Relying on other people to tell you about a product you’ve never seen or used is like having someone describe to you what it’s like to ride a rollercoaster; you can sort of imagine it, but you can’t form an opinion of whether you like being hurled up and down a track in a little buggy until you try it.

I was ignorant about cryptocurrency as a product. So, I recently decided to get hands-on and think about it from a product perspective.

Dipping my toe in

I did what I think are the very basics with cryptocurrency: I acquired, transferred, and exchanged.

1. Acquired: I used an online exchange to convert some US dollars into one cryptocurrency. I also found some places online that would give a small amount of cryptocurrency in exchange for viewing ads or letting a browser “mine” for coins.
2. Transferred: I used a couple of ways of transferring cryptocurrency from one place to another. Specifically, I transferred from an exchange into an online wallet.
3. Exchanged: I used a few different means to exchange that one cryptocurrency into another.

In the span of minutes, I witnessed my US dollars being converted into a digital store of value and be sent over to a virtual storage place. I watched as a distributed ledger running on a bunch of different computers confirmed the transaction. I also watched fees paid to those running the computers that helped me do the transfer or exchange.

First impression: it works, but it’s hard

I was impressed that the technology worked and worked quickly. Transferring money was much faster than an Automated Clearing House transfer between banks, and in some cases was lower cost than a credit card transaction fee or a Paypal merchant fee.

However, most options to buy, transfer, and exchange cryptocurrencies are not well documented, not easy to access, and confusing. I ended up committing several hours of research and experimentation with about a dozen different websites to do what I did. And I feel I was just scratching the surface.

The walls are up, but there’s still no running water

If cryptocurrency was a house, it would be far from ready to live in for most people. Sure, developers will point to the walls and say “look, they’re standing!” and take pride in the tarp roof they’ve stretched across the walls. But most people will point to the lack of a toilet and ask, “where do I go to pee?”

Developers are busy addressing infrastructural problems, like how much information is part of each section of the distributed ledger, how fast the transactions are processed, how the transactions are verified or proven, and how time- and energy-efficient the verification process can be. There is demand for this work because coins are racing to differentiate from each other in order to get adopted by those running servers to verify transactions and those interested in buying the coins.

So. Much. Hype.

As of this writing, there are over 1,400 cryptocurrencies listed on CoinMarketCap. The barrier to entry is low. Can you fork an existing open-source project, setup a server running that code, and create a reasonably nice-looking website? Congratulations, you’ve just started a cryptocurrency.

Also as of this writing, there are over 1,000 books on Amazon about cryptocurrency.  Many focus on cryptocurrencies as an investment vehicle, promising some insider secrets that others don’t have.

So, what’s it good for?

Right now, not a lot. You can buy some coins and keep them, speculating on their future value. You can buy them to send money to people, but the transaction fees sometimes make this unappealing compared to Paypal or Venmo or just a simple check. You can also go online and argue about why one coin is better than another, in various forums.

So what about the future? Optimists say cryptocurrencies will replace gold as safe stores of value. Others think they will upgrade or replace the banking system, and expand money services for those unbanked and for those wishing to send money overseas. Still others see the distributed ledger as a way to create a new computing platform, complete with file storage and information transfer.

And then the pessimists point to the crazy state of the product today: lose your private key? Congratulations, you’ve lost your money. The same congratulations is warranted if you keep your money in an exchange and the exchange gets hacked. Oh, and you can lose your money trying to buy a cryptocurrency from an ATM because the transaction fees are too high.

I think that both optimists and pessimists are right; currently, cryptocurrencies aren’t ready for the mainstream user. What I don’t know is whether the innovations will hit a critical mass that will free developers to focus on building things at the application layer, solve end-user problems, and allow for everyone to easily adopt the technology.

This could be another BitTorrent

Remember BitTorrent, the distributed file sharing system, letting you quickly download files from multiple other computers that had all or part of those files? Movie studios and music labels were shaking at the prospect of everyone downloading films and albums for free with this technology. Then, the streaming revolution happened, and people realized paying a few bucks to Netflix and Spotify was much easier than spending time downloading a pixelated version of a movie with Portuguese-dubbed audio only to then receive a stern letter from their ISP.

Or, this could be the future.

Cryptocurrencies could follow the same path as BitTorrent: a lot of hype around a cool technology that remains in the margins, outside of most people’s everyday life. Or, it could be the beginning of the next platform in computing, creating a new way to store, transfer, and transact value and information without a central authority with killer apps yet to be imagined.

Only product people’s creativity, developer’s ingenuity, and what customers ultimately spend their time and money on, will tell.

