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I don’t claim to have all the answers. I am not and never have been a product designer or expert. My context is from being very active and observing the Bitcoin space since 2013. I observed over the years what moves were made, by whom, and how people and firms have positioned themselves.
At some point things veered off onto a course of direction where the primary focus of the Bitcoin industry became pushing products/services/ideas that almost entirely rely on the price of Bitcoin rising or behaving if you will. I’m not here to say whether that was the right choice or not. I am here to say that put the industry in a position where advancement and progress in some ways was held hostage to the exchange rate performance. It happened. Whatever. Time to move on.
One approach moving forward that I tend to appreciate and feel is useful and worthwhile is the following: isolate and focus resources on opportunities within the economy and markets where something is only possible because of Bitcoin.
One area that jumps out immediately is using mining to capture excess (in many cases also damaging to the environment) energy and convert that to real value that is liquid (Bitcoin). I’m aware there is already progress here but it seems to me to be an absolutely near perfect opportunity to shine a spotlight on how this particular economic activity is ONLY possible because of Bitcoin.
In my view this can help shift the conversation away from obsessing over the exchange rate towards focusing on innovative technology that opens up new doors that also happens to have a token and exchange rate associated with it.
Here are two more quick ideas:
Lightning Network Participation
Am aware some are working on this. My vision is letting individuals and organizations seamlessly and easily “plug in” to providing liquidity to the Lightning Network and earning fees from doing so. The “yield” if you will doesn’t necessarily matter all that much early on as the true yields will develop themselves as it is more about making Bitcoin useful and getting more people and businesses tethered (no pun intended) to Bitcoin.
Translation: use Bitcoin and Lightning Network to build a near zero fee payments infrastructure where a portion of (or almost all of) the economic value shifts from the current payment processing ecosystem to those that are using their own Bitcoin (whether individual or entity) to support the Lightning Network and in effect the new payments infrastructure. Instead of Visa and MC doing most of the collecting for the next century or so it is primarily individual people collecting.
In my view this would change the environment significantly. This enhances a sense of community and teamwork while also showing the world one way of making Bitcoin more useful on a daily basis. Letting people and business entities provide the liquidity for and earn from the future payments infrastructure is only possible because of Bitcoin.
Bitcoin Collateral Credit Cards
Credit cards and fiat aren’t going away. As I’ve stated before I really like the idea of using Bitcoin Rewards with credit cards. It’s simple and people easily understand it. It also can create a potent bid underneath the exchange rate over time as service providers have to provide the Bitcoin Rewards to users.
Time to crank it up a notch or two though in my view. Take this further doing things that are only possible because of Bitcoin. Why not allow individuals and business to use their BTC as collateral for the credit card and be subject to interest rates that align with the LTV (loan to value). Maybe your rate on any balances is SOFR + 200 bps if your balance stays below 30% of your Bitcoin collateral. Tier the rates customers must face based on the leverage being utilized.
This highlights how useful and near perfect Bitcoin is as collateral and brings benefits to the users not previously available. “You should just use real estate as the collateral!” Really? Real estate has atrocious liquidity characteristics. When people default you have to deal with jurisdictions, foreclosures, blah, blah, blah.
Instead you are telling customers you can provide these services that are only possible because of Bitcoin. But let’s not stop there. Also figure out a way where users can pledge BTC for the access to attractive short term credit but ALSO use the same BTC to provide liquidity to the Lightning Network. Now users are earning from Lightning while also using the innovative features of Bitcoin to secure attractive short term financing terms and flexible options. Bring this to IRAs as well so people can save with BTC but also use it to earn the entire time.
Only possible because of Bitcoin. It’s long past time to leverage this in my humble opinion.
