Bitcoin's killer app is ..



TL;DR none of us were expecting this back in 2014.

I recently read an article entitled: Why Porn Might Just Be Crypto’s First Killer App (https://hackernoon.com/why-porn-might-just-be-cryptos-first-killer-app-596cf822ef3f). The reasoning is straightforward; aside from the privacy features of crypto in general (if used correctly) and of certain coins by design, disintermediation has very real profits associated with it. ‘Today those payment processors and the big adult sites have a stranglehold on the industry, charging outrageous fees that bite deep into entertainer’s pockets. Adult cam sites jack as much as 50% from popular performers. That’s worse than the top tax bracket in socialized France and it means adult entertainers have to grind twice as hard just to get by.’

Whilst it’s entirely likely the adult industry will benefit from blockchain technology, though, it’s not crypto’s first killer app – and the ‘obvious’ use cases sometimes don’t work out the way we expect.

Back in 2014 it was clear that bitcoin would transform the remittance industry. Instead of spending a hefty chunk of your paycheque to send your own money overseas (up to 10% for low-income migrant workers in some economies), crypto would make it fast and low-cost.

It didn’t happen. The exchange infrastructure didn’t exist to make it work in practice, and it still doesn’t. Despite some recent headway along those lines, it’s still too hard to get your money into bitcoin at one end and out again at the other to make remittance a truly killer app.

E-commerce was another obvious win. It would be faster and cheaper for customers to pay for goods from anywhere in the world with a crypto transaction, and merchants loved the idea of becoming immune to chargebacks and credit card fraud. It was a no-brainer.

That didn’t happen either. The perceived benefits weren’t large enough to convince merchants and consumers to take the risk of switching from a familiar system to one they didn’t fully understand.

Over the course of 2017, though, it has become clear what bitcoin’s killer app is.

Bitcoin’s profile has grown hugely, in tandem with price and network effect. Bitcoin is recognised not as a transactional currency, useful for paying for coffee or for goods online (even adult ones), but as a new asset class. Call it ‘digital gold’ if you like, but people are buying bitcoin for what it is, not for what you can do with it.

Which means that bitcoin’s killer app is… bitcoin. Who’d have thought?





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