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Bitcoin Has “No Use Case”
Y’know, just like the internet in the early days
Now I should be clear. I don’t do negative, disrespectful or personal assaults on people or their views on Twitter (or, in fact in real life) because I think it’s unprofessional, unnecessary and, in the end, helps no-one.
Life’s tough enough. No-one needs the extra negativity, especially journalists who are always going to be under fire for making their views public. As Twitter spats go, therefore, it definitely falls in the “damp squib” category as you can see.
That said, Mr Tim Mullaney was dead wrong. Not just in my opinion, you understand, but factually wrong. In fact, given the contents of the piece, I contacted 99bitcoins.com, keeper of the famous Bitcoin Obituaries (a site that tracks how many times journalists have declared Bitcoin dead) and asked if this qualified as an entry.
Just 24 hours later I received a reply and Tim’s piece is now forever recorded as one of the 416 declarations of death (at time of writing) it has received in over twelve years of operation. All have thus far been proved incorrect.
But while I think there are many points in the article I consider tenuous at best and could address (but won’t), there is one overriding message that simply does not hold up under scrutiny — this idea of “no use case”.
I’ve always struggled with this one. Not only does it not even hold up with the tiniest casual glance — let alone actual scrutiny — it can be unequivocally disproved in seconds. It is the one anti-Bitcoin argument I have never been able to understand at any level.
Sure, I can get the power consumption concern, it’s a complex issue where more work, genuinely, needs to be done. Yes, I can understand the “it’s digital not tangible so it can’t have any value” argument — Bitcoin certainly takes time to get. I can even see the “criminal use” argument, even though we already know this is largely untrue.But “no use case”?
But then I remembered, we’ve been here before. Not only that, but I’d personally been right on the cutting edge of “before”.
This is not history rhyming as Mark Twain would have us believe, it’s actually repeating.
And I can prove it.
All major new tech breakthroughs have “no use case”
Back in 1997, as an ambitious young man, I was working in brand marketing at Microsoft.
As brands to go, it was a pretty good one to have at such a young age and I reported to the UK Brand Manager directly on various projects. One of those big budget projects was the national “Get on the Net” campaign, designed to drive the adoption of the internet in the UK.
Of course, this wasn’t for altruistic purposes. It was underwritten by MSN (Microsoft Network) a new division of Microsoft tasked with both providing content for the new MSN “portal” sites and providing ways for the masses to access it. Getting people “on the net” would inevitably lead to subscription charges and software upgrades over time. It was essential to long term business.
Of course, this was long before ADSL or fibre connections. This was the age of desktop PCs with 4MB of RAM, 15" square monitors, 500 MB hard drives and dial up technology. The only way people could connect to the service was to get a CD, install some proprietary software and physically switch the cable from the phone line to the computer whenever they wanted to use it.
The trick was to get CDs to everyone as fast as possible (and definitely before competitors) so we put them on the front of magazines, gave them out at exhibitions and promoted through internet cafes that were ubiquitous at this point. In fact, I owned three internet cafes myself at the time with permission to do so from my paymasters.
My role was to design and deliver the new CD, co-ordinate the marketing including TV ads, and do whatever it took to bring the internet to the masses.
It was a task I relished. Not only did I find the technology fascinating, it was inherently obvious to me that this thing was going to change the world.
Frankly, I was just excited to be part of it.
The internet? What’s it for exactly?
The only trouble was, it was soon clear that not everyone agreed with me. I remember being genuinely — and consistently — shocked.
At events or even in social situations, people would look at me in total confusion every time I talked about this internet thing and questions that we’d now consider bizarre were very common.
People simply couldn't understand how it worked. The concept of having a computer connected to, well, anything was entirely foreign at that time. No-one had ever considered them anything except standalone devices, especially at home. If you wanted to move information between them, you used a floppy disc.
People were also concerned about what would happen if they accidently deleted someone’s website (yes, really!), or whether people could access their own PCs if they were using them on the internet. They also couldn’t understand the concept of single clicks or addresses or browsers.
It all just seemed like too much hassle. After all, what was the point? Who was actually going to use this apart from — maybe — research students? What, exactly, was its use case? And why on earth would you ever have internet at home?
Of course, people in the industry knew exactly what that use case was and where it was going, although I think it’s fair to say that even we never envisaged web 3.0 apps like Uber, Airbnb or Bitcoin. The media, of course, were just as clueless as anyone else in the early days and commentary was usually less than helpful, fueling the confusion.
There was skepticism, claims of government conspiracies to keep tabs on the population and plain hatred of the concept. Several times I received “Get on the Net” CDs back in the post, defaced and labelled with colorful — but very clear — anti-internet sentiment. Once I was even verbally assaulted by an angry man at a large scale event when I offered him a free CD resulting in several colleagues coming to my rescue.
Of course, these are the exceptions that stick in your mind. The vast majority of people were generally amenable to the concept and were intrigued to know more, but even they still struggled with what they would actually use it for.
This was partly because there really wasn’t very much that could be done on the internet at the time coupled with the fact that it was quite hard to use, but there was also a general lack of vision on behalf of the average person.
