“I want this, this and that and I want it now.”
One could argue that this is very much the mindset of a modern human being. In an economy where most things are available to us with the swipe of a finger we have become more picky, more impatient and more informed about the things we consume.
With this comes an unwillingness to pay for unnecessary and excessive things that aren’t perfectly tailored to our needs. One good example is the airline industry; if you go back in time, flying was for long a business surrounded by exclusivity and excess, everything was included.
If you look at the industry today it has in many regards been stripped down to the bare essentials; transport from A to B. This is particularly true for newer low-cost airlines such as Norwegian or Ryanair but you also see traditional airlines such as SAS and Lufthansa getting rid of their complimentary meals, headphones, baggage allowances etc.
These services however are still available, you just have the option to add them yourself at a small charge – on demand if you may. The result of this is a larger number of small transactions at a faster pace, and while paying on-board, calculating currencies back and forth might be a hassle for the consumer, it is also costing the airline companies in terms of transaction fees. Now this is not only true for the way we travel, I could make similar examples for the way we consume news or entertainment.
In a society where these small “on-demand” transactions are becoming more of a commodity friction arises as credit companies, banks and other intermediaries continue to take transaction fees.
This is where bitcoin comes up big. Most of us know bitcoin as a digital currency but might not know the infrastructure behind it. One of the main advantages with bitcoin is that it is built on peer to peer transactions with no intermediaries such as banks or credit card companies. This means transactions are done instantaneously without you relying on someone else to handle, transfer or convert currencies for you. If you look at it from a bigger perspective this means that there is now a safe way to transfer ownership of digital property from one party to another. If you’d like to know in detail how the safety of this transfer works it is greatly described in this article.
My point here is that these transfers can be as large or small as you want – from selling a house down to the fraction of a penny, and while selling a house without a 3 % transaction fee might make a big difference for you personally I think it is the enabling of small transactions that will make the big difference on a global scale.
The example made with the airline industry is an example of how a large traditional industry has tailored their offering with smaller (more frequent) payments/transactions. But these transactions are still quite significant from a customer standpoint.
If we bring this in to a digital landscape, because of the friction-less transaction, bitcoin enables what is know as micro-payments. Payments so small they are barely measurable in traditional currency. This could allow companies to charge for things too small to price before, like if you’d only want to consume one article or one video clip rather than the whole magazine. For the customer these are small things that could elevate and tailor their experience to exactly what they want, at a price that is barely noticeable to them.