Let's try another......
Netscape is NOT THE Internet, IT doesn't take you anywhere?
And another....
Video will never be more than a postage sized, pixilated and choppy image on the internet, the bandwidth will Never support it and building it out is far to cost prohibitive. How would you make money with video anyway????
And another.....
People will NEVER put their Credit Card numbers online!
And Serveral Others....
Amazon will always be Just a Bookstore if it survives
Studio Content will NEVER be online for fear of Piracy
The Internet will NEVER threaten the way the Music Industry works
Banks will NEVER fully go online because of security concerns
See where I am going with all of this? Riotous indignation for every technology innovation that began with a huge promise that also carried with it a huge threat to somebody, or some entrenched way of doing business, or earning money. I'll take them one at a time.....
The Internet
It was created by academia, for academia, and many believed that it should have stayed there because it opened a a free market of exchange for illicit things and ideas. Nobody could see around a corner that had no reference point. They couldn't say, "ah, it's like this thing or that thing....." And because there was no reference point, the only thing that was visible was the threat that it posed to the status quo. We as a society all new that it was a giant thing but it was to big to conceive what it was or what the potential was. What was obvious is how it could be used for evil, so the negative narrative began.
First let me tell you what the internet REALLY is/was. I like to use the analogy of an iceberg. Iceburgs are massive moving objects that are capable of bringing down the Titanic. But it wasn't the pretty shiny tope that sank the unsinkable, it's what lied beneath! Only 10% floats on the surface and it's pretty to look at and sanitized by nature. What's below is dark and destructive. The internet as you know it is the same.
In the beginning, there was no shiny top but there was a large, and growing exponentially, hidden internet. It was only accessible by sophisticated users that knew how to get to it. Then came AOL and they mailed a tiny, but shiny, top that amounted to a fraction of a fraction of one percent of what was actually out there. This provided an easy entry to the World Wide Web that was all over the news and in the popular narrative as an evil thing that was dominated by pornography. AOL was the Happy Days of the internet with nothing but Cunningham type people with Steve Case serving as Mr. Bosley.
The underbelly and dangerous stuff was still hidden from view. Story time to decribe the real internet in those days. It was primarily text based and dominated by what's called "News Servers." There were News browsers that allowed you access to this content and most stuff was categorized by addresses like alt.mayfavorite.thing.that.I.want.to.read.about and picture sites would look something like alt.binaries.pictures.that.I.want.to.see......Basically, giant message forum where anybody could exchange stories or discussions on any topic or post pictures of their favorite things. Heaven forbid if you posted a useless picture or you would get lambasted for hogging precious internet bandwitch! The story will get dark below, from my own experience.
Then came Netscape! The Browser provided a way to see the REAL internet, but still only a fraction of it. The tip of the iceburg pierced the surface of the water but it was still tiny. You had to know the exact IP address that you could type into the browser. Then came DNS and the URL. This made the the internet user friendly and available to the masses as a simple address that started with a WWW....... rather than a number i.e. 253.256.37.1
What was missing to bring more to the surface? The search engine! Yahoo was born! What began as a single guy catagorizing the web in his dorm room with a friendly web page to display it all in a Netscape browser, turned into an army of others doing the same. A very intensive manual process that others tried to out do by building better, but equally as archaic, mousetraps e.g. Lycos, Alta Vista....Two Stanford computer science students changed that with Google. No longer labor intensive but automatic and accurate reflection and accessibility to the entire TIP of the iceberg! And here we are!
Earthlink was born around this time frame and provided dial up access to the masses and combined with Netscape, friendly URLs and Yahoo, we began to see the real potential of the internet! Anybody could create a website and every company was in a mad dash to put up a website. Ideas sprouted through all of the menuer like weeds and money flowed like a faucet to anybody with an idea. Business fundamentals went out the window and it was all about capturing eyeballs. Hence the growth of Silicon Valley; Hence the .com boom/bust. The shake out had to happen to purge the landscape and business fundamentals had to return. What was left was companies like Amazon.com. What was left behind was pets.com selling dog food online where the shipping costs were greater than the order itself.
We are in the late 1990's and the Internet has solidified itself into popular culture and business, even though we STILL had no idea what it was or where it was heading. We just knew that it wasn't going away and that the world was in the midst of a paradigm shift never seen before in history. Does that mean that the dark part, or the underbelly went away? Nope! It grew faster than the shiny iceberg top. This is where we pick up the darker part of the story from above.
