[ANN][NOTE]DNotes - Celebrating DNotes 3rd Birthday - Forum Now Open

[RJF]

This is by no means a positive or an inspiring article. I hesitated if I should even post and comment on this. In my mind here is another “pioneer penalty” that should be added to Bitcoin’s long list of pitfalls causing it to stumble time and again, delaying or preventing mass acceptance altogether.

Bitcoin cannot blame the media for lack of coverage. There has been some news coverage about Bitcoin everyday; may be not by network TV, and not always the most complimentary, but none the less, it still helps this nascent industry to become known relatively quickly.

There has not been a shortage of investment poured into Bitcoin ecosystem either. As pointed out, BitPay alone raised $30 million and the industry as a whole have raised well over $1 billion, mostly venture capital (VC) money.  One would think that this is the smart money; since they typically have some of the smartest people on their team going over hundreds of business plans, and do, on average, one deal for every 100 they analyzed and scrutinized. BitPay is indeed the leading Bitcoin payment processor. For that alone, it is very telling that Bitcoin is not ready to go prime time as a medium of exchange and I do not see any plan to help Bitcoin get there.

This was part of my message when I made my presentation at NASDAQ on June 22, 2015 and it still holds true today:

“The Currency:  As the pioneer, Bitcoin has struggled as a currency with countless negative headlines. It is failing to meet the full functions of money. It has been struggling to gain mass acceptance as it has been too volatile as a store of value and medium of exchange. It seems to have settled with a limited purpose as a speculative trading vehicle.”

At DNotes, we believe that meeting the full functions of money, as a unit of account, as a medium of exchange and as a store of value, is critical for DNotes to be successful as the trusted global digital currency for everyone. The “jewel” is in the medium of exchange but achieving mass acceptance to use DNotes as the medium of exchange is one of the biggest challenges in the world of commerce and seriously under estimated. I personally believe that it has to be engineered with a very complex sustainable plan, systematically executed over an extended period of time. It takes a tremendous amount of ingenuity, hard work and tenacity few would care to commit.

DNotes has been doing precisely that by virtual of our growing ecosystem. It is a huge commitment on our part. It has the least short term payoff but absolutely essential for DNotes to be superior to fiat currency without a doubt, in the minds of reasonable people, one day. Most likely, the values and the importance of DNotes ecosystem are not even reflected in the price of DNotes. With mass acceptance, DNotes will become most valuable when the vast majority of the transactions are between two parties with nearly zero transaction cost. At that point nothing else can beat it. Though not obvious, that is the value of DNotes in contrast to other digital currencies, including Bitcoin.

*************************

The Troubles of “Bitcoin’s PayPal” Show
Why the Cryptocurrency Is Not a Good Payment Mechanism

Leading Bitcoin startup BitPay is cutting costs, suggesting that the currency won’t be catching on soon.
In 2014, a Bitcoin startup called BitPay raised $30 million from investors and was dubbed the “PayPal of Bitcoin” for helping companies such as Microsoft accept payments in the digital currency. But 2015 has been less kind. Last week BitPay made significant layoffs, and earlier in the month it admitted to having $1.8 million in Bitcoins stolen.

The company’s travails neatly demonstrate two problems with Bitcoin as a currency and payment mechanism.

First, no one much wants to pay with Bitcoin and there’s not currently good reason to think that will change. BitPay’s business model was to help merchants take Bitcoin payments—often converting them directly into dollars—and take a cut of transactions. The company has enabled Microsoft, retailer Newegg, and many other companies accept Bitcoin payments.

Unfortunately for BitPay, just about no one gets paid in bitcoins, and for most people there are not clear reasons to bother with the trouble of buying bitcoins just to spend them again. The people with the best incentive to buy stuff with the currency are those who bought it several years ago and are now cashing out their gains after Bitcoin’s rise in value.

BitPay’s CEO Stephen Pair admitted as much in June, when he told BusinessInsider that the company was trying to find another business model. “We keep adding merchants—we’re up to over 60,000 now—but they’re selling to the same pool of Bitcoin early adopters.”

Gavin Andresen, who in 2010 was picked by Bitcoin’s mysterious inventor to lead work on its code, recently told me that he didn’t see that changing soon (see “The Looming Problem That Could Kill Bitcoin”). “Until part of your paycheck is regularly paid in Bitcoin, I’m not sure how it would really go mainstream,” he said.

BitPay’s embarrassing loss of 5,000 Bitcoins worth $1.8 million, revealed in court documentsthis month, highlights another challenge facing both the company and the idea of Bitcoin as a currency. The thief was able to trick BitPay’s CEO into transferring the funds just by sending e-mails from the account of his CFO.

That reflects badly on BitPay’s compliance mechanisms. It also adds to the short but very rich history of spectacular Bitcoin thefts (see “Bitcoin’s Rise Constrained by Heists and Lost Fortunes”). They suggest that the currency’s design is not well suited to being used like conventional digital payment and money tools. Although digital, bitcoins are like cash in that transactions cannot be reversed if something goes wrong. Researcher Nicholas Weaver at the International Computer Science Institute has called that Bitcoin’s “fatal flaw.” Conventional electronic transactions such as credit card charges and bank transfers can all be undone if fraud is detected.

All this presents a big headache for BitPay—and for many other people and companies betting on the idea that Bitcoin would become a widely used payment mechanism. In addition, the Bitcoin community is currently faced with tough decisions about adjusting the cryptocurrency’s design (see “Leaderless Bitcoin Struggles to Make Its Most Crucial Decision”).

The e-mail BitPay’s CEO sent to his staff announcing layoffs last week said that the company needed to “reduce costs” so as to “better align with the pace of growth” in the Bitcoin industry. BitPay may have stumbled for reasons specific to the company. Or we might see other companies start to show the strain as hopes that Bitcoin would quickly gain traction as a currency and payment mechanism prove to be false.

Source:

http://www.technologyreview.com/view/541901/the-troubles-of-bitcoins-paypal-show-why-the-cryptocurrency-is-not-a-good-payment/

Tom Simonite
September 29, 2015

I read this as well this morning and thought the same thing about posting it - more bitcoin bad news isn't good for the industry.  I am glad you posted the article though, because it's important for everyone to understand why bitcoin is struggling.  We have discussed this before regarding premature merchant adoption, and I believe this story represents the fallout of it.  When DNotes is ready to push for merchant adoption, there will be things the merchant can do with the DNotes such as CRISPs for employee benefits, retirement, and probably a portion of wages in the not to distant future.

Bitcoin has always seemed so 'scattered' (the nature of crypto, I guess), with no clear leadership or master plan, and the resulting uphill battle is going to be a steep one.

I also find this very disturbing:  "The thief was able to trick BitPay’s CEO into transferring the funds just by sending e-mails from the account of his CFO."  REALLY???

