I’ve been impressing people with Bitcoin lately. Being the romantic that I am, I gave my wife 0.1 BTC as a wedding anniversary present back in June (see transaction). She assures me she was very impressed. In late November, I told my brother-in-law and business partner: “You bring the takeaway to my place and I’ll pay half with bitcoins”. He assures me he was also very impressed.
The reason you can still impress wives with Bitcoin (trust me) is that it isn’t mainstream yet. As much hype as there is about the new technology, getting your hands on the electric coins is anything but straight forward (unless you live in the US, where you can use Coinbase). And if you live in currency-controlled Iceland trading bitcoins for the hated Krona is probably down right illegal.
So how do you buy bitcoins?
First: Transfer your currency of choice to an exchange. In my case it was BitStamp, which meant I had to send US dollars via a bank transfer to BitStamp’s bank account in Slovenia.
Second: Once the exchange has processed your deposit, which can take a few days, you have dollars in their account. Now you have to buy bitcoins. The easiest option is to make an “instant order” which means you buy bitcoins for the current market price. They might come from a single seller or multiple sellers, depending on how much you’re buying. You don’t need to worry about the technicalities though, the exchange does this for you. The Bitcoin exchange is simply a match maker that charges a fee for every transaction they process.
Third: Now that you have your precious bitcoins, it’s best to transfer them to a wallet. I use Coinbase but other popular options include the Bitcoin client for Android and the Blockchain Wallet. Once you’ve transferred your coins to a wallet, you can start trying to impress people by sending them coins. Or you could just hold on to them, cross your fingers and hope the price takes another upwards swing.
Finally, watch the price fluctuate wildly: The graph below shows the price of bitcoin in US dollars over the past year. My wedding anniversary present is becoming ever more generous while my brother-in-law lost out by accepting bitcoin as a payment for the takeaway, although I’m not sure he would have been better off with the Icelandic Krona. Not in the long run, anyway. But that’s a different story.
When the late Iain Banks, one of science fiction’s most imaginative writers, has his character sitting in a futuristic bar in an intergalactic space station in ConsiderPhlebas, published in 1987, what currency does he dream up for his protagonist to pay for a space cocktail? The Aoish credit.
The Aoish were a banker species, and the credits were their greatest invention. They were just about the only universally acceptable medium … [T]he Aoish guaranteed the conversion and never defaulted, and although the rate of exchange could sometimes vary … [the] value of the currency remained predictable enough for it to be a safe, secure hedge against uncertain times.
Before the arrival Bitcoin, even science fiction writers couldn’t imagine a currency that wasn’t underwritten by someone – even a super reliable, intergalactic “banker species” who probably speak some futuristic version of German.
What makes things worse is that Bitcoin isn’t tangible. As opposed to gold. Or as Paul Krugman puts it:
Gold, after all, has at least some real uses, e.g., to fill cavities; but now we’re burning up resources to create “virtual gold” that consists of nothing but strings of digits.
Ignoring the fact that gold hasn’t been in mainstream use to fill cavities since before Ronald Reagan became president, at least it’s tangible. Come the apocalypse, you can make jewelry out of it to peddle at a the local farmer’s market.
A functional currency must be able to do two things; store value and be a medium of exchange. Bitcoin is already a medium of exchange but in order for it to store value it needs to be more stable than it is today. But it doesn’t need to be backed by a government or be tangible. The post-apocalyptic dentist is just as much of a fantasy as the Aiosh credit.
What Bitcoin needs to become a functional currency are the same elements that underpin both the US Dollar and gold: Trust and liquidity. Both can come with time. With time comes maturity and with maturity will come stability. And by then, Bitcoin will indeed be a viable currency.
The latest PISA scores are out and Scandinavia didn’t do well. Here in Iceland it’s all anyone talks about (at least for the current news cycle). Various opinions are being floated as to why we did so poorly, ranging from austerity to culture.
One opinion floated recently was that the countries that improved the most in the most recent PISA tests tend to be non-democratic. So maybe we don’t need to worry at all. Maybe we’re suffering at the PISA tests because the tests somehow favour authoritarian education systems.
The above plot, which shows various countries’ PISA maths scores plotted against the Economist’s Democracy Index disproves this theory. Undemocratic countries that do well in the PISA tests seem to be outliers rather than representing a trend. If anything, the trend seems to be the other way around, with countries scoring high on the Economist’s Democracy Index also doing well at the PISA math test.
Snapchat recently turned down a $3Bn acquisition offer from Facebook, the Wall Street Journal reports. Why would they ever do that?
Inspired by Benedict Evans’ post on the successful acquisitions of Youtube and Instagram I thought I’d visualise a few acquisitions that didn’t turn out as well. Sure the founders cash out, but don’t you think the founders of MySpace wish they were the stars of the Social Network rather than Mark Zuckerberg?
The Office for Standards In Education (Ofsted) is the governmental department responsible for inspecting schools in the UK. Ofsted visits a school, writes a report and gives it a grade between 1 (outstanding) and 4 (inadequate). The interesting part is that these results are all made public.
