Thursday, November 03, 2016
What is bitcoin? What is blockchain? And what is the difference?
Bitcoin is the world’s first global decentralized digital currency. As a crypto currency, it uses cryptography or math to control the creation and the transactions of bitcoin. These transactions are verified by a network of nodes on a distributed public ledger called blockchain.
Thomas Glucksmann, marketing manager, Gatecoin, is passionate about dispelling the myths around bitcoin. Here are some of them.
“Billions of people around the world are trading, transacting and mining bitcoin, and so it really recreates this global infrastructure that isn’t centralized at any one point. It’s secure, it’s safe, it’s government proof,” he said.
China is the largest trading platform for bitcoin. According to Glucksmann, 91% of global bitcoin trading is against the Chinese yuan and 95% of bitcoin global trading is controlled by exchanges in Mainland China.
The average bitcoin user is a 24-35 year old Chinese man. 97% of bitcoin users are men, according to Glucksmann.
The public ledger component of the blockchain technology used to transfer virtual currencies is the most transparent in the world. “It’s traceable and its permanent.”
Blockchain allows a user to be ‘pseudo anonymous’. For example, if a user makes or receives several transactions from the same wallet address, those transactions can be traced back to the single user. If a user sets up a new address for each transaction, it will become more difficult to trace transactions back to the same person.
However, many exchanges today are now requiring users to submit their passport details for KYC (know your customer) regulatory compliance, either to meet existing regulation or to pre-empt it, Glucksmann said.
Taxation and regulation depend on jurisdiction. In Japan, for example, it is regulated by the FSA. In China, it is viewed as a type of product or value equivalent to a type of property right.
“If you are just going to get the money in fiat there is no risk to you,” said Glucksmann.
Fees are considerably lower than a bank, with many bitcoin payment processes only charging a merchant fee if monthly transactions are above a certain amount. The fiat is then capped at around 1%. “Compare that to a credit card, which can range between 1.9% to even 4% or other payments such as Tenpay, Alipay at around 3%, and it’s still relatively cheap,” Glucksmann said.
Setting up a bitcoin wallet as a freelancer or small business is free.
Thomas Glucksmann, marketing manager, Gatecoin, is passionate about dispelling the myths around bitcoin. Here are some of them.
Virtual currencies have no value
“People always argue that bitcoin doesn’t have an underlying value. But I would argue that the essential value of it is the ecosystem,” said Glucksmann.“Billions of people around the world are trading, transacting and mining bitcoin, and so it really recreates this global infrastructure that isn’t centralized at any one point. It’s secure, it’s safe, it’s government proof,” he said.
China is the largest trading platform for bitcoin. According to Glucksmann, 91% of global bitcoin trading is against the Chinese yuan and 95% of bitcoin global trading is controlled by exchanges in Mainland China.
The average bitcoin user is a 24-35 year old Chinese man. 97% of bitcoin users are men, according to Glucksmann.
Transparency
Lack of transparency is the biggest bitcoin myth of all, Glucksmann said.The public ledger component of the blockchain technology used to transfer virtual currencies is the most transparent in the world. “It’s traceable and its permanent.”
Blockchain allows a user to be ‘pseudo anonymous’. For example, if a user makes or receives several transactions from the same wallet address, those transactions can be traced back to the single user. If a user sets up a new address for each transaction, it will become more difficult to trace transactions back to the same person.
However, many exchanges today are now requiring users to submit their passport details for KYC (know your customer) regulatory compliance, either to meet existing regulation or to pre-empt it, Glucksmann said.
What does bitcoin mean for marketers?
For businesses thinking about accepting bitcoin there are a range of payment processes.Taxation and regulation depend on jurisdiction. In Japan, for example, it is regulated by the FSA. In China, it is viewed as a type of product or value equivalent to a type of property right.
“If you are just going to get the money in fiat there is no risk to you,” said Glucksmann.
Fees are considerably lower than a bank, with many bitcoin payment processes only charging a merchant fee if monthly transactions are above a certain amount. The fiat is then capped at around 1%. “Compare that to a credit card, which can range between 1.9% to even 4% or other payments such as Tenpay, Alipay at around 3%, and it’s still relatively cheap,” Glucksmann said.
Setting up a bitcoin wallet as a freelancer or small business is free.
