DAO ≠ D.O.A.

Before we start talking about the great $79 million DAO robbery, let’s make a quick introduction.

The DAO is a Decentralized Autonomous Organization (“DAO”) – more specifically, it is a new breed of human organization never before attempted. The DAO is borne from immutable, unstoppable, and irrefutable computer code, operated entirely by its members, and fueled using ETH which Creates DAO tokens.

Thus spoke The DAO.
Which is just one possible way to implement Decentralized Autonomous Organizations.

A translation attempt into plain English may sound like this:

In traditional western economies, capital ownership, production and consumption are separated entities:

  1. Uber investors pour billions of USD into a company they own.
  2. The drivers invest into production (CAPEX like cars, OPEX like gas and insurances, their time) and pay their USD tribute to Uber’s shareholders.
  3. Passengers pay USD for the ride.

A decentralized autonomous organization isn’t a shareholder  construct, but a stakeholder model based upon securely transferable crypto tokens.

  • Every token holder is a stakeholder in the DAO’s ecosystem
  • Tokens can be held …
  • … or circulated to pay for services rendered or products received …
  • … or exchanged into another crypto token (e.g. Bitcoin) or any legacy currency


It’s a radically different type of participatory economy and may offer the chance to fix a dangerous flaw of our current monetary system:
– the “real” economy is dwarfed by an unbridled financial system
– the financial sector is pretty much decoupled from the “real”, productive economy
– but both spheres share the same tokens to exchange value: our traditional currencies like the EUR, the GBP or the USD
– those currencies are basically minted and controlled by the aforementioned financial sector.

A DAO token works like a programmable complementary currency. Traditional alternative systems looked like the Wörgl Schilling: a piece of paper used to locally exchange value to keep external problems at bay. Being just locally accepted is the key constraint – and the defining feature. Because the intent behind is purely local.


DAO tokens resemble complimentary currencies in this. They are constrained currencies. Traditional currencies are pretty much universal: highly fungible currencies like the USD or the EUR can be used to pay for any kind of product or service or asset pretty much all over the globe.

The Wörgl Schilling was only valid in Wörgl, the Bavarian  Chiemgauer is only accepted in this beautifully set local economy:

chiemsee_vonkampenwand … but not in Wörgl, located just a one hour car drive further down south in Austria.

Like with traditional complimentary currencies, the DAO token’s constraint is it’s limitation to a specific economy. It may be tied to a locality (like with the Chiemgauer) or a specific private entity (like airline miles, which are a certain form of private currency) – but is much more versatile.

In the DAO, the token is not only used to exchange value.

  1. Every token owner is a stakeholder of the specified economy.
  2. The token itself is programmable. Ideally, it becomes an intrinsic part of the whole process, not just the value exchange.

Token holders are a bit like owners of printed bearer shares: he who owns the physical share is the rightful owner of the asset represented in the paper. The company’s central ledger only lists the shares, but knows nothing about their ownership.

Crypto tokens, be it DAO or Bitcoin, pretty much automate all authentication, validation and transaction processes needed with an amazingly safe technology. Traditionally, all those transactions are safeguarded by a central authority. To buy shares of a company, you need to trust the company as the issuer, the stock exchange as the trade facilitator, the clearing house as the middleman, the settlement process for the exchange of assets (money/shares), and the custodian for administering your held securities.

Crypto transactions are pretty much trustless, meaning: as long as the crypto process is untainted, the whole chain of the transaction, from trade facilitation, clearing, settlement to custody services is inherently secure.

So how come somebody can instigate a rather dubious $79 million transaction?

Let’s go back to the trustless thing. If you read really carefully, you might have noticed I left an important piece out of the trustless specification: the issuer of the share.


And here’s the reason. Meet Victor Lustig. The man who sold the Eiffel Tower – twice. His con was actually pretty hilarious. He convinced a couple of Parisian scrap metal moguls that he represents the French government and they should bribe him for the right to melt down the rusting iron world wonder.

Some misplaced trust in charming Lustig later, the tower was still standing, the government still the owner of the cast iron hulk and Lustig’s target, one of the scrap metal dealers, a bit richer in experience and bit poorer in funds.

A trustless crypto transaction wouldn’t have affected Lustig’s con at all. Like every gifted con man, Lustig leveraged the conditio humana.

