Crossing the Bitcoin chasm

On 2 February (8 weeks ago) I wrote “Ditching BHP + RIO shares for Bitcoin” thanks to an introduction by Mark Andreessons post.

Crossing the bitcoin chasm

IMAGE: Slideshare : Geoffrey Moore, Crossing the Chasm – What’s New, What’s Not

I’m late to the game, but I thought I’d share what I’ve learned by participating with real dollars. I’ve just closed a tech startup (“a learning experience”), so with time on my hands while I find the next thing, I went all in for 6 weeks to learn by doing. I learn best by full immersion.

I’ve worked with and built multiple tech startups, so I understand the space, but this is a massive chasm to cross. Bitcoin is hard to get your head around and still very complex for the layperson. In the last few weeks I’ve tried to understand what bitcoin is, what the opportunities are, how it functions as a protocol / platform instead of a currency, built a ‘Work for Bitcoin for Freelancers’ site to explore the adoption and found various tools and resources after looking at tens of those available. Here is the distilled version of what I learned.

Six weeks of mayhem

btc crash

I stumbled into bitcoin during a crazy four weeks. I’ve seen the market crash twice – first when Apple decided to pull the last bitcoin payment app from blockchain.info the same day that My Gox halted withdrawals, causing panic – and a great buying opportunity, and then a few weeks ago when Bitstamp and others followed with the ‘transaction malleability’ issue. Oh, and the money laundering arrest. Welcome, Early Adopters!

What is Bitcoin?

In my view, Bitcoin is a protocol that allows untrusted parties to transact and contract anonymously with near instantaneous payment, anywhere in the world, all publicly visible in a transaction ledger, validated by algorithms.

Why use Bitcoin now?

Bitcoin is being used now as a simple alternative online payment mechanism, primarily for:

  • Fast Peer to peer transactions on the internet
  • Low fees
  • No banks involved
  • Anonymous

I’ve met a few local retailers who are accepting bitcoin, but it’s risky in my view. Very volatile ‘currency’, banks don’t like your business association with bitcoin and tax laws are up in the air, although the US Fed just announced that bitcoin will treated as property and subject to capital gains tax. This will make transacting tricky. Not insurmountable, but challenging. Much respect to these early adopters helping the cause.

 The Experiment

mac-glasses-crop-300h

To test this, I spent a week hacking together Qoina-wp-header-background-150x44Qoina,  a site to connect Freelancers and Employers that transact in Bitcoin. The results are still out, but so far it’s been a great way to engage with the bitcoin community and feel the growing pains as we figure this out. It’s a perfect use case – technical people, instant payment, trust issues and cross-border transactions.

Getting started.

In Australia, I used Coinjar to convert AU$ into BTC. It’s surprisingly hard to buy bitcoin without using cash. You can purchase Bitcoin from Coinbase and Bitstamp in the USA who seem to be reputable and trustworthy. Merchant Payments are super-easy to accept by using simple code from a service like Coinbase .

The $/BTC exchange rate fluctuates wildly, especially over the last month, so it’s worth monitoring Coinreporting.com or bitstamp.com to get a feel of the pricing before buying.

Hot or Cold?

Your bitcoins are stored in a ‘wallet’. Briefly, a hot wallet is online and riskier than a Cold wallet, which is essentially a code printed out on a piece of paper stored in your safe or placed on a USB drive. Coinjar, as an example, will hold your bitcojns in a hot wallet (online) which is a riskier option than a local (cold) wallet on your offline pc/mac/paper.

The best tools for managing, transacting and storing your bitcoins are Bitcoin-QT, Armoury or Electrum. I prefer Electrum as it’s easier to use than Armoury. Bitcoin-QT takes days to sync and needs 16Gb data storage space, so is not practical for me. I’m using Electrum with my key encrypted with the free AESCrypt as advised by the Udemy course.

It’s a balance between paranoia and accessibility – until I get hacked, of course ;-)

Bitcoin Mining

In short, you’ll spend more on hardware and electricity than you’ll earn. Don’t do it.

Will bitcoin survive and cross the chasm?

Transacting with bitcoin is easy if you’re used to hex keys and QR codes, but I suspect the average merchant or consumer is a long way off using this, so 2014 needs to be the year of the merchant and making bitcoin more friendly in terms of buying some and spending it. We should see a lot of innovation in this area as it’s glaringly obvious as a blocker to broader adoption.

Most of my friends are skeptical and believe that I’m either on drugs or laundering money, which is the unfortunate side effect of the laughable reporting in mainstream media. W.T.F.?
If you ever wonder about the accuracy of the BS that you read, watch how the sensational nonsense gets reported with little or no research while reality is completely ignored.

I’m not sure if bitcoin will survive, but the point is that the effects of bitcoin have already changed the way we think about payment and authentication systems forever. It has impacted legal frameworks across the world, financial institutions, online payments and technology innovation. Bitcoin has created this conversation and we’re testing the status quo, which is good for innovation. Crypto-currency is here to stay and will drive transaction costs down and ease transacting across virtual lines on maps. Of this I’m convinced.

