In your interview with Kyle Bass, you described Bitcoin as a collectible (found here @ 36:28). This took me by surprise since I had never heard of Bitcoin labeled as a collectible before; but after you laid out your reasoning, I found myself agreeing with your assessment. In its current state, Bitcoin really is just a high-tech collectible. You can’t really call it a currency if people don’t transact with it — and why would people transact with it when it’s cheaper to simply use a credit card? So, you’re right. Bitcoin is not a currency, nor will it turn into one as long as the current financial system remains the superior option. It’ll be a collectible.
Now, my question for you is what if the competitive advantages changed? What if the costs to transact were in the pennies and they would forever remain that way? What if transactions were always settled without delay and businesses never had to worry about chargebacks or paying 3% to credit card companies? What if this system was paired with a limited-in-quantity asset that could easily be used for everyday transacting? If those competitive advantages changed, do you think this particular “cryptocoin” would have the right characteristics to become an actual currency?
I ask you these questions because I value your opinion and because I would like to share with you a cryptocoin that actually plans to do this — and I’m wondering if you think it has a chance.
As you mentioned in your interview, Bitcoin has had a “Central Bank” type of issue regarding how it should increase transaction capacity; and as you are aware, there have been branch-offs because of this. One of those branch-offs solved the transaction capacity problem that has prevented Bitcoin from being used as an actual currency, and that branch-off is called Bitcoin Cash. It solved this problem by upgrading Bitcoin’s transaction capacity (blocksize) so that transactions backlogs would occur no more, and this gives it the capability to reach the billions of people in the world while keeping fees in the pennies all the while.
With that said, you may think the same “Central Bank” issue may repeat itself over again when Bitcoin Cash’s blocks become full — but you shouldn’t, as increasing the blocksize is baked into the Bitcoin Cash cake. With two years plus of argument over the matter, the community that created, and now supports Bitcoin Cash, never intends on letting the blocksize get in the way again. They are fervent supporters of this, and they hold the belief that they are carrying out the founder’s vision by doing so — which is something I personally agree with.
When transactions are settled instantly and fees are in the pennies, the possibilities are endless, and I’d like to share with you a possibility that turned to reality as a result of Bitcoin Cash — a platform/company you’d probably invest in if it were pitched on Shark Tank. The platform, which I am posting this letter on, is called Yours.org and it’s very similar to Reddit or Medium.com with one very distinct difference — the content creators get paid directly and instantly by other users of the platform via tips in Bitcoin Cash.
This social network allows content creators to display part of their content for free and to set a price for viewing additional content behind a paywall. To limit spam, trolling, and to increase quality, it costs 10 cents to post and viewers can only comment if they have already purchased the material. For this letter, viewership will be free, but I won’t be surprised if I earn over $10 from users showing their appreciation (If you followed the link, you’ll be able to see how much I’ve earned).
Now it should be noted that this unique platform was pushed away from using “collectible” Bitcoin because fees were too high. After all, nobody is going to send a 10 cent tip when the fee to send a transaction is over a dollar. But since this network uses Bitcoin Cash, fees are in the pennies and these types of micropayments are possible.
This micropayment, disruption of the traditional advertising model that allows anyone in the world to make money off their creativity is only possible because of crypto. It demonstrates that sending “value” over the internet is more efficient using crypto as long as fees are cheaper than traditional methods. Assuming fees are cheaper because they’re transacting in Bitcoin Cash, businesses and merchants benefit from avoiding credit card transaction fees and not waiting days to receive their money. Plus, chargebacks are an added cost and headache they won’t have to experience. Once the money is received, it’s theirs. And lastly, it also makes more sense for transacting over the internet since your privacy is protected. There are no social security or credit card breaches coming from it. Crypto, and more specifically, Bitcoin Cash, does have characteristics that allow it to outperform the credit card and traditional financial system, so my question to you is this:
Do you think it has chance to become an actual currency used in everyday commerce if these superiorities remain permanent? — Your thoughts on the matter would be much appreciated.
I hope this letter finds you well, and I thank you in advance if you find the time for a reply.
P.S. I’m a big fan of Shark Tank and your perspectives, and if your name was ever on the presidential ballot, you’d have my vote.