Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Fireside Chat – A Fascinating Year in Retrospect and Exciting Times Ahead

Episode Date: December 29, 2014

As we wrap up 2014, Brian and Sebastien have a fireside chat and look back on some of the areas of Bitcoin they thought were the most defining. They also look out to 2015 and give their thoughts about what to expect in the coming year. This episode also marks the show’s 1-year anniversary, so celebratory drinks are in order. No guests or scripts for this one, just a candid conversation between the Epicenter Bitcoin founders. This episode is hosted by Brian Fabian Crain and Sébastien Couture. Show notes and listening options: epicenter.tv/059

This episode of Epicenter Bitcoin is brought to you by Fairlay. Fairlay is a Bitcoin prediction market where you can place predictions on the likelihood of sporting events, the Bitcoin price, or current affairs. You earn money if your predictions are correct. Head over to Fairlay.com slash epicenter, that's F-A-R-L-A-Y dot com slash epicenter, to place your first bet today. And by the Gem's Social Messaging app. We believe Gems has a real potential to bring new users into the Bitcoin ecosystem and take adoption to the next level. It's social messaging on cryptocurrency steroids.

The Gems pre-sale is running now, and you too can benefit from becoming an early supporter. Head over to getGems.org to learn more. And by Shapeshift.io. With no account or sign up required, it's the easiest way to buy and sell light coin, dochecoin, dark coin, and other leading cryptocurrencies. Go to shapeshift.io to instantly convert all coins and to discover the future of cryptocurrency exchanges. Hello, welcome to Epicenter Bitcoin, the show which talks about the technologies, projects, and startups driving decentralization and the global cryptocurrency revolution.

My name is Sibbisank with you. And my name is Brian Kroin. So today, we have a bit of a special episode. And we are approaching our one year anniversary, or actually we did our pilot episode, I think just about a year ago, made a bit over a year ago. I think it was just about now about this time. It was right before New Year's, if I recall. I think it was before Christmas.

But then our first official episode was just around New Year's, right? So, yeah, we've sort of come a full year. And as you know, as our listeners, we have been doing a lot of interviews recently. So we've been talking to a lot of people and getting their perspectives on things. And today we're going to do a bit of a different episode in, that it's just going to be the two of us and we're going to have time to really dive into some of the things that happened this year, some of the areas that we find most interesting and most important. And we're also going to look out a bit and talk about 2015 and what we can

expect in those different areas. A fireside chat, I think we can call it. Yes, a fireside chat, which also means we have secured ourselves some alcohol. Yes. Otherwise, it wouldn't be complete. So what are you drinking there, Brian? I'm having some port. Let's see the bottle. This is from a brand called Sandman. They are not a sponsor. Very nice.

And I'm drinking musca de riftesalt. I don't know if this is any good, but it's got the green label, so that means it's controlled by the state. Yeah, that means it's good. All right. Also, just before we get started, I wanted to announce, at least let you guys know about episode that are coming up. So which are going to be, again, more in line with what we've been doing recently.

So we're going to have Robert Sams coming on in one week. Now, if you listen to our episode with Vitaleck, we did talk a little bit about this idea of a stable coin. So a cryptocurrency that isn't volatile, but sort of adjusts its supply in a way that the price is relatively stable. And he's written a paper on that. And he's a well-known sort of a crypto-economist. and a hedge fund guy in London,

and we're going to talk with him about that. It's a really interesting topic. Then we're going to have Preston Byrne and Sean Jones. Sean Jones, of course, has been many times doing regulatory stuff for E.P.C. Bitcoin has also been on our show in an interview once that Sean actually did. And so he started a new company called Iris or Eris Industries.

I'm not sure how you pronounce it. And the idea, I think, is to have some sort of decentralized autonomous organization framework that's also integrated in the legal framework, I think. But we will be diving into that. And I think Preston is a really interesting guy. And Sean, I think we'll make for a really interesting topic. Yeah, I'm really looking forward to that one. Yeah, absolutely.

And we're also going to have Admiral Levine on probably in February, beginning of February. and we're going to talk about cryptocurrencies and media. And of course, Adam Leeu-in played a crucial part in this podcast getting started because we did our pilot episode as part of the Let's Talk Bitcoin contest a year ago. So, I mean, looking back on the year, it's been an exciting year. We've done over 70 episodes, if you count in all the conference stuff that we did at different conferences like Berlin, London, and Amsterdam. Amsterdam. And I got to say, I mean, in some, I have to say it's been a pretty successful year.

