The Cryptocurrency business (Bitcoin and other electronic currencies) feels a lot to me like the Internet did back in 1995. Everybody was talking about it, but most people had no idea how to use it, or go about setting up a website on it. It was obvious though it had big growth potential. Also, the Internet back then had a hacker feel, just like Cryptocurrency currently does.
It took me many months to get around to setting up my CheapFlowers.com site to accept Bitcoin (see my blog posting about this), because I knew it would be a long, complicated process, and I was unsure if there was even much benefit to doing it. But, I expect this will change over the next few years, just like things did in the early days of the Internet.
Setting up the website initially was a fairly easy process – it was only incorporating Bitcoin that caused me any difficulties. Once you’ve built a website everything else usually seems to fall in to place. If you’re in the process of getting a website online, why not consider Wix? The cost of Wix varies depending on your location and how much storage your website needs but there really is something for most budgets.
However, after 19 years in the website/domain business, I am eager to try something new. I would never go back to trying to make money offline, but there is much more to the Internet than just building websites. Cryptocurrency is one of the few opportunities I have been excited about, in terms of the money making potential. Take a look at Cryptocurrency Trends in 2019 and you’ll see why. Other big technologies have emerged over the years, but they just weren’t right for me:
* Web Phone calls and video calls – I tried making phone/video calls back in 1999 but the whole thing just sucked, especially on dial-up internet. And, most recipients did not have the ability or knowledge to take the calls anyhow. Even 10 years ago it still sucked, so it was too early to do anything with that market. Skype eventually got big, but they were losing lots of money until Microsoft bought them.
* Online Videos – Back in the late 90s I watched some music videos by downloading the files from a website, and it was absolutely amazing. But, it was torture downloading the huge files on dial-up, and streaming them was too slow. I knew online videos were the future, but there was not much to do about it. In 2006 Youtube got popular, but they were also losing huge amounts of money on server/bandwidth costs, and might have gone out of business had they not been bought out by Google.
* Mobile Apps – Mobile was an obvious growth area when smartphones started getting popular, even before the iPhone, but there was no easy way to capitalize on that. I could have made a ton of apps like I churned out websites, but I am not sure those apps would have done any better than my websites did. Also, I used a Blackberry for many years, so because of that I was not an expert on apps and what mobile phone users needed.
* Social Networks – I could tell this would be a big business, but it was not something I was personally into at the time, and also sites like Friendster and Myspace totally failed, so it turned out not to be a great business for anyone other than Facebook.
* The Cloud – As I described in my posting from 2 years ago about cloud hosting, it is basically just Web Hosting 2.0. The differences between cloud hosting and old-fashioned web hosting are way more technical than what the vast majority of customers want to know, so it basically boils down to that cloud hosting is a better way to host your website or data. Everything is moving to the cloud not because it is something new, but because it is much cheaper and easier than the alternatives (like having your own data center). That is all great for the customer, but the problem is that running a cloud hosting company is still just as much hassle as running a regular hosting company. There are non-stop technical problems and there are non-stop complaints from customers, plus the technology is constantly changing so you need to always be investing time and money in new things while the prices for your service go lower and lower. There are of course other ways to be in the cloud business without being a web host, but those opportunities are not that different from what was out there when was just regular hosting available. The main advantage now is just that everything is a lot more inexpensive. For a web hosting UBC review there are many websites you can find using a quick Google search!
* 3D Printers – Many people think printing items/products in your home will disrupt the entire manufacturing industry. But, it involves things like blueprints, CAD/CAM, engineering, product design, and manufacturing, all of which are areas I am not that knowledgeable about or interested in.
* Virtual Reality – Oculus Rift (VR headsets) was recently bought by Facebook for $2 billion, and Google Glass (augmented reality glasses) will soon be available to everyone, so this business is set to explode. I look forward to trying these devices myself, but it all based on complex programming and expensive hardware, so it is not an easy market to enter. I did test the waters back in 2009 by creating an augmented reality area (at a cost of around $1000) on my Adoptme.com website, where users could print out the page and then using their webcam watch an Adoptme pet come to life on their desk, but it did not get me any extra traffic or publicity.
