Takeaways from an old Bitcoin fan watching  “World’s first ever Bitcoin bank” on Fox News

Happy New Year.  I had not planned a post today but this news is important.

In case you missed it, a young entrepreneur called @jackmallers appeared on mainstream TV to talk about a revolutionary new bank based on Bitcoin.

No, I do NOT watch Fox News – not my tribe, despite my age. I got there via Twitter. However,  the fact that a new Lightning Network wallet is on Fox News is significant.

Here are my takeaways

1.VCs who back youngsters are right. Old folk tend to resist new ideas. What @jackmallers has pulled off so far is amazing; I guess nobody told him it was impossible.  I happen to be an old man who loves Bitcoin, but most of my age group think it is nuts. PS, there is no sign of any VC backing @jackmallers

2. PR 2.0 is fundamentally different. Getting on Fox News and getting celebrity endorsement is something that you expect after a pre IPO unicorn round, not from a kid launching his first app.

3. Lightning Network is NOT dead. To 99.999% of people Lightning Network gets a yawn at best, but it is exciting to long term Bitcoin bulls who believe it may help the cryptocurrency transition from Store of Value to Medium Of Exchange, but there has been little traction news to comfort such bulls. Mallers acted like a PR pro and did not once distract his audience explaining the Lightning Network and other technology that makes it all happen.  Behind the scenes there is some very practical technology that works like Square’s Cash App, connecting to bank accounts via a routing number. Instead he focussed on asset inflation, a subject that anybody (including Russell Okung ,the NFL celebrity who elected to have 50% of his $13m annual salary paid in Bitcoin) can relate to. If you want to understand offchain and other second layer Blockchain scaling solutions such as Lightning Network, read this chapter of the Blockchain Economy.

4. Revolutions happen when the establishment breaks ranks. I learned this studying revolutions at college. It is not enough to have either mass uprising or establishment incrementalism. You must have BOTH. Older people looking to protect wealth worry about asset inflation. So does everybody figuring out how to pay for a home or for education. These are things that Mallers talked about on Fox News.

5. Micropayments and other great concepts may become reality. In 2018 I wrote “2019 is the year Lightning Network has to be proven at scale or be relegated to the dustbin of history.” Now I pay more attention to Amara’s Law – “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.” Lightning Network has to solve problems that we have a hard time articulating.

6. Speculation drives innovation. The bull market speculation in Bitcoin is obvious. What is less obvious is how speculation drives innovation. A rising price means exposure on Fox News and investors lining up to invest in the hot new thing. Media may focus on money made & lost through speculation, but it is the long run impact of all that innovation that is more significant.

Bernard Lunn is Editor and CEO of Daily Fintech and author of The Blockchain Economy

Daily Fintech’s original insight is made available to you for US$143 a year (which equates to $2.75 per week). $2.75 buys you a coffee (maybe), or the cost of a week’s subscription to the global Fintech blog – caffeine for the mind that could be worth $ millions.

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