Bitcoin's Big Challenge in 2016: Reaching 100 Million Users

Michael Jackson was the COO of Skype and is currently a venture capitalist at Mangrove Capital Partners. He also serves as a director of Blockchain, a Bitcoin wallet provider. In this article, he discusses the challenges facing Bitcoin in 2016. He points out that Bitcoin companies need to create Bitcoin products and services that are loved by global users.

The importance of the service is used to prove the value of Bitcoin technology.

As a technologist, engineer, and now partner at Mangrove Capital Partners, I often think about transformative developments that impact the world. My career has seen the global explosion of information brought about by the World Wide Web.

Disruptive technologies don’t appear often, so when they do, you must seize the opportunity. Today, when you walk into any startup incubator in Europe, you will hear people talking about blockchain.

As CoinDesk readers are already aware, blockchain technology has become ubiquitous, yet it remains widely misunderstood.

Just saying we can build a business model using blockchain technology is of little use. Businesses are built day by day, by building lasting relationships with users and forming a stable user base. You can have a great team but a bad product, or you can have a great business idea but not execute it. Success requires continuous effort and perseverance as well as strategy and vision. But most importantly, you need to have a product that users really like.

Bitcoin and blockchain companies need to focus on solving problems first, and then developing services and software that users love. In 2015, we haven't really solved any real problems yet, and we are still a long way from delighting users.

Serving as CEO of Skype has given me a front row seat to perhaps the biggest transformation in the history of telecommunications. Interestingly, most people around the world probably don’t realize that nearly all of their phone calls are routed through VoIP technology. The conversions made by the copper coils happen in the background, without people actually seeing them. Today’s phones and their interfaces have changed, but this fundamental need for communication has always remained.

Peer-to-peer network technology enables instant communication between people around the world at almost zero cost. Now, using Bitcoin's block chain technology, any form of real-time transaction will be possible at extremely low cost.

Like the popularity of VoIP technology, it will take time for Bitcoin and blockchain technology to be widely used around the world. But it is already happening. It will be done in the background, and at the same time, applications like Facebook or call centers already have the function of "exchanging information", so transactions with blockchain technology will become more and more popular.

Even though we have made little progress, we have something very precious. I can’t think of any other backend system that has been online for seven years without a single glitch, 24 hours a day, seven days a week, 365 days a year, like the Bitcoin blockchain. The Bitcoin blockchain technology has proven its resilience. In fact, a quick review of some data also shows its stability and maturity in the network.

In the past 12 months, the Bitcoin network’s total computing power has tripled to 650 million GH/s. The number of users of core services has also grown significantly.

According to publicly available data, the number of Bitcoin wallets has now exceeded 10 million. Perhaps the most telling statistic is transaction volume: it has grown dramatically over the past year, from barely 80,000 transactions a day to 200,000, and shows no signs of slowing down.

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We heard a lot of discussion about private vs public blockchains in 2015. This is an important conversation to have, as the competition between the two will ultimately determine the business case for which technology is fit for purpose.

I firmly believe that the Bitcoin blockchain has an important role to play as the backbone of digital value transfer. The blockchain is the only solution that has been deployed in production and has run reliably for many years. Public protocols ultimately win in the long run, and active miners provide independence and trust that "private blockchains" cannot replicate.

In the meantime, the great challenges of 2016 will only be met by those companies that can successfully crack Bitcoin’s complexity and bring conflict-free value transfer to the next 100 million everyday users.

The task may seem daunting, but like Snapchat, Facebook, Twitter, Skype, Kazaa, and many other great products have done in the past, only breakthroughs can lead to success.

This needs to be our next goal for Bitcoin applications, and obscure niche products certainly won’t achieve it.

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