We were wrapping it up with a huge episode we did with Vitalik last week. So if you haven't heard that episode, definitely check it out. It's definitely our most popular episode with I think about 2,000 views on YouTube just a week after its release. It was very interesting. And so, yeah, I mean, I'm really happy to see, like, from what we've gone, which was essentially a hobby, I mean, if you think about it at the beginning, to an actual business with an audience and a growing community. And I'm really looking for 4 to 2015. I think we have lots of things to do and lots to build. Absolutely. I think it will be interesting for us. And of course, correspondingly for Bitcoin and the two are very tightly linked. And that's one thing.

So, well, let's do this. So first of all, I would briefly mention the topics we have before I sort of segue back to what I was going to say. So we're going to talk about regulation a bit. We're going to talk about adoption. We're going to talk about decentralized applications and sort of the Bitcoin 2.0 space. We're also going to talk about security. And that's sort of, in our view, some of their main interesting topics this year. and looking forward.

And before that, we wanted to just very briefly mention a few of the, I don't know how you would call that, so that the main things people focus on are sort of drivers of the development or maybe one could say marks of the development. That's a good way to call it, yeah. Yeah, so the first one is price. Now, if you are listening to this, of course, you are well aware that the Bitcoin price hasn't done too well in 2014. I think when we started this,

and when a lot of people started things in Bitcoin space, was when the price was just going through the moon, and we passed $1,000 very briefly beforehand, and even though the price had gone down maybe a tiny bit, but at least personally I thought, and I think a lot of people felt this is just sort of a speed bump, but now it's going to go full up to the moon. And that hasn't happened at all, right?

So I think in many ways you can say 2014 was a good year. A lot of things have happened. But if you look at the Bitcoin Prize, it certainly doesn't look that way. What was your expectations about when you go into, like when we started out? Do you remember what you thought was going to happen with the Bitcoin price? I guess I would say in retrospect, I naively thought that the price was going to continue to go up, which is why I bought a bunch of Bitcoin when the price was going up back in, I guess, December of last year.

Probably not a good move at the time. Probably would have been best to wait a little bit until the price came back down again. But, I mean, if you look at, if I'm by no means qualified to give any sort of analytical information about price charts. But if you look at the price chart, it is, even though it has been an unsteady, not a steady decline but sort of stable decline in the last year from its peak at above a thousand dollars i mean it's definitely above where it was in 2013 um i don't want to say it's stabilized but i mean for the last few months it's been hovering around 500 between five and four hundred

500. Sorry, keep doing the euro conversion. So I think we're better off now than where we were perhaps 18 months ago. But there is a lot of room to grow. That's for sure. I mean, I think we all like to see the price go up and the price will bring in more people. And it's sort of a snowball effect where the more people come in, the more the price will probably go up. And then the more the price goes up, more people come in.

Right, right. So I think the interesting thing is that I personally thought of the price as sort of a tracker of the Bitcoin, the state of Bitcoin, right? Like, where are we in the development of Bitcoin? And I think that's the way many people think and thought of the price. But what we've had in 2014 is a bit of a decoupling of that because the price is done terribly. but at the same time, if you look at VC investment, which is another sort of interesting indicator, and also just the growth in the number of startups

and the number of mature startups and the number of startups that are run by, you know, professional people who have experience, who have funding, et cetera, that has exploded. You know, there was very quite, there was not very much a year ago. Two years ago, there was practically nothing. And today, there's quite a lot. So that has developed.

a lot, the price hasn't come along with that. And it would be interesting to speculate why. I think we did some of that in an episode of Daniel Galancy. But that being said, I do suspect that is going to change. I don't think this decoupling will continue. And I think somehow it has to catch up. Right. No, I think that's a good way to look at it.

