A few thoughts - Friday, June 20, 2014
Posted: Fri Jun 20, 2014 1:40 pm
A few thoughts for today, which is a Friday or Sunday, so as usual on those days of the week there is little to talk about:
Consumer adoption via discounts is insufficient
There is much gnashing of teeth over the idea that consumer adoption is lower than merchant adoption is. Some see offering 2% discounts for payments with bitcoins as the solution to low consumer adoption. I disagree because a 2% discount is actually a 1% discount when Coinbase's fees are considered. If you use the right categories of credit cards, that's usually less than the cards will provide in cashback bonus.
In order for bitcoins to become more widely adopted, competition needs to force Coinbase to lower its rates to something more reasonable. Until rates can get down to 0.25% or less, people like me will subtract 1% from 2% and notice that credit cards are still a better choice.
And please don't suggest that buttercoin is going to somehow launch and destroy Coinbase. Buttercoin has been vaporware ever since a few guys thought they could just throw together an exchange to replace Mt Gox last April. I don't know why people still talk about them.
With "Yo," we are officially in a tech bubble
I'm convinced that we are in a huge tech bubble at the moment. Venture capitalists are throwing money around like never before, on products that have a questionable business model and which have little innovation.
The best example I've seen is the "Yo" app. This cell phone app consists of a single button. All it does is allow you to select someone's name and send a message that says "Yo" to him or her. You can't say anything else, and the developer never plans to add another feature. Yet, he somehow raised $1m and moved around the world to start marketing this app.
He says that "Yo" is valuable because the context in which the "Yo" is sent indicates to the user to what the sender is referring. For example, a "Yo" received from Starbucks while you are waiting for your coffee to be brewed probably indicates that it is ready. A "Yo" from Starbucks when you aren't near a restaurant means to check their site for new coupons, and so on. The use case for normal people is less clear. If I'm meeting my brother for dinner at a restaurant, does "Yo" mean "I'm stuck in traffic, so I'll be late," or does it mean "I'm here, where are you?"
"Yo" is a continuation of the trend of oversimplification of computers. Over the past few years, the goal of everything is for ease of use, even to the point of removing useful features. Microsoft, for example, deleted the Aero interface, and the resulting Windows 8 interface looks uglier than the previous version. In 2005, to get the word out you wrote a blog, but now people send often incomprehensible 160-character limited messages using Twitter.
Just like the bitcoin bubble cycle, this tech bubble cycle is going to burst and the pendulum is going to swing back towards a more rich user experience when it does.
/u/lowstrife's charts are better than my thoughts
/u/lowstrife obviously put a lot of effort into his charts yesterday, much more than I did into my thoughts. Give him a tip if you haven't already - he deserves it.
Other
Consumer adoption via discounts is insufficient
There is much gnashing of teeth over the idea that consumer adoption is lower than merchant adoption is. Some see offering 2% discounts for payments with bitcoins as the solution to low consumer adoption. I disagree because a 2% discount is actually a 1% discount when Coinbase's fees are considered. If you use the right categories of credit cards, that's usually less than the cards will provide in cashback bonus.
In order for bitcoins to become more widely adopted, competition needs to force Coinbase to lower its rates to something more reasonable. Until rates can get down to 0.25% or less, people like me will subtract 1% from 2% and notice that credit cards are still a better choice.
And please don't suggest that buttercoin is going to somehow launch and destroy Coinbase. Buttercoin has been vaporware ever since a few guys thought they could just throw together an exchange to replace Mt Gox last April. I don't know why people still talk about them.
With "Yo," we are officially in a tech bubble
I'm convinced that we are in a huge tech bubble at the moment. Venture capitalists are throwing money around like never before, on products that have a questionable business model and which have little innovation.
The best example I've seen is the "Yo" app. This cell phone app consists of a single button. All it does is allow you to select someone's name and send a message that says "Yo" to him or her. You can't say anything else, and the developer never plans to add another feature. Yet, he somehow raised $1m and moved around the world to start marketing this app.
He says that "Yo" is valuable because the context in which the "Yo" is sent indicates to the user to what the sender is referring. For example, a "Yo" received from Starbucks while you are waiting for your coffee to be brewed probably indicates that it is ready. A "Yo" from Starbucks when you aren't near a restaurant means to check their site for new coupons, and so on. The use case for normal people is less clear. If I'm meeting my brother for dinner at a restaurant, does "Yo" mean "I'm stuck in traffic, so I'll be late," or does it mean "I'm here, where are you?"
"Yo" is a continuation of the trend of oversimplification of computers. Over the past few years, the goal of everything is for ease of use, even to the point of removing useful features. Microsoft, for example, deleted the Aero interface, and the resulting Windows 8 interface looks uglier than the previous version. In 2005, to get the word out you wrote a blog, but now people send often incomprehensible 160-character limited messages using Twitter.
Just like the bitcoin bubble cycle, this tech bubble cycle is going to burst and the pendulum is going to swing back towards a more rich user experience when it does.
/u/lowstrife's charts are better than my thoughts
/u/lowstrife obviously put a lot of effort into his charts yesterday, much more than I did into my thoughts. Give him a tip if you haven't already - he deserves it.
Other
- Days until the auction: 7
- Days until July 24: 35