America runs on... blockchain?

I typically hate being a hater on stupid concepts, but I do it on occasion. People know my amusement at these idiotic private blockchain projects that are dying slow, gratifying deaths: https://ledgerx.com/blog/2018/7/25/were-doubling-down-on-bitcoin

Now i’ve gotten so many questions from people about this blockchain coffee concept, which will remain absolutely nameless (https://twitter.com/paul_l_chou/status/1025688285002313728) that I thought I would just consolidate my response into a blog post.

In Silicon Valley, there is a rough rule that in order to shift consumer behavior, you have to offer something that is 10x better (an order of magnitude) than the current solution, not just slightly better. 

But this doesn’t always scale the way people assume. For example, if there is a service that would lower my real estate brokerage fee from 6% to 0.6%, sign me up right now. But at the super low end of the spectrum, it’s sort of irrelevant. For example, if a credit card transaction for a cup of coffee has a roughly 10 cent fee, that dynamic is different.

The reason I have this sneaking suspicion that consumers don’t care at all about saving a few cents is because, you know, they are spending 6 dollars on their Venti Pumpkin Spice Latte every morning. I mean seriously, how many of your friends are adding up the transaction costs for their coffee every month and writhing in pain about the huge financial hardship?

This is solution looking for a pain point that is begging not to be solved. In general, I think this type of use case for crypto is way overrated. I love bitcoin, but I’m not aching to use it to buy coffee.

So instead of a blockchain solution for your coffee transaction woes, there is one that I’ll offer that will not just save you one order of magnitude in cost, but two orders of magnitude — go to Dunkin Donuts.

Paul