Speaking frankly, stupid people should not be in the finance industry. Nothing has happened to Bitcoin that hasn't happened to cash over the many, many years it has been "king". I would not worry much about it, just something to write about when little other news is available and we all know bad news sells and good news is ignored. We need to counter with upbeat stories and speak the truth as we see it. Don't let the nay sayers have their day, fight back!

Anyway, I'M back! And, now it looks like I will have to deal with a Hurricane for all the agencies I'm connected to including USCG who just set Condition FOUR for us so, I 'll be reading but not posting much....

[DNotes]

This is by no means a positive or an inspiring article. I hesitated if I should even post and comment on this. In my mind here is another “pioneer penalty” that should be added to Bitcoin’s long list of pitfalls causing it to stumble time and again, delaying or preventing mass acceptance altogether.

Bitcoin cannot blame the media for lack of coverage. There has been some news coverage about Bitcoin everyday; may be not by network TV, and not always the most complimentary, but none the less, it still helps this nascent industry to become known relatively quickly.

There has not been a shortage of investment poured into Bitcoin ecosystem either. As pointed out, BitPay alone raised $30 million and the industry as a whole have raised well over $1 billion, mostly venture capital (VC) money.  One would think that this is the smart money; since they typically have some of the smartest people on their team going over hundreds of business plans, and do, on average, one deal for every 100 they analyzed and scrutinized. BitPay is indeed the leading Bitcoin payment processor. For that alone, it is very telling that Bitcoin is not ready to go prime time as a medium of exchange and I do not see any plan to help Bitcoin get there.

This was part of my message when I made my presentation at NASDAQ on June 22, 2015 and it still holds true today:

“The Currency:  As the pioneer, Bitcoin has struggled as a currency with countless negative headlines. It is failing to meet the full functions of money. It has been struggling to gain mass acceptance as it has been too volatile as a store of value and medium of exchange. It seems to have settled with a limited purpose as a speculative trading vehicle.”

At DNotes, we believe that meeting the full functions of money, as a unit of account, as a medium of exchange and as a store of value, is critical for DNotes to be successful as the trusted global digital currency for everyone. The “jewel” is in the medium of exchange but achieving mass acceptance to use DNotes as the medium of exchange is one of the biggest challenges in the world of commerce and seriously under estimated. I personally believe that it has to be engineered with a very complex sustainable plan, systematically executed over an extended period of time. It takes a tremendous amount of ingenuity, hard work and tenacity few would care to commit.

DNotes has been doing precisely that by virtual of our growing ecosystem. It is a huge commitment on our part. It has the least short term payoff but absolutely essential for DNotes to be superior to fiat currency without a doubt, in the minds of reasonable people, one day. Most likely, the values and the importance of DNotes ecosystem are not even reflected in the price of DNotes. With mass acceptance, DNotes will become most valuable when the vast majority of the transactions are between two parties with nearly zero transaction cost. At that point nothing else can beat it. Though not obvious, that is the value of DNotes in contrast to other digital currencies, including Bitcoin.

*************************

The Troubles of “Bitcoin’s PayPal” Show
Why the Cryptocurrency Is Not a Good Payment Mechanism

Leading Bitcoin startup BitPay is cutting costs, suggesting that the currency won’t be catching on soon.
In 2014, a Bitcoin startup called BitPay raised $30 million from investors and was dubbed the “PayPal of Bitcoin” for helping companies such as Microsoft accept payments in the digital currency. But 2015 has been less kind. Last week BitPay made significant layoffs, and earlier in the month it admitted to having $1.8 million in Bitcoins stolen.

The company’s travails neatly demonstrate two problems with Bitcoin as a currency and payment mechanism.

First, no one much wants to pay with Bitcoin and there’s not currently good reason to think that will change. BitPay’s business model was to help merchants take Bitcoin payments—often converting them directly into dollars—and take a cut of transactions. The company has enabled Microsoft, retailer Newegg, and many other companies accept Bitcoin payments.

Unfortunately for BitPay, just about no one gets paid in bitcoins, and for most people there are not clear reasons to bother with the trouble of buying bitcoins just to spend them again. The people with the best incentive to buy stuff with the currency are those who bought it several years ago and are now cashing out their gains after Bitcoin’s rise in value.

BitPay’s CEO Stephen Pair admitted as much in June, when he told BusinessInsider that the company was trying to find another business model. “We keep adding merchants—we’re up to over 60,000 now—but they’re selling to the same pool of Bitcoin early adopters.”

Gavin Andresen, who in 2010 was picked by Bitcoin’s mysterious inventor to lead work on its code, recently told me that he didn’t see that changing soon (see “The Looming Problem That Could Kill Bitcoin”). “Until part of your paycheck is regularly paid in Bitcoin, I’m not sure how it would really go mainstream,” he said.

BitPay’s embarrassing loss of 5,000 Bitcoins worth $1.8 million, revealed in court documentsthis month, highlights another challenge facing both the company and the idea of Bitcoin as a currency. The thief was able to trick BitPay’s CEO into transferring the funds just by sending e-mails from the account of his CFO.

That reflects badly on BitPay’s compliance mechanisms. It also adds to the short but very rich history of spectacular Bitcoin thefts (see “Bitcoin’s Rise Constrained by Heists and Lost Fortunes”). They suggest that the currency’s design is not well suited to being used like conventional digital payment and money tools. Although digital, bitcoins are like cash in that transactions cannot be reversed if something goes wrong. Researcher Nicholas Weaver at the International Computer Science Institute has called that Bitcoin’s “fatal flaw.” Conventional electronic transactions such as credit card charges and bank transfers can all be undone if fraud is detected.

All this presents a big headache for BitPay—and for many other people and companies betting on the idea that Bitcoin would become a widely used payment mechanism. In addition, the Bitcoin community is currently faced with tough decisions about adjusting the cryptocurrency’s design (see “Leaderless Bitcoin Struggles to Make Its Most Crucial Decision”).

The e-mail BitPay’s CEO sent to his staff announcing layoffs last week said that the company needed to “reduce costs” so as to “better align with the pace of growth” in the Bitcoin industry. BitPay may have stumbled for reasons specific to the company. Or we might see other companies start to show the strain as hopes that Bitcoin would quickly gain traction as a currency and payment mechanism prove to be false.

Source:

http://www.technologyreview.com/view/541901/the-troubles-of-bitcoins-paypal-show-why-the-cryptocurrency-is-not-a-good-payment/

Tom Simonite
September 29, 2015

I read this as well this morning and thought the same thing about posting it - more bitcoin bad news isn't good for the industry.  I am glad you posted the article though, because it's important for everyone to understand why bitcoin is struggling.  We have discussed this before regarding premature merchant adoption, and I believe this story represents the fallout of it.  When DNotes is ready to push for merchant adoption, there will be things the merchant can do with the DNotes such as CRISPs for employee benefits, retirement, and probably a portion of wages in the not to distant future.