The ecosystem is growing from within with, like you said, startup growth, the investment community coming in and investing more and more in startups. I mean, we've seen just a growth of investment money in the last year. It has to catch up at some point, but then the question is, what happens? Does that bubble explode when that happens? When the mainstream realizes that everybody is, that they need to start looking at cryptocurrency, you know, will there be an explosion of the price and then will it come back down again? Well, I mean, in a sense, if there is a belief develops that cryptocurrency is sort of an asset of the future,

then it never has to come down per se, right? It's not like a stock where there's a bubble and there is some earnings that, you know, that are tied to the corporate activities. So at some point, that valuation has to come down unless the earnings go up. We don't have that with Bitcoin, right? There's nothing keeping it sort of down. That being said, one thing that is to consider is one thing we talk about with Vitarek as well, and we're going to talk about with Robert Sams.

That's the whole idea of how good of a currency is Bitcoin, how good of a store value is Bitcoin. and of course that may have an influence because we may have a success of cryptocurrencies but maybe not with Bitcoin so I think that's very possible and of course if that's the case then there doesn't have to be any correlation anymore right we can have cryptocurrencies take over the world

and Bitcoin go to zero totally possible I think I think that's probably one of the things that struck me most that stayed with me since from the Vitalik episode is is you know will Bitcoin be a stable unit of account?

And his response was pretty simple. That probably won't be Bitcoin. Because it has, it doesn't have the attributes required to be a stable unit of accounts. And to be honest, I think I do agree with him. There are a lot of people who have said that, you know, Bitcoin has become more stable over time, like less volatile. And maybe that is true. But I don't think that's something that will necessarily continue. I think even if, even if Bitcoin isn't displaced by some other currency, and even if Bitcoin

now breaks through and really gets used sort of globally as a world currency in payment, I think that is not going to decrease volatility at all, because you will have a lot of people flushing into Bitcoin, people thinking, like, where is this going to go? Do I need to move my money over there? That's going to have a drive huge volatility. I mean, for the most part, in a good way, it's going to be upward volatility, but also downward. I mean, it's going to be, it's going to be, It's just going to be very volatile. And of course, one could imagine maybe in 20 years or 50 years when everybody is using Bitcoin all the time, that you won't have these dynamics anymore.

But that's a very, very long way to go if we ever get there. So in the meantime, I think Bitcoin is going to be very volatile. Now, the question is, how much of this advantage is that? Does that mean it's not going to be used as a sort of the currency, cryptocurrency of the future or not. And I'm not sure which one way it's going to go. I think both scenarios are possible. And I have a question for the economist in you.

What would be to happen if, so take for example, you know, we're a Bitcoin-only company. We accept Bitcoin as payment from our advertisers and we pay, I guess, most of our suppliers in Bitcoin and moving forward, we'd like to pay all of them in Bitcoin. if Bitcoin companies that work closely together, as has been the case, I mean a lot of companies in the Bitcoin space do work together, if they all start pricing in Bitcoin, is that feasible? Is that possible that the Bitcoin ecosystem prices in Bitcoin, regardless of the volatility? No, I get your question.

and I think the answer is no. Because, I mean, the only scenario where you could imagine this is if you had some sort of closed-off system, right, where you don't interact with the outside world. But that is not true at all, right? I mean, even though we have most of our revenues in Bitcoin and we pay a significant part of our expenses in Bitcoin, nothing is priced in Bitcoin, right? Everything is priced in U.S. dollars or euros or something like that. So you cannot just ignore that. It doesn't work at all, I think. So there's, I don't think there's any way of that happening.

So I guess the next topic on the list is, you know, still in the sort of general overview of the last year's media. And specifically the treatment of Bitcoin and mainstream media and how that's evolved. I think the general consensus in Europe and also in the United States, I'm not sure that would be the case in Russia or China or countries like that. But my impression is that in the last year, we've seen a trend where the media has become more sympathetic to Bitcoin, or at least not as, they don't come down on it as much as they used to. I mean, when I first got into the Bitcoin ecosystem about a year ago, my impression was that the mainstream media was very negative about it, focusing on sort of like the speculative bubble and then Mount Cox and all these other. bad stories that happened within the past year.

I think in the last six months, we've seen sort of a general trend where the media, the mainstream media is starting to get it. I don't know if it's also because governments have started to get it. What are your thoughts on that, Brian? Well, I think that is going too far. I personally see a little bit of a divergence. And I think Bitcoin is being taking a lot more seriously in the tech space, in the startup space. So if you read like TechCrunch, and I think it really has broken through to an extent

in the startup world, especially in the Silicon Valley startup world. And I think that's reflected in the content and the treatment you see in a side like TechCrunch, but also on some mainstream media that's more focusing on that. But then if you see the treatment in European newspapers, It's definitely, I think that has become sort of a voice, right, where it says, oh, Bitcoin, is this interesting technology. It has a lot of potentials. It could lead to a lot of things. Even Microsoft is accepting it now, that sort of thing.

