Blockchain Startups: Bitcoin and Ethereum as the Frontier of Finance by King Stefan

Author:King, Stefan [King, Stefan]
Language: eng
Format: epub
Publisher: Token Flow Ltd
Published: 2021-01-11T00:00:00+00:00

The bright future of crypto-assets can only become real with benefits for specific buyer personas and use cases. We can explore that space of possibilities by asking questions that start with a lack. For example:

• Ordinary BTC transactions are too costly for small payments.

• Wire transfers are too slow and expensive for retail payments.

• PayPal is not secure and final enough for receiving e-commerce payments as a merchant because they can and do freeze your account.

• Credit card companies charge the merchant a percentage per payment and finalize the payment after 60 days.

• TransferWise is not open enough for black market transactions.

• Credit card companies and PayPal will not process payments of the online purchase of some medicines.

• Credit card payments are not free (as in speech) enough for buying medicines online or controversial donations.

• Savings accounts and treasury bonds are not secure enough for long-term savings because of the risk of currency inflation or outright collapse of the debtor.

• Paper cash is unsuitable for payments over long distances.

• Informal payment networks are too slow or insecure because of vulnerability to a third party.

As money becomes a free and flexible medium, we can expect these problems to disappear. These containers do not limit an economy that relies on cryptocurrency. Money is money: why should an arbitrary medium or custodian for your wealth determine how you hold or spend it? Once you see the features of ideal money, you itch to transcend these limitations of particular media. We will explore the opportunities of ideal money in the next chapter.

The entrepreneur and investor Paul Graham discusses the source of startup ideas in his essay How to Get Startup Ideas . His suggested methods boil down to: “Live in the future, and work on what seems interesting.” Another way of saying that is: notice what is missing. Now that we have looked at how crypto-assets could be used, we review a few examples of these innovating buyer personas to see how crypto-assets enter their reality and what perspective they have on advanced forms of money. Entrepreneurs who start a company in the current crypto space will sell to at least one of these buyer personas. It is worthwhile to know to whom you are selling.

Early Adopters as Potential Customers

There are multiple reasons to care about cryptocurrencies, and each idea motivates a type of crypto-enthusiast. These different enthusiasts help to grow the network of a given crypto-asset. These reasons for caring about cryptocurrency often combine in a single person, with one or two motives at the forefront. These types of people show up at conferences and meetups to discuss cryptocurrencies and tokens in detail; they are often working professionally with crypto-assets or have invested a portion of their savings. In Everett Roger’s model of Diffusion of Innovations (1962), they are the innovators who are willing and able to take risks with new technology. As an entrepreneur, you might care about an innovator’s opinion. Can you engage their imagination and inspire them to act? That is a test your product must pass.

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