And that is the point of innovation – to challenge the status quo and imagine smarter and more efficient ways of living and engaging with the rest of the planet. Bitcoin is as important as the internet was in 1994 – the domain of techies, geeks, and smart visionaries.

Stay in the conversation

Cool stuff:

Quote

“I am a strong supporter of BTC… and yet the only interesting use cases I see for nonfanatics as of 2014 are where they can perceive an advantage over using credit cards: embarrassing transactions (porn, prescription drugs) and high fee transfers (eg remittance to underbanked foreign countries – or buying with Gyft that gives you 3% back).” http://www.reddit.com/user/EuroTrash on Reddit

Ditching BHP + RIO shares for Bitcoin

I finally ditched my BHP and RIO shares today after hoping in vain that they would recover since I bought them just before the GFC crash in 2008. It’s only a couple of thousand dollars, so I ignored them for a while. I know I should have done something sooner, but anyway…

The trigger? Reading Mark Andreessons excellent, no-nonsense and jargon-free post on why Bitcoin is an alternative currency of the future, but more than that, the new online business opportunities presented. Like anything new, the risk appears high, but some of us have to get in to prove or disprove the viability of any new technology.

So I’ve cashed out my very flatline shares in BHP and RIO
bhp rio.png
and I’m going to use this cash to play with Bitcoin via Coinjar, a local Bitcoin wallet/merchant/exchange.
btcmarkets.png

The risk is low – I could lose the money, but I will do what I love doing best – LEARN. And, either way, I will be one of the early pioneers that seed alternative thinking, whether Bitcoin succeeds or fails.

Now imagine using fee free ultra-micropayments in under-developed and unbanked areas such as parts of Africa as part of an SMS based banking solution to enable transactions that are currently too small to absorb the credit card/processing fee.

mmm….

D-clutter the reclutter

I work in tech startups and am amazed at the amount of noise in our lives. Not information, or learning, or experiences – just clutter and noise.

As I do each year, I’ve just returned form the annual digital detox at the beach on a hammock with my lovely wife and become aware again of the clutter I’ve allowed to seep back into my life over the last year.

I’m an avid reader and love learning, but the first thing I do when I get to bed is take my iPad, not my perfect Kindle Paperwhite, and mindlessly stare at Facebook to play with my imaginary friends, or view Google Plus animated gifs. What a waste of time and brain space, not to mention the impact on my ability to fall asleep.

So far this year (all 9 days of it) I’ve managed to reach for the Kindle instead of the iPad and read each evening and it’s great. My brain is alive and making connections and being creative while I sleep, and I rest well not having blasted my eyes with high intensity light and crap.

So it’s time to evaluate where I’m putting my precious time. Facebook benefits are almost zero. Staying in touch with distant “friends”? Watching an endless stream of ads and food pictures? Checking in to places so my imaginary friends can ‘like’ it, thereby wasting their precious time?

This year I’m going to go retro – stay in touch with real friends in real life. Going to places with them negating the need to ‘check-in’. Getting them over to show them the holiday pics if they care or are slightly interested at all.

Twitter? Not so sure about this one. It has led to loads of serendipity and real-world benefits, connections and is quite useful. My go to place for near-time news or events. So Twitter stays, but as a ‘near-time event search engine’.

Linkedin? Unavoidable and useful as a business tool and great for generating leads and interest, but I’m ignoring the news feeds and articles (mostly).

Google Plus. Dead.

News? I use Flipboard but the problem here is discovery. You get force fed whatever topic/stream you choose pandering to confirmation bias, so I’m not sure how to optimise this yet. I’m switching off general world news besides BBC and Al Jazeera for 2 opposing views of the world, but in small bites as the negativity can’t be good. I believe that if you care enough about an issue, do something – don’t be a voyeur.

TV? I don’t watch much TV and when I do, it’s streaming and on-demand only. Going to a movie is still a good experience, so that can stay.

email? UNSUBSCRIBE FURIOUSLY AND MERCILESSLY. I’m pleasantly surprised how little email comes in when doing this.

These few habits have already freed up one to two hours a day. More time for exercising my body and mind, reading, doing nothing and relaxing with Kim, and thinking. A good start to the new year.

Australia as the broker between ‘West" and "East"

Australia needs to look North and embrace our position as the conduit between “West” and “East”. We have a unique competitive advantage – let’s use it!
image.jpg
Image: Business Insider

The Australian media is constantly hammering on about how the resources boom is rapidly coming to an end and how we need to embrace a knowledge economy and support more small business, etc.

I’m not so sure.
Sure, the knowledge economy is important and clearly this needs attention, but I’ve lived and worked here for 6 years in Enterprise Professional Services and tech startups and it seems inconceivable to me that we don’t see and leverage the obvious. We’re at a critical tipping point in history where the ‘East” is rising economically and rapidly competing with the “West”.

Australia sits in the fortunate and interesting position where we are neither East nor West. Geographically Australia is in Asia but behaves as if it’s in the USA or Europe. We try to walk a fine line between appeasing the USA for “protection”, holding on the the Monarchy in the UK for trade benefits and historical reasons and trying not to step on the toes of the mighty China over the pond.

This is unsustainable.
One day we have to take sides.
Or not.