Every transaction is a chain of trust. The perceived transaction started with a land register certifying the French government as the rightful owner of the tower and ended with a cash transfer, a trusted means of value exchange.

But in the Eiffel Tower case, the starting point of the trust chain was Lustig and his made-up credentials. Or, to use crypto speak: the Genesis transaction was not building and owning the tower, but Lustig coming up with a fake identity and a masterfully implemented storyline.

Let’s go back to the DAO. In a rather spectacular crowd funding, a quite substantial amount of (crypto) money was raised. The basic premise:

Historically, corporations have only been able to act through people (or through corporate entities that were themselves ultimately controlled by people). This presents two simple and fundamental problems. Whatever a private contract or public law require: (1) people do not always follow the rules and (2) people do not always agree what the rules actually require.

From the DAO Whitepaper.

The offered solution:

The DAO is self-governing and not influenced by outside forces: its software operates autonomously and its by-laws are immutably chiseled into the Ethereum blockchain.


Or, in a nutshell:

  • the problem: people are not always following rules or not always really agreeing what those rules really do mean.
  • the solution: immutable contracts.

Which are a really great solution for many real world problems. But not for the problems they try to solve. Because they missed (3) people cannot foresee all consequences a contract or by-law may have

This is not a new thing, born out of crypto contracts. Matt Levine brings a great example in his Bloomberg piece Blockchain Company’s Smart Contracts Were Dumb.

One more story, one of my all-time favorites. The California electric grid operator built a set of rules for generating, distributing and paying for electricity. Those rules were dumb and bad. If you read them carefully and greedily, you could get paid silly amounts of money for generating electricity, not because the electricity was worth that much but because you found a way to exploit the rules. JPMorgan read the rules carefully and greedily, and exploited the rules. It did this openly and honestly, in ways that were ridiculous but explicitly allowed by the rules. The Federal Energy Regulatory Commission fined it $410 million for doing this, and JPMorgan meekly paid up. What JPMorgan did was explicitly allowed by the rules, but that doesn’t mean that it was allowed. Just because rules are dumb and you are smart, that doesn’t always mean that you get to take advantage of them.

Contracts have always been a complicated affair. Because they have to formalize a stable framework around fuzzy intentions by using language – which as a tool is inherently fuzzy as well.

The proposed solution for this inherent fuzziness created by the mismatches of intent and description and the thereby caused mismatching realities is probably a bit too ambitious: bug free software.



And what do you know: somebody smart quickly outsmarted the contract.

I have carefully examined the code of The DAO and decided to participate after finding the feature where splitting is rewarded with additional ether. I have made use of this feature and have rightfully claimed 3,641,694 ether, and would like to thank the DAO for this reward.

It’s unclear if the text has been written by the hacking trickster, who just wants to add a bit of insult to the injury. But the consequences of his contract are actually rather unclear as well. He may just be entitled to keep the load.

Because The DAO as a non-organisation constructed itself around the premise of its own infallibility. Read this part of self descriptive hubris:

The DAO will be deployed as an exact implementation of the Standard DAO Framework. The Whitepaper therefore describes perfectly how the DAO functions and is a great place to start learning more.

… exact implementation … describes perfectly …
Well. Obviously not that perfectly exact.

In the DAO’s belief system, acts of people are the problem, so let’s move them out of the equation. This created an entity ready to be preyed upon by other people of rather questionable intent. With the attack vector being people not being able to create 100% perfect contracts.

Hard core smart contractors don’t see a problem with this. Win some, loose some: it’s part of the package of immutability. Changing the rules after the fact may be technically possible, but violates the core principle of a Decentralized Autonomous Organization. Rolling back those transactions by an deus ex machina-act would inherently destroy the trust in the perfect engine: mind you, it worked actually without a fault.

Which is probably right. Because in their hubris, The Dao tried to construct themselves as an infallibility engine without any meaningful mechanisms for mediation or arbitration or recourse. And saving The DAO by ex-post changes might really hurt the underlying case for Decentralized Autonomous Organizations.

On the other hand: creating a machine, which enables smart contract-con men to systematically defraud unsuspecting token investors, who wouldn’t have any path of recourse at all … this sounds like a solid way to implement fringe system of very limited reach and effect.