This was beautifully summed up in this quote by my old boss, Peter Shackleton, in an article published in May 1997 about the “Get on the Net” campaign which read as follows:
Most people have heard about the Internet but have not used it because they think it holds no relevance to their lives
And it was true. Microsoft’s focus group research confirmed the same thing every time we ran it and entirely shaped the way we executed the “Get on the Net” campaign.
The single biggest question, for example, was always a variation of this one, over and over again:
Why would you buy something online that you can’t see properly, pay extra for delivery, wait for delivery and then hope it was OK, when you can just buy it instantly in a shop where you can actually see it?
It seems incredible now given the power, speed and reach of companies like Amazon, but it must be remembered that even Amazon itself was under pressure to make a profit at the time. Many doubted it ever would.
Even in my own internet cafes, where we trained and introduced new users by the thousands over the years, the divide between people who understood what they were using and those who didn't was clearly evident.
By way of example, our Guildford branch had the misfortune to be located next to a popular bar. During the early years, the bar’s inebriated patrons would walk past the floor to ceiling windows and observe the library-like concentration on the faces of the users therein as they left to go home.
They simply couldn’t resist shouting comments or banging on the glass to show their disdain, often making customers jump in their seats. As was clear from their comments, they believed that only sad geeks, lonely nerds and “dodgy people” would ever use the internet — a phraseology that seems eerily familiar now when Bitcoin is mentioned.
Funny thing is, somewhere around the early noughties, they all seemed to disappear.
A use case for Bitcoin?
Of course, all major tech breakthroughs have gone through similar acceptance cycles.
It was the same with cars, electricity, phones, computers, the internet and so many other major inventions. Reviled by critics, ill-informed media, existing large organizations (usually ones who have a lot to lose) and even governments, they rely on the network effect to overpower what is eventually revealed to be a short-sighted or self-interested position. In the end, the critics have to adapt. Or die.
Bitcoin is no different.
And while I am accepting of this process — having lived through it twice already with both the internet and mobile phones — I find myself being even more passionate this time round.
Because this time it’s not all about me. This time it’s not just about lining my own pockets or making my own life easier.
Like many other people in their fifties, I’ve been thinking more and more about what my responsibilities are to the next generation. And, since Bitcoin has the potential to improve more lives than almost any invention that has come before it, it feels like I should be doing everything I can to make sure it succeeds. Even better, it has the potential to do so for some of the least fortunate people on the planet.
I love that. It motivates me on a level I can’t even explain.
With that in mind, let’s put aside Bitcoin’s more obvious uses for now.
Let’s ignore storing hard value for long periods of time against a backdrop of ever diminishing fiat value. Or moving money almost instantly across the planet directly to the intended recipient for peanuts with a 100% success rate and a built in tracking system. Oh, and while we’re there, let’s forget that no-one can stop you doing it.
Let’s also pretend you can’t spend it with Paypal, Visa or Mastercard like you can any other currency, let alone the thousands of companies, charities, sports organizations and retailers who take Bitcoin in its pure, native form. (Incidentally, this is certainly more than the “five” indicated in the original article. And yes, they are all legal.)
Let’s imagine the fact that a truly scarce asset that can be accessed on equal terms by anyone on the planet regardless of race age, sex or economic background — something the human race has never had before — is no longer important somehow.
Let’s focus instead on the things that us Westerners take for granted and don’t immediately see.
How about, for example, being able to take your entire family fortune with you if you’re unlucky enough to be displaced by war? Before Bitcoin, history has shown us that this was all but impossible.
What about being one of the 1.7 billon people globally who find themselves outside the banking system and have to deal only in the more expensive (and usually corrupt) cash economy who can now be their own bank with any smart device?
What about the billion people — around 13% of the entire global population — who lost some, most or even all of their net wealth due over the last 18 months to the mismanagement of their sovereign currency by their governments who can now have the option to preserve their life savings in an incorruptible non-sovereign asset for future generations?
To me, and many others, these are not “no use case” scenarios. They are the reason I write these articles, record podcasts and spend all my time introducing new people to Bitcoin all over the world, just as I did with the internet over 25 years ago.
Except this time the stakes are bigger and Bitcoin's use case is more important than anything that has come before it for millions, probably billions, of people. Just ask anyone in El Salvador who relies on remittances from the US for example.
So the next time someone tries to convince you that Bitcoin has no use case, ask them what their alternative solution for all these problems would be instead.
And if it’s not as comprehensive or as inclusive as Bitcoin's is, it may be time to walk away.
Politely and respectfully, of course.
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Disclosure: The author of this opinion piece has been heavily involved with bitcoin for several years and holds a substantial cryptocurrency portfolio, including bitcoin. He also has a mining operation running the SHA-256 algorithm based in Siberia and is a published author on the subject of promoting the understanding of cryptocurrency. Jason is an analyst at Quantum Economics and consultant to Luno.
Disclaimer: Investing in any asset class is risky. The above should not be taken as financial advice, nor construed as so. Always do your own research before investing or consult with a professional financial planner.