当你的家人开始谈论购买比特币时，那说明它已经被大多数消费者所了解。加密货币有可能解决消费者乐天堂娱乐领域的一些实际问题。在McKinsey的采访中，区块链公司高级副总裁Liana Douillet Guzman表示，目前，25亿人被拒于乐天堂娱乐体系之外，而每12个美国人中就有1个无法享受到乐天堂娱乐服务。在这种体系之外的交易成本可能非常高，特别是涉及到移民向家乡转钱时。Douillet Guzman举了一个例子，有人向菲律宾汇款200美元，在那里，交易费用可能高达12美元，而通过比特币的交易费用可能只用12“便士”。
高昂的交易成本限制了市场发展。从基础经济学角度来看，即一个商品或服务的高价格会抑制商品或服务的需求。我们以中美两国的移动支付市场为例：Hillhouse Captial与Kleiner Perkins的合作调查显示，美国信用卡交易的成本超过200个基本点，而微信或支付宝则不到50个。2016年，中国移动支付市场(部分由微支付推动)达到了5万亿美元，而美国只有1120亿美元。比特币和其他加密货币之所以如此流行的原因之一就是它们可能帮助人们避免“昂贵”的支付成本。
Bitcoin, blockchain, distributed ledgers, cryptocurrencies – you could almost forget about IoT and big data, with the way people are talking about blockchain these days. The developments around the technology are proceeding at a breath-taking pace, and for retailers, if you were ignoring it or thinking you’d wait until later to start paying attention, well, later has arrived.
While blockchain is not going to revolutionize retail tomorrow, there are enough changes coming and enough real players involved in innovation and investment, that retailers need to pay attention to how it will impact their industry.
I’m not going to define blockchain or how it works. If you want that, I recommend this series of articles, as I found them to be extremely helpful (and basic). But whether you understand how it works or not, here are four big changes, in order from closest to coming to fruition, to farthest away.
When your in-laws start talking about buying Bitcoins, it’s fair to say it has hit a level of general consumer awareness. Crypto-currencies have the potential to solve some real problems in the consumer financial world. In a McKinsey interview, Liana Douillet Guzman, the senior vice president for growth at Blockchain, said 2.5 billion people are currently outside of a financial system, including 1 in 12 Americans. The transaction costs of being outside that system can be very high, especially when you’re talking about immigrants sending money back home. Douillet Guzman cited an example of someone sending $200 to the Philippines, where the transaction fee might be as high as $12 for a traditional transaction vs. “pennies” via Bitcoin (more on those pennies in a moment).
High transaction costs constrain a market. That’s basic economics in the sense that a high price for a good or service depresses demand for the good or service. Compare mobile payments in China vs. the US: according to Hillhouse Captial, in partnership with Kleiner Perkins, a US credit card transaction costs over 200 basis points, vs. less than 50 for WeChat or AliPay (see slide 222). In 2016, the mobile payment market (driven in part by micropayments) in China reached $5 trillion, yes with T, vs. $112 billion in the US. One of the reasons why Bitcoin and other crypto-currencies are getting such buzz is because they offer an opportunity to bypass “expensive” forms of payment for something much cheaper – if crypto-currencies can keep their transactions “cheap”.
So there is the potential for a lot of demand for crypto-currencies from a consumer perspective, but right now it’s a pretty complex process to set up a digital wallet, gain access to a crypto-currency exchange, and start buying up coins (and not all crypto-currencies are Bitcoin. Heck, even Bitcoin isn’t always Bitcoin). Is there a way to make that easier? One startup in Singapore, TenX, is connecting its digital currency wallet to a Visa wallet, making it possible for consumers to use a Visa card to spend crypto-currencies. Another company, BitPay, offers a Bitcoin payment integration to point of sale, so that retailers can accept the crypto-currency as a form of payment. Some retailers are already accepting Bitcoin as a form of payment, including Burger Kings in Russia.
