Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Brian Armstrong, JF Gallas, Jon Matonis, Marc Barach & Radko Albrecht: Bitcoin 2014 Amsterdam

Episode Date: May 30, 2014

This episode is part of our coverage of the Bitcoin 2014 Conference which took place in Amsterdam from May 15 to 17, 2014. Topics covered in this episode: Jon Matonis, Executive Director and board member of the Bitcoin Foundation (@jonmatonis) Marc Barach, CMO of Jumio (@MarcBarach) Brian Armstrong, CEO of Coinbase (@brian_armstrong) Radoslav Albrecht, Founder of Bitbond (@RadkoAlbrecht) JF Gallas, Chairman of the Board of the German Bitcoin Foundation (@jfgallas) Episode links: Bitcoin Foundation Germany and the Netherlands join the Bitcoin Foundation as affiliates Jumio Coinbase BitBond Bundesverband Bitcoin This episode is hosted by Brian Fabian Crain and Sébastien Couture. Show notes and listening options: epicenter.tv/bitcoin2014-02

Hi, I'm Brian Fabian Crane and I'm here with Sebastian Guter. We just got back from Amsterdam where we attended Bitcoin 2014 conference, which took place from May 15th to 17th. It was the second conference organized by the Bitcoin Foundation and over 1,000 people gathered for three days of talks and conversations. We had the opportunity to interview many speakers and attendees and talk about their projects and perspectives. We will release those episodes over the coming weeks.

So to kick off our series of interviews, we sat down with John Matonis, executive director and board member of the Bitcoin Foundation. He spoke to us about the growth of the Bitcoin ecosystem and the role of the foundation moving forward. We also spoke to Mark Berish, CMO of Jumio, specializing in ID verification. Also, Brian Armstrong, CEO of Coinbase. Then, Radislav Albrecht, founder of Bitbond, a peer-to-peer lending platform for Bitcoin. We end this one with J.F. Gallus. He's chairman of the board of the German Bitcoin Foundation,

and he talked to us about the Bundesverbom Bitcoin signing on as a Bitcoin Foundation affiliate. My name is John Motonis. I'm the executive director and board member of Bitcoin Foundation. So tell us about this conference. It's our second annual conference. Our first one was in San Jose, and we selected Amsterdam for a number of reasons. First of all, we wanted to do a conference outside of the U.S. to be very inclusive.

Bitcoin is a lot more than just a USA technology. It's a global currency, so we want to start doing the conferences outside of the U.S. And if you look at a Bitcoin Foundation membership base, we are over 50% non-U.S. membership base. So that's another reason that we wanted to be in the EU and outside of the U.S. Netherlands, though, specifically, is, as I mentioned in the opening remarks today, they are number six in global active Bitcoin nodes, which is very great because they are not number six in population.

So a very active community in the Netherlands. So if you compare last year to this year, I mean, you've talked a bit about the influx of new businesses. What else do you think has changed that's really maybe surprised you? Well, yeah, and then the 12 months have just flown by since the last conference. A lot of things have changed, but the thing that's most noticeable is the amount of number of professional companies that are now starting to get involved in Bitcoin. And I'm not just talking about the ones that have venture capital funding, but just the professionalism of the teams, they can get funding from many places. larger companies even are looking at integrating Bitcoin offerings into their current product portfolios. So the amount of independent development that we have seen is just booming across the world.

And we didn't see that last year. We only saw little pockets. And I guess if you look at one year ahead, what are your most – what do you think is going to be the most important trend? Well, you know, one year ahead for Bitcoin, I think we'll start to see, you know, real permanent applications starting to be deployed in the developing world. Like, just as we showed on the video this morning, I mean, there's real world uses that can show, you know, real world benefits today. They don't have to wait for, you know, legislative decree or regulators to catch up. people can transfer money now to places like Uganda, and the money can be used, and it can solve problems today.

Now, that's for Bitcoin, you know, in a year. For the foundation, what you'll see is we'll start to broaden out more globally. So we intend to play a big role in the EU. We opened an international office in London. We're signing on affiliates, which are local partners that represent the Bitcoin Foundation in their country. Yesterday, we signed Germany and Netherlands as affiliate partners, so they have their own nonprofits in those countries, and they become our eyes and ears in those countries.

