Today, we’re delighted to announce that Jay Bregman, CEO of Hailo, will be coming to BITFIN to offer his personal view on the coming “tidal wave” of financial innovation that bitcoin will drive. Welcome to the conversation, Jay!
Why would a consumer elect to spend a currency that may prove to be worth more next week? Or worse, how would a loss-averse consumer feel about spending a currency that lost value in a week? There are much clearer incentives for investors to hoard bitcoins and merchants to accept bitcoins than there are for consumers to spend them. There seems to be only one way to bridge the gap and get consumers excited about bitcoin…
Give them what they want, of course! A free, fast and private currency that works like digital cash. Sure, most of today’s bitcoin consumers are also bitcoin investors – people who are diversifying their gains by spreading their bitcoin wealth around to new merchants who now embrace the currency and technology. But real bitcoin consumers probably won’t even know they are using the bitcoin currency. Instead they will just see a cheap, reliable tool that helps them settle their dinner tabs, collect rent or grocery money from roommates, or send money to a child away at college – in real-time.
In developed economies with wealthy bitcoin users, the superiority of bitcoin for consumers might be a bit hard to identify for consumers with lavish credit card rewards and bill-splitting apps. But talk to the underbanked who rely on things like pre-paid debit cards, or the migrant workers who send hundreds of billions of dollars of their earnings to family living abroad, and you quickly get a better appreciation for the power of bitcoin’s portability and near-zero fees. When it comes to foreign exchange and remittances, even an upper-middle class consumer will feel the pinch of 5-10% money changing fees!
Finally, regardless of demographic, the security benefits of bitcoin may still outweigh the benefits of using even the most favorable credit card or banking service. In an era in which authorities can force banks to freeze customer assets, odd spending patterns can cause a payment service to temporarily deactivate an account, and nearly 7% of online consumers face the prospect of identity theft, it simply doesn’t make sense to share one’s credit card information with dozens of different companies. Especially when even the largest and seemingly safest retailers have proven to be susceptible to data breaches (read: Target).
Perhaps the most underestimated and important component of future consumer bitcoin demand: the “latent” variety. Most consumers won’t realize how much they want bitcoin until they use it. It will help if their first experience dulls the pain of a peer-to-peer payment, foreign currency exchange, or online checkout process.
Join us at BITFIN in Dublin next week on July 3-4, and learn more about the types of merchants that will benefit the most from integrating bitcoin into their strategic plans. Hear experts like Jay Bregman, along with Stripe’s Greg Brockman, BitPay’s Moe Levin, Bitnet’s Stephen McNamanra, and GoCoin’s Steve Beauregard discuss the near-term business cases for bitcoin.