Bitcoin has always seemed so 'scattered' (the nature of crypto, I guess), with no clear leadership or master plan, and the resulting uphill battle is going to be a steep one.

I also find this very disturbing:  "The thief was able to trick BitPay’s CEO into transferring the funds just by sending e-mails from the account of his CFO."  REALLY???

Speaking frankly, stupid people should not be in the finance industry. Nothing has happened to Bitcoin that hasn't happened to cash over the many, many years it has been "king". I would not worry much about it, just something to write about when little other news is available and we all know bad news sells and good news is ignored. We need to counter with upbeat stories and speak the truth as we see it. Don't let the nay sayers have their day, fight back!

Anyway, I'M back! And, now it looks like I will have to deal with a Hurricane for all the agencies I'm connected to including USCG who just set Condition FOUR for us so, I 'll be reading but not posting much....

Glad to see you're back RJF. We will be doing our best, growing DCEBrief and informing people without the need to use fear and negative press to draw in traffic.

[DNotes]

Interesting discussion among my mob yesterday:

suppose you were a cynic, expecting serious financial trouble. The reputations of legacy financial institutions will weaken*; the attractiveness of cryptos will increase -- but not equally.

Coins like TittieCoin and CryptoMeth will attract attention last.

The stealth coins and the 'libertarian' coins will eventually do well.

But the coins that are likely to attract attention soonest are the 'corporate' coins. Paycoin won't -- but it was designed as a genuine 'corporate' coin. Ethereum has major backers, a plus for it in this respect. Doge warrants mention 'cause the Shibes will seize the day.

But Dnotes' raison d'etre, acceptance by the mainstream, puts it in the box seat!

*Some might say they already are weakening.
Mark

Mark, that is a fairly objective characterization of the financial world and our industry. Structurally, there are many cracks and stress marks all over. We can say with certainty that some will not be able to weather the incoming storms. To be specific and precise is a different ball game. We just don't know but not a bad idea to have an alternative backup plan.

Digital currency will not be the cure all any time soon. It could take decades to gain widespread mass acceptance but could happen a lot sooner if we position ourselves correctly and enough people can recognize the value and joining force with us to gain the network effect sooner than later.  

Your timing on this subject is almost perfect. We will be issuing a press release next week covering this subject and provide a glimpse of our strategic plans going forward.

Here is a small slice of my conceptual draft I submitted for editing: " Yong pointed out that our greatest challenge is dependent on our ability to understand the dynamics of the moving parts that collectively will have the most profound impact on the mass acceptance of digital currency and the countless new ways of doing business enabled by the Blockchain technology.

Subsequently, we must identify the constraints and obstacles confronting our path towards mass acceptance and map out strategies and viable plans to overcome them. Additionally, it is important for us to realize that we are now equipped to confront big global problems with big bold global solutions, not possible before. Being hyperconnected effectively removed proximity and national boundaries that were historical barriers. Online global collaboration a world apart is just as efficient as collaboration with one’s neighbor."

Mark, this is an important post and I appreciate you sharing these views. It took me a while to think through it, in fact it lingered in the back of my mind throughout the day.

We do have a corporate sense of responsibility and we are building a profit model to support DNotes and I think that is why you have classified us as a 'corporate coin'. Which I believe is accurate to a point, but there are some clarifications needed when classifying DNotes this way. It is decentralized with an engine behind it pushing it forward. It is everyone working hard for a common goal so everyone can benefit together. It is working with the systems in place and environment we live in today to make a brighter future. It is a platform and ideology that I think everyone can get behind and support for not just the here and now but for many generations to come.

[KristinaHD]

http://s22.postimg.org/r98yqzv69/image.jpg
image upload with preview

This should be made into a poster. Or maybe a rack card.....

[matatyau-cohen]

My idea is to run a strip with the Digital Currencies rates from L to R as it runs on other digital and tv media nets or as it runs on SQR Times. we even can illustrate a central global new square of our own to be the background of this strip. such image can work. people are very interested on the rates of properties in general and their own especially. this idea is kept with me also for the moment our team will decide to create the "New Global Economy" - a daily newspaper ---- which I suggested to establish a few weeks ago

All, one way I was thinking of to promote DCEBrief on social media is infographics. They typically get a lot of traction on social media. It could be based on statistics surrounding an article, or even independent of an article on DCEBrief, or an explanation of an idea or system. If you have ideas, please let me know.

[DNotes]

My idea is to run a strip with the Digital Currencies rates from L to R as it runs on other digital and tv media nets or as it runs on SQR Times. we even can illustrate a central global new square of our own to be the background of this strip. such image can work. people are very interested on the rates of properties in general and their own especially. this idea is kept with me also for the moment our team will decide to create the "New Global Economy" - a daily newspaper ---- which I suggested to establish a few weeks ago

All, one way I was thinking of to promote DCEBrief on social media is infographics. They typically get a lot of traction on social media. It could be based on statistics surrounding an article, or even independent of an article on DCEBrief, or an explanation of an idea or system. If you have ideas, please let me know.

Thanks Mati, It is a good idea. Some time ago, I did start on extracting this type of data from the exchanges, it's a fairly large project. It is on the back burner until we have more time.

[matatyau-cohen]

Thanks. I think the inborders economy of DC - waits to inborders global economy media (which might be the second step of DECBrief)

My idea is to run a strip with the Digital Currencies rates from L to R as it runs on other digital and tv media nets or as it runs on SQR Times. we even can illustrate a central global new square of our own to be the background of this strip. such image can work. people are very interested on the rates of properties in general and their own especially. this idea is kept with me also for the moment our team will decide to create the "New Global Economy" - a daily newspaper ---- which I suggested to establish a few weeks ago

All, one way I was thinking of to promote DCEBrief on social media is infographics. They typically get a lot of traction on social media. It could be based on statistics surrounding an article, or even independent of an article on DCEBrief, or an explanation of an idea or system. If you have ideas, please let me know.

Thanks Mati, It is a good idea. Some time ago, I did start on extracting this type of data from the exchanges, it's a fairly large project. It is on the back burner until we have more time.

[DNotes]

Thanks. I think the inborders economy of DC - waits to inborders global economy media (which might be the second step of DECBrief)

My idea is to run a strip with the Digital Currencies rates from L to R as it runs on other digital and tv media nets or as it runs on SQR Times. we even can illustrate a central global new square of our own to be the background of this strip. such image can work. people are very interested on the rates of properties in general and their own especially. this idea is kept with me also for the moment our team will decide to create the "New Global Economy" - a daily newspaper ---- which I suggested to establish a few weeks ago

All, one way I was thinking of to promote DCEBrief on social media is infographics. They typically get a lot of traction on social media. It could be based on statistics surrounding an article, or even independent of an article on DCEBrief, or an explanation of an idea or system. If you have ideas, please let me know.