As VC Albert Wenger writes: The Path to  Learning requires Failing: The DAO

Blockchains and smart contracts are amazing new tools in our overall technological toolset. We have to learn how to deploy them to the best uses (many of which have yet to be invented). That will take failures. The DAO is not the first one (e.g., Mt. Gox) and won’t be the last one.

Unfortunately, the first DAO failure might have been somewhat expensive.







The Highlander Syndrome 

Jules Urbach is the brilliant founder and CEO of OTOY, a rockstar virtual reality and 3D company. But reading this, I did fear at first that he’s taking a bit too much of a Magic Leap (pun intended) here:

When I ask him how virtual reality will be able to encompass our increasing habit of watching videos on our smartphones, he has one answer: sunglasses.


“You’ll be done with any other screen,” he says. “You won’t need it. It will be generated on a surface in the air. Put your finger over your palm, it’s a phone. Your desk becomes a laptop.”The resolution two generations from now will give you a 4K experience, so you probably won’t go to a movie theater. Why would you buy a wall-sized TV?”

I wouldn’t disagree with the glass approach (or, a bit more far fetched: contact lenses, like Vernor Vinge proposes in Rainbows End). But the “done withy any other screen” sounds like funky hyperbole. Screens are getting bigger for a reason. Not just because they can.

It’s not primarily a matter of technical feasibility. Engineering the super shades might take a bit longer that folding a Google cardboard, but hey the Magic Leap guys are on it. And the promise is right: no more weird little screens on microwaves, printers or fridges. Even your phone could probably live without it’s main screen. And your personal Netflix will do nicely without a non-virtual big screen on the wal.

But what’s with all those non-core watching use cases? Let’s take television. Watching TV implies somewhat that somebody is attentively following what’s happening on a screen. Which, most likely, you won’t. One of the primary use cases of any TV set (not just wall-sized whales) is the animated wallpaper. TV’s main job is to de-dull any room.

Well, seems like Magic Leap has fixed this, by enabling you to fix any virtual device spatially in any real place. Just watch the first 15 seconds of the video and see what’s happening with the YouTube screen. This might be how a future TV set behaves:

Case closed? Maybe not. TV sets do augment our physical reality in a very social kind of way. It’s an experience which may be flat but is inherently a shared, for good or worse. The question will be: why do we really put moving images on a wall-sized TV? We will have to look at the proper use cases more diligently. When I watch a movie with my daughter, projected on a wall, she watches me watching. Don’t I dare to check my Facebook while we sit together. Will I then become a glasshole, secretly overlaying the movie with my Twitter feed?

It might be more obvious with the movie theatre case. How much of going to the movies is the large screen? How important is the social aspect of a dedicated public room, a cinematic cathedral? What’s the significance of mostly going in a pack or at least a twosome, but rarely alone?

And, as a matter of practicability, you will not wear your glasses 24/7. Maybe not even the far fetched future scifi lenses.
That’s why, most likely, we’ll be surrounded by even more screens, big or small. But wearing your magic holodeck/-lens leap glasses, you might be able to easily replace what’s on those screens.

There can be only one screen.
Memo: a screen is not an independent variable.

Source: The man behind Jon Stewart’s secret project with OTOY lays out the future of media – Business Insider Deutschland

What is TV good for?

What is TV good for? The linear, traditional TV of 1969. No, really. This is a legit question. It’s the 21st century. Rigid timelines of massively parallel broadcasts of more of the same should be a thing of the past. Or, maybe not yet.

Unreal stats: is TV an immortal unicorn?

What is TV good for? The linear, traditional TV of 1969. No, really. This is a legit question. It’s the 21st century. Rigid timelines of massively parallel broadcasts of more of the same should be a thing of the past. Or, maybe not yet.

OK, look at the numbers, viewer shift is happening. To quote this complaint of the American Marketing Association:

Adults between the ages of 50 and 64 spend 191 hours per month watching traditional (rather than time-shifted) TV, according to Nielsen, and those over 65 watch more than 223 hours per month. Teens, by contrast, spend 84 hours per month watching TV.

The younger they are, the less they watch. Like bingo, traditional television smells a bit like an unkempt retirement home. People are dying here! TV is past its prime. Thank you, case closed. Or, is it?

Now bear with me. Let me read you the Oxford Dictionaries’ definition of watch.

