Tag Archives: virtual currency

2014 belongs to Social Commerce, Bitcoin, Wearable Tech and Sentiment Search

2013 saw the rise and rise of mobile commerce, the stock market launch (and surge in share price) of social media sites such as Twitter, LinkedIn & Facebook, the introduction of wearable technologies like Google Glass, and high demand for Bitcoin took its valuation to $1,000.

Google shares reached over $1,000, LinkedIn shares are trading at over 300% of their original value, Twitter and Facebook shares are strong too. Overall, the year was very exciting and reached heights that caused  critics to suspect a tech crunch just around the corner.

On  the downside, 2012 stars like Zynga and Groupon have struggled to maintain their share price and profits, and Samsung and Apple went to war over various patents.

Amid all these highs and lows, I have spotted some trends that might dominate the coming year’s technology developments.

1.Facebook, Twitter and LinkedIn might need to think beyond display advertising or parish

Social media networks have become the most popular and most time-consuming sites and applications for users and the big three ($FB, $TWTR and $LINKD) are already trading on Wall Street with a combined valuation of over $200bn and a valuation per user over $100,  but revenue per user still in single figures. Therefore, I think to justify their valuation and competitive advantage, these networks will be forced to find means for brands to do commerce solely on their platform, because revenue merely based on display advertising and industry specific marketing products is not good enough and might only take them to closure rather than leading them to flourish.

2.Google, Samsung and Apple will indulge in a big wearable technology domination war

The Consumer Electronics Show (CES) 2014 in Las Vegas is full of companies (including LG, Intel, Sony, and Samsung) demonstrating wearable technologies, such as: smart watches, smart bands, smart ear buds, and smart glasses.

Apple and Google are not participating in CES 2014 but undoubtedly they must be keeping track of their competitors with an eye on the almost saturated smartphone and tablet market.
Apple has already filed a patent for iWatch and, due to shareholder pressure, might launch this in 2014. If we believe in the continuation of historical trends around competitors product launches following Apple’s new product release, I am sure Google glasses will come out of beta and Samsung will improve their already launched Galaxy Gear in order to be top of their industry; a wearable technology war seems inevitable.
https://twitter.com/tim/status/410097802664890369

3.Sentiments and Location Search will replace Google Keyword Search

For many, Google keyword search is still the primary form of data finding service. However, the rising popularity of Q&A engines like Quora, Facebook’s Social Graph, Apple’s Siri, Google’s Map, and recently launched Social search app Jelly, by Twitter founder Biz Stone, indicate the futuristic search trend is more aligned to human sentiments, where users can search stuff based on real intention rather than generic search terms.

4.APIs accelerate Marketing Automation but surge bot rates too

“A study by Incapsula suggests 61.5% of all website traffic is now generated by bots. The security firm said that was a 21% rise on last year’s figure of 51%; however, Activity by ‘good bots,’ it added, had grown by 55% over the year.”

The trend will continue because marketing automation with artificial intelligence is gathering momentum and content networks and providers are giving access to their data via open APIs.

5.The direct messaging industry is poised for disruption or consolidation

Snapchat, WhatsApp, Blackberry Messenger (BBM), Twitter Direct Message, and Facebook Messenger process over ten billion direct messages every day. However, none of these has managed to determine their monetisation model, which means consolidation is inevitable. Biggies like Facebook and Twitter in particular are trying to spread their wing in this sector.

6.Bitcoin or virtual currency will become mainstream

Recent developments in the virtual currency industry are:

1) Bitcoin is trading at $1,000 after Zynga announced that they will take Bitcoin as formal currency to sell their products or games.

2) Many companies are already following the Bitcoin success story and launching their own currency such as “a new Bitcoin-like virtual currency inspired by rapper Kanye West is set to be launched, and has been named “Coinye West”. Kanye West is not involved and has yet to comment on its inception. It will follow in the footsteps of “Dogecoin”, another virtual currency based on the popular Doge meme.”

3) Amazon and Facebook are pondering their own currency too! Overall, 2014 will see virtual currencies become mainstream!

4) National government such as Singapore Tax Authorities (IRAS) Recognise Bitcoin;

Why Bitcoin (virtual digital peer-to-peer currency) is not a bubble

A recent crackdown at Liberty Reserve by the NYC Attorney’s Office regarding an over $6 bn money laundering case once again puts the limelight onto  virtual digital peer-to-peer currencies and their legitimacy! Before this, bit coins were in news, with a highly inflated price and then steep reduction in valuation, from $288 to $168 within a week. Due to the high volatility of digital currencies and doubts as to their legitimacy, many pundits predict the current surge in these kinds of currencies is an accident waiting to happen (i.e. a bubble is about to bust)! In addition to this, experts add virtual currencies to a long list of alternative currencies that disappeared quickly over the several thousand years of human history!

On the other hand, these digital currencies, especially bit coins, are attracting big investors like Goldman Sachs, Morgan Stanley, UBS, Citigroup, and BlackRock as an investment option. VCs are also heavily investing in bit coin start-ups i.e. the believers in this type of currency are not bowing to the current market view and are considering virtual currency as a viable option for consumers, suppliers and investors.

Despite all apprehensions about legitimacy and anonymity of virtual digital currency, the concept has legs, and I strongly believe, for the following reasons that digital currency will prevail for far longer than experts suggest!

1. Bit mining has logic and not FREE

Bitcoin is a crypto-currency; a decentralized, open source, peer-to-peer network based medium of exchange that for years has enabled online transactions to be made more simply and securely therefore the concept of money mining is not new, and digital currency enables consumers to mine their own currency. For example, bit coin clients enable users to become part of a pool and earn some their own coins in exchange for computing resources such as hardware i.e. Bitcoins are mined in a computing resource-intensive process that validates transitions by solving a series of cryptographic puzzles.

2. Anonymity is by choice, not mandatory i.e. every bit is traceable

The very foundation of Bitcoin is laid on computer resources that can be tracked and traced by their digital signature and blockchains that link Bitcoins to each other and “to date, there haven’t been attacks on blockchains that led to stolen money, heists from exploiting the protocol or thefts due to holes with the original Bitcoins client.” In other words, the recent accusations that, due to the anonymity of this currency, it is widely used by arms, drugs and other notorious dealers for transactions are sheer myths.

3. P2P means transactions are instant with no conversion and commission fees

Virtual and digital currency enable peer-to-peer instant transfer of money, which means unlike banks or credit card companies, the transactions don’t take days and no money is lost to payment processors in currency conversions, commission or transaction fees.

4. Digital and Virtual means not controlled by regulatory bodies

The best side of open source virtual currency, which is recognised by the US Financial Crimes Enforcement Network (FinCEN) is that their values cannot be manipulated by governments to give undue aid to their economies i.e. the game is fair for everyone who participates in this.

Overall, virtual digital P2P currency can be a real alternative, and works especially well in digital space i.e. to produce and consume content over a digital platform, as this has potential to monetise and buy digital products at real values, rather than rely on various currencies, financial institutions and the bureaucracy around those.

However in order to get more credibility, legitimacy and, above all, acceptability,  there is still huge room to improve Bitcoin’s mining and exchange logics such as:

1. Bitcoin mining logic must be aligned to digital content produced and resource consumed, in order to produce the content;

2. Bitcoin exchange rate, even though it relies on supply and demand, but must be proportionate to gross digital production so that price volatility can be controlled i.e. a transparent currency mining formula is needed to make sure no one is unduly able to mint the money.