We took the latest Ofsted report on all of London’s “maintained” schools (i.e. state schools) on the primary and secondary level and counted how many schools graded “outstanding” there are in each borough compared to its number of households.
The result shows that Harrow comes up on top with 3.6 excellent schools per 10,000 households. On the other end of the scale is Bexely with only 0.86 outstanding schools per 10,000 households.
So if you have kids and are moving to (or within) London, the above graph is one way to start your search. Having said that, I live in Islington because we like French restaurants and the Almeida theatre. So the Ofsted data doesn’t necessarily tell the whole story about a neighbourhood’s quality of life, but it’s certainly a starting point if good schools are important to you.
Worried your peers are spending to much time on YouTube? Relax. Your peers haven’t heard of YouTube? You should be worried.
One of the components of the recently published Global Innovation Index (GII) is a country’s activity on YouTube. In collaboration with Google the GII ranked every country of the world according to how prolific they were in uploading videos to YouTube as an attempt to measure the country’s digital creative output. The result is a rank on the scale of 1-100, with actual numbers obscured to protect Google’s data.
Interestingly, if these results are plotted along with the OECD’s data on productivity the results seem to be correlated. That’s not to say YouTube usage makes you productive, but it could indicate that both YouTube activity and productivity are a result of a technologically advanced society.
The outliers are also interesting. Icelanders, for example, are a very connected, tech-savvy bunch (I should know, I’m Icelandic). In fact, they’re in first place when it comes to YouTube uploads per capita. But Iceland’s productivity is below the OECD average – they work long hours to achieve their high GDP per capita. Israel is also prolific on YouTube (and has one of the most active startup ecosystems in the world) but they’re even less productive than us Icelanders.
On the other end of the spectrum, our cousins the Norwegians should probably start spending more time on creating digital content. Too much oil money might make them rest on their laurels and fall behind. Which means fewer Norwegian videos on YouTube. And that can only be bad.
AngelList recently launched a feature called Syndicates. A syndicate allows any angel investor to get in on deals made by more high profile investors. For example, Kevin Rose is probably more likely than (the hypothetical moneyed) me to be an angel investor in the next Facebook. He lives in the Valley, he’s connected, he’s already in on the deals. I live in London and I’m not. But if I sign up for AngelList and join his syndicate, he can source the deals for me. It’s a win-win situation. I’m in on the deals and he can make bigger investments.
AngelList syndicates represent an exciting opportunity to change how new businesses are funded. And as it turns out, the biggest syndicates are connected through the angels that invest in them, as the picture above shows.
The circles with a profile picture are syndicates that are backed with more than $100k. The size of each circle represents the amount of money they are backed with. The lines indicate someone backing someone else. On the edges of the graph are angels who only back one of the top 10 syndicates. As we get closer to the centre, you find investors who invest in most of the high profile syndicates.
By the way: If you’re interested, feel free to follow Five Hundred Plus on AngelList.
Note: These nubers are from last Monday, when I scraped the data. Since then, Kevin Rose has raised even more money and the Brad Feld syndicate is now the Foundry Group syndicate.
This week’s Economist has an article, “Start Me Up“, on the progress made by London’s Tech City (which I like to call the Silicon Roundabout) when it comes to fostering a startup ecosystem.
The piece was slightly short of hard data, though:
The proliferation of start-ups is impressive. An online map showing their location in the area around the Old Street roundabout in east London and neighbouring districts boasts hundreds of dots…
Dots. We have dots. Hundreds of them. But how do the dots compare to, say, the dots in San Francisco?
One way to look at it is to mine TechCrunch’s database of startups, CrunchBase. It so happens someone has already done that, over at SeedTable. Here’s some data from SeedTable on the number of startups securing Angel funding, VC funding and the number of startups that exit in London on one hand and San Francisco on the other:
The statistical rigour of these numbers is probably on a par with the Economist’s “hundreds of dots” and the upward trend is due to CrunchBase’s growing dataset – not the ecosystems. However, the data does shed some light on the difference in startup activity in the two cities. And the data indicates that the Valley still leads London by a wide margin. But we already knew that.
The CrunchBase data also seems to show that London leads Europe, at least when it comes to submiting their startups to CrunchBase and pestering Mike Butcher for coverage:
As the Economist rightly points out, London needs more big exits to catch up with the Valley. And the folks in Berlin need to start updating CrunchBase. Let’s hope King’s (of Candy Crush fame) upcoming listing will churn out a PayPal-esque clique interested in reinvesting in the ecosystem. If they do, maybe London will one day become the Silicon Valley of casual gaming.
I recently came across the very interesting “Digital News Report,” a survey done by the Reuters Institute for the Study of Journalism. It has some encouraging findings for those who care about the quality and future of journalism.
According to the findings, more and more people are paying for their news. In the UK, the percentage of people paying for some kind of digital news content jumped from 4% to 9% from 2012 to 2013.
The chart shows an increase in people paying for news in all the countries that were polled, except Denmark.
What’s even better is the chart that shows the age group of those who pay.
The digital generation is actually prepared to pay for news online. Remarkable. As time goes by, I imagine this chart will flatten out as the 25-34s get older and the 18-24s start earning some cash.