I went to a conference in New York this week to promote our new website Bitcoin Market Journal. The Consensus conference covers bitcoin, blockchain, and related technologies. Here are three photos that tell you everything you need to know about the state of the industry.
Crossing the Chasm
This diagram, presented by Arvind Krishna of IBM Research, illustrated perfectly the state of the industry. To date, bitcoin has been a niche technology, adopted only by freaks and geeks (which he calls “Trailblazers”).
It is very much like the internet in 1995: most people had heard of it, but few had actually used it. Launching a website required learning the dark arts of web servers and HTML. But once you were in, you saw the possibilities of this new thing, and you couldn’t talk about anything else.
We’re now entering the “Mass Adoption” stage of bitcoin, where the technology will gradually improve, and ordinary investors will get involved. It is like the great wave of Internet that happened around 1997–1998, where everybody was suddenly coming online, leading to the frenzy of excitement around 1998–1999.
Those were the golden years, and I predict we’re about to experience them again.
To get from the “Trailblazers” to the “Mass Adoption” phase, you have to “cross the chasm,” or make the technology easily accessible to the mass market. That’s the great challenge ahead for bitcoin, and the reason for our new Bitcoin Market Journal website and newsletter.
The Suits and the T-Shirts
I went to a Silicon Valley virtual reality conference a few months ago, and my conclusion was that there is a tremendous amount of innovation going on, but VR is still a few years away from being a real part of our lives.
In contrast, this conference was the real deal. Interest in bitcoin and related technologies is exploding, and the bankers now mingled freely with the geeks. This photo of one of the discussion panels illustrates it perfectly: three suits, three shirts.
One of the biggest challenges at a conference like this is, What do I wear? My local bitcoin meetup is very casual, T-shirts and jeans. But an investment conference is dark suits and ties. I split it down the middle, and wore a dark blazer with jeans, which was a good choice.
If anything, the serious bankers and investors outweighed the geeks and freaks (possibly because of the cost to attend). It was also heavily international: I heard people speaking in German, Mandarin, Hindi, Spanish, and even Canadian.
The suits are watching the value of bitcoin skyrocket, and they want to get involved, but they can’t: it’s too new and weird for the traditional banking system, just like the internet was too new and weird for traditional media companies. They need the T-shirts to help them cross the chasm.
It’s pretty funny to watch conservative bankers trying to mix it up with long-haired programmers. Both have slicked-back hair: one from styling product, and the other from natural oils.
The Tech Stack
Don’t worry about understanding this slide, because I don’t think anyone did, even the guy who made it:
These words were sent to you by a server, which has its own stack of technologies: an operating system, a database, a programming language, and a web framework.
Modern technologies evolve through the creation of these stacks. Every new layer in the stack provides some kind of additional functionality or ease of use.
In order to really use bitcoin and other digital currencies like we use money, new parts of the stack need to be built. Sending money around the world, it turns out, is pretty complicated. This is more so with digital money, because it’s so easy to make unlimited digital copies of things (think of all those forwarded emails you’ve received).
The magic of bitcoin-related technologies is that they are limited in supply, like gold — you can’t copy them infinitely. But this also makes them technically complex. When you combine the complexity of bitcoin with the complexity of the modern financial system, you get a disturbing slide like the one above.
To sum up: this is the real deal. A lot of work still to be done, but the wave is coming. Get ready, because the dot-com heyday is happening all over again.
If you’re interested in learning more, check out our new website, Bitcoin Market Journal.