But at the same time, you still have a lot of voices that it is some sort of dubious thing and like trying to do a currency, which is a government job or its way to wallet out. it's a speculative bubble. I think all of those are still very, very strong. But I think it has lessened a bit, right?

And I think that other voice has gained in prominence. I think we can say that it's sort of neutralized. So the, if the, if the voice was mostly negative a year ago,

it's more nuanced now. And we might look at both sides of the coin, rather than simply looking at the negative sides. Right. You still have the negative voices, but you also have some positive voices now, and you have some in the middle. Is there anything else you want to add to the media? No, I think that's it. I mean, maybe one thing we can talk about is the Bitcoin media, Bitcoin specific media. My view is that, of course, you know, the price increase in

December ushered in a whole bunch of new media outlets. I mean, there are definitely more podcasts than they were than there were a year ago. There's more Bitcoin news sites. Now, whether so I think there's a lot of lots more Bitcoin blogs and Bitcoin news sites, which ones are qualitative and not. I think a lot of them are simply reblogging or reposting what the big ones are doing, but there's definitely more variety in in terms of Bitcoin media. Like there's lots of new YouTube channels that have popped up in the last year as well. What are your thoughts on that? Yeah, an interesting point.

I mean, this is actually something I've been sort of watching over the year. Of course, also from personal interest and from us doing Episand Bitcoin. And I've really been paying attention throughout the year to the Alexa ranking. So for those who don't know, uh, Lekyllis. Alexa, it's basically a ranking of the popularity of all the websites in the world. It's not perfect, but it at least gives a good indication of the traffic levels we're seeing. And if you look at that and you look at any of the main Bitcoin sites, whether it's Coinbase, blockchain or the info, coin desk, any of those sites and companies

like that have been around for, you know, relatively long time. the traffic levels have declined pretty much very, very significantly throughout the year. And most of them are, I would say, they've probably lost like 50% of the traffic or something since January. Now, I think that if you, if you track that compared out with the price, that's very much, you know, very much correlated. So I think that's been interesting to watch. So I think a lot of these. media sites you're talking about, media endeavors, you're talking about, they were started, and like we started it at the height, right, where everybody was excited about it.

This is a big opportunity. And I think for the most part, it hasn't lived up yet, right? But of course, we believe and many others believe that it will come. So, you know, you keep doing it. And of course, some of them didn't, right? Many of them also stopped. But I guess that's just normal. No, but I think, you know, like the price we've seen.

a leveling off of a of a Bitcoin specific media and so the cream has risen to the top and I mean in terms of in terms of blogs you we you know we can identify perhaps four or five maybe six blogs that are kind of top of mind people will be able to cite people in the space anyway as sort of go-to places for Bitcoin news and you know podcasts as well you know there's sort of you know A good example is in Amsterdam, there was the blockchain awards and they actually had a podcast category. Well, before, like in the year previous, we wouldn't have been able to have a podcast category because there was one podcast. I mean, I think another thing that sort of very much tracks into that is the conference space. And if you, I think it was very similar in the conference space.

there was basically in the first half of 2013, there was like one conference or two conferences. There was the San Diego conference by the Bitcoin Foundation. And then in the fall, there were some conferences. I went to my first Bitcoin conference in the fall, 2013. Amsterdam was a great conference. Also pretty much full sold out. A lot of enthusiasm. At price going up, everybody was starting conferences.

You started having conferences. You had like a conference every. every weekend, constantly there was a conference somewhere. And I think what I've seen is that those haven't done very well, right? Like a lot of them have been half empty. They have had difficulty selling their sponsorships. So I would say, you know, and I mean, I know personally, a few people organizing conferences that have had this experience.

And now if you look at the fall conferences, I think there's not that much, right? This fall, I think there has been a. decrease from before and there's definitely something something similar going on there right there was a lot of enthusiasm a lot of people got into this space i mean actually i was actually also thinking of putting on a conference at one point i'm very glad i didn't get into this yeah so was i and and that's totally leveled off because and that sort of tracks also one of our topics is that adoption just hasn't kept up with what expectations have been Yeah, I mean, I agree. We definitely saw explosive growth in conferences, but whether they're profitable or of any interest, because, I mean, a lot of these conferences, you look at the speaker list, it's just always the same people, right?