So we're very encouraged by that. I think you'll see probably 10 or 20 more of those. How many are there right now? Right now there's a total of five. It's Canada, Australia, Mexico, and then, as I mentioned, Netherlands, and Germany. We also intend to play a big role in Asia as well. Our next conference in next year in 2015 will take place in Asia, and we're not sure yet if it's Singapore or Hong Kong.

So is this the vision to branch out the Bitcoin Foundation and kind of sign-on affiliates in different countries? or, yeah, I mean, is that the vision? That is the vision, and it's also the major thrust for 2014. We looked at a lot of different ways to become more relevant globally, and this is a methodology that we came up with that is the most decentralized, I think, because we allow these nonprofits that are local

to retain their own governance structure. They can form their own boards. They can use their own websites. I mean, we're not trying to come in there and build a subsidiary in a country. We would rather partner with somebody who's already existing in the country. And what is the advantage for those partners? Like, for instance, in France, we have the French Bitcoin Association, or the French Bitcoin Foundation.

What is the advantage for the foundation to join the Bitcoin Foundation? Yes, we're actually trying to partner with the French ones right now. You've been in the Associated? Yes, I know so very well. So the reasons are, I mean, there are several, but we've structured in a way where it's a turnkey solution. So the people who are running the local board in France, for instance, they don't have to quit their regular jobs.

We take on the overhead of running the foundation in terms of the membership portal and some of the logistics. They can keep their full-time jobs, and they gain credibility by partnering with the Bitcoin Foundation in terms of gaining new members. So we do revenue sharing back to them, where we will split the revenue on the new membership, and they get to keep 100% of any of the local donations.

So we believe, and we've demonstrated this with the other affiliates, that after partnering with the Bitcoin Foundation, they tend to get more memberships, they have more credibility with their own local regulators, if they're going and doing an educational presentation, for instance. They also get more media contact because we cannot answer all the queries ourselves. So queries come in from France, for instance. We will refer that to the French affiliate.

So it solves a lot of problems, and it's a true partnership. It's only a two-year agreement. So if either party decides that it's not working out, then we're free to go our own way. But so far it's been very successful. Cool. And for the foundation, is the main focus now. This one regulation, or where would you put the most important areas of your work? Well, we really cover three important areas.

And the number one is the core development work around the Bitcoin Core Protocol. And our chief scientist is Gavin, Gavin Andresen. And we also provide compensation for some of the other core developers. So developer compensation is what we set out to do in the beginning. Would you like the extent on the future? We are extending that in the future, but we don't really have a goal of compensating every developer. We would like the Bitcoin companies themselves to hire some of the core developers and pay them to work full-time on the protocol. BitPay has already done this, and several other Bitcoin companies are considering doing the same thing.

Now, when it comes to the developer compensation for the ones that work at the foundation, we set it up so that we can ensure transparency of compensation. So in other words, they cannot be compensated in another way, in secret, so other governments maybe can't, government bodies can't be paying them, so they won't be influenced. That was very important from the beginning to set up transparency of compensation for the developers. And you don't think that independence of developers would be compromised if their salaries paid by a Bitcoin company?

Well, it's not compromised when they're at the foundation because we have a very strong dividing line and a Chinese wall, if you will, between the developers and the board of directors. So they still have the same amount of autonomy that they would, Gavin and Vladimir, for instance. Now, on the corporate side, if a corporate takes on the role of,

of bringing a developer on board, then certainly they're going to have their biases. But that will be recognized when the contributor is working in the open source environment. This is no different than the Linux model, where companies would sponsor people to work on Linux. Everybody knows in the community where they're coming from and their priorities and how they work up the GitHub priority list in open source is going to be, you know,

moderated by the peer community. They're not going to let somebody who has an obvious agenda. They're not going to let him push that to the top. It's still going to be community driven. It's really just a matter of who's paying them. And, you know, they may be able to do more because they're being paid, but it's not going to make it through if it doesn't pass with the rest of the community. So I've seen quite a few of your articles, you know,

where you often talk about kind of economic issues related to Bitcoin as well. And one thing I've been thinking about a lot and wondering about, and I'm really curious on your opinion on there, is to what extent Bitcoin is scarce or it will be digitally scarce, given that you have all those other currencies that can basically take on the same function. You're talking about the alt coins? Yeah. Yeah. No, it's a good question. And we've spent a lot of time discussing this and thinking about this. Bitcoin is the leader right now, as you know, and it has the strongest network overall because of the increasing trend of the hash rate.