Mobile payments: the difference between a mobile wallet and a credit card
The credit card might have taken 50 years to reach mainstream adoption, but the speed of mobile wallet adoption is happening much quicker and it is being driven by the consumer, said panelist Paul Tomes, chief executive officer and co-founder, PassKit.
This is particularly relevant for millennials and high-income earners – standouts in their willingness to use a smartphone to make those mobile payments.
“People’s attitudes to using the smartphone are changing. They understand that there is more security and that it can provide more facility. And when you combine payments with a much more holistic view of the customer purchasing experience – because you now have content within the smartphone, that is enhancing people’s lives,” said Tomes.
As an example, Tomes highlighted adoption rates in countries and regions with existing mobile wallets such as Apple Pay, Android Pay .
“It’s when you are combining a payment with something that is adding additional value to the customer. Not just the convenience – but making the intention to purchase easier and being rewarded for that purchase after you’ve made it with your smartphone,” said Tomes.
In 2012, the Starbucks app was one of the few electronic wallets around. The big change since then is the move from branded wallets to smartphone operators like Apple, or big companies like a Tencent or Alibaba, deploying mobile wallet applications that brands can use to deliver an experience to their customers.
With the rise of the bot, the smartphone fits within the value change, allowing a mobile wallet to give consumers a deeper experience when they shop.
“Mobile wallets fit within the value chain because they can greet you in a personalized way, they can make recommendations for what would be useful for you to purchase, they are making your payment more convenient and then they make the ability to retain you as a business more exciting,” said Tomes.
And this is where the difference between a credit card and a mobile wallet becomes evident. It becomes an opportunity to optimize the whole value chain.
“You can deliver a very magical experience to your customers at every moment of intention along that purchasing cycle.”
A marketer can see where a consumer has clicked, when they bought something, or whether they ended up buying something else. It’s now possible to present the consumer with a product in an online store that they are more incentivized to buy. If they like that experience, they are more likely to come back to shop for more, Tomes said.
By applying mobile wallet technology with other customer engagement technologies like beacons and big data, the same cool experience can be replicated in the physical.
“The mobile wallet is well beyond the transaction. The transaction is just one micro moment in a shopping experience, or a travel experience, or a hotel experience. And now we have to think, how do mobile wallet applications help me, as a business deliver that core experience to customers?”
This is particularly relevant for millennials and high-income earners – standouts in their willingness to use a smartphone to make those mobile payments.
“People’s attitudes to using the smartphone are changing. They understand that there is more security and that it can provide more facility. And when you combine payments with a much more holistic view of the customer purchasing experience – because you now have content within the smartphone, that is enhancing people’s lives,” said Tomes.
As an example, Tomes highlighted adoption rates in countries and regions with existing mobile wallets such as Apple Pay, Android Pay .
“It’s when you are combining a payment with something that is adding additional value to the customer. Not just the convenience – but making the intention to purchase easier and being rewarded for that purchase after you’ve made it with your smartphone,” said Tomes.
In 2012, the Starbucks app was one of the few electronic wallets around. The big change since then is the move from branded wallets to smartphone operators like Apple, or big companies like a Tencent or Alibaba, deploying mobile wallet applications that brands can use to deliver an experience to their customers.
What are the opportunities for marketers around mobile wallets?
“If you have a wallet, there are other things inside that wallet that are not just credit cards,” said Tomes.With the rise of the bot, the smartphone fits within the value change, allowing a mobile wallet to give consumers a deeper experience when they shop.
“Mobile wallets fit within the value chain because they can greet you in a personalized way, they can make recommendations for what would be useful for you to purchase, they are making your payment more convenient and then they make the ability to retain you as a business more exciting,” said Tomes.
And this is where the difference between a credit card and a mobile wallet becomes evident. It becomes an opportunity to optimize the whole value chain.
“You can deliver a very magical experience to your customers at every moment of intention along that purchasing cycle.”
A marketer can see where a consumer has clicked, when they bought something, or whether they ended up buying something else. It’s now possible to present the consumer with a product in an online store that they are more incentivized to buy. If they like that experience, they are more likely to come back to shop for more, Tomes said.
By applying mobile wallet technology with other customer engagement technologies like beacons and big data, the same cool experience can be replicated in the physical.
“The mobile wallet is well beyond the transaction. The transaction is just one micro moment in a shopping experience, or a travel experience, or a hotel experience. And now we have to think, how do mobile wallet applications help me, as a business deliver that core experience to customers?”
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