– Jason Voiovich, Vice President, Marketing, Logic PD
In the grand arc of history, today’s realities often seem like foregone conclusions.
But spend any time exploring the past, and I’ll bet you’ll be amazed at how many false starts litter the road from there to here. That’s on display in Walter Isaacson’s The Innovators. In it, he charts the last 100 years of the tech revolution – the transistor, the microprocessor, the personal computer, and the Internet, among many others – as well as all of the colorful characters who made it happen, from Lovelace and Babbage to Gates and Jobs.
Do you remember Tandy laptops? They were the precursors to the Apple PowerBooks and all other portable personal computers. Maybe you remember AltaVista, a precursor to Google. There are dozens of other examples. It’s a common pattern: Often the first entry into a new market is the “Moses” of its category. It leads the way, but never lives to see the promised land.
Isaacson didn’t mention Bitcoin in his book (although he does create something of a “second edition” in December Time Magazine article), but it doesn’t take much of a leap of logic to see how it fits the same pattern of innovation.
But before we explore that, let’s exclude some of the usual suspects.
What doesn’t fit the pattern? Legal barriers. Unlike other commentators on the rise of digital currency, I don’t believe the fundamental roadblocks are legal ones. There are obvious financial regulatory barriers (currency conversions and merchant acceptance to name two), trademark issues (no one owns the trademark to the “dollar” or the “renminbi”, but Bitcoin certainly wants to own BitPay and BitGive), and patent concerns (Will any currency be truly adopted if it is not in the public domain? And if it isn’t, will Bitcoin investors continue to fund it?) Those are obvious issues, but they are not insurmountable.
What also doesn’t fit the pattern? Marketing. Bitcoin isn’t at a loss for name recognition, nor are they starved for cash. The Bitcoin St. Petersburg Bowl is ample evidence, although not the only evidence. It’s also getting plenty of free publicity (albeit the negative kind) from the Oracle of Omaha himself, Warren Buffet, urging people to stay away from Bitcoin. Anyone with children knows how effective that strategy is.
So if the barrier to adoption isn’t legal, and it’s not funding, and it’s not marketing, what is it? The true barrier is cultural readiness.
If you think about it, what we’re talking about here is a change in the nature of money itself. Currency has been the exclusive domain of the state in any advanced economy for hundreds of years. In fact, most governments mandate an exclusive monopoly over it. At its core, money is solely a measure of confidence in the institution granting it, and few governments want to give that up.
But I think we’re almost there.
In the next couple of years, the widespread adoption of ApplePay, Google Wallet, and other smartphone-enabled payment technologies will decouple money from paper, coins, or plastic, making it completely virtual. That’s the last step. The last iterative innovation required. Once the average person no longer carries a wallet with paper money (or even a credit card), it’s not much of a leap of faith to explore different currencies.
Think about the implications. Decoupling currency from government is one of the founding pillars of the modern state, along with military/police and the rule of law. What’s next? What remains? Somewhere, Ayn Rand must be smiling.
What’s the real lesson here for innovators? Timing is critical. An innovation too far ahead of its time often is relegated to the fate of setting the stage for others to follow. A moral victory, yes, but rarely a financial one.
Bitcoin is a few years ahead of its time, and it is unlikely to be the one we ultimately use, but digital currencies’ time will come.