Bitcoins Start Ups

Are You Using Bitcoin?

bitcoin silicon valley

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He followed me out of the coffee bar and said, “Excuse me, was that a Bitcoin transaction you just did?” Since he was behind me in line at Coupa Cafe, Palo Alto’s only retail place I know to use Bitcoin, I assumed the question was rhetorical. Wasn’t it obvious? I had my phone out and pushing buttons and doing the QR code. Purchasing with Bitcoin at the retail level is a bit of a sideshow. If my hair isn’t looking good, I’m using cash because everyone gathers round and looks at you. No wonder it isn’t mainstream. Kind of like, “Does my SAT score make me look fat?”,  “Is my short story on artificial intelligence/machine learning too much for pillow talk?”

Yes, I told him,  it was a Bitcoin transaction  “Oh good”, he replied, “because I’m a lawyer with clients with Bitcoin startups and I have no idea how it works.”

Hmm…my mind was wandering: “And you waited until now to find out? Do they know you are clueless? No googling, no meet ups? No purchasing and using? You don’t know what it is and they pay you? Can I become a lawyer too?”

Not my style, that’s for sure. How could he represent clients in this exciting field and not even know how it works? I jumped all over Bitcoin when I heard about it. A cryptocurrency? The blockchain? Mining? Oh, feed me more! I want to know what this is all about.

Color me curious. I can’t explain what it was about Bitcoin that was so attractive to me. But it probably has to do with my sometimes early adoption of technology in certain areas. I’m female and middle aged. I’m not the typical demographic.  But I am the one going around town using Meerkat and Periscope and putting up with Pebbles that ask, “How do YOU know about Meerkat?” (Pebble is my neighbor and they are nice, but my son and I are still arguing over whether that is a sexist or ageist comment.  Probably both, but Pebbler, you are forgiven.)

Back to Coupa Cafe. I love how the employees there taught me how to use Bitcoin to purchase a coffee. I find that very cool that they are so well trained, so helpful and did it so well.  English may not be the first language but they sure knew the language of Bitcoin. Not so cool is the fact that I was taking my son who works at Intel there for coffee and paying with Bitcoin and he has no interest.

Maybe I find the word cryptocurrency exotic (I do) and new and full of potential. When I see that one of my vitamin stores online accepts Bitcoin,  (yes!) I use it.  I buy a T-shirt at the Bitcoin meet up at Plug and Play: Don’t Mess with Bitcoin. When I have a garage sale in downtown Palo Alto I put the shirt on the tree to point out where the garage sale is. Only one person mentions it. I advertise the room I have to rent on Craigslist with Bitcoin in the title: Bitcoin Accepted. No one responds. Until…..

A 20 something female intellectual property attorney takes the room for a month while finding a place of her own. She pays with PayPal. At some point in her stay she asks me, “How come in your ad for this room you said you would take coins?

I had the talk with her: not coins but Bitcoin. I explained Bitcoin. She had no idea. The next day she came back from work and thanked me for saving her from potential embarrassment: an IP lawyer in Palo Alto that hasn’t heard of Bitcoin. I guess she asked around the office and realized it might be a good sign to not confuse physical coins with Bitcoin. Maybe I should hook her up with the lawyer who followed me out of Coupa?

I don’t pretend to understand all the blockchain tech but when I had to get a refund, Scott Robinson, facilitator of a local Bitcoin meet up showed me how to use the blockchain to see my transactions and prove I was due a refund. This was cool! I used it to contact the owner of Coupa Cafe who was interested because this was his first Bitcoin refund and he understood what I printed out and showed him. And refunded my transactions. 

But why such slow adoption? My take; until there is a marketing campaign that showcases objects bought with use of Bitcoin, it’s not going to be adopted at the retail level. The blockchain technology can be used in various arenas due to its mechanism of action and right now that looks like its immediate future. But buying a dress at Neiman Marcus or bottled water at Walgreens – not so easy even if it were available at those places.

