[cryptography] Digital cash in the news...
iang at iang.org
Sun Jun 12 08:23:38 EDT 2011
On 12/06/11 4:21 PM, Peter Gutmann wrote:
> Am I the only one who thinks it's not coincidence that the (supposed) major
> use of bitcoin is by people buying hallucinogenic substances?
The best way to think of this is from the marketing concepts of "product
diffusion" or "product life cycle".
The challenge for the new product is to migrate from left to center to
right of that graph in above link. In doing so, the newer groups come
to dominate the earlier groups, and the earlier groups typically fall away.
Recall the video story? The innovators got in very early, and bought
Betamax because it was better quality. But they got stuck when the
market was captured by the VHS system. So lesson #1 is that early
groups are risking punishment. Same story for DVD.
Also, the backroom story for video was that the porn films, the big
market that lifted the revenues of the distribution chains, and made it
worthwhile. These products/people/chains kept the industry alive while
it built up steam for the mainstream. Lesson #2 -- you need these
strange uncomfortable groups to get to where you want to get.
Later on, as more mainstream comes into play, these strange
uncomfortable groups can be eased out. Or they go somewhere else, or we
change our minds about them. We also write them out of history...
So, as far as recreational pharma product is concerned, this is typical
of these things (if that is what it is). E.g., SSL certificates early
revenue was also porn, Paypal had some dodgy customers, and for e-gold,
it was ponzis / games that pushed the business into the black.
The challenge is what to do next, how to grow up. This is going to be
practically impossible for BitCoin because it has no guiding hand like
e.g., Paypal had. It's only got the invisible hand, which suits the
innovators fine ... but it also means it hasn't got much of a chance of
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