Look at or observe attentively over a period of time.

Do 50-64 year olds “observe attentively” for more than 6 hours per day what’s happening in the box? Mind you, this is an average we’re looking at. There must be people out there “attentively observing” the tube 24/7. And if you ever observed attentively a Teenager: does the majority of teens have an attention span of 2 hours plus of single-minded daily dedicated observation of anything? Besides that: a daily active usage of 2 hours plus sounds like user stats any super successful web service would kill for. You’re looking for a Facebook killer? Take grampa’s television.

There seems to be something a bit off-kilter. So I decided to take a fresh look at this TV thing again.

and TV’s job is …

What are you looking at?!
What are you looking at?!

Working with my friends at Magine TV, a Stockholm-based OTT TV service, I looked for some answers by applying Clayton Christensen’s Jobs To Be Done-framework. JTBD’s core concept looks like this: people don’t buy a product. They “hire” a product to get a “job” done. The researcher’s job is to identify the job people want to get done.

The outcome can, sometimes, be rather surprising. Christensen’s milkshake-example is all about the insight, that if you know what job a product is hired for, you can much better improve and scale.

“The fact that you’re 18 to 35 years old with a college degree does not cause you to buy a product,” Christensen says. “It may be correlated with the decision, but it doesn’t cause it. We developed this idea because we wanted to understand what causes us to buy a product, not what’s correlated with it. We realized that the causal mechanism behind a purchase is, ‘Oh, I’ve got a job to be done.’ And it turns out that it’s really effective in allowing a company to build products that people want to buy.”

Same goes with TV. We know for a fact that billions of people are “hiring” television on a daily base. But what is television’s job to them?

Jobs To Be Done is qualitative research. You try to find answers by analyzing longform interviews, which follow a clearly defined timeline. Never ask directly. Stated preferences are your enemy. You chat your people up to get the the gist of what you need to know.

As a former full time journalist, I felt quite comfortable in going this direction. And it worked reasonably well. Most results are of course proprietary. But let me share a couple of things with you: forget about inform and entertain as the core driving factors. There are two core jobs TV has to fix, depending on personal needs. Because not all of you TV viewers are created equal. What we can identify are two quite different sets of viewer personas:

  • there are the bespoke attentive TV personalities
  • and there are the many owners of an animated wallpaper

total attentive immersion: your personal off switch

Totally immersive must watch TV: your world lives in a box.
Totally immersive must watch TV: your world lives in a box.

Let’s start with the fully immersed, totally attentive viewer. The job he needs done is what you would actually expect from “hiring” TV: get effortlessly tuned out of your daily life.

If there’s a Santa for media executives, the attentive viewer will make top of their wish lists. Turn on, tune in, drop out: they are the idiotes savantes you need in any ad recall measurement.  There are a couple of subgroups here, which differ mostly in how they discover what they want to watch. But their typical user journey starts always like this: I’m coming home from work and need to turn off the day. The subgroups mostly differ in how they choose what to watch.

  • totally passive: you have a relevant subset of two handfuls of channels. You turn on and start to watch what’s on your favorite channel. If you’re not satisfied, you switch to the next channel. You prefer to zap or maybe use an EPG to get a quick overview on what’s currently up. You might even know when your fav show is running. You’re mostly satisfied with the work the professionals did in programming a timeline. Because everything else would be way too much work.
  • somewhat picky: you have some kind of an idea what you want to watch. Or, maybe even more important: what you do not want to watch. You might have programmed a PVR to record your favorite things. Because this one time effort brings some pleasure later on when you’re in the mood to watch something (but not anything).
  • totally picky: there’s just a couple of highlights you’re after. Maybe top sports events. Maybe top movies. Maybe the daily news (if you are in a decidedly un-Teen age bracket). You actively plan around those events.

You might have recognized yourself already in all three of those subgroups. Which is not too surprising. Those preferences have just a different weight. If you’re totally picky and down with the flu, you easily switch into your totally passive persona.

If you’re leaning towards pickiness, a SVOD service like Netflix sounds like a present from heaven. If you’re the totally passive viewer, you might actively hate the concept. Because, as one of the interviewees mentioned: actively looking for some program to watch is way too much work.

