The hype around the Bitcoin price rollercoaster has subsided, but a quieter revolution is underway that will ensure the long-term future of digital currencies and build the infrastructure that will solidify their role as the “Internet of Money.” inside. Here, we speak to two of the leading VC investors in Bitcoin infrastructure to understand more about Bitcoin’s journey to mainstream adoption.
When the Bitcoin price drops below $17,000 at the end of 2022, Bitcoin will “Road to Indifference” European Central Bank Director Ulrich Vintseil said: But Bitcoin has once again defied naysayers and is now hovering around a respectable $30,000 level, while many new use cases and business opportunities are surfacing.
Bitcoin maximalists believe that Bitcoin is different from other cryptocurrencies, serving as a store of value comparable to gold, offering a faster and cheaper payment method, and perhaps the basis for an entirely new monetary system. I have always argued that it could be However, despite its unshakable beliefs, Bitcoin has struggled to gain mainstream acceptance and adoption.
Some recent advances suggest that the tide is turning. BlackRock, the world’s largest asset manager, last month applied to the SEC for approval of a Bitcoin spot exchange-traded fund (ETF). Meanwhile, as of June, the amount of Bitcoin stored on the Lightning Network, Bitcoin’s payment protocol, was record highincreased by 42% year-on-year.
So is Bitcoin finally finding its place in the world, freed from its ties to cryptocurrency and the dark side of the internet? I spoke with Timechain partner Alex Mann and Stillmark founding partner Alyse Killeen to discuss Bitcoin’s path to mainstream adoption and the obstacles that still exist.
Opportunity or Philosophy?
Bitcoin advocates have a reputation for being almost evangelical about Bitcoin’s superiority over existing monetary systems and centralized powers. But for most investors and founders working on Bitcoin today, it is just like any other layer of technology on which different applications, innovations and businesses can be built.
“Basically, all Bitcoin companies do, like any other supplier, is provide customers with goods and services that they have to pay for,” Mann commented. “Bitcoin is on the same layer of technology as the internet, and bitcoin companies use bitcoin the same way Amazon uses the internet.”
As in the early days of the internet, Bitcoin’s early adopters were experimenting with different use cases, and its usefulness was determined by the needs of each target audience and how well companies could build solutions that met those needs. determined by
“Bitcoin is being adopted in both developed and emerging markets, but the drivers and ‘killer apps’ are different,” says Killeen, which has invested in the technology that unlocks bitcoin’s usefulness, especially the Lightning Network. says Mr. “In developed markets, many people are embracing Bitcoin as an investment…For emerging markets and families split between developed and emerging countries, money transfer is a killer app.”
building the foundation
But to develop existing and future use cases, innovators and entrepreneurs need a first layer of infrastructure that can take advantage of Bitcoin and the Lightning Network without understanding the complexities involved. According to Killeen, this is one of the main challenges he faces, a common problem with any new infrastructure he technology, from the cloud to cybersecurity.
“Developing apps and business models that incorporate the Lightning Network has traditionally required a high degree of technical skill, but we have made the infrastructure, development tools, and user services available to everyone within apps and business models. It only happened recently,” she says.
Killeen site example: VoltageAmboss, which provides the lightning node infrastructure, and Amboss, which allows users to automate their network usage. Solutions like these are paving the way for a new wave of entrepreneurs driving use cases and broader adoption.
“Then there are people in the space who understand how to translate technology into user-based use cases,” she explains. “When you see this kind of entrepreneurial activity developing and thriving, it tends to lead to the adoption of the technology itself, because these founders are trying to make it something valuable and tangible. because you can.”
Nonetheless, Mann said that while the Lightning Network is expanding rapidly, the technology is still not perfect for processing payments, and there are technical barriers that must be overcome for Bitcoin payments to become mainstream. I admit there is.
“If your use case is payments, is there still a scaling bottleneck? Yes, especially for retail payments. However, even here, there are still challenges to making payments cost-effectively, and with that in mind, the ecosystem is developing layers like lightning. Fedi”
However, Mann believes the network may be better suited for B2B payments.
“For B2B payments, Lightning seems highly desirable as it enables real-time payments. Shinota or Vida Applying lightning-fast payments to the energy and communications sectors could be a game-changer. ”
change the story
Another big challenge is winning the hearts and minds of consumers and businesses. For many, Bitcoin is still deeply associated with cryptocurrencies and tokens, which are now widely discredited as gambling. Cryptocurrencies have also been damaged by last year’s FTX debacle, and unfortunately this mud has clung to Bitcoin as well.
“We have to explain over and over what Bitcoin is and how it is different,” Killeen said. “People have tried to avoid what they know is gambling behavior in selling and trading cryptocurrencies. …it is difficult to distinguish between the two.”
She argues that there is an education to be given on the differences between Bitcoin and cryptocurrencies in terms of decentralization and how it provides security. But both investors make it clear that for commercial purposes, the key is to lead the problem and the solution, not the underlying technology expertise.
“It describes how bitcoin can be applied to solve a specific problem, and it varies from individual to individual, institution to country,” Mann said. “We need to build literature and technology that allow each audience to interact with Bitcoin in ways that are meaningful to them.”
“The sales pitch doesn’t have to be ‘We have to believe that Bitcoin will replace the fiat currency system’, it can simply be ‘Would you like to pay faster and cheaper?’” Killeen says.
Synota is an example of this succeeding by helping energy companies settle payments in real time using the Lightning Network. Vida has also found compelling use cases in the telecommunications sector, enabling cross-border value settlement between carriers.the other one is Galloybuilt a Bitcoin wallet called Blink that provides free Bitcoin banking to people in emerging markets. All you need is a smartphone, which can now be purchased for the following prices: under $100 in africa.
Is it just a matter of time?
It’s been almost 15 years since Satoshi Nakamoto mined the “Genesis Block”, but Bitcoin has repeatedly resisted critics and is still as strong as ever. And indeed, in emerging markets, its ability to enable financial inclusion and security appears to be a transformative force for real good in the world.
“The most important ‘gradual change’ is that Bitcoin is not controlled by a central authority like a government or bank. This makes Bitcoin more secure and more resistant to censorship and manipulation. ‘ said Killeen. your own bank. ”
Killeen also suggests that further breakthroughs should not be far away, as he sees top-notch minds and entrepreneurs rushing into bitcoin.
“One of the trends we have seen over the past few years is that very experienced founders and operators are looking for the most meaningful thing they can do next, and they are entering Bitcoin. It means that there is
So if you haven’t converted to Bitcoin yet, they believe you will convert to Bitcoin soon.
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