decision with their credit card.
This is the gateway to micropayments online, which is where BCH is has a huge competitive advantage over regular cash.
Services like Paypal, credit cards, and other payment systems will always inject an amount of additional cost to support their infrastructure, making it almost impossible for them to easily handle payments that go less than one or two US dollars. Unless there's some truly radical change that I can't see at the moment, the way that cryptocurrencies can transact with little to no human middlemen, they will always be able to undercut banking institutions that have to pay people to maintain them. And shareholders who expect returns.
Imagine someone out there has a game that everyone falls in love with. The next *Angry Birds* or *Pokemon Go* craze. Like so many games, they want to offer in app purchases for customization and abilities and other stuff. If they could do that with tokens built on Bitcoin Cash, that could fuel insane amounts of network traffic on BCH, the kind of traffic that would lead to interest, and adoption, and growth.
It doesn't have to be a game, it could be any kind of killer app. Who knows. The important point is that unlike any one coffee shop accepting BCH at the cash register, an online app or service could explode into millions of users and transactions almost overnight.
Then, it would be pretty easy after that point for subsequent services to say, "our points have the same underlying system as that popular app that everyone's been using recently." Depending on how the tokens are minted and exchanged, people could potentially start exchanging them between apps. In that world, it will become useful to have pure BCH, the universal underlying token, to buy into future services without paying credit card fees each time.
But, if your minimum buy in for that initial app or game is twenty bucks, it's all dead before it starts.
Whether we're talking about a developer who wants to include BCH as the backbone for their internal economy, or just a consumer who has seen some service or something that makes them interested in buying BCH, in either case, there needs to have a way for people to buy BCH in tiny amounts. As low as possible. Even if at the start those small purchases of BCH have large credit card overheads, it's worth it in the long run.
It starts with buying just one beer, and deciding you like it. Later, you buy in bulk.
@dave_gutteridge