That’s probably one of the main reasons why series and binge watching work so well on SVOD: when a movie ends, you go back to zero and have to start searching all over again. But after the first 13 episodes of a series, you just move on to season two.

extensive wallpapering: radio with benefits

In reality, this electric fireplace is a talking animated wallpaper.
In reality, this electric fireplace is a talking animated wallpaper.

Remember the average viewing numbers? 84 hours per month, 191 hours, 223 hours for 65+. TV can look like a full time job, even if you’re not working in media. Not too surprisingly, those viewing hours are only slightly connected to attentive watching. The time is spent with media, but not on media. For those people, TV’s job, to stay in the JBTD-framework, is not immersion, not entertaining. They just need a companion.

A typical example goes like this: you work home alone, be it running a household, working in your home office, preparing your student homework whatever. You sit in front of your notebook. But somewhere in the room, not too far away is a running TV set. It’s either totally muted (if you’re the sensitive type), softly babbling (probably the majority) or blaring in full power (yes, granny, I’m looking at you).

Those TV sets are actually doing what the name television is promising: you can see something happening, far, far away. It’s a window to the world. And like with real windows looking over a street or a back yard, you’re not glued to the view. It’s a just very nice and humane distraction. Being able to look out of a window beats staring at a white washed wall. Mind you, a running TV set cannot (yet) substitute a real window. TV lacks spatial information, the color temperature does usually not match your biorhythm and the time of the day. But it adds a social layer: TV is constantly trying to tell you more or less entertaining stories. You don’t have to ask for anything, search for anything, do anything. If you open the hose, it will never stop until it gets your attention. Then you might turn up the volume and watch for a minute or two.

It’s visual radio (a medium, which used to be an immersive one as well). But without the ads literally shouting at you, because the visual attention grabbing is there as well.

The real television is a talking, animated wallpaper.   

Excess Capacity

What’s the economic driver behind the so called sharing economy? Robin Chase points into one direction. Thanks to technology, we can build platforms which enable us to harvest the excess capacities all around us. As a co-founder of Zipcar, the car-sharing trailblazer, she knows what she’s talking about. Owned cars are sitting around most of the time. Rentals you get for 24 hours (which, hopefully, is a bit longer than you’re actually going to drive it). A Zipcar you get by the hour. Daimler’s Cars2Go are even rented by the minute. That’s harvesting the excess capacity of a massive chunk of hardware which usually hangs around at the curb like idling teenage mall rats after school.

Excess Capacity
Robin Chase on Excess Capacity: too much of something can become a good thing.

Her talk was partly a compressed version of her new book Peers, Inc. The gist: linear solutions for exponential problems just don’t scale. Peers, Inc. is about harnessing massive problems with scaling. How was AirBnB able to quickly offer more as much bed-inventory as the largest hotel chains? Because their technical platform leverages the power of the people to pool their excess capacity.

Of course we do know by now, that some of the drivers of the sharing economy are not that benign. Granny letting out her spare bed room once a year sounds nice. But Mr. Greedy creating new inventory by taking 3 bedrooms condos off the rental market to rent them out by the day is a rather excessive approach to excess capacity.

Harvesting excess capacity is the underlying scalable model. Mr. Greedy may be driven more by taking advantage of regulatory arbitrage. But this is a problem which fairly easily can be remedied.
The complicated part starts when sharing economy entrepreneurs understand, that one excess capacity in later stage capitalist societies is man power. Look at Über: the drivers take on the capital expense of buying the car, take on the operating expense of maintaining it, take on all the risks.

And that’s how we come back to Robin’s talk. The occasion was our biweekly Bitcoin Startups Meetup. How does this relate? Currently, most sharing economy platforms are driven by shareholder value. The Bitcoin (or crypto) model works differently. It’s a stakeholder model.

Some small steps are already happening. A couple of Denver cabbies are asking: What If Uber Were a Unionized, Worker-Owned Co-Op? Joel DietzSwarm is pushing forward in many different ways.
Crypto-based decentralized applications don’t need statements like “Don’t be evil”. Their DNA is sequenced and public from the start. This includes the potential switch of the underlying economic model, from rent-seeking shareholders to a revenue-sharing stakeholders.

Addendum: here’s some more material from a talk I gave last year on the topic: “The new decentralized sharing economy and crypto coins”

To Infinity and Beyond: Monetary Sci Fi

At ZapChain, the crypto Q&A central, Daniel Cawrey had a pretty funny question: Do you think bitcoin could become the currency of space?
Here’s my slightly enhanced answer.