Thanks Mati, It is a good idea. Some time ago, I did start on extracting this type of data from the exchanges, it's a fairly large project. It is on the back burner until we have more time.

I think you are absolutely correct, that has been at the top of my mind to implement something to that effect.

[Dyna]

I am not posting this article because of the sensational and negative headline. In fact the headline is fine and very appropriate for this article. There has been so much negativity about Bitcoin, I might even be a little at fault for being too sensitive when I come across anything that linked bad actors to Bitcoin like the most innovative technology of our generation is faulty.

The author did such a great job with his concluding paragraphs, as follows, that I can close my case without even having to state my argument. Digital currency, like fiat currency, will be used to conduct illegal acts. Fiat currency can be used without a trace. Digital currency provides and preserves all the trace evidences. When fully implemented, digital currency, like DNotes, is far superior to fiat currency in meeting every function of money; as a unit of account, as a medium of exchange, and as a store of value. When the vast majority of the transactions are between two parties at nearly zero transaction cost, hundreds of billions of dollars will be saved in global commerce. That is what DNotes is committed to accomplish. It may take us a generation to achieve that goal but I do know that it is a worthy mission for the betterment of mankind.

“This story will have a slightly negative impact on the Bitcoin ecosystem, as mainstream media will continue to feast on anything that puts virtual currency in a negative spotlight. However, it is exactly these mainstream media outlets who are not telling the entire story, as the major culprit isn’t Bitcoin, but fiat currency.

Bitcoin is perfectly traceable and a far cry from anonymous. Fiat currency, on the other hand, is the most anonymous form of money that has ever existed. There is no way to trace paper money or coins at any given time, and fiat currency has been part of drugs, gambling, prostitution or any other illegal activity since the day it was created.”

Dutch Police Arrests Three People in Bitcoin Money Laundering Investigation

A total of six people has been arrested during police raids yesterday, which took place in The Netherlands and beyond. These police raids are a result of an ongoing investigation regarding money laundering with Bitcoin, a service offered by several individual residing in the Rotterdam area. Bitcoin’s PR problem has gotten slightly worse yet again by the look of things.

Guaranteeing Total Anonymity While Exchanging Bitcoin

It is not the first time Bitcoin is linked to money laundering activities. However, this police investigation focuses on several individuals offering a guaranteed anonymous exchange from fiat currency to Bitcoin. This type of business is deemed illegal under Dutch national law, and it was only a matter of time until the operation was shut down.

The individuals offering this service would accept large amounts of Bitcoins in exchange for fiat currency, all the while charging a higher commission rate. Doing so enables money laundering of stolen or illegal fiat currency into Bitcoin, which will affect the Dutch economy in the long run. Customers who received the fiat currency would own illegally obtained funds, causing all kinds of legal trouble.

According to preliminary reports, these individuals have been able to launder a few million EUR through Bitcoin. All of the bank accounts and Bitcoin wallets used during the operation of this business have been frozen by the authorities. A total of three residents of The Netherlands have been arrested during the police raid, and they will be arraigned as early as tomorrow.

Police officials also confiscated various computers, drugs, weapons and any type of administrative files that could help build the case against these criminals. The three Dutch people arrested are 19, 20 and 23 years old respectively, all of whom live in the Rotterdam area.  On an international level, one 24-year old man was arrested, whom will be extradited from Malta. The other arrest took place in Latvia, and police officials are questioning this person right now.

It will take some time to fully construct the flow of money going in and out of Bitcoin through the hands of these individuals. Not all of the money sources have been unraveled just yet, nor is it clear how this team of criminals managed to get their hands on such large amounts of Bitcoin. More details will be revealed as the investigation progresses.

Bitcoin Is Not Viable For Illegal Activities

If there is one thing the history of Bitcoin has shown us, it is that virtual currency is not a viable tool for illegal activities. Despite Bitcoin’s association with various illegal marketplaces and less-than-legal business deals, all of these schemes have come to an abrupt halt sooner or later. The reason for this is simple: Bitcoin is not an anonymous form of money, as every transaction can be publicly tracked through the blockchain.

This story will have a slightly negative impact on the Bitcoin ecosystem, as mainstream media will continue to feast on anything that puts virtual currency in a negative spotlight. However, it is exactly these mainstream media outlets who are not telling the entire story, as the major culprit isn’t Bitcoin, but fiat currency.

Bitcoin is perfectly traceable and a far cry from anonymous. Fiat currency, on the other hand, is the most anonymous form of money that has ever existed. There is no way to trace paper money or coins at any given time, and fiat currency has been part of drugs, gambling, prostitution or any other illegal activity since the day it was created.

Source:

http://insidebitcoins.com/news/dutch-police-arrests-three-people-in-bitcoin-money-laundering-investigation/35076

Bitcoinist.net  Oct 1, 2015 9:22 AM EDT

[KristinaHD]

I am not posting this article because of the sensational and negative headline. In fact the headline is fine and very appropriate for this article. There has been so much negativity about Bitcoin, I might even be a little at fault for being too sensitive when I come across anything that linked bad actors to Bitcoin like the most innovative technology of our generation is faulty.

The author did such a great job with his concluding paragraphs, as follows, that I can close my case without even having to state my argument. Digital currency, like fiat currency, will be used to conduct illegal acts. Fiat currency can be used without a trace. Digital currency provides and preserves all the trace evidences. When fully implemented, digital currency, like DNotes, is far superior to fiat currency in meeting every function of money; as a unit of account, as a medium of exchange, and as a store of value. When the vast majority of the transactions are between two parties at nearly zero transaction cost, hundreds of billions of dollars will be saved in global commerce. That is what DNotes is committed to accomplish. It may take us a generation to achieve that goal but I do know that it is a worthy mission for the betterment of mankind.

“This story will have a slightly negative impact on the Bitcoin ecosystem, as mainstream media will continue to feast on anything that puts virtual currency in a negative spotlight. However, it is exactly these mainstream media outlets who are not telling the entire story, as the major culprit isn’t Bitcoin, but fiat currency.

Bitcoin is perfectly traceable and a far cry from anonymous. Fiat currency, on the other hand, is the most anonymous form of money that has ever existed. There is no way to trace paper money or coins at any given time, and fiat currency has been part of drugs, gambling, prostitution or any other illegal activity since the day it was created.”

Dutch Police Arrests Three People in Bitcoin Money Laundering Investigation

A total of six people has been arrested during police raids yesterday, which took place in The Netherlands and beyond. These police raids are a result of an ongoing investigation regarding money laundering with Bitcoin, a service offered by several individual residing in the Rotterdam area. Bitcoin’s PR problem has gotten slightly worse yet again by the look of things.

Guaranteeing Total Anonymity While Exchanging Bitcoin

It is not the first time Bitcoin is linked to money laundering activities. However, this police investigation focuses on several individuals offering a guaranteed anonymous exchange from fiat currency to Bitcoin. This type of business is deemed illegal under Dutch national law, and it was only a matter of time until the operation was shut down.

