Bitcoin Remittance Innovation through Isolation
When Charles Darwin first visited the Galapagos Islands, he found a plethora of species that had evolved on a completely different path as their brethren on the continent. The iconic tortoises, marine iguanas, flightless cormorants, and equatorial penguins unique to the islands could have only existed because competition wasn’t tough enough to snuff them out before their respective populations could gain a foothold.
The term for this phenomenon, coined by economist Tim Harford and referenced by writer Neal Stephenson, is ‘Galapagan Isolation.’ The theory states that true innovation occurs with less competition, not more, because not all great ideas are strong right out the door. Entrepreneurs with a six-month runway and a seed fund or incubator monitoring them week-to-week will rarely create something truly unique; in that situation, it is generally safer to go with ideas that have been road-tested by someone else.
Galapagan Isolation is observable in smaller locales like the Philippines because our community exists on the fringesof the Bitcoin space. Our problem areas are different, and a less intense level of competition allows our solutions time to evolve and gain traction, instead of being crushed in their infancy by ROI pressure, or rivals with deep pockets.
Remittance is one such problem area, and in terms of the Philippines, it’s a doozy: With the average remittance cost from the US to the Philippines at 5.3%, Bitcoin is seemingly poised to crush the incumbents. That this isn’t already the case might be surprising to some (Bitcoin remitters in the Philippines have lowered that cost to just 1%), but the situation is actually far more complex than it appears on the surface.
This post was published at Coin Telegraph on 2014-09-23.