Transcript of the video below.
So I have a crazy idea for a new Apple product: Money. Actual money. You know, digital currency like Bitcoin?
If you're not already familiar, Bitcoin is what they call cryptocurrency. It's basically computer money. Unlike regular money, it isn't issued by a government and there's no traditional banking system, so it's completely decentralized. It's also open sourced, so anybody could make a copy and make their own version. Banks don't like it because it takes them out of the equation, and governments don't like it because it means they no longer have control over the currency. But if banks and governments don't like it, you can safely assume it's probably a good idea.
But digital currency is also really really hard to explain: Like, instead of a government issuing new currency, bitcoins are produced by its users through a process called mining where computers spend a whole bunch of processing power to generate new bitcoins (and that is where baby bitcoins come from). It's a complicated mess of technology that can be really tricky for non-technical people to fully understand.
So while bitcoin is rapidly growing in popularity and value, there's no real danger of it taking over the world's currency system. Yet it kind of reminds me of Linux: It seems like every year since 1998 has been "the year of Linux on the desktop." While Linux is great for lots of stuff (and you may have even heard of it), it never really gained mainstream popularity. (Well, sort of.) What is Linux? Well, it's a free and open-source operating system based on UNIX.
And what is Unix? Well, UNIX is another operating system, mostly used by big mainframes and other fancy servers; there's also another free open-source version called FreeBSD. The FreeBSD people and the Linux people have pretty similar visions, but they still can't stop arguing with each other. Bottom line: They're both free and they're both basically Unix.
Linux and FreeBSD are built on a pretty cool idea: If you take something super stable and well understood, and make the source code available to everyone, you can make a more secure and stable operating system. The trouble is that it's also technical and complicated and difficult to use, so normal people have a tough time adopting (it not unlike Bitcoin).
But then Apple came along in 2001 and released Mac OS X: A beautiful, modern operating system with a flashy user interface and support for most popular commercial software. (Sorry, gamers.) It also happens to be built on FreeBSD. Now every Mac runs UNIX under the hood, and so does every iPhone. Even Google's answer to the iPhone, Android, is a variant of Linux. So there's a decent chance that you just went from not knowing what UNIX is to realizing you're holding some of it in your hand right now.
There's a popular old argument that Apple just acts like they invented things that others have already been doing, but I think this is the piece they're missing: Apple rarely shoots for being the first of anything. They didn't make the first computer, the first music player, the first smartphone, the first tablet, or the first smart watch. But even if you don't like Apple, you can't deny their influence in each of those categories. So Apple doesn't need to invent digital currency: They just need to make it accessible, understandable, usable, and desirable.
Okay, that sounds great on paper, but why would Apple do this?
The iPhone isn't just popular: It's the most successful and popular product in history. Nothing else even comes close. That success has the funny side effect of making everything else Apple does seem small. For example: The Apple watch isn't just the best-selling smart watch — it's the best-selling watch, period. Imagine being so dominant in a single category that your other successes just go overlooked!
Unfortunately, this leads some people on Wall Street to assume that Apple's success can't possibly last — we'll just ignore Apple's historic charge toward being the world's first trillion-dollar company. The common line is that Apple stopped innovating, but I think what they really mean is that Apple hasn't put out anything as big as the iPhone, which is true. The iPad didn't match the iPhone. The Apple watch didn't match the iPhone. But nothing has, and I don't think anything can. Maybe this statement will seem quaint in a few years, but I can't imagine a single product with the potential to be as successful or as dominant as the iPhone other than... well, money itself. With the iPhone, Apple basically is printing money. The only thing they could do to generate cash even faster would be to literally print money.
Apple's already dabbling in digital currency: Apple Pay is here today and accepted at a ton of shops with pretty reasonable and favorable rates to the merchants. You can also pay people via iMessage for free in the U.S., but that's nothing new. Facebook lets you send money, Square and Venmo do the same thing; NFC payments have been around for years. This is just Apple doing what they do best: Taking a complicated system and making it easy and desirable.
The user benefits are easy to market: security. Apple Coin would require Touch ID or Face ID, so it's even more secure than your actual bank. No need to transfer money internationally, no fees — in fact, no banking fees of any kind, ever. Oh, and there's an idea maybe — with Apple Coin, there's a mining feature, so your phone or Mac could be generating money while they charge and the more devices you own, the more money you make.
Plus, there's lots of interesting things about digital currency from a social perspective, which is kind of Apple's jam. Developing nations and emerging markets may not always have the most stable governments or banking systems, which is why Bitcoin is already finding a foothold there; now, assume you could also get a physical debit card that automatically converted to the local currency into money you could use in your Apple Coin account. You'd at least try it, right?
For most people, this solves way more problems than it creates. Apple also loves owning their entire supply chain: They bought a processor company just to have more control over the way their chips get made, and now the iPhone X is the most powerful mobile device on the planet.
Now that digital currency is a thing, it's not absurd to imagine the benefits to Apple of having control over the money itself. For example, Apple expects to make about eighty-five billion dollars in the first quarter of 2018; even if we assume they get a really sweet deal on credit card processing fees and somehow escaped paying for any per-transaction fees, that's still like a billion dollars in fees — I mean, probably. I'm terrible at math. So even if we ignore the money they make from the increasing value of their own currency, there are still benefits to tying it directly with our ecosystem and the mind share benefits of more people being aware of and using Apple products and services. It would be worth doing it to save a billion dollars.
This is what Apple is really great at: Taking complex technical systems and making them more accessible to everyone. They did it with computers, music players, phones, tablets, smartwatches. Digital currency is already out there and poised to be both massively disruptive and massively profitable for whomever finds a way to take it mainstream, and I can think of no better company to pull it off than Apple.
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