The individuals offering this service would accept large amounts of Bitcoins in exchange for fiat currency, all the while charging a higher commission rate. Doing so enables money laundering of stolen or illegal fiat currency into Bitcoin, which will affect the Dutch economy in the long run. Customers who received the fiat currency would own illegally obtained funds, causing all kinds of legal trouble.

According to preliminary reports, these individuals have been able to launder a few million EUR through Bitcoin. All of the bank accounts and Bitcoin wallets used during the operation of this business have been frozen by the authorities. A total of three residents of The Netherlands have been arrested during the police raid, and they will be arraigned as early as tomorrow.

Police officials also confiscated various computers, drugs, weapons and any type of administrative files that could help build the case against these criminals. The three Dutch people arrested are 19, 20 and 23 years old respectively, all of whom live in the Rotterdam area.  On an international level, one 24-year old man was arrested, whom will be extradited from Malta. The other arrest took place in Latvia, and police officials are questioning this person right now.

It will take some time to fully construct the flow of money going in and out of Bitcoin through the hands of these individuals. Not all of the money sources have been unraveled just yet, nor is it clear how this team of criminals managed to get their hands on such large amounts of Bitcoin. More details will be revealed as the investigation progresses.

Bitcoin Is Not Viable For Illegal Activities

If there is one thing the history of Bitcoin has shown us, it is that virtual currency is not a viable tool for illegal activities. Despite Bitcoin’s association with various illegal marketplaces and less-than-legal business deals, all of these schemes have come to an abrupt halt sooner or later. The reason for this is simple: Bitcoin is not an anonymous form of money, as every transaction can be publicly tracked through the blockchain.

This story will have a slightly negative impact on the Bitcoin ecosystem, as mainstream media will continue to feast on anything that puts virtual currency in a negative spotlight. However, it is exactly these mainstream media outlets who are not telling the entire story, as the major culprit isn’t Bitcoin, but fiat currency.

Bitcoin is perfectly traceable and a far cry from anonymous. Fiat currency, on the other hand, is the most anonymous form of money that has ever existed. There is no way to trace paper money or coins at any given time, and fiat currency has been part of drugs, gambling, prostitution or any other illegal activity since the day it was created.

Source:

http://insidebitcoins.com/news/dutch-police-arrests-three-people-in-bitcoin-money-laundering-investigation/35076

Bitcoinist.net  Oct 1, 2015 9:22 AM EDT

Thank you, Dyna for posting this. I understand why you want to stay away from negative media coverage, but it makes sense to analyze things of this nature. This story in particular turned out to prove wrong those who think digital currency is for criminals. The fact that every fraction of every coin may be traced to any individual who uses it is essential to stop corruption and crime - something that paper money CANNOT DO. (one more reason crypto is superior to fiat)

[DNotes]

I am not posting this article because of the sensational and negative headline. In fact the headline is fine and very appropriate for this article. There has been so much negativity about Bitcoin, I might even be a little at fault for being too sensitive when I come across anything that linked bad actors to Bitcoin like the most innovative technology of our generation is faulty.

The author did such a great job with his concluding paragraphs, as follows, that I can close my case without even having to state my argument. Digital currency, like fiat currency, will be used to conduct illegal acts. Fiat currency can be used without a trace. Digital currency provides and preserves all the trace evidences. When fully implemented, digital currency, like DNotes, is far superior to fiat currency in meeting every function of money; as a unit of account, as a medium of exchange, and as a store of value. When the vast majority of the transactions are between two parties at nearly zero transaction cost, hundreds of billions of dollars will be saved in global commerce. That is what DNotes is committed to accomplish. It may take us a generation to achieve that goal but I do know that it is a worthy mission for the betterment of mankind.

“This story will have a slightly negative impact on the Bitcoin ecosystem, as mainstream media will continue to feast on anything that puts virtual currency in a negative spotlight. However, it is exactly these mainstream media outlets who are not telling the entire story, as the major culprit isn’t Bitcoin, but fiat currency.

Bitcoin is perfectly traceable and a far cry from anonymous. Fiat currency, on the other hand, is the most anonymous form of money that has ever existed. There is no way to trace paper money or coins at any given time, and fiat currency has been part of drugs, gambling, prostitution or any other illegal activity since the day it was created.”

Dutch Police Arrests Three People in Bitcoin Money Laundering Investigation

A total of six people has been arrested during police raids yesterday, which took place in The Netherlands and beyond. These police raids are a result of an ongoing investigation regarding money laundering with Bitcoin, a service offered by several individual residing in the Rotterdam area. Bitcoin’s PR problem has gotten slightly worse yet again by the look of things.

Guaranteeing Total Anonymity While Exchanging Bitcoin

It is not the first time Bitcoin is linked to money laundering activities. However, this police investigation focuses on several individuals offering a guaranteed anonymous exchange from fiat currency to Bitcoin. This type of business is deemed illegal under Dutch national law, and it was only a matter of time until the operation was shut down.

The individuals offering this service would accept large amounts of Bitcoins in exchange for fiat currency, all the while charging a higher commission rate. Doing so enables money laundering of stolen or illegal fiat currency into Bitcoin, which will affect the Dutch economy in the long run. Customers who received the fiat currency would own illegally obtained funds, causing all kinds of legal trouble.

According to preliminary reports, these individuals have been able to launder a few million EUR through Bitcoin. All of the bank accounts and Bitcoin wallets used during the operation of this business have been frozen by the authorities. A total of three residents of The Netherlands have been arrested during the police raid, and they will be arraigned as early as tomorrow.

Police officials also confiscated various computers, drugs, weapons and any type of administrative files that could help build the case against these criminals. The three Dutch people arrested are 19, 20 and 23 years old respectively, all of whom live in the Rotterdam area.  On an international level, one 24-year old man was arrested, whom will be extradited from Malta. The other arrest took place in Latvia, and police officials are questioning this person right now.

It will take some time to fully construct the flow of money going in and out of Bitcoin through the hands of these individuals. Not all of the money sources have been unraveled just yet, nor is it clear how this team of criminals managed to get their hands on such large amounts of Bitcoin. More details will be revealed as the investigation progresses.

Bitcoin Is Not Viable For Illegal Activities

If there is one thing the history of Bitcoin has shown us, it is that virtual currency is not a viable tool for illegal activities. Despite Bitcoin’s association with various illegal marketplaces and less-than-legal business deals, all of these schemes have come to an abrupt halt sooner or later. The reason for this is simple: Bitcoin is not an anonymous form of money, as every transaction can be publicly tracked through the blockchain.

