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Will Bitcoin Transactions Drive a $100 Billion Market?


If you read my blog “For Fast Final Settlement Bitcoin Wins”, you would know my wife and I always have to wait until Monday to see our hard earned AirBnB proceeds, because legacy banking holds things up and takes its cut.

But this Monday morning as I was sending money to my wife via CashApp as our Thursday AirBnB revenue finally hit our checking account, I saw something different this time. I had the option of paying her in Bitcoin or USD.


I then double checked to see if I could send my friend who I had tried and failed to pay for my part of a group lunch about two months ago in Bitcoin, and indeed I could use whatever cash balance I had in my Cash App and send it to him in Bitcoin. (Thanks to the new Lightning Network feature on CashApp.) We’re having lunch again this week and I can't wait to show off to fellow tech industry veterans, and finally pay him in Bitcoin. (It will be nice to see him as well.)


In between buying some street art and relaxing this past weekend, I was contemplating and processing all the news that came out of Bitcoin 2022 this past week. The annual Bitcoin conference takes place in Miami, Florida, with this year's attendance topping 25,000. The news and sessions I caught online reaffirmed my belief that we will see Bitcoin-based transactions surpass $100 billion in the next 5 years. You're sure to read and hear a lot of counter arguments including government regulation, the environment, and speed of transactions, which are all indeed legit headwinds. While these concerns are being addressed and solutions deployed that are adequate for now, I believe Bitcoin will have an unprecedented lead that no one will be able to touch over the next five years.


Here is some of the news that came out last week that supports my case:


Block, formerly Square, owner of CashApp, actually had three significant announcements in the Bitcoin ecosystem. “Paid in Bitcoin” lets CashApp users auto-invest a portion of their direct deposits into Bitcoin within the app. “Bitcoin Roundups,” CashApp users can round up payments to the nearest dollar, and the difference is automatically invested in Bitcoin. Finally, the Lightning Network feature that I referenced at the beginning of this post makes paying for lunch in Bitcoin so much easier than last week.


This alone would reaffirm my bullish posture on Bitcoin and Blockchain. It also motivated my decision to drop all the previous cutting edge technology companies I was working with over the past few years–including AI, edge computing and cloud computing–to focus exclusively on Bitcoin and the related blockchain ecosystem, which I believe will change everything.


But that’s really only a fraction of news I caught that’s relevant to hitting $100B in bitcoin transactions. We also heard that Lightning Network app technology company Strike struck deals with Shopify and NCR (National Cash Register). This is very significant because Shopify alone does $175B+ in gross merchandise value (GMV), and NCR is the largest point of sale (POS) supplier for the 5th year in a row.


It’s going to take time for this to roll out and scale to be anything beyond a few percentage points of overall sales. But in the meantime, once consumers world wide get comfortable with self custody and managing their own crypto holdings, and see how easy it is to send Bitcoin peer-to-peer then we’ll see increasing sub-$100 dollar transactions, such as buying art on the street or maybe a nice bottle of wine from your neighborhood bodega, becoming more and more common.


We’ll also see cross border trade in Bitcoin, especially from emerging markets in African countries, grow to become an economic force in exporting art and culture. One of the more colorful sessions I watched from Bitcoin 2022 covered the topic of the unbanked in Africa which according to Francis Ngannou MMA World Heavyweight Champion is 70%. You can watch the session here.


Unbeknownst to many, it’s very hard for African nations to trade with each other because the existing monetary system based on the French: CFA franc in 14 African countries is all slightly different and must first go through France. That little colonial stopover of course incurs a fee and makes cross border free trade much more difficult in these countries. Once these unbanked entrepreneurs and artists from the biggest continent in the world embrace Bitcoin as a standard coupled with some clever marketing and shipping options, we will see Africa emerge as a full-fledged cultural and economic exporter.


In the same session, I learned of a platform for podcasters to get paid in Bitcoin for their work. This is an extremely nascent market. However, I do see this taking market share from the $21B streaming music business and $92B video streaming market even if it is only a few percentage points in the next few years, it will add up nicely. And I personally will be happy to discover and support new artists and music again through the Bitcoin economy. Similar to how I discovered South African Techno rappers Die Antwoord who built up a world wide audience through You Tube 10+ years ago. I think the possibilities of artists being paid in Bitcoin is freaky and I like it a lot.


Finally, if you're still fixated on price you would be interested in the session on Bitcoin Macroecononmic Landscape. It turns out today that Bitcoin is indeed 90% correlated to the Nasdaq. As of this writing, it's a down day for both Nasdaq and Bitcoin. In my view, days like this are pretty exciting as it’s a Spring sale on Bitcoin!

But these “Bitcoin Sales” will surely become less and less frequent in the not so distant future. No one knows when it will truly decouple and trade, and take its rightful place as the next generation of truly scarce technology-based commodities that will forever change global and local trade.


Full disclosure–and no surprise–I gave up on technologies that drive the Nasdaq around June 2020, and started getting serious about Bitcoin as the next driver of innovation and commerce.


All the best,


Jim


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