What if Australia was the Switzerland of Asia? It already is in many ways as it’s geographically separated and carefully tries to stay in the middle.
Google_Maps-16.png
Australia has a massive untapped natural resource.
Our proximity to Asia, our intimate understanding of the region , our “western” ways and understanding and a growing “Asian” population. If we harness this and become the broker between these two very different cultures and approaches to business, we will become the international clearing house of business over the next few decades.

To understand the size of the opportunities, look at what Hugo Barra, ex-product manager of Android at Google, now at Xiaomi, has discovered after a few months working in China.

Alibaba, which owns Taobao, a shopping site he said is TWICE the size of eBay and Amazon combined

During a Chinese holiday called “Singles Day” Taobao did more than twice the sales all US e-commerce companies did on Cyber Monday

the Chinese are incredibly educated with 8 million college grads per year — more than the US.

How can we ignore this massive opportunity?

Competing is futile. Let’s change the game to co-opetition…

I’m using quotes for “west”, “east”, “asian” as these are ancient but generally understood terms to get my point across ;-)

Fitbit is the same as a gym membership

No more Fitbit for me
fitbit.jpg
I’ve been going to gym regularly and love the idea of wearables and tracking progress as a motivator, so gave the Fitbit Flex a go for a month.

Not impressed. It’s basically a pedometer on your wrist that counts steps and some movement. It works well enough and has a pretty app, but adds zero value to my need as a user which is to incentivise or motivate me to exercise more regularly and measure all my exercise.

There is not enough value to me to warrant wearing this device on my wrist 24 x 7.

The Atlas workout tracker recently launched at TechCrunch seems to be closer to what I need. Logging of workouts and exercises beyond walking.

So thanks, but no thanks Fitbit. The only value I see with the Flex is to make the fledgling wearables market mainstream and people buying them to appease themselves that they are exercising. Buying a gym membership is not the same as actually working out regularly.

$100 experiment completed.

Chickens and eggs

After finding a great place to stay on airbnb on the Queensland Coast of Australia , we discovered it included chickens. Our first reaction was “I hope they don’t make a noise and there’s someone to look after them”. By day 2 we contacted the owner to ask if was ok if we looked after them as they were such low maintenance. This may seem ridiculous, but I’m amazed that you put some grain and water in the one end and out pops an egg on the other. Every day.

Stop and think about this for a second. I work in tech startups so my entire world is virtual and a serious of 1s and zeroes. That makes sense. But there are many things that don’t work this way and it’s good to stay grounded and occasionally filled with awe. The new iPhone is not awesome.
A bird converting grain to eggs each day is.

Destroying the reputation of Freelancers everywhere

At GetViable we rely 100% on freelancers and outsourcing to create , build and run the business.

The platform is built on Ruby on Rails running on MySQL and the fantastic Elastic Beanstalk from Amazon Web Services. Not too complex, but enough to challenge the average freelancer.

Freelancers have a bad reputation for shoddy work, poor quality, taking the money and running and various other evil deeds. This is mostly unfounded and our experience has been excellent so far, as proven by a recent event with our offshore Ruby on Rails dev team based in Serbia.

Besides delivering the work on time and budget as one would expect, the freelancer in question, lets call him ‘N’, has been awesome. Late nights spent debugging issues, 30 minute response times day or night, challenging questions about some of our design or dev decisions, a constant awareness of us being in startup mode with suggestions on affordable options to deploy various bits of tech and then two unforgettable incidents.

The first time I knew this was going to be a great relationship was when ‘N’ dialed in for our usual Monday evening call and started the conversation with “I was thinking over the weekend that a good way to optimise the user experience would be xx which would positively impact YY in the business”. A simple statement, but the ownership of our product and commitment to our business was clearly demonstrated right here. I’ve worked with many hundreds of freelancers at an enterprise level and have heard lots of talk about ‘partnerships’ but this simple statement did the trick.

The second happened yesterday. We’ve decided to make GetViable free from the end of August 2013 and keep our costs as low as possible while we look for alternate revenue streams. More on this in another post. I called ‘N’ to let him know what was happening and, given that this impacts his pocket directly, was very pleasantly surprised by his response.

‘N’ said: “I’ve been thinking that the right thing to do here is give you 50% off my last bill (around $700 USD discount) given the situation. I value our relationship and I’m choosing the right thing vs the right business decision. I’m sure we’ll work together again and believe in what GetViable is trying to do.”

just wow. speechless, as this is a huge amount of money in Serbia for ‘N’

Like I said, destroying the poor reputation of Freelancers everywhere!

 

Excellent guides for offshore business cultures or relocating

Communicaid PDF Catalogue.

Turning data into information into data

Isn’t it interesting how we’ve spent massive resources interpreting data to turn it into information, and then through the sheer volume of information, have now turned that information back into data? Now we have to aggregate the data-information into meaningless ‘infobites’ (twitter, facebook, etc) to get through the noise. Is the result information of data? Or noise?

Bitcoin: What is it? | Bitcoin | Khan Academy

Bitcoin: What is it? | Bitcoin | Khan Academy

Everything you need to know about bitcoin. Thanks @getcoinjar