So not only does it have a lead in market cap, but that lead is mirrored in the strength of the overall network. Some of the other cryptocurrencies, and there's over 300 of them, there's over 300 different ones right now. They don't have the same strength of the network. They would eventually run into difficulties related to security if they ever did achieve any high value or usage rate. And because of that, the leaders tend to be the ones who end up, you know, the initial leaders tend to be the ones who end up with the advantage because it's definitely a first-move or advantage.

but the security of the blockchain is very helpful to the leader, and it kind of keeps the other ones at bay. Now, the other comment I'll make on that is that the world really can't handle so many different value standards. Think of crypto coins and altcoins as a measurement of value, just like the temperature. is a measurement of the way you measure temperature is also a measurement, and we have Celsius, we have Fahrenheit. Our minds can think of, you know, my mind thinks in Fahrenheit, your mind thinks in Celsius,

then there's also Kelvin, which is another measurement system for temperature. If we're measuring value and our mind gets used to Bitcoin and other maybe light coin or another coin, of course there may be two, three, or four, but you're not going to end up in a world where there's 100 because humans don't work that way. They tend to gyrate to one standard, and a standard emerges, or in the case of temperature, you know, a few multiple standards. So there's room for one or a few. Now, the reason that you don't see that today with the national currencies

is because the national currencies, like these flags out here, are all still drawn in artificial boundaries. So they're artificial to begin with, So that's why they've maintained their privilege within those artificial boundaries of being the value standard for that one area. If those boundaries went away, you would see the citizens of the world just naturally gyrate towards only a few measurements of value, as they did with gold. Yeah, I think that would be really fascinating to see how that plays out. I certainly agree, right, like security is a network effect. You have that there.

and usability, I agree, there's one too. I think it will be interesting to see how strong they are and what other incentives there are and maybe go the other way. Exactly, no, the network effect. You mentioned you're spot on with that. I just had one last question. Going back to the foundation,

can you talk to us about the new board members? Yeah, the new board members are Bobby Lee from BTC, China, and then Brock Pierce from GoCoin. They were elected by the industry members, and both of them, both of those two spots were replacing the two vacancies that we had from Charlie Schram and Mark Carpalis. Their terms begin on June 1st, and I think they will be two and a half year terms. Cool. Well, let's hope that there's been a lot of criticism of the foundation as well, so let's hope that going forward some of those will be alleviated.

I think that this conference and the turnout we're seeing at this conference, you know, really demonstrates that the foundation is strong, the foundation is global, and we are also the leaders in the conference space as well. Yeah, absolutely. Thank you. Cool. Yeah, good. Thanks you guys.

I'm Mark Berish. I'm CMO at Jumio. And what I'm spending a lot of time on these days is figuring out how to bring our product to Bitcoin industry because we think it's really vital to the growth of the industry. And can you tell people who don't know about Jumio what the product is? Sure. Well, Jumio is an expert in computer vision technology. So that means that we utilize device cameras in order to validate credentials

and extract the information from them and use them in transactions. Credentials in our world include all sorts of ID credentials and payment credentials like credit cards and things like that. And our secret sauce is that were fully embedded inside of our clients, mobile apps or websites as just a seamless process that they put the customer through wherever it makes sense in their business process. And that means that consumers are guided through a simple process and they don't need to interact with any external entity. So in particular, right, if, I mean, you talked earlier about Airbnb, you know, so if you need to authenticate with the people, people are. So you can use that a simple way.

That's the most common use cases when opening an account at Airbnb or at a bank or money transfer. Any one of those entities typically says, hey, show me your ID. And in the real world, we know how to do that. But what's the corollary in the connected device world? How do you actually show an ID? So that's where we step in. And with our computer vision technology, we're able to capture the image, validate that it's real and use the information in the transaction. It seems like kind of an obvious way to go if that would be that you have some sort of face match or matching of the ID picture with the picture. Are you doing that? And we call it face match.

That's exactly the brand name. So that is an additional feature on our product where after the document. That's hilarious because I was writing down the questions before and I was like, we'll use face match. I don't think I saw that word on the website. Well, it's an obvious name. And that helps calculate the confidence that the individual who's holding up the ID is the same individual who's featured in the photo on that. Yeah, exactly.