Scott Robinson said middle aged females would have to use Bitcoin for it to become popular. I think it is more than that.  Mark Zuckerberg would have to declare a Bitcoin awareness day to attract that crowd. A 10% off day for use of Bitcoin on every online and physical store purchase that accepts Bitcoin would go a long way to awareness and adoption. Ease of use and awareness that people can relate to : priceless.

No one is denying the payment arena is in flux. My friend has a biometric palm ID start up and it will eventually be compatible with Bitcoin as well as credit cards. (Maybe…the only start up I saw go sky high was my in house renter,  who came here in beta as co-founder and  CEO of Pinterest.  I may not be the best person to look to the future…I should have traded rent for a piece of the pie. But I thought, gosh, this is boring yet there’s no denying he and the VC’s were right and I was wrong.  Boring it may be but obviously my take was the minority. And there is nothing like sharing your house with someone over the top about mega funding for his startup. Shout out to Paul!)

Why is my other son (a millennial living in L.A.) not using Bitcoin? He says: “It isn’t something widely accepted and I know next to nothing about it.” Damn! That reflects poorly on me as teacher. I guess if I didn’t use it, he would know nothing?

Older son at Intel says: “Mom, you are geekier than I.” (Does your boss know this?)

Online use of Bitcoin is easier right now than retail.  Advances in wallets help – and places like XAPO are moving us in that direction. I just signed up for an account and look forward to using it. Thanks for making life easier, XAPO. This is where we need to be going.

My real time price counter of Bitcoin on my website, my t-shirt, my many coffees using Bitcoin at Coupa and some vitamin purchases are exciting to me, but I’d love to see the Bitcoin community (backers, investors, miners, etc) using some incentives to make it inclusive. Right now, it’s for a special club (geeks? men? those who need to get funds cheaply across the world?). Not everyone speaks Bitcoin language and enjoys throwing the words cryptocurrency and blockchain around. No, I am not a dominatrix as someone asked me upon hearing me use the word blockchain and no, I don’t advise hiding assets in divorce in a Bitcoin arena as someone else asked.

“Love your highlights. Your shoes are awesome.” I’d love to be able to respond, “10% off every Thursday with Bitcoin at Macy’s.”

Meanwhile, thanks Coupa Cafe for your awesome employees who learned Bitcoin and helped me use it and for the many conversations the use of Bitcoin has brought me. And I look forward to the day I don’t have to worry about my hair before I pay. Bitcoin has a future in my world but I’d rather not struggle to use it. So, here’s to the backers, investors, miners, users, early adopters, and start ups like XAPO for all that you do. And the meet ups at Plug and Play in Sunnyvale and Hero City.

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1 Comment

  • Reply
    Magdalena
    August 24, 2015 at 10:32 am

    I understand what you are saying, but I find it extremely unlikely that we keep up the current growth for a year. That would imply we’d need to invest more than 3 times as much in mining as we have over the entire Bitcoin history in less than a year. Keep in mind that most of the rate growth recently has come from efficient hardware (ASICs) so evolution in technology will play a much less important role in future increase.

    To reach the 6 PHs you assume, then KnC or Bitfury needs to sell the equivalent 15,000 of their most powerful miners. As these are at their cheapest priced at $9,600, we need, as a community, to invest $144 million in ASIC miners over the next year or so, or $12 million per month. If we assume that most of today’s power comes from the currently least efficient hardware (AM Blades at 50BTC/13 GHs and I’m using the least efficient to make the current investments as high as possible) the community has so far in its history invested roughly $40 million in Bitcoin mining. This is the absolute best scenario. It ignores all Avalons, BFLs, or other more efficient miners. If we ran the same numbers with BFL 5GHs miners at $249, we’ve invested $9 million in mining, and would need to multiply that by 10x over the next year to keep up your assumptions. If we assume that future mining power comes from Avalons priced at 75BTC/66Ghs, the future investments would cost just short of $500 million. In other words, I don’t think we’re going to see numbers like these, or anywhere near that.

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