So if you've got 10 conferences in the year and you're seeing the same talks and seeing the same people, I mean, I think this is something we talked about at some point as well, is, you know, what are. what are our goals when we're going to conferences? Is it to produce content? Is it to meet people? And I think when you're choosing a conference to go to, you really have to try, you really have to think of that and and evaluate whether it will be,

you know, profitable for you to go there. Whether you'll get a return on, whether you'll get a return. Yeah. I wouldn't say profitable, but if you'll get the return on your investment. Yeah, absolutely. Now, just briefly, I wanted

to talk about meetups because we both have meetups. We haven't really talked about it in a long time. I'd like to get your feedback on the Berlin meetup in the last year. Yeah. So I started, when I got into Bitcoin when I was living in Berlin, there were two existing meetups. One was a meetup at Room 77, which is the first physical location to accept Bitcoin in 2011, it's a restaurant, the bar, run by, owned by York Plotz. And there was also a Bitcoin Exchange, which is sort of a Satoshi Square thing, which was once a month. And it did have a short talk, like 10 minutes or something, usually.

And so I wanted to have a meetup that's really focused on building companies, getting people together, really having content and that sort of stuff. So I started Bitcoin Startups, brilliant meetup in, I've, think it was like October 2013. And it was very well received from the beginning. We had like, I think, 35 people at our first meetup. It was, of course, also at the sort of when you just started having the price going up and there was a lot of enthusiasm at the time.

And it really felt that. Like the atmosphere was very clear that, you know, we are onto something big, sort of thing. and our meetup has as on well you know i mean i think it's it's been a great group we have meetups every two weeks and we have usually between three and four five sometimes even talks we've had a lot of great people giving talks and and today we have about 450 members on on meetup and if you talk about the actually attendance of our meetups it's actually not that different from when we started out it's still about i would be a little about i would be a little bit of our meetup and if you talk about the actual attendance of our meetups and I would say 40 people.

We have had a few bigger ones. So we've had up to maybe 100 people at some occasions. But I think it has been a great experience. And it's been lots of fun and very valuable to do it. And I think it has served a good purpose in getting the community together in Berlin. How many have you done so far? Oh, I'm just on that. We have 1032.

Wow. Okay. And you do it every two weeks. Yeah, we do it every two weeks. basically yeah well that's that's slightly contrast to my experience here I mean I started the meet up just after use I guess in January I did my first one and we've had five I had a couple I had a few months hiatus the community in Leal I mean it's definitely a big big city like Berlin so there are but it is a very there's a big

tech community here there are many tech startups and tech incubators so I was expecting more people to come in, but I've really had to kind of grab people and tell them to come and check it out. We've got about 100 people in the meetup group. And so I'm rebooting it for January, for January. So my first one this year will be in in in, in, in, in, in, in, in, in, in, in, in, in, in, in, in, in, I haven't had one since the, since the, since the, since, since, like, may of, uh, of, uh, of, uh, of this year. And, um, what I've, what I've, what I've found more, the most challenging is getting people to do talks. For a long time, it was just me and two other guys and sometimes like one other person doing talks, but I've really had a hard time getting people to sort of be empowered and tackle a subject. So what I've done for January is I've gone and just grabbed people from Paris, entrepreneurs and said, like, you know, come on over and explain. So we'll have Richard Catano on, for instance, from a handshake. We'll have the founder of the Yollett Wallet. and a guy who works for Paymium.

And, you know, the response that I've got from that, I mean, lots of people signed up for it. So I'm hoping that this will sort of give people the drive to want to do talks. And I've talked to other people here in town that do meetups, like web design meetups and things like that. And they tell me, like, if nobody wants to propose a talk, we just don't do one. So maybe that's maybe that's the right approach. Yeah, that's certainly one way to do it, right?