Like many others at the time, I was plucked out of business school to run one of these technology ventures. It was an ISP what was born from a larger company that made it's business selling pagers, remember those? But the CEO saw the writing on the wall so he was setting the company up for change. I was brought in to manage that growth into uncharted territories. I didn't try to create something that differentiated the company. Rather, I took a look around and decided on the cheaper-faster-better-mousetrap strategy and set out to compete with Earthlink i.e. Cheap dial up service, access to the internet and some basic web hosting services. We had a large advertising budget and we went after Earthlink's $15/mo with our own $7/mo offering. I'm a learn-by-doing kind of guy so I had to learn EVERYTHING about technology that the nascent industry required and the services that were in demand from the customers. This is where it all comes full circle. If you remember, AOL was $20 and limited your minutes on line. You were constantly disconnected and the service was slow. Our advertising worked and we switched over a LOT of people. But now, without AOL, they would hear the air raid of the modem connecting, it would say that they were connected but they no longer heard "You Got Mail." Now they had to open that Netscape thing and go to that Yahoo Place and type a thing into that address space. We gave a lot of refunds to a lot of confused folks!
Here is the dark side that I promised. The number one hosting request was for porn sites, which I refused to do. However, I quickly discovered that our programmers learned every tip and trick from the developers of those sites. THEY were on the bleeding edge of what was possible so if you came to me with a resume of an engineer with that kind of experience, there was no moral battle. They didn't consume the content and great computer code is just that, code. Eye opening.
The demand for the news server was strong so I had to figure out how to do that since our customers needed a server to connect to. I did that, and here where it got very dark and made me loose my faith in humanity. Once that server was up and running for a month or so, I would run reports on which newsgroups were most requested because we were charged for every group we carried and, obviously, only wanted to carry the thousand or so that were being looked at with any frequency. My first report came back and it was not what I expected.
al.binaries.pictures.pre-teen.xxxvideos
alt.binaries.pictures.pedophollia
al.binaries.pictures.underage.sex
and more, and more, and more......every iteration of child pornography request that you could imagine followed by every disgusting fetish, followed by every porn name iteration. Shocked and confused, to say the least.
So that's the beginning of the internet, that thing that you cannot live without, EVEN THOUGH is it by far the go-to method for sharing child pornography around the world, which encourages the PRODUCTION of the same! EVEN THOUGH it's genesis IS the dark web that has ALWAYS been used for illicit activities! Why? Because the societal good outweighs the bad! Even the Dark web has significant benefits. The Arab Spring would have never happened without it, China, North Korea and every other censored nation would not have access to the world outside the government firewalls with it. I would tell you how to get there but your life would never be the same and I like you to much for that.
There is always a victim and a beneficiary of innovation. Entrenched status quo leads to a consolidation of power, greed and corruption in every instance and in every business. Technology has broken down entire industries and each had a negative narrative created by the victims but inevitably the benefits to the many outweighed the cost to the few. Think Music; Think Circuit City. Think Blockbuster; Think Online Banking. Think movie making/distribution; Think long distance companies; Think Job Hunting. Think empty malls and neighborhood stores. I'm not against a wholesale swap-out to a simpler time where kids played outside but, we are too far down the slippery slope to turn back. Now think of those industries that are yet to be disrupted or that are in the early stages. They will, and always have, followed the five stages of grief and either adapt or ride that obsolescence curve where the only way is down.
Now that I have taken you through a lesson in history, you should have put yourself and your own thought process in various places along that time line. If not, answer these questions.....who is your long distance provider? When was the last letter you sent? When is the last time your took your roll to a Kodak booth? How many stamps do you lick to pay your bills? When was the last time you balanced your check book? When was the last time you drove to rent a movie or even go to the theater? What news paper do you pick up from your driveway each morning? Change will happen whether you are an active participant or not.
Now the purpose of this write up.
I share because I care, not to brag. I had nothing to do with the creation or promotion of the next revolutionary innovation that the world has ever seen. I just see it and study it through the lens of history and to satisfy my own curiosities. Bitcoin, period, end of story, but probably not.
Remember these things first, victim and beneficiary; five stages of grief e.g. Denial, Anger, Bargaining, Depression, Acceptance. And for good measure throw is a little FUD (Fear, Uncertainty, Doubt)
I will layout what bitcoin is, and isn't, in it's current form; the underlying blockchain technology, the direction its going and what the current narrative is and who is threatened. All with the hopes that you will be smart enough not to be a part of it, but hear it, recognize it and place it where it belongs in the stages of grief or fud.
Bitcoin began as a global internet currency on a public ledger called the blockchain. Think Napster and how hard it was to shut that down. The songs lived on peoples computers in their dorm rooms or offices. You downloaded bits and pieces from the songs from computers around the world and then the software put them back together into something that you could listen to. However, their was a vulnerable point in the system that allowed it to get taken down, but not without changing the music industry forever. The blockchain is similar, but not really. Just think of computers around the world that have to talk to each other and agree upon that public ledger, and everyone has a copy of that too that is constantly synchronized. Think of ledger entries as your checkbook where you enter debits and credits that go against and asset, your dollars in a bank. The only one that needs to agree with you is the bank. Now take the bank out of it. Your checkbook has to balance with the world and if it doesn't, you don't get to make the entry into the ledger. This public ledger cannot be shut down and does not have any single point of failure. It utilizes the same public cryptography that makes online banking, and any other critical infrastructure, safe to use today. It is completely transparent and anybody in the world can see any transaction that has ever been cycled through it, but your identify is safe. This is the blockchain.