This story will have a slightly negative impact on the Bitcoin ecosystem, as mainstream media will continue to feast on anything that puts virtual currency in a negative spotlight. However, it is exactly these mainstream media outlets who are not telling the entire story, as the major culprit isn’t Bitcoin, but fiat currency.

Bitcoin is perfectly traceable and a far cry from anonymous. Fiat currency, on the other hand, is the most anonymous form of money that has ever existed. There is no way to trace paper money or coins at any given time, and fiat currency has been part of drugs, gambling, prostitution or any other illegal activity since the day it was created.

Source:

http://insidebitcoins.com/news/dutch-police-arrests-three-people-in-bitcoin-money-laundering-investigation/35076

Bitcoinist.net  Oct 1, 2015 9:22 AM EDT

This sounds like a great story for DCEBrief. That point is exactly correct, digital currency is not ideal, as many may think, for money laundering and elicit activities. The media has made it out to be a dark secret place for criminals, but the fact remains, it is likely the best way to get caught as there is always a trail to follow unlike physical money.

[matatyau-cohen]

"there is always a trail to follow unlike physical money" - very good point

I am not posting this article because of the sensational and negative headline. In fact the headline is fine and very appropriate for this article. There has been so much negativity about Bitcoin, I might even be a little at fault for being too sensitive when I come across anything that linked bad actors to Bitcoin like the most innovative technology of our generation is faulty.

The author did such a great job with his concluding paragraphs, as follows, that I can close my case without even having to state my argument. Digital currency, like fiat currency, will be used to conduct illegal acts. Fiat currency can be used without a trace. Digital currency provides and preserves all the trace evidences. When fully implemented, digital currency, like DNotes, is far superior to fiat currency in meeting every function of money; as a unit of account, as a medium of exchange, and as a store of value. When the vast majority of the transactions are between two parties at nearly zero transaction cost, hundreds of billions of dollars will be saved in global commerce. That is what DNotes is committed to accomplish. It may take us a generation to achieve that goal but I do know that it is a worthy mission for the betterment of mankind.

“This story will have a slightly negative impact on the Bitcoin ecosystem, as mainstream media will continue to feast on anything that puts virtual currency in a negative spotlight. However, it is exactly these mainstream media outlets who are not telling the entire story, as the major culprit isn’t Bitcoin, but fiat currency.

Bitcoin is perfectly traceable and a far cry from anonymous. Fiat currency, on the other hand, is the most anonymous form of money that has ever existed. There is no way to trace paper money or coins at any given time, and fiat currency has been part of drugs, gambling, prostitution or any other illegal activity since the day it was created.”

Dutch Police Arrests Three People in Bitcoin Money Laundering Investigation

A total of six people has been arrested during police raids yesterday, which took place in The Netherlands and beyond. These police raids are a result of an ongoing investigation regarding money laundering with Bitcoin, a service offered by several individual residing in the Rotterdam area. Bitcoin’s PR problem has gotten slightly worse yet again by the look of things.

Guaranteeing Total Anonymity While Exchanging Bitcoin

It is not the first time Bitcoin is linked to money laundering activities. However, this police investigation focuses on several individuals offering a guaranteed anonymous exchange from fiat currency to Bitcoin. This type of business is deemed illegal under Dutch national law, and it was only a matter of time until the operation was shut down.

The individuals offering this service would accept large amounts of Bitcoins in exchange for fiat currency, all the while charging a higher commission rate. Doing so enables money laundering of stolen or illegal fiat currency into Bitcoin, which will affect the Dutch economy in the long run. Customers who received the fiat currency would own illegally obtained funds, causing all kinds of legal trouble.

According to preliminary reports, these individuals have been able to launder a few million EUR through Bitcoin. All of the bank accounts and Bitcoin wallets used during the operation of this business have been frozen by the authorities. A total of three residents of The Netherlands have been arrested during the police raid, and they will be arraigned as early as tomorrow.

Police officials also confiscated various computers, drugs, weapons and any type of administrative files that could help build the case against these criminals. The three Dutch people arrested are 19, 20 and 23 years old respectively, all of whom live in the Rotterdam area.  On an international level, one 24-year old man was arrested, whom will be extradited from Malta. The other arrest took place in Latvia, and police officials are questioning this person right now.

It will take some time to fully construct the flow of money going in and out of Bitcoin through the hands of these individuals. Not all of the money sources have been unraveled just yet, nor is it clear how this team of criminals managed to get their hands on such large amounts of Bitcoin. More details will be revealed as the investigation progresses.

Bitcoin Is Not Viable For Illegal Activities

If there is one thing the history of Bitcoin has shown us, it is that virtual currency is not a viable tool for illegal activities. Despite Bitcoin’s association with various illegal marketplaces and less-than-legal business deals, all of these schemes have come to an abrupt halt sooner or later. The reason for this is simple: Bitcoin is not an anonymous form of money, as every transaction can be publicly tracked through the blockchain.

This story will have a slightly negative impact on the Bitcoin ecosystem, as mainstream media will continue to feast on anything that puts virtual currency in a negative spotlight. However, it is exactly these mainstream media outlets who are not telling the entire story, as the major culprit isn’t Bitcoin, but fiat currency.

Bitcoin is perfectly traceable and a far cry from anonymous. Fiat currency, on the other hand, is the most anonymous form of money that has ever existed. There is no way to trace paper money or coins at any given time, and fiat currency has been part of drugs, gambling, prostitution or any other illegal activity since the day it was created.

Source:

http://insidebitcoins.com/news/dutch-police-arrests-three-people-in-bitcoin-money-laundering-investigation/35076

Bitcoinist.net  Oct 1, 2015 9:22 AM EDT

This sounds like a great story for DCEBrief. That point is exactly correct, digital currency is not ideal, as many may think, for money laundering and elicit activities. The media has made it out to be a dark secret place for criminals, but the fact remains, it is likely the best way to get caught as there is always a trail to follow unlike physical money.

[DNotes]

image upload with preview

This should be made into a poster. Or maybe a rack card.....

By the way Kris, this is pretty good at explaining the mining process. However, it may not be good for general public use, as most people aren't interested in mining. Were you thinking of using it to show people how transactions are secured and added to the public ledger?

[kanus1113]

image upload with preview

This should be made into a poster. Or maybe a rack card.....

By the way Kris, this is pretty good at explaining the mining process. However, it may not be good for general public use, as most people aren't interested in mining. Were you thinking of using it to show people how transactions are secured and added to the public ledger?

Would be nice if it included how transactions are added a bit better.

Bob sign's a transaction with his private key, then it can be confirmed that is came from Bob via the public key, and so on.

[Chase]

This story is the same age as bitcoin, so it's getting on in years, but I really enjoyed it and can see a lot of similarities here in cryptocurrency. 