You can just have social meetups. In Berlin, it hasn't been a problem generally, getting talks. I mean, because we have like a lot of meetups. It has sometimes been the case that I could only find like one person to give a talk or something versus like three that maybe we like to have at least two. And sometimes if I had to run after people and like email them, but in general it has been pretty good. and some people have also sort of gone that they when Johann Barbie of 37 coins were still in Berlin he was giving a talk every meetup

and I've given a lot of talk myself and a few other people have also given a lot of talks so that's been definitely something that it's just also something oh you can take on any topic get into it and give a talk about it and you know I've done a lot of times to take one day to learn about the topic and you know for example give a talk on Ethereum or something like that But that's definitely, I'm sure that's a challenge if you have a smaller community and maybe not as many active people.

But before we get into our first topic, we want to briefly talk about our sponsor, GEMS here. So let's put up the logo. So James, I think many of you heard about it. James is a social messaging app. We have had Daniel Pellet, the CEO, a few weeks ago. It was a very interesting episode, and I encourage you to check it out. So, gems, the way I like to think about gems is that it's a bit like WhatsApp, but it has a cryptocurrency aspect to it.

So it has its built-in cryptocurrency, and the cryptocurrency is used for a few things. First of all, it's sold in a crowd sale, and that sale is still going on today. So if you want to get involved in that, we'll tell you the URL where you can go to at the end. So the crowd sale serves to raise funds to build the app. That's one thing. It also gives people a stake in the project. So we've bought some gems. So we are like invested in the project.

We want it to succeed. And if it does succeed, then the tokens we've bought, they will appreciate in value. And the third thing it's used for is that gems will be used to incentivize users. So, for example, let's take Facebook as an example. We have some power users on Facebook that have thousands of friends, post all the time, invite new people. And you can really say that they've played a big role in making Facebook a success. And not to mention brands, too. They have like hundreds of thousands of followers.

Exactly, right. But I think brands, they tend to have a monetary interest to try to get people off. But a lot of people, if you talk about users, they don't have a monetary interest. All they do is they really increase the value. of the platform and Facebook now being worth, I don't know, 50 billion or whatever it is, they haven't gotten anything for that. So what the James currency can do is it can incentivize people for that, right? So you can say you do a lot to increase the value of the network, increase the value of the

platform, we reward you. And that's something I think that has a huge potential. And that's why I think it has a big shot of actually, you know, becoming a big success. I have to say I actually have it on my phone. Daniel allowed me to get the beta version. And so this actually comes out on January 30th, I think, for iPhone and Android. I've been using it, and I've got to say, it's really, really cool. And the interface...

Is there... What about the iPhone? Is there a beta for that yet? Well, I think just from a technical perspective, it's a bit harder to get people in on an iPhone beta because you need to sort of add them in the developer platform. He just sent me the APK for the Android version. So the cool thing about this is it works with telegram. So telegram is an open source messaging platform. There's 50 million users.

So if you have telegram or if your friends have telegram, they'll show up in your list and vice versa. So yeah. So now a couple of cool things about this. So they've integrated the wallet. So for example, like if you see here, like I've got 123 gems and I can tap it and it says that I've got 0.003 bitcoins. And when you're in a conversation with someone, you just type like 100 gems and it sends them straight away. And then it sends them to gems. So I'll show you.

Okay, I should probably delete clear history. So I'm just typing it 100 gems. All right, so I've got it here, 100 gems. And then I could press this little gems button down here, and it would send the gems. So the integration of the wallet is really well done. That's really cool. And they've got, so encrypted chat as well,

so you can begin an encrypted chat with someone, initiate it, and all the messages are encrypted end to end, and you can even set like time limits. So a bit like snap. Snapchat, but for messaging. So you could say, like, my messages only last 10 seconds, and then they get deleted. So that's really cool, too. Yeah.

So, yeah, it's a cool project. And that's another thing that I'm excited about. And that's also sort of the project that they talked, that Daniel talked about that motivated them, was that they want to really bring cryptocurrencies to a wider audience. And this is something that could do it. And I think has a good child that doing it. And of course, the cool thing is that the potential is just so big, right? Because even if you think of Coinbase having like 2 million users at most, right? I mean, 2 million wallace probably means more like 1 million users or something.

And if you think of like a company like WhatsApp having 500 million users or something like that, you don't have to get way far. Only if you get like 5% as good as WhatsApp, 5% as far as WhatsApp, that's still a huge number of new cryptocurrency users. So that's an exciting thing. Now, so they've raised about 2,000 Bitcoins, I think a bit more. So if you want to, the, I don't, so I think the sales going on for like about another week. And until January 5th. January 5th, yeah.

