Of course, nothing beats the original Bitcoin white paper, but it might be too complex for someone new to the technology.
WHY THE PRICE DOESN’T MATTER AS MUCH
The majority of discussions about Bitcoin revolve around it’s speculative and currency aspects. ‘Wow! It went up to 1.2 k and then plummeted to 600 dollars’. It’s exciting to watch – especially if you have invested – but at the same time, it doesn’t matter.
Although I’m a huge fan of Bitcoin technology, I’m not really sure it’s the future currency everyone will use shopping at the local grocery store. As Andreas Antonopoulos says, the ‘currency is just the first app’.
Do you remember the first iPhone? It dropped calls, and in many ways its voice call experience was inferior to the existing Nokia feature phone alternatives.
The real revolution came with apps built on top of iOS, which had previously been unimaginable.
TWENTY-FIRST-CENTURY TECHNOLOGIES IN NINETEENTH-CENTURY CORPORATE STRUCTURES
The existing models of IPO funding and stock ownership (owned by few, used by many) are more aligned with the needs of nineteenth-century railway companies than twenty-first-century information companies.
So what’s the difference between major industrial-age railway networks and information-age social networks.
A passenger can be alone on a train and still get the value of getting from A to B. It’s the technology itself that delivers value to the passenger. In fact, passengers have no interest in promoting the railway to others, as their experience could be diminished (no free seats, etc.).
On the other hand, a Facebook user gets tremendous value from others being on the same network (Metcalfe’s Law) – on Facebook it’s the users who create value for each other by posting, sharing, commenting, etc. The other users are the only reason the network has value.
FROM ‘USER AS A PRODUCT’ TO ‘USER AS A SHAREHOLDER’
If you use any type of modern social network (Facebook, Google+, YouTube, etc.), you are the product – your attention is sold to the advertisers in the form of advertising, and in return you get the permission to create and receive value from others on the same platform.
Also, you probably don’t own any shares in the platform you use. The stock is owned by the founders, some wealthy investors and large institutions, but only a few of the actual users.
For the shareholders, maximising profit means maximising the amount of advertising. For the users, it often means the reverse (with exceptions such as Search and other well-targeted ads).
So, even though the users create all the value on the social network, they don’t have any form of participation in it.
Technologies like Bitcoin have suddenly allowed the design of ‘distributed ownership’ systems (e.g. Kickstarter), but with the difference that you don’t fund a cool, shiny gadget, but actually become a stakeholder in a company and participate in its future profits.
Why is this so important? Because it aligns the interests of the owners with the interests of the users.
When you buy a Bitcoin, you not only own a unit of currency but also become a shareholder in a company whose value depends solely on the number of users participating.
IT’S ALREADY HAPPENING
The experiment has already started. Bitcoin itself is a kind of a social network. Bitcoin had it’s ‘IPO’, ‘hired’ developers and generated a ton of free PR, and now it’s ‘hiring’ the marketing people.
People promote it because it’s in their best interests to do so. Bitcoin is not owned by anyone, but at the same time it’s owned by everybody.
And Bitcoin rewards its users proportionally to the investment/risk they take in supporting the network.
Compare that to the fundamentally extractive model of Facebook, where value is transferred from users to a small group of shareholders.
If you haven’t heard about them, they might sound too geeky for you. That’s fine – in the 1990s, the Web was too geeky for most of us, too.
These companies are paving the way for ‘micro-ownership’ and the funding of future startups, and revolutionising the stock market in the same way Twitter revolutionised the publishing industry.
Soon you will be able to come up with a cool concept and go ‘public’, raise capital from all over the world and, if your idea is good, effectively become a million-dollar company in a matter of minutes.
Or if you just want to invest $100, $10 or even just $1, you’ll be able to do so with a single click.
That’s why I’m pretty sure that the next Facebook will be owned by you.