That's a tricky piece of technology only because people change. Or you can fake it. Well, anything is fakable, but the problem that it was set to solve is theft, because if someone steals a bona fide ID, if only look at the ID, then we can say that's a bona fide ID, but we don't know that it was stolen five minutes ago. But if a client of ours must be sure,

then we'll say, hold your face up to your camera, and then if it's not similar enough, then we'll say... Could you spoof a face from the picture of the ID? It would be pretty difficult. Yeah. But, you know, we don't... There's no 100% certainty. Yeah.

and be just obviously we couldn't tell it to be an identical twins, for example. Yeah. So there are limitations. But the way businesses look at this is just risk mitigation. They do many, many different things to lower risk in their business. None of them are perfect. In aggregate, they drive fraud down to levels they can live with. And this is just one of those things they use.

So is it used in the robocoin? Because they're doing something like that, you know. The Robocon Bitcoin-AtMs. We have some Bitcoin ATM clients. I think the biggest one is bid access. Okay. And they're a client and a user of this technology, and I think more are coming on board. Okay, yeah.

We've been existing, I mean, we're four years old. We're four years old. So we've only really started focusing in the Bitcoin industry in the last maybe four or five months when the Bitcoin industry came to us. And we noticed that we had all these young companies exchanges and wall. wallets and mining companies and things like that, needing this solution. And once we recognize that there was this new market and this new need, we created a more specialized approach for the industry.

So is it a significant part of dreamer's business now? Not yet. You expect it will be? I expect it will. Yes. We're big believers in this. And we know there's hundreds of players in the space and there's room for many. and we know that every single one of them

should be doing some kind of KYC they should be doing, we'd like them to be doing it the way we think is best, but no matter who or how, they still need to do it. So we see it as a big growth market. Yeah. You mentioned in a talk before,

or yesterday, this Bezon Network or Baizon Network. Bison is a buffalo. Yeah. Animal of the American West. So that stands for the Bitcoin Identity Security Open Network. And it's something that we formed in late March and launched with a lot of acclaim with our initial set of companies, which was eight Bitcoin companies.

And what this network is all about is to create a standard for the Bitcoin industry for how to do KYC, number one, number two, to really stand out to customers, regulators, and criminals, that this is a company that takes KYC. seriously is using a state-of-the-art tool. That's very important for all audiences, because consumers are concerned, regulators, and you want criminals to go somewhere else. I want them to do business with your company.

But then a greater interest is the share of fraud trend information because we're able to look at fraud trends across all the companies in the Bitcoin network, and then anonymizing the data, let each company know where they stand against others. So they can assess kind of their own fraud profile. And the last piece is rolling out this summer, which is the actual user network. And this is something that allows a customer to be validated once with their initial Bitcoin relationship.

In other words, let's say they go to Coin Runner, who's a client, and they open up their first account at Coin Runner. They'll scan their ID and be validated and their information will be captured. Next time they go to another Bitcoin company. company in the network, before they do anything, we'll recognize that they're on that other company's app or site, and we will be able to pass along the fact that they're already validated and send the customer's information into the form. Okay. So hyper-convenient, and that drives completion rates sky high.

But you're going to have a centralized database, which will be helped by GMEO, I presume. That's correct, with customers opt-in, of course. But absolutely, we see ourselves as that independent middle party, third party, that can, with customers' permission, hold that data and then utilize it across our network of companies. That's going to be a very controversial service in Bitcoin world, now? Well, I think so, but, you know, as we talked about before, it's sort of what does the industry really want here?

Does it want a large audience and move up in the world of financial currencies and be a player in order to do so? it has to just attract masses of people, which means simpler product, more standardized, working within regulations, and that's where we fit. We think the industry is going there because there's such a need for more efficient transfer of money.

It's ridiculous what it's like to wire money or to do Forex, very expensive and slow. So we see a huge need for efficient money transfer. But in order for it to become ubiquitous, I think that some of the earlier routes that formed Bitcoin will evolve. Otherwise, it's going to probably say a niche product that only feels to a certain class of customer who's different from the mass market.

Yeah. You know, the analogies have been made to, and I think I mentioned it, to Internet, 1993, pre-browser Internet, a little before your time, perhaps. But can you imagine you could get online. There was an online world, but you couldn't get online unless you were scientists. unless you were a coder, and then you got into this dark, weird place where people interacted computer to computer. It attracted a highly scientific and sort of fringe element. And then it got popularized with a way to display information in the initial browser. And once the initial browser

was made, all of a sudden regular people could start interacting with it. And that's when the industry started to take off because it had been around for a decade prior. So it's that sort of maturation, I think that we're going to see in the Bitcoin world as well. Do you think we will see that in the future that merchants, for example, require that thing when you pay with Bitcoin? No. I don't think the merchants are going to need it because the merchants will be, whoever their Bitcoin processor is will be carrying the risk.