Bitcoin began as a medium of exchange operating on top of this ledger so every single transaction in the 9 year history since the Genisis Block is recorded in the public ledge. Anybody can use it, anywhere in the world, at anytime. The value is determined by the same supply and demand rules as any other currency BUT, here is the beauty. From it's inception, it has been mandated that only 21MM coins will ever be issued. Unlike central banks that can print more money under the guise of quantitative easing. More on this later....
There are the two components. Now here is the narrative and see if you can pick out the victims and identify where they are in the 5 stages or FUD.....
- It's all Just Fake Money
- It's A Fraud (Jaime Diamond, CEO JPMorgan)
- It Can Be Used By Drug Dealsers and Criminals (every politician in the world)
- It's currency for the Dark Web (government officials and every talking head)
- It's for money laundering (IRS, talking heads, government)
- Nothing Backing It (taking heads, government, banks)
- more, and more, and more,.......
Now the acceptance.......
- Blockchain is the thing that's interesting, not Bitcoin (Jaime Diamond, CEO JPMorgan)
- It's not a currency, it's an asset so it should be taxed as such even when used as a currency (IRS)
- It isn't going anywhere (Bill Gates, Richard Branson, Warren Buffet)
- We'll create our own bitcoin (Russia, China, Every major bank (walled gardens!)
Now the current state of affairs.
Bitcoin was envisioned as a form of digital currency when it was created in 2009 during the global financial crisis. Calculated timing! But it has moved into the gold category since, as a store of wealth given what's happened in the world. It has become too valuable and expensive to spend so people just hold onto it. Because it's increasing in value so quickly? Some of that but really, NO. Because people are afraid of their own governments ability to manage local currencies through central banks. Think Greece where the private savings accounts were obfuscated by the government; Venezuela, Zimbabwe with it's Trillion Dollar notes of currency; South Korea Facing inhalation and citizens wanting to move their wealth out of the war zone; China and it's strict currency controls........ Because of this shift, many other coins are trying to fill the gap for quick transactions that share the same blockchain properties. Bring in the ICO'c or Initial Coin Offerings.
You hear as part of the narrative that there are over a 1000 different crypto currencies. Now go back to the beginning of the internet with Pets.com. Most are useless and have no value whatsoever but money is flowing out of a new faucet and regulation has not caught up until recently. When you hear countries are outright banning crypto currencies, these ancillary coins and further ICOs are what they are talking about, akin to the shake out of the .com. Very much needed but they are not bitcoin.
Bitcoin itself has been under every attack imaginable from governments, press, prevailing narratives and even infighting. Still, it has proven resilient against it all as it just keeps hitting new highs. We just went through a contentious technical in-fighting weeks ago and as of this writing, it is hitting all time higts into the mid 8000 range. If you look around, you will find price predictions for $1MM/coin by 2020 but I think 25K is more reasonable and attainable.
Now here is the thing, every technology has an adoption curve that starts with pioneers, early adopters and then broad acceptance until it crosses over the hump to the obsolescence down curve. We are just in the early adopter stage but moving into the mass adoption phase. This means that "smart money" from wall street is trying to come in and stake their claims. Remember the 21MM . To date, approximately 16.5MM coins have been released and as time goes on, the process for realeasing more coins get's more difficult, so value increases. With such a small fraction of consumers holding digital wallets and with such a very small fraction of it's potential value realized, the price will continue to go up as we climb the adoption curve. Now it is possible for the average Joe to stake a claim that can grow with significance. If the future, it may be cost prohibitive. Which brings me to me next points.
When you see the price tag of $8000 for a single bitcoin, you may think cost prohibitive already. That is not the case. Each bitcoin can be divided up into smaller increments, called Sitoshis, down to 0.00000001BTC. That means you can buy very small increments. Currently, 1 Sitoshi = $.000082. The fee to buy would be greater than the unit but you get what I mean. And this leads me to a bit of advice for anybody reading this.
I benefit nothing whether you heed my advice or not but I introduced you to BTC at $200/coin!!! Listen to the experts, it ain't going away. You may be too old to change or you are independently wealthy and don't care for financial advice. But your kids and grandkids aren't. It costs you NOTHING to set up a a wallet, hardware or online. Set one up, drop a few bucks in there and then come back in a month. Drop $10/week in there and come back in a year and you will probably have new lighting for your living room.
My biggest wish for you is this. It's is easy to parrot the narrative but now that you have been slightly educated, don't. You will look as dumb as Briant Gumble and Katie on the today show in 1994. Remember how video will never be on the internet, look it up on Youtube :p
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