Bitcoin’s Tipping Point – CoinGeek

by James · May 3, 2023

In my quest to get inspiration from non-Bitcoin thinkers in the business world, I recently read The tipping point by Malcolm Gladwell. My goal is to see what ideas I can overlook as a Bitcoin-focused entrepreneur, author, and casual influencer. The book is a fascinating exploration of how ideas, products and social behavior spread like epidemics. While I love Gladwell’s writing style, the book seemed almost painfully obvious in the points it made, but that may be because his book served as a template for formatting digital virality in the information age, and I myself am a product of the world created by this seminal work from about twenty years ago.

Gladwell identifies three key factors that contribute to the tipping point:

The Law of the Few: the impact of influencers.
The Stickiness Factor: the impact of messages and product desires on the market.
The Power of Context: the impact of time and place or “luck.”

By understanding these principles, Gladwell wisely predicted that one could better predict and influence the factors that make ideas and trends go viral.

My thoughts on using Bitcoin

As with any epidemic, Bitcoin has reached its tipping point, but not by solving real problems like cross-border money transfers, online payment walls, or login authorizations with any significant frequency. Instead, it spent over a decade on protocol and governance debate and turned into a speculative bubble. We will lose the very essence of this brilliant creation if we do not address the issues that matter.

They are allowed: Bitcoin’s early adopters, innovators and tech-savvy enthusiasts have been instrumental in introducing it to the masses. But as bitcoin gained popularity, a new group of influencers emerged: crypto bros, rent-seekers and speculators. Driven by the lure of quick profits or cushy consulting positions, these individuals have transformed the perception of Bitcoin into a speculative investment, causing drastic price fluctuations and detaching it from its original purpose. We need the visionaries and entrepreneurs to come back to the fore if we are ever to realize the true potential of Bitcoin. There is an opportunity here to encourage the creation of truly disruptive businesses.

The Stickiness Factor: Bitcoin’s stickiness lies in its distributed nature, its cryptographic utility, competitive security model, provability of otherwise complex data, and its ability to bypass many inefficient systems. But are these functions fully utilized? Not yet. To ensure Bitcoin’s longevity, entrepreneurs must take advantage of these characteristics and build businesses that harness the power of the blockchain. By creating solutions for cross-border transfers, online payment walls and login authorizations, we can anchor Bitcoin’s value in utility, not just the whims of the market. Another principle for determining if something is a Bitcoin opportunity is to ask “do I need to reduce payment friction or increase data integrity?” If the answer is yes, you might have something sticky for Bitcoin.

The power of context: Bitcoin emerged in the midst of the 2008 financial crisis, which eroded trust in centralized institutions, and people assumed it was a response to mismanagement by the banks and the government. It defined much of the first half of Bitcoin’s life, and it still informs much of the messaging for the “store of value” people.

Today, the context has changed. The world is moving towards a borderless digital economy, and the need for more efficient and inclusive financial systems is growing. The factions of bitcoiners have split apart, and experiments with borderless payments, commerce, identity and tokenization continue to rage. The time has never been more ripe for businesses to use Bitcoin as a tool to revolutionize the way we shop and interact online.

Principles and thoughts

Imagine a world where money transfers across national borders are instant, cost-effective and secure. Migrant workers could send money to their families without losing a significant portion to exorbitant fees, thereby improving their living conditions and providing a lifeline to developing economies. Bitcoin-based businesses can create platforms that make this vision a reality, improving financial inclusion and reducing global inequality.

Imagine a digital landscape where online paywalls no longer prevent access to knowledge and content. Instead, micropayments in Bitcoin can facilitate a fair exchange between creators and consumers. Such a system would encourage the production of high-quality content while ensuring that consumers only pay for what they truly value.

Imagine a digital world with a single, secure login authorization that provides access to all online services without the need to remember countless passwords or reveal personal information. Bitcoin’s blockchain technology could be the foundation of this revolutionary system, which provides a secure, decentralized and user-friendly authentication process.

How about tokenizing all assets so that they can be more easily valued and traded?

It’s time to shift the conversation from speculation to innovation. Let’s not squander the potential of Bitcoin by confining it to the volatile world of market speculation. The power of Bitcoin lies in its ability to reshape the economic landscape, and we need to nurture businesses that will make this potential a reality. We must move past the tipping point and bring about a new era of technological and financial revolution.

I’m very excited about the Ordinals colored coin protocol that exploded into the bitcoin consciousness this year. It may very well be a unifying factor that brings together value creators on all UTXO chains to share and value real assets globally! But so far, speculation about memecoins and JPEGs has ruled the day. While it’s great to make easy money shockingly fast, we need to think harder about value creation too!

ONE call to action

Let’s rally around the entrepreneurs who dare to challenge the status quo and build businesses that harness the true power of Bitcoin. And let’s not forget the promise of a distributed economic future, where barriers are broken, opportunities are leveled and trust is restored. By embracing this vision and taking decisive action, we can turn the fourteen-year speculative bubble of Bitcoin into a transformative force that is reshaping the world for the better.

So let’s embark on this journey together, fueled by the spirit of innovation and the conviction that Bitcoin is more than just a speculative asset – it’s the catalyst for change that we’ve been waiting for. We just have to be brave enough to stop waiting.

What are some other books I should read to understand virality, the business cycle, and economics so I can learn more ways to think about bitcoin in their context?

Watch: Kurt answers viewers’ most pressing questions about Blockchain and Bitcoin

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