But there are still a lot of challenges. The biggest one is that the value of crypto-currencies is very volatile. One crypto-currency, Ethereum, lost $4B in market value on the fake news that its founder had died in a car crash. And those “cheap” transaction fees, that made crypto-currencies so attractive? Bitcoin’s transaction fee has grown from 5 cents two years ago, to as high as $5 this year. And depending who you want to listen to, Bitcoin is either going to crash and burn or hit $100,000 per coin in the next ten years.
Some of that volatility is technology-driven, which is important to remember. On August 1, Bitcoin underwent what’s called a “fork” where the currency split into Bitcoin and Bitcoin cash. The split was driven by a desire to create larger blocks in the blockchain, which will theoretically make it faster to process transactions. But Bitcoin Cash, or bcash as it’s becoming known, is not worth anything approaching Bitcoin, and right now the market for bcash is very illiquid, which means as exchanges adapt their technology to accept bcash, the value could fall even more.
And the security of some of these crypto-currency markets is not assured. As recently as last month, an exchange in South Korea was hacked, one of the largest exchanges out there. Thirty-thousand accounts were compromised, and they’re not exactly FDIC-insured. For account holders, the exchange is promising approximately $85 in repayment, with a sliding scale depending on how much value was in the account. That’s not the kind of news that lets the average consumer rest easy when it comes to holding or using crypto-currencies.
This one has lots of nuances. Blockchain, because it is a distributed ledger, makes counterfeiting very hard. That’s part of the value of the technology that makes it attractive as a currency. Blockchain makes it possible for every legitimate touch in a supply chain – from a supplier to a manufacturer to a shipper – to add a verifiable record to an item’s pedigree.
This has applications like making it harder to pass off that Hermes or Louis Vuitton bag as “genuine” when it’s not. It makes country of origin labeling and product safety tracking easier in things like the food supply chain, where blockchain makes it possible to record every touchpoint in the lifespan of a product as it moves through the supply chain, from farm to fork. It also has applications for assuring the authenticity of unique goods, like art or Super Bowl tickets. This can also be adapted to ensure confidence in resale markets.
There are a whole host of startups and software solutions that are targeted toward addressing these various use-cases and it’s pretty easy to say this is the next most-developed area of blockchain within retail.
One of the biggest challenges for crypto-currencies is acceptance as a real currency. To get there, banks would have to be willing to hold crypto-currencies as deposits, and participate in exchanging crypto-currencies for cold, hard cash. Right now, banks are experimenting with blockchain technology, not just to take deposits or trade currencies. Twenty-eight banks from around the world are currently participating in a SWIFT-driven blockchain proof of concept to determine if they can use it to settle cross border transactions.
Outside of banking, blockchain is being proposed more in terms of “smart contracts”, basically private blockchains that update automatically over time, recording all of the actions taken in regards to the contract, whether the buyer, the seller, or third parties acting on either party’s behalf. The R3 Consortium, with 15 participating banks, are currently evaluating whether blockchain can be used to replace traditional letters of credit.
For retailers that will mean less paperwork, more digital exchanges of information, and smoother transactions across borders and across multiple parties – once it gets out of proof of concept phase.
In digital advertising, a lack of transparency is hurting the industry. Some of it comes from blind market bidding, where ad marketplaces are getting accused of taking advantage of the blind bidding, at both sellers’ and buyers’ expense.
Some of it comes from the rise of bots, which look and act like humans, and generate ad payments to demand side platforms without any actual human having seen the ad. And some of it comes to ad buyers in the form of ads placed on sites where the association with the site’s content is actually damaging to the brand.
The big digital agencies as well as the Interactive Advertising Bureau are experimenting with blockchain to see if it will solve some of digital advertising’s problems.
The problem in the adtech space is speed. Blockchain as it exists is very secure, but it’s not very fast. It’s definitely not fast enough for the real-time market bids that happen in digital. While there are some proofs of concept and some initial efforts, there aren’t a lot of “solutions” in this space, unlike with supply chain tracking or even B2B payments. So this one is the farthest off, but even so is compelling enough to have big potential impact on the retail industry.
Retailers: Pay Attention To Blockchain
The bottom line for retailers is that blockchain is not going anywhere. And there have been enough developments out there across both consumer and business applications out there, that it is time to pay attention to the technology, and where it’s headed next.