And with Bitcoin, unless something were to change, there is no charge back or return. So, in fact, it would probably be the safest transactions. for a merchant. The only reason a merchant would do it is if they wanted an additional validation on something very expensive. Let's see you're selling $10,000 watches or rings or something. Yeah.

Where even today, just to make sure it's not a bad credit card transaction, sometimes ID is checked. Yeah, yeah. And I could see that happening also. Or if it's above a certain amount and there are, even with cash transaction, I think sometimes you have to. Absolutely. Yes. all about risk mitigation.

So where do you kind of see, let's talk about Bitcoin a bit. So where do you see Bitcoin in three years? I see it being more ubiquitous. I think, I think my mom will have a Bitcoin account. She will or not? But I think that my friends who are not in tech will, the doctor here or the designer there,

I think that they will start to see this. But I believe, my own personal belief, is that it's not going to take off so much on regular purchases. It's going to take off initially on foreign exchange, on sending money country to country. Because that's the biggest pain point today. Huge dollars are sent, but not necessarily the largest number of consumers do it, right? I mean, not every consumer wires money to Japan every week. It's sort of more of a specialized. but I believe that's where it adds the most value today.

And you need a beachhead. You need to have one use case that's really popular. I think it's going to be around Forex. So three years out, I would see this being a big part of how people buy things and pass money between countries that is very difficult to do today. What do you think the biggest threat is to Bitcoin? I think it's self-inflicted wounds. Seven-figure women.

I think it's the biggest problem. I mean, we saw in the last six months some very cataclysmic events in the industry and how that drove Bitcoin prices down. And it didn't dampen investor excitement because investors take a long view, but it scared away many, many potential consumers. Well, I mean, if you look at the Bitcoin price, now, it's down the long. It's down quite a bit. But who knows what it should be?

I think the biggest issue is just creating stability in the price. because it's difficult to treat it as a true currency if you can't hold it. And for most merchants, like Overstock and others, they're not holding the Bitcoin. They're converting them immediately so they have no currency risk. I think for it to be a currency, it just has to have a more stable value because it's not much of a currency if you don't want to hold it for an instant because you don't want to take that risk. I think that's something that will be...

With more volume. More volume. More volume. Yes, I think so too. So I think that's key. And then just a simple process. Because even today, if you want to buy something on overstock, it's something of a complex process to go get your wallet and go buy your Bitcoin and then go figure out how to use it.

And all that will improve. I think the first wave of companies is going to do the hard work to develop the market. And the second wave of companies that come on in and steal the market with slick applications. I mean, we have to now kind of circle type thing, that come late, but with a lot of money. Yeah, it still is early, though. It's still as early, yeah. It's just as it's later than before. It's all relative to, yes.

It's true. I mean, my own experience of these things is that, you know, the so-called hockey stick, you know, on the graph, it's always later than you think it's going to be. Yeah. But it does happen eventually. But in the case of mobile, it was about 10 years later than people thought it would be. It was all through 2000, all the way till really the iPhone. Mobile was always three years off. It was really going to hit stride three years from now,

and everybody's presentation said that, and it was never happening. But then something changed, right, which was faster connectivity. In many countries, all you can eat pricing. And then this wonderful, slick, fun device, as you know, Blackberry was out years prior with an app ecosystem. Is that something that you ever used? I didn't realize that an app. You could go on your BlackBerry to their app store and find apps and download them and use them exactly like Apple.

Except it wasn't the same. Wasn't the same. UI wasn't the same experience. So years after BlackBerry did Apple essentially did that and change the game. It would be very interesting to see in what timeline that happens. It's extremely hard to estimate. What is your estimate if I could ask? Well, what is the milestone we're trying to hit of ubiquity?

Or how would you measure success? I think the number of users is really, like number of people who are, number of users, number of transactions, but transactions not so much as in transactions on the blockchain, but actual, because there's a lot of transactions that aren't actually economic transfers of value that are in the blockchain. So I see. I think those two things are maybe the market. Two things are maybe the most important metrics, and I find it very hard to estimate.