Why fast followers beat first movers

Better business model, better marketing, better timing, better management

Innovation drives our industry, attracts the best talent,  attracts VC money, and wins fame for its leaders. Innovation leaders burst onto the scene, win early market leadership, but sometimes can't sustain the pace. Why do "fast followers" often jump in later and make fortunes? Is management responsible for the success or failure? Or, are these innovation leaders acquired by larger players before they have a chance to evolve into successful stand alone companies?

I have been on the leading edge, sometimes bleeding edge, of technology for most of my career. I have been fortunate to be part of start-up teams that have created "first-of-its-kind" innovations at companies like Forte Software, AltaVista, Napster, Bowstreet, and Groove Networks. All of these companies were first in their field, yet few of them realized the financial rewards one would expect. Is it all timing and luck? I don't think so.

Before exploring the reasons for success or failure lets review a list of innovation leaders and fast followers.

AltaVista -> Google
Napster -> iTunes
VisiCalc -> Lotus 123 -> Excel
Word Perfect -> Word
Netscape -> Internet Explorer
Apple Newton -> Palm Pilot -> Blackberry
IBM PC -> Compaq -> Dell
Double Click -> Google Ad Sense
Ofoto -> Flickr
Compuserve -> AOL -> @Home -> Comcast & Verizon
Nintendo –> Xbox
Friendster –> Facebook
Blackberry –> iPhone

All of these companies were innovation leaders and market leaders. Yet, they were eclipsed by fast followers, in some cases multiple times, who imitated their innovation. My belief is that the technology was outstanding. The management was not.


Read more at http://vator.tv/news/2009-06-29-why-fast-followers-beat-first-movers#HSBQLqbf4YLmKv1k.99

[DNotes]

This story is the same age as bitcoin, so it's getting on in years, but I really enjoyed it and can see a lot of similarities here in cryptocurrency. 


Why fast followers beat first movers

Better business model, better marketing, better timing, better management

Innovation drives our industry, attracts the best talent,  attracts VC money, and wins fame for its leaders. Innovation leaders burst onto the scene, win early market leadership, but sometimes can't sustain the pace. Why do "fast followers" often jump in later and make fortunes? Is management responsible for the success or failure? Or, are these innovation leaders acquired by larger players before they have a chance to evolve into successful stand alone companies?

I have been on the leading edge, sometimes bleeding edge, of technology for most of my career. I have been fortunate to be part of start-up teams that have created "first-of-its-kind" innovations at companies like Forte Software, AltaVista, Napster, Bowstreet, and Groove Networks. All of these companies were first in their field, yet few of them realized the financial rewards one would expect. Is it all timing and luck? I don't think so.

Before exploring the reasons for success or failure lets review a list of innovation leaders and fast followers.

AltaVista -> Google
Napster -> iTunes
VisiCalc -> Lotus 123 -> Excel
Word Perfect -> Word
Netscape -> Internet Explorer
Apple Newton -> Palm Pilot -> Blackberry
IBM PC -> Compaq -> Dell
Double Click -> Google Ad Sense
Ofoto -> Flickr
Compuserve -> AOL -> @Home -> Comcast & Verizon
Nintendo –> Xbox
Friendster –> Facebook
Blackberry –> iPhone

All of these companies were innovation leaders and market leaders. Yet, they were eclipsed by fast followers, in some cases multiple times, who imitated their innovation. My belief is that the technology was outstanding. The management was not.


Read more at http://vator.tv/news/2009-06-29-why-fast-followers-beat-first-movers#HSBQLqbf4YLmKv1k.99

Excellent find Chase! DNotes has an advantage, with a dedicated team with a clear plan to drive it forward. We have been working on the upcoming press release which will help clarify your point to the rest of the world. Thank you for sharing that.

[KristinaHD]

http://s22.postimg.org/r98yqzv69/image.jpg
image upload with preview

This should be made into a poster. Or maybe a rack card.....

By the way Kris, this is pretty good at explaining the mining process. However, it may not be good for general public use, as most people aren't interested in mining. Were you thinking of using it to show people how transactions are secured and added to the public ledger?

Would be nice if it included how transactions are added a bit better.

Bob sign's a transaction with his private key, then it can be confirmed that is came from Bob via the public key, and so on.

It was at first hard for me to comprehend how crypto worked. For me to understand something, I need to know the how's and the why's. I thought this image I came across helped explain a small part of the how.

 I have thought about the effectiveness of print to help bring awareness to digital currency. I'm not sure how it would be received. I agree with you that this particular picture probably wouldn't be a good candidate for a marketing tool, but maybe in the future in every 6th grade classroom, somemething like this will replace the poster of the kitten dangling on a branch saying "hang in there".

[DNotes]

Good morning all, made a few minor changes on DCEBrief, to give our featured articles a bit more of the prime real estate.

Also started a linkedin company, for those who frequent linkedin please follow / share / like / comment our content as it comes out. Today I will add be added our previous featured content and adding new content as it becomes available.
https://www.linkedin.com/company/dcebrief

Planning to launch our social media campaign soon, within the next few days, and it will include linkedin as one of the social media sources.

[Dyna]

Good morning all, made a few minor changes on DCEBrief, to give our featured articles a bit more of the prime real estate.

Also started a linkedin company, for those who frequent linkedin please follow / share / like / comment our content as it comes out. Today I will add be added our previous featured content and adding new content as it becomes available.
https://www.linkedin.com/company/dcebrief

Planning to launch our social media campaign soon, within the next few days, and it will include linkedin as one of the social media sources.

Excellent work, Joe. What we need now is to have more DNotes believers to expand their support by doing even more to help take DNotes to the next level. With your help, we have accomplished a lot and we appreciate your participation very much.

We are actively positioning DNotes for phase two of our strategic plan to commence in 2016. Watch for our next press release scheduled for Monday next week. We are disclosing our road map more than we have ever done.

[Dyna]

Thanks, Chase. Although, I won’t give the author very high marks, there are some very good points worthy of my comments.

Quite often there is a “pioneer penalty” as apparent in the case of Bitcoin. As much as Bitcoin is still enjoying the “first mover advantage” with substantially higher market cap than all the other coins combined, Bitcoin is saddled with “pioneer penalty” that it may never be able to sufficiently overcome and gain mass acceptance.

Our upcoming press release scheduled for publication on Monday will be quite telling as we reveal part of our road map for 2016 and beyond. Being positioned to be the trusted global digital currency for everyone worldwide to participate, we believe that DNotes has a great chance to take the leadership position one day.

“Innovation leaders burst onto the scene, win early market leadership, but sometimes can't sustain the pace. Why do "fast followers" often jump in later and make fortunes?”

Innovation leaders are often consumed by the excitement of their innovative ideas and failed to recognize that being outstanding in just a few areas while being weak in others areas is a failing strategy and not sustainable.


“The basic premise of the book is that management optimizes around protecting their existing business and fails to recognize and react to disruptive threats.”

