Bitcoin's Big Challenge in 2016: Reaching 100 Million Users
Michael Jackson is the former COO of Skype, a current venture capital investor at Mangrove Capital Partners and a board member at bitcoin wallet provider Blockchain.
Here he explores the importance of creating bitcoin products and services that will delight users globally and prove the technology's worth in 2016.
As a lifelong technologist, engineer, and now partner with Mangrove Capital Partners, I often reflect on the transformative developments that impact the world around me. I’ve spent my career watching the World Wide Web unleash unfettered information across the world.
Paradigm shifting technologies don’t come along that often, so it’s critical to capture the moment when they do. Right now, it’s impossible to step into an accelerator anywhere in Europe without hearing someone talk about the blockchain.
The blockchain is ubiquitous yet, as many readers of CoinDesk already know, it continues to be vastly misunderstood.
Just saying that a business can use blockchain technology means very little. Business are built in the daily grind by forging enduring relationships with users and creating communities. You can have a good team with a lousy product or can have an amazing idea but no execution. Success requires the constant application of energy, strategy, persistence and vision. But above all, it requires the delivery of products that people really appreciate.
Bitcoin and blockchain companies need to first focus on solving problems, and then build services and software that delight their customers. So far, in 2015, we are yet to solve a problem – and we’re a long way from delighting consumers.
As the COO of Skype, I received a front-row ticket to probably the biggest disruption in the history of telecommunications. Interestingly, most people in the world might not realize that almost all of their telephony occurs over VoIP. The switchover from copper wires happened in the background. Phones and their interfaces have changed, but the basic human need for communication still exists.
Peer-to-peer technology allows anyone in the world to instantly talk to anyone else at nearly zero cost. The same is now true for all forms of transacting, using the bitcoin blockchain.
Like with VoIP, global adoption of bitcoin and blockchain technology will take time. But it’s already happening. It will be in the background, but just as ‘communications’ now is a part of many apps – from Facebook to call centres, so will transactions powered by blockchain be more and more prevalent.
Despite our lack of progress, we have something precious. Anecdotally, I can’t think of a single other back-end system that has been online for seven years without a glitch, running 24 hours a day, seven days a week, 365 days a year. The bitcoin blockchain has proven its resilience. In fact, a quick review of some stats points to hardening and maturity across the network.
Over the past 12 months the hashrate of the bitcoin network has tripled, to over 650,000,000GH/s. User growth across core services has been impressive.
According to publicly available data, there are now over 10 million bitcoin wallets. Perhaps the most informative statistic of all is the transaction volume: the number of transactions has also grown impressively, from roughly 80,000 a day to more than 200,000 without showing any signs of slowing.
We heard a lot of talk this year about private vs public chains. It’s an important dialogue, and competition will sort out the business cases for fit-to-purpose technologies.
It is my firm belief that the bitcoin blockchain will play a fundamental role as the backbone of the digital value transfer. The blockchain is the only production-deployed solution that’s been running reliability for years now. Open protocols win out in the long run, and the independence and trust provided by motivated miners can’t be reproduced by the ‘private blockchains’.
Yet, the challenge in 2016 will be captured by the companies that can successfully obfuscate the complexity of bitcoin and bring frictionless value transfer to the next 100 million daily users.
That may seem like a lot, but it’s only as many as Snapchat, Facebook, Twitter, Skype, Kazaa and so many others have achieved.
It has to be our next goal for bitcoin adoption, and we won’t get there through obscure niche products.
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Disclaimer: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, CoinDesk.
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