As sci fi has a tendency to shape future technical realities (think Arthur C. Clarke and the geostationary satellite, think all things Neil Stephenson from his cyberpunk period), and as the pressing need for a non-terran currency may still lay a bit in the future, we should have a look at what sci fi has to tell us on all things currencies:

Galactic Credit Chips come in handy.

According to Wookiepedia, The Galactic Credit Standard, simply called a credit or abbreviated to cred, colloquially referred to as Republic Dataries, and later known as the Imperial Credit, was the main currency in use in the galaxy since the time of the Galactic Republic.

Around this official currency, alternative currencies seem widespread:

In some other space and time, and in a slightly more post-monetary future, the Federation credit is the monetary unit of the United Federation of Planets. To put things into perspective:

  • a Tribble sets you back 10 credits (that’s obviously before they unveil their rather inflationary reproductional pattern)
  • to use the Barzan Wormhole, the Federation pays a lumps sum of 1.5 million credits and an annual fee of 100.000 credits.

Mars (Total Recall) and the non-radioactive Earth leftovers and its space dominions (Judge Dredd) go for credits as well.

This means:

  • all major centralized utopias rely on a credit based system
  • in their lesser controlled fringes, alternative currencies are highly likely to be accepted

Which shouldn’t be too surprising. A rallying cry like To Infinity and Beyond implies one quite demanding requirement: space is infinite and to conquer infinity you need infinite resources. And to pay for those infinite resources, you need an infinite money supply.

Which is actually not that different from the economic realities of today. Space may be a rather finite commodity for us inhabitants of earth in the early years of the 21st century. But time is endless.
As long as our economic model is based on growth, we will need a money supply which can grow with time – and therefore has to be infinite.

So sorry, BTC or XBT:

  • If Bitcoin or one of its crypto-successors aspires to become THE currency of space, it will need to incorporate the credit principle into its money supply first. A finite resource like Bitcoin or gold will always be on the fringes, be it of future space dominations or the economies of today.
Hyperinflationary reproductional patterns: a Tribble based-currency is not advisable.

A dissenting sci fi opinion could be based upon Ian M. Banks wonderful construct of The Culture.
In his interstellar anarchic post-material-scarcity society, us puny humans exist in a symbiotic relationship with tremendously capable (and eternally quirky) artificial intelligences (the minds), humanoids, and other alien species, who all share equal status.
And one side effect of post-material-scarcity for everybody is: units of account, mediums of exchange and values stores are things from a rather barbaric past.

In The Culture, you will just have to forget about credits and crypto-credits and interstellar blockchains. And if you insist on living with the perils and perks of a monetary value system, you can always move to one of the Culture’s lesser enlightened neighbors, which still deal, steal and trade with credits or commodity based currencies.



Who will win the Bitcoin blocksize war?

My take on this question on Quora: Who will win the Bitcoin blocksize war?

Here we go:

To quote Niel Bohr:

“It’s hard to make predictions, especially about the future.”

But of course we can always make fairly educated guesses.

QuoraThing is: Bitcoin is currently on a crossroads. At stake is the mother of all crypto currencies, the mighty Bitcoin. Due to its size and value, the Bitcoin network had to become a fairly slow mover. Changes take ages. But it’s becoming obvious that the status quo is not really sustainable.

The blocksize war (rather big name for a rather ludicrous challenge) can be seen as a forerunner of bigger things to come. It’s kind of obvious that the Proof of Work mechanism is working really nice, thank you. Unfortunately it tends to be a rather power-hungry (and therefore expensive) way to deliver seigniorage and validating transactions. Newer crypto contenders look into different models, like Proof of Stake, which of course have their very own challenges, but need way less power and are therefore much cheaper in operations.

To put things into perspective: about a year ago, I did a ballpark calculation onPower Hungry Crypto Coins. Back then, the equivalent of about 0.13 nuclear power plants was needed to run the mining infrastructure. Not much, one might say, to power a global currency.