It will take a while. It will take two years until we have a decent volume, I think. Yeah. Yes. Or longer. At least two years. Yeah. So is your, is Jimio kind of American focused, or do you have customers everywhere?

We have customers throughout Europe and the Mideast. Well, mostly Europe and the U.S. were almost 50-50 between both markets. And we originated as an Austrian company. Our founder, Daniel Mats, is Austrian. So, as we started a company, and we still have a large office in Vienna, where we have our development and in Linz, and then we open up our U.S. headquarters in Al-AWALto. Okay. And so it's mainly a service for Bitcoin startups now or a Bitcoin company,

so any size, who need to do KYC? Yes. in the most efficient way possible. There's a lot of ways to do KYC, but most of them really suck. Yeah. So if you want to treat your customer well and move them through the process

in a way they've become accustomed to with all these slick apps, then I think we've got really the winning solution. But we've been selling it quite a bit already to other verticals, whether it's financial services or marketplaces, travel airlines are just jumping on board now.

It's very powerful in mobile apps to check in for your flight now with your ID verification. Okay, cool. So there's so many applications for it. So if people are listening to this, and that's exactly the kind of thing they need, how can they get in touch? Well, they should just come to Jumeo.com and just put their name in and we'll get in touch with them right away, or they can certainly read about us and learn. We've got a lot of demos and other information on the site, and once they're self-educated,

you know, give us a shout, and we're happy to talk. Cool. Thanks very much. Okay, Brian. Yeah, so I'm here with Brian Armstrong's year of Boeing Base. Is your first time in Amsterdam now? It is, my first time here. You're going to give a talk at the conference as well? Yes, I am. There's going to be a talk on Saturday morning about the future of Bitcoin industry and things like that.

So I'll be talking then. And what do you think about that? Where is Bitcoin going? Well, you know, a lot of it's obviously unwritten, right? I think we're kind of in the web 1.0 phase where we're building the core infrastructure companies of Bitcoin. Kind of like in the early days of the internet, there was web hosting companies and DNS and email and those kind of basic functions all got put in place. And then we only saw Web 2.0 later. So I think at Coinbase, we're really interested in building that the Web 1.0 right now. That's our primary focus with our API platform and get the fundamental pieces, like being able to store Bitcoin securely,

exchange it, your local currency, deal with some of the compliance aspects. and things like that. And then I think we'll see that second generation of Bitcoin companies crop up. So we're just starting to see the very beginnings of that. Coinbase actually has an app gallery of people who are building different things on top of the API. And there's a lot of really cool stuff there that's people doing things around tipping and like smart property and creative ways that people are using it. So to be honest, I don't know what those ideas are. We sometimes come up with them, and we put them on the platform ourselves. So you build apps yourself as well.

We do. But what I'm much more excited about is thousands of developers out there who are going to build the ideas on top of that. I think one of those will be the killer app that we didn't even come up with ourselves. So you think there's going to be that one killer app that's going to lead to a more mainstream adoption? Yeah, I mean, aside from currency, which is already a killer app, right? But I think there will be other ones. it's a lot like Apple came out with iOS, right, as a platform, and they kind of ceded that with their own first main apps, right?

Like email and contacts and cameras and things like that. But eventually they had an app store where 500,000 apps were all built, and a lot of people don't even use the apps that Apple originally created themselves. They're using other ones created by other people. And there was brand new functionality that nobody expected or really could have thought of at the beginning. So we want to think of it more. How do we build the platform where a thousand good ideas can blossom?

So I'm also curious. Do you think that, you know, we've seen, for example, recently Xappos did this Bitcoin debit card. And I know a lot of people thought about, you know, Bitcoin kind of functions as a backbone where you have maybe a dollar on the one side, a dollar on the other side or a local currency, but just Bitcoin in the middle. Do you think that's going to be more prevalent? Are you think people will actually, you know, huge fans, people will start holding Bitcoins themselves? Yeah, well, I think in the early days, it's definitely going to be, you know, the former case where people are actually using things like a debit card,

and they're swiping that at local merchants who haven't done a full Bitcoin integration yet, but that's a great way for consumers and people have Bitcoin to be able to start going around and using it, even if the merchants are not accepting it yet. So that'll be a great growth strategy in the early days. But in a couple years, if that merchant is seeing 15, 20% of their volume in Bitcoin, there's no reason why they then wouldn't go do a direct integration. So I really see it as a way to help the network grow, but it's not the long-term potential.