One of the things that initially drew me to Twitter years ago was celebrities. Actors, authors, musicians, and tech investors were all directly posting and sharing their thoughts to this medium, in a seemingly unfiltered fashion. This was pretty exciting; you couldn’t friend a celebrity on Facebook, but you could follow them on Twitter and get a peek into their thoughts.

Posting to Twitter is another matter. Hashtags and at-replies are part of the vernacular, but it’s not obvious when and how to use them. Conversations among people are hard to follow and join. Most importantly, it’s hard to find your social graph there. Sure, you can add people via your address book, but an address book is not a complete network, given how easy it is to make casual acquaintances online.

I post to Twitter, but I don’t get a lot of return from it, such as replies, likes, and retweets. And, a lot of people I know are either on Twitter purely for consumption, or don’t bother with the service at all. For me, this turns Twitter into a source of breaking news and celebrity chatter, and not a place to have a conversation with my social graph. This is an engagement problem for Twitter; there’s only so much one-to-many broadcasts from celebrities one can consume before wanting to move on to a real, engaging conversation.

Snapchat Stories vs Instagram Stories

When I first started using Snapchat, I had that same feeling as I did with Twitter. Here were people like Macklemore, Mark Suster, and Bob Saget posting videos, and I could watch them, unfiltered. How cool! But, posting to Snapchat had echoes of Twitter’s troubles: it’s tough to figure out how to post to Snapchat, conversations between people are difficult, and social return is low. Most people I know are not on the service. My posts get seen by 4 or 5 people, at most.

Recently, Instagram unabashedly copied Snapchat stories. I was surprised to see about a dozen friends had already posted to Instagram Stories. I tried it out, and found it simpler to use than Snapchat. And, in 18 hours, my first Instagram story had 10 times as many views as my most popular Snapchat story.

At this point, I’m questioning whether I’ll continue to post to Snapchat. Why post there when all of my friends and family are on Instagram (or, by extension, Facebook)? And here’s where Facebook’s advantage shines through: Facebook has the most complete social graph and is able to bootstrap any new feature or service they build or buy with it. The network effect is strong, and draws people in.

Snapchat’s Twitter lesson

Snapchat’s Twitter lesson is this: one-to-many broadcasts from famous people with millions of followers is great, and will get you far. But, at some point, you’re going to want everyone to post and consume to have a vibrant, growing social service. And to do that, you need to make it easy for users to find those they know and to post very easily. Right now, Snapchat is not that place.

For Snapchat to scale, it will need to heed Twitter’s hard lessons, invent new ways to differentiate, or suffer a usage plateau. There’s only so many videos of Bob Saget telling puns one can stomach.

My first computer was a Tandy 1400FD. It had an 8MHz processor (which you could slow down to 4.77MHz for those games that were synchronized to the processor). It had two floppy drives, 768KB of RAM, and no hard drive. It had a CGA monitor. The first modem I purchased for it was 1200 baud.

My smartphone is an iPhone 6. It has a 1.4GHz processor, 64GB of storage, and 1GB of RAM. It has a high-quality, multi-color screen. It has a host of other technologies like WiFi, Bluetooth, NFC, LTE, and sensors galore. It can download and upload data at speeds measured in tens of megabits.

When you compare these two computers, you see that their processor speed, storage, memory, and bandwidth are all at least 100 times (100x) different. And, my smartphone can also do about 100x the things my Tandy could do.

At the time I was using my Tandy, I don’t think I ever envisioned something like an iPhone 6 (though I did envision having a Tricorder). However, I could have predicted parts of the experience of using an iPhone 6 if I had asked myself, “What happens if all of these things in my computer became 100x faster, smaller, cheaper, or better?”

If you want to predict the future of technology, imagine what will happen if something in today’s technology gets faster, smaller, cheaper, or better, by a lot. For example:

• What if everyone had bandwidth measured in the terabits, anywhere they went?
• What if computers were as small as a grain of salt?
• What if everyone had exabytes of storage, both locally and in the cloud?
• What if you could put dozens of touch screens around your house, car, and workplace, for the same cost as one inexpensive tablet today?
• What if every light, appliance, wall, floor, and piece of furniture in your home had an Internet-connected computer within it?
• What if your devices understood not only your speech as well as a person, but could anticipate your thoughts by analyzing your brain waves?

Of course, not all of these things will happen at the same rate, if ever. And speed, size, cost, and quality are not the only factors that drive new technology. Yet, imagining 100x improvements are a good thought exercise if you are trying to look ahead beyond two or three years.