[cryptography] Digital cash in the news...
Nicholas Bohm
nbohm at ernest.net
Sun Jun 12 05:55:23 PDT 2011
On 12/06/2011 13:23, Ian G wrote:
On 12/06/11 4:21 PM, Peter Gutmann wrote:
Am I the only one who thinks it's not coincidence that the
(supposed) major
use of bitcoin is by people buying hallucinogenic substances?
The best way to think of this is from the marketing concepts of
"product diffusion" or "product life cycle".
[1]http://www.quickmba.com/marketing/product/diffusion/
The challenge for the new product is to migrate from left to center
to right of that graph in above link. In doing so, the newer groups
come to dominate the earlier groups, and the earlier groups
typically fall away.
Recall the video story? The innovators got in very early, and
bought Betamax because it was better quality. But they got stuck
when the market was captured by the VHS system. So lesson #1 is
that early groups are risking punishment. Same story for DVD.
Also, the backroom story for video was that the porn films, the big
market that lifted the revenues of the distribution chains, and made
it worthwhile. These products/people/chains kept the industry alive
while it built up steam for the mainstream. Lesson #2 -- you need
these strange uncomfortable groups to get to where you want to get.
Later on, as more mainstream comes into play, these strange
uncomfortable groups can be eased out. Or they go somewhere else,
or we change our minds about them. We also write them out of
history...
So, as far as recreational pharma product is concerned, this is
typical of these things (if that is what it is). E.g., SSL
certificates early revenue was also porn, Paypal had some dodgy
customers, and for e-gold, it was ponzis / games that pushed the
business into the black.
The challenge is what to do next, how to grow up. This is going to
be practically impossible for BitCoin because it has no guiding hand
like e.g., Paypal had. It's only got the invisible hand, which
suits the innovators fine ... but it also means it hasn't got much
of a chance of going mainstream.
Ah well. I joined bitcoin quite early, seeing it as like donating
spare cycles to an interesting experiment. I ended up with quite a
substantial balance, at no cost that I can identify.
Now I find I can exchange a little over five bitcoins for a #50 Amazon
gift certificate that Amazon seems happy to credit to my account.
I quite see the force of the critical comments made here; but they
remind me of a (probably apocryphal) remark attributed to the late
Garret Fitzgerald when Prime Minister of Ireland. After a new scheme
had been outlined to his cabinet, and greeted with enthusiasm by
several ministers, he remarked, "Well, it's all very well in practice;
but will it work in theory?"
Nicholas Bohm
--
[2]Contact and PGP key here
References
1. http://www.quickmba.com/marketing/product/diffusion/
2. http://www.ernest.net/contact/index.htm
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