And what about Coinbase? So, I mean, you talk about kind of the infrastructure part of Bitcoin. And which parts of that do you think will be most important for Coinbase in that future? Yeah, I mean, so the biggest ones for us are about building great consumer wallet. but that just means people are able to store it securely, send and receive it easily with mobile apps, web apps. The second thing is around exchange tools, right? So people need to be able to convert it to their local currency easily

and in a compliant way. And the third thing is we just want to build a great developer platform where we expose that functionality, not just on our own website, but in an API where people can integrate it in a very white-labeled way into any other product or service that they want. So that's where we spend a lot of our time focusing. And we've seen, for example, BitPay, as they've started expanding in other countries. What are your plans there?

Are you going to open offices in other countries? Are you going to stay focused on the U.S.? Yeah, well, you know, we already are working with some merchants that are in other countries. And so we do that as well. I think the focus for us is less about opening other offices remotely at this time and more just about how we can get those merchants on the platform. So then I guess you need to have local banking relationships and that kind of stuff, though? Sometimes, yes, sometimes no.

It depends on what payout mechanism they prefer, right? So there's a number of ways to get to that outcome. Simplest one is you can just wire funds to a foreign bank count, right? But there's also local payout methods that are popular. Yeah. Okay, cool. Yeah. Well, thanks so much.

and I hope you enjoy the conference. Yeah, thanks, and I enjoyed chatting with you. Yeah, so I'm here with Rod Garbage. He's from Berlin as well as me, and just found with BitBond. Can you tell us about what BitBond is? Yeah, so BitBond is a peer-to-peer lending platform for Bitcoins, which means that we're a marketplace for loans. You can either borrow Bitcoins or you can lend Bitcoins,

and then you can earn interest on these Bitcoins, and we are bringing borrowers and lend us together internationally. And Bitcoin enables us actually to do a worldwide loan market, which was not possible before Bitcoin. So are you guys the first company to do that worldwide? We have one competitor that was a little bit earlier than us in the market, which is BTC jam, but we were the second to actually implement this concept. Okay, cool. And how's it going? Do you see a lot of traction? Yeah, at the beginning it was difficult, which is natural for a marketplace model,

where you need to balance supply and demand. but especially in the last two months it's picked up pretty good and we're getting about one loan per day funded which is very good for now oh great congratulations thanks so where are a lot of the people boring and lending can you tell us a bit about the geographical dispersion of that sure it's actually very diverse i have to say we have customers from over a hundred countries already and the strongest countries so far are the anglo-saxon countries that have english as a first language so So the UK, the US, Australia, Canada, New Zealand, those are the strongest. And then there is a very diverse set of different countries also from continental Europe and from Africa. And is that similar for both lending and borrowing, or is there a difference there?

Yeah, I would say that applies to both sides, borrowers and lenders. It's both very diverse. Cool. And you're going to give a talk or you're at a panel at this conference. Is that right? Exactly, that's right. I'm at a panel on merchant services where we will discuss a future outlook. of how merchant services regarding Bitcoin, of course, will look like in the future.

Can you tell us a bit more about that? What's your view on merchant services? Yeah, well, my personal view is that right now, when you have payment service providers, what they basically are, they are an interface to an exchange. So they enable merchants to accept Bitcoin, and these merchant service providers actually convert Bitcoins to local currency, like dollars or euros or other currencies instantly.

so the merchant actually gets paid in their local currency. What my personal believe is how the future will look like is that merchants will want to keep actually Bitcoin and will not want to convert the total sales they make into their local currency. So then you need new services compared to today, and this is mainly an accounting integration. Because currently, when you have a normal business running

and you accept payments on your bank account, this bank account integrates with your accounting very easily on the technical side. And this is something that I believe that Bitcoin merchant services will have to offer in the future as well. Yeah, I mean, I totally agree that there's going to be a big need, right? As soon as you start accepting Bitcoin, like what do you do with all accounting, plans, etc. But it's interesting. I say that's going to be offered by payment processes, because I always thought like there will be separate companies that do that.