Online payment systems/currencies on the other hand, are something much more up my alley. I dabbled in that business when I started Digicredit, and have an extensive background in finance (stock market, bonds, options, futures, etc.). I am not sure Bitcoin is the future, but there seems to be a lot of opportunity out there. Here’s some of the more interesting cryptocurrency related technologies:
- Ripple – A peer-to-peer payment network that is a cross between Facebook, Paypal, and Western Union. It supports almost any currency or commodity, and has almost no fees.
- Colored Coins – Uses “sidechain” technology, allowing you to mark Bitcoins with additional information so they can be used to trade more than just currency. You “color” each coin to represent one of your assets such as a car, house, gold, stock, bond, etc. Anyone can then trade these colored coins anywhere, just like how bitcoin works. It also has the security of piggybacking on the existing Bitcoin network and protocol.
- Ethereum – Allows financial contracts on top of its cryptocurrency, kind of like an automated escrow service. Each Ethereum transaction is recorded in the Ethereum cryptoledger and can have its own scripting code (providing the automation part).
- Mastercoin (and also Counterparty) – Uses the Bitcoin blockchain to store data, so it has the security of Bitcoin, but creates a different currency than Bitcoin. The extra data can be used to create smart contracts to enable the electronic exchange of assets such as stocks, bonds, real estate, and intellectual property. In addition, you can create your own currency with it.
- Open Transactions – An open source financial cryptography software that can be used to create an online financial market and banking system. You can also use it to create their own cryptocurrency backed by hard assets such as gold, silver, dollars, euros, stocks, oil futures, and more. In addition, it can be used for things such as issuing stock, virtual currencies for online games, paying dividends, sending and receiving digital cash, and escrow using scripted custom agreements.
- Coinffeine – A game theory based Bitcoin exchange (a place where people buy and sell their Bitcoin, kind of like a stock exchange), where there are no fees since it is peer-to-peer (person to person, with no central intermediary). The “game theory” part involves a zero-trust exchange algorithm which forces users to cooperate in several micro-transactions until the entire transaction is complete. If users pull out of the transaction early, they lose money.
- HolyTransaction – A universal cryptocurrency wallet. Typically if you want to buy 10 different cryptocurrencies (Bitcoin, LiteCoin, Dogecoin, NameCoin, etc.) you need to have 10 different wallets, which makes it hard to manage. HolyTransaction solves this problem, plus it comes with currency exchange features so you can easily convert one cryptocurrency to another.
- Crypto::Stocks – A crowdfunding site that operates like a stock exchange for cryptocurrency businesses. Unlike traditional crowdfunding sites where consumers pre-order a product or provide loans or venture capital to a company, at CryptoStocks.com people invest Bitcoin in companies to make money via weekly dividends which are paid out in Bitcoin. You can also speculate by buying and selling shares, since each stock is traded like a “real” public company. As of right now, this is legal because Bitcoins are not considered currency and no fiat currency (like US Dollars) changes hands, so are not subject to the massive SEC rules that a company normally has to follow to go public. This might change though once the government looks into this more.
- NXT – An improved version of Bitcoin, written entirely from scratch in Java. It has all the abilities of Bitcoin, but also can handle colored coins, includes a decentralized asset exchange (i.e. you can buy and sell things with no 3rd party needed), includes a built-in encrypted messaging system, and has the ability for anonymous payments. It also uses much less electricity for mining than Bitcoin does (it can be mined using a mobile phone, Raspberry Pi, or any PC), due to the use of “proof-of-stake” instead of “proof-of-work” protocol.
These are just a few examples of current cryptocurrency technology, and keep in mind the industry is in its infancy. Unlike the Internet back when it first started to take off (around 1995), the currency market is not something totally new. It took many years for the Internet to really catch on, due to slow dial up access, ineffective search engines, complex web hosting, expensive programming costs, and lack of great content. Cryptocurrency, on the other hand, is disrupting the already existing financial markets. The foreign exchange market (people converting money from one currency to another to make payments) alone has over $5 trillion a day in volume, and that does not include the millions of dollars a day that is transferred within each country via wire transfers, ACH, and services such as Western Union and Paypal. Add to that the $500 billion a day traded on the global stock and commodity markets, and this total dwarfs the amount of business that is done on the Internet. This means there are fortunes to be made in cryptocurrency just by grabbing even a very small slice of the financial market economy.