This is true even with established business. Sometime, reacting to disruptive threats may not be sufficient. Understanding, the threats objectively, with winning strategies to deplore multiple action plans may be the best course of action. Major banks today are responding to the disruptive threads from Bitcoin and other digital currencies like DNotes. Perhaps the optimal strategy here, may be, to collaborate with an innovative small player like DNotes and benefit from their strengths in multiple areas, including being nimble, agile, and innovative.

 “it takes a different set of skills to start a company than it does to sustain a company”

This is very true, even in the case of DNotes. We will bring in professionals at the appropriate time.

“Lessons for entrepreneurs;
•   Never stop innovating
•   Build a well rounded management team early
•   Value sales and marketing talent as much as technical talent
•   React quickly to disruptive technologies or business models
•   Don't be too proud to imitate when it makes sense”

They are all good points with too many more to list, such as being the best in class, and be great across to board as opposed to being exceptional in one area but poor in others. I am still trying to find time to finish my book which will cover this subject in details.

•   Apple Newton ->Dauphin DTR -> Palm Pilot -> Blackberry



The author certainly did not have a very complete list. There are many more than what he listed. Dauphin DTR was the leader of the pack and dominated the news in the personal computer industry. http://articles.chicagotribune.com/1993-05-20/business/9305200013_1_pen-based-dauphin-technology-risc-system

*****************************************************************

Quote From Chase – Oct. 2, 2015:

This story is the same age as bitcoin, so it's getting on in years, but I really enjoyed it and can see a lot of similarities here in cryptocurrency. 

Why fast followers beat first movers

Better business model, better marketing, better timing, better management

Innovation drives our industry, attracts the best talent,  attracts VC money, and wins fame for its leaders. Innovation leaders burst onto the scene, win early market leadership, but sometimes can't sustain the pace. Why do "fast followers" often jump in later and make fortunes? Is management responsible for the success or failure? Or, are these innovation leaders acquired by larger players before they have a chance to evolve into successful stand alone companies?

I have been on the leading edge, sometimes bleeding edge, of technology for most of my career. I have been fortunate to be part of start-up teams that have created "first-of-its-kind" innovations at companies like Forte Software, AltaVista, Napster, Bowstreet, and Groove Networks. All of these companies were first in their field, yet few of them realized the financial rewards one would expect. Is it all timing and luck? I don't think so.

Before exploring the reasons for success or failure lets review a list of innovation leaders and fast followers.

There is a rare breed of technical visionaries who are also great business leaders. Bill Gates, Gordon Moore, Larry Ellison, and Scott McNealy are examples. They are truly extraordinary and rare


•   AltaVista -> Google
•   Napster -> iTunes
•   VisiCalc -> Lotus 123 -> Excel
•   Word Perfect -> Word
•   Netscape -> Internet Explorer
•   Apple Newton -> Palm Pilot -> Blackberry
•   IBM PC -> Compaq -> Dell
•   Double Click -> Google Ad Sense
•   Ofoto -> Flickr
•   Compuserve -> AOL -> @Home -> Comcast & Verizon
•   Nintendo –> Xbox
•   Friendster –> Facebook
•   Blackberry –> iPhone

All of these companies were innovation leaders and market leaders. Yet, they were eclipsed by fast followers, in some cases multiple times, who imitated their innovation. My belief is that the technology was outstanding. The management was not.

Clayton Christensen wrote The Innovators Dilemma which I reviewed in an earlier post. The basic premise of the book is that management optimizes around protecting their existing business and fails to recognize and react to disruptive threats. However, the examples in Christensen's book play out over 10 or 20 years. The above examples played out in 5 or less years. Are the same factors at work here? Lets take a look.

AltaVista was the first search engine and the clear technology leader. The management at DEC didn't understand what they had and didn't invest the necessary resources to make it a business success. Later Compaq and CMGI squandered the search opportunity and tried to imitate Yahoo, Excite, Lycos, and AOL in the consumer portal game. Big mistake. Fault management.

Napster was the first P2P file sharing application to bring together search, FTP, and Instant Messaging. Brilliant technical synergy. There are lots of reasons for failure here, mostly management decisions and unfortunate timing.

VisiCalc was the first spreadsheet, invented by Dan Bricklin and Bob Frankston. I know Dan fairly well but have never asked him why he thinks VisiCalc fell behind and Excel moved ahead. This topic deserves its own post. My memory is that VisiCalc was slow to adopt the DOS platform. Lotus 123 moved ahead on DOS and achieved market leadership, but failed to jump onto the Windows platform fast enough. Excel did make the move and the rest is history.

IBM created the PC revolution and was the early leader. Compaq was a fast follower focusing on "transportable" PCs and won huge market share. Dell came in later and trounced them all with a better business model.

Compuserve was the first dial-up service provider. Together with Prodigy they dominated the market. Later AOL entered the game with superior marketing and original content. AOL absolutely dominated in the 80's and early 90's. Then @Home created the cable Internet market and took the early lead. It wasn't long before Verizon, Comcast, and other cable providers owned the broadband market. AOL never really made the transition from dial-up to broadband.

In nearly every case the early innovators were eclipsed by fast followers. Why did the fast followers take over market share leadership?

•   Better business model (Google, Ad Sense, Dell)
•   Better market position (Word, Excel, Comcast, Verizon)
•   Better timing (iTunes, Flickr)
•   Better platform choices (Blackberry, Word, Excel)
•   Better management (all the fast followers)

It is overly simplistic to pin the success or failure of these innovators on one factor. There were a combination of factors at work. But in most cases the problem was not inferior technology, it was inferior management decisions.

So, were these early innovators led by technical visionaries who were not good managers? Will the imitators  and "fast followers" suffer the same fate and be overtaken by new fast followers?

The list of "fast followers" above are more than just imitators. They have continued to innovate far beyond the original idea or feature set and have maintained market leadership. If you look closely at these companies they have a  mix of technical visionaries and business management leaders. I discussed this with Robert Scoble who pointed out that it takes a different set of skills to start a company than it does to sustain a company. This balance of skills, I think, is the key to sustained market leadership.

Cisco is an example of an early innovator that kept their market leadership position over time. Their technical founders brought in professional managers to take them to the next level.

There is a rare breed of technical visionaries who are also great business leaders. Bill Gates, Gordon Moore, Larry Ellison, and Scott McNealy are examples. They are truly extraordinary and rare. However, I suspect that each of them has a strong business management team behind them. Bill Gates has Steve Ballmer. Larry Ellison had Ray Lane. The early innovators who failed did not have the business leadership necessary to sustain them.

Lessons for entrepreneurs;
•   Never stop innovating
•   Build a well rounded management team early
•   Value sales and marketing talent as much as technical talent
•   React quickly to disruptive technologies or business models
•   Don't be too proud to imitate when it makes sense
Source:
 http://vator.tv/news/2009-06-29-why-fast-followers-beat-first-movers#V53zpWR7c8EHzQFt.99