Why do you think that's going to be payment processes that will offer that? and of, for example, accounting software or... Well, I believe that the payment service providers that we have in the Bitcoin world so far, which the largest examples, of course, are BitPay and Coinbase and maybe CoinCite, I think that they will take the opportunity and might go into that direction, although maybe it's not the most natural thing, because currently, like in the standard Fiat world, its companies like SAP and their enterprise resource,

planning software that actually does this. But I'm not sure whether they will be innovative enough to do this for the Bitcoin world. So I believe that there will be Bitcoin startups. Some of them that already exist today. And maybe some of them will just be founded in the future that will provide these services. No, I think that's a really interesting topic and also a really important topic. Because I think that's probably a really big hurdle now. Maybe it's not so much a hurdle to Bitcoin acceptance.

Because, yeah, you can use BitPay, get your local currency. But it's definitely a huge hurdle when it comes to keeping Bitcoin. as a company. I absolutely agree. And that's also the reason from my standpoint why you need new services that allow you to integrate Bitcoin deeper in your company, right?

Because just accepting it and then actually taking a local currency is not that big of a deal. It gets a little more difficult and a little more tricky once you actually want to keep Bitcoin and once you're actually living in a Bitcoin world the way you don't convert 100% of the revenues

into a local currency. I feel I remember that either Bitcoin or Coinbase have some sort of quick books integration. I don't know how that works. But I remember at one point that. Something that was exist. To be honest, I haven't heard of that yet. I'll ask about it. Yeah. So what are you looking forward to at the conference once? Well, I think this is really a conference where you have a very diverse set of people who are speaking and who are visiting the conference.

And I'm looking forward to meet new people that I've just. known by emails so far, and I have the chance to actually meet in person and make deeper connections and just meet a lot of people. Cool. Well, thanks very much, and I look forward to your panel and hang out to speak. Thank you very much. So I'm here at the correspondence reception just before the Bitcoin 2014 is about to start, and I'm here with the chairman of the board of the German Bundeswobam Bitcoin,

which is the German Bitcoin Foundation, Jeff. How are you? Good, how are you? Yeah, I'm very good, yeah. I'm very excited about the conference. Yeah, pretty excited to be here. We got in a little earlier because we finished talking to the Bitcoin Foundation

of becoming an affiliate of the Bitcoin Foundation as a German chapter, sort of. Yeah, I was hearing about that, and I remember in the beginning when the Foundation, you know, they wanted us to join or the German Foundation joined. Everyone was like, no, no, no. And it seems like now this has come around

and then people are more positive to this one. Yeah, and I think it is more positive, mainly because we started communicating with each other, which didn't really happen before. Every piece of information we got maybe a year ago or a half year ago was all rumors, and it turned out the Bitcoin Foundation is made out, they're all really great guys.

They're enthusiastic about Bitcoin. They are looking out to promote, to protect, and to standardize them. And I'm excited that we're actually going to be part of that in Germany as well. So what do you think that's going to mean for, you know, kind of

Bitcoin foundations in general and for Bitcoin if we have a lot more cooperation? A global cooperation? Well, I think as it looks right now, on a broken down to a national level, regulators are getting more aware

of Bitcoin and it feels that the community has to, on some parts at least, work together to create the best possible outcome on legal stance, on regulatory stance. And so every country faces some challenges for the future right now, some more, some less. And having an international organization that kind of combines all the efforts and provides an infrastructure and provides schooling and orchestrated press. Yeah, that's definitely valuable. Totally valuable.

So what are you most looking forward to at the conference? I'm sorry? What are you most looking forward to at the conference? Are there any talks you want to see or meeting people? Well, I think one of the more interesting talks is probably going to be the talk by Andreas Patterson about mycelium, a Bitcoin wallet. that also has an integrated training feature.

The local trader function. Yeah, so it's pretty much Bitcoin Wallachianroid combined with local bitcoins. And I'm excited to hear more about that. For one, I'm pretty excited to hear Patrick Byrne talk. He's going to give the keynote speech tomorrow. And there's a bunch of talks about the possible mass adoption of business. So that's going to be interesting.

That's going to happen this weekend. Yeah, well, possibly. Hopefully. Cool. Well, thanks very much, Jeff. Well, thank you. I look forward to hang out this week. So we hope

you enjoyed this episode about the Bitcoin 2014 conference. If you liked our coverage, please consider tipping us at epicenterbidcoin.com slash tips. You can also subscribe to a weekly newsletter

at Epicenterbikcoin.com slash newsletter. And tune in next week for more interviews and coverage of Bitcoin. in 2014