One of the key issues that has possibly been holding back further adoption of Bitcoin up to this point has been all of the various scandals in the industry. From the MtGox collapse to all of the darknet marketplaces that use the peer-to-peer digital cash system for payments, there has been plenty of shady activity in the Bitcoin ecosystem up to this point. Even with all the scandals, there are still many investors who are willing to put money into startups who are building apps on top of the blockchain.
Yang Ventures Founder Terrence Yang is one such investor who is willing to invest in startups associated with this new, scandalous technology, but he also recently let it be known that the killer apps for Bitcoin need to be developed soon in order for the industry to get everyone’s minds off the scandals. Yang used a recent BitPanel Meetup as a forum for discussing Bitcoin scandals and the need for killer apps.
Bitcoin Needs Killer Apps to Weaken Impact of Scandals
During his remarks at the recent BitPanel Meetup, Terrence Yang made it clear that Bitcoin’s scandals will not be a problem as long as some killer apps are built in the near future. He explained:
“The scandals don’t matter if Bitcoin has killer apps. It’s great technology, but the killer apps need to start coming out soon; otherwise, the scandals will, I think, impact negatively [Bitcoin startups’] ability to go mainstream, even with enterprise.”
Bitcoin Has More Developers, But Where are the Apps?
Yang also mentioned a number of different aspects of the Bitcoin industry that don’t seem to be going so well right now. He explained that the increase in Bitcoin developers over the past few years has been great, but those developers have been unable to create killer apps for the young technology up to this point:
“People talk about [how] like consumer [adoption] isn’t working, this remittance thing isn’t working, charity [or] tipping with bitcoin isn’t really working, the transaction volumes aren’t taking off, and new merchant adoption is going down. It’s great we have more and more developers, but where is the next place where Bitcoin growth can come from? If it’s enterprise, you’re going to have to deal with Fortune 1000 companies who are very risk averse, and they don’t want to touch this stuff because of the scandals.”
While many large corporations are still wary of getting involved with Bitcoin right now, the reality is most of them would be ready to hop on board if there was some kind of killer app that could help them cut costs or drastically improve efficiency. One strategy used by a number of startups in the space these days is to talk about the blockchain instead of Bitcoin. Some institutions are friendlier to the idea of using Bitcoin when it is referred to as blockchain technology, even if the Bitcoin blockchain is the one that will be used for the application in question.
Hiding Bitcoin in the Background of Apps
In addition to talking about the blockchain rather than Bitcoin, it could also make sense to simply hide the use of Bitcoin in the background of a new application. Yang discussed this point during the BitPanel Meetup:
“So, you really, I think, need to be very smart about — if you can and Brock [Pierce] has talked about this in the past — putting Bitcoin underneath everything as the rail, the Bitcoin blockchain. And what enterprise sees, or at least the people that are maybe responsible for reputation risk and so forth — they need to see that there is nothing [bad] out there about Bitcoin for you to get faster adoption . . . Unless you have a killer app, it’s better to just put Bitcoin behind the scenes and have a beautiful product that tracks whatever better.”
Yang clarified that he is only talking about the US market when it comes to these specific strategies for moving attention away from the scandals in Bitcoin. Abra may be the best example of an app that doesn’t blatantly mention the underlying use of Bitcoin to the consumer. At the end of the day, the general public is only going to be interested in applications that provide something of value to their lives. If Abra can lower the costs and increase the speed of international remittances, then most people aren’t going to care about the scandals associated with the underlying technology that powers the app.
Kyle Torpey is a freelance journalist who has been following Bitcoin since 2011. His work has been featured on VICE Motherboard, Business Insider, RT’s Keiser Report, and many other media outlets. You can follow @kyletorpey on Twitter.