But here we have the next problem: Bitcoin as a currency for everyday transactions just hasn’t taken off. As a currency, it seems a bit of a very clever solution in search for a problem. On the other hand, there are a couple of problems lying around, which would happily latch on to a blockchain based solution – well, if some technicalities would be in place. Hence all the initiatives around Bitcoin 2.0 and VC and other monies pouring into the space, efforts like sidechains, the increase of the blocksize or straight forward competitors like Ethereum.

So let’s come back to the question. The blocksize war is a mere skirmish – which could end up in a civil war. Bitcoin’s technical strength, the power of its network, is at the same time its most prominent weakness. Fiddling with technical specifications means a handful of software engineers tweaking a distributed infrastructure worth several billion Dollars. Some large changes, like the blocksize decision, need a hard fork of the blockchain.

From a miner’s perspective, forks that lower the ROI are always scary. Your margins are as volatile as the exchange value. But your operating cost, due to the energy consumption, are always to be paid in Dollars, EUR or Yuan.

And if the ultimate fork would happen, the switch from PoW to PoS, this would leave you with some server racks filled up with expensive scrap metal. Of curse, on the other hand: if competing currencies or models make Bitcoin obsolete, there’s nothing left to mine for you as well.

As a small Bitcoin holder you can just watch carefully. And if you want to treat your coins as an investment, then do as with any investment: don’t put all your eggs in one basket.

Jobs To Be Done

This year, I was sitting with a rather baffling question. What if there is a kind of successful product in the market, you do lots of research and such. But in the end, you still ask yourself: so what are those users really doing there? You can always ask them nicely. But you know, there’s this difference between stated preferences and reality. Ask people, and they read the NY Times and watch CNN. See the data, and you won’t believe what happens next.

Right. Stated preferences mostly reveals more about the guy asking than what’s really going on. People try to keep up appearances. That’s the human condition. If you’re not a registered sociopath or a saint or another type of fringe personality.

All users lie. But only if you ask.
All users lie. But only if you ask for it.

#JTBD to the rescue

Guess what. There’s a really nice solution out there. Because the problem of not knowing what your customers really do and want is a fairly common one. Clayton Christensen, professor at the Harvard Business School, came up with the concept in the 90ies.

Jobs To Be Done refers to the core concept behind: people don’t buy “a product”. They “hire” a product to get a “job” done. Have a look at those four guys in a subway car. The “job” is always the same: How to not get bored on a subway ride. But three totally different products got “hired”. A book, a smartphone, a magazine (we don’t know about the gentleman to our left).

But that’s not the hard part. The hard part is finding out what the job really is people hire your product for. Think about a newspaper publishers. A weekend issue of the NY Times is a nice thing to stack up in your spacious living room. But unfolding it on the A-train needs lots of manual dexterity, yogi-like body mastery and a certain disregard for the people sitting next to you. It took decades to come up with newspapers sized for subway rides (and no, the NY Times isn’t one of them).

One job, 3 different products hired.

The beauty of Christensen’s concept is its simplicity:

“The fact that you’re 18 to 35 years old with a college degree does not cause you to buy a product,” Christensen says. “It may be correlated with the decision, but it doesn’t cause it. We developed this idea because we wanted to understand what causes us to buy a product, not what’s correlated with it. We realized that the causal mechanism behind a purchase is, ‘Oh, I’ve got a job to be done.’ And it turns out that it’s really effective in allowing a company to build products that people want to buy.”

You want more? Watch Christensen a bit more in detail.

To get to the bottom of the jobs question, you start with interviews. No surprise. What you want is an xray of your customers mindset when he’s using your product, when he decided to buy, and finding out what is really the job he is solving by using it. So you better start talking, and forget all your assumptions (even if they turn out right).

The interview style is pretty interesting: laid back and trying not to be leading you walk your customers along a scripted timeline. I liked it. Seems like my former journalistic life not only lead to excessive noseyness (an occupational hazard). But then, I had some help (thanks, Tor) and many helpful resources. The Jobs be Done Handbook might look rather pricey for being a self-published booklet of just a handful of pages and really hideous typesetting. But hey, it get’s its job done.

More of a challenge: most scripts, guides to scripts and examples of interviews out there are geared towards real products, bricks and mortar style. Tangible goods. Which makes it a bit hard to follow advice like “build around the Point of Sales“. As the PoS will be most likely your customer’s living room.

But hey, I got it to work. It’s just that the how part might have to become another post.