So if you want to back the project and purchase some tokens, you can do so at Coinify. So that's K-O-I-N-I-F-Y.com. And then you will see it, GEMS. And you can also check out the app at get gems. org. So yeah, please do so check it out. And I'm certainly excited until I have the version as well. And I can send Sebastian some gems.

And thanks a lot to gems for the supportive episode of Bitcoin. Yeah, exactly. So back to our episode. Now we have the first kind of proper topic. Now we're already kind of in. So the first topic we wanted to talk about was regulation. Now, we've talked about regulation quite a few times in this podcast. it's been a big topic, although not so much in the last three months.

I think at some point regulation is going to become as important. At some point, we're going to stop talking about regulation because it's sort of established, right? Like we know what people have to do. It's going to become a boring subject at the own point. It's not right now, right? It's so important right now. And it has such a huge influence on where things are going. And so in my view, if we look at the sort of current

state of regulation, right? There are two main jurisdictional areas that matter. The first one is the United States. The second one is Europe. Now, a bit simplifying of course, Canada matters and the rest of the world also to some extent. But those are- Yes, Canada matters. But those are by far the most important, right? So what's going to happen in the U.S. and in Europe is going to have a big influence on the rest of the world. And it's also just going to have a big influence because a lot of Bitcoin companies are there, right? The most Bitcoin companies are either in the US or in Europe. So in the EU, there's one thing that sort of looms above everything, which is this VAT case. So the question is, do you have to charge VAT on the sale of Bitcoin? So let's say, for example,

there is a company called Cephelo in Sweden. It's like Coinbase. You can buy 300 euros worth of Bitcoin from them. So the question is, do they have to charge you BAT on that and then give that money to the government? Now, if that's the case, it is a total disaster. It is a disaster in so many front. It makes everything a mess. It especially makes a mess of accepting Bitcoin as a payment for companies.

It essentially becomes impossible. And it's not clear which way that's going to go. And in some countries, like the UK, they've said there's no VAT. And in other countries like Sweden, for example, they said VAT should be charged. And now the EU Court of Justice is going to decide that we don't know exactly when, but it's probably going to be reasonably soon, probably 2015, I guess. And that's going to determine a lot of things. So that's really the one thing.

I think that's lubing in Europe. That's going to be, it could be a big, big threat to Bitcoin. It could really have a huge negative effect. And it's something that people aren't so aware of, I think. I was just a few weeks ago, two weeks ago or something, at a workshop in Berlin about founding a cryptocurrency bank with Fedor and some other people, Krakken were there. So we were about 30 people talking about how we could.

could go about funding cryptocurrency bank. And this, for example, is a topic that was not really talked about. People aren't totally aware of it. But it's so important. It could totally destroy this project. They could destroy so much with Bitcoin in Europe. So that's looming there. We don't know where it's going to go, but it's a big dark cloud in the sky.

And then in the US, we have the big license thing, right? So we've talked about the license as well. There has been some update. I think Benjamin Lossky has said that some, they've made some clarifications about what it will look like. And I think they're positive clarifications. So before there were some rules that were just totally crazy. Like for example, that every Bitcoin, you know, bit licensed company, so basically everyone who sort of transactions with Bitcoin or holds Bitcoin for someone else, they have to know every party to every transaction. So that means a wallet provider would have to prevent you from sending Bitcoin to some unknown address

because they don't know the party of that transaction. Right. Totally crazy. I mean, it would totally destroy Bitcoin. Fortunately, they've gotten rid of that. Or they've announced that they will get rid of that. And they've done some other good changes. So we haven't yet seen the results. But I'm reasonably optimistic there that there will be at least,

semi-reasonable and they will allow at least the well-funded companies and some people to actually provide good Bitcoin products in the US. And I think it seems, it may well be likely that other states are going to take on or take over the spit license thing. But even if not, companies will have to cooperate with it because otherwise they can't have New York customers, which is also a pain. So those are the kind of the things that stand out to me. This VAT case and the bit license thing.

And they're really important. And I think 2015 is going to determine a lot. I think we will know a lot more at the end of the year how feasible the regulatory environment will be, you know, how much it will allow cryptocurrency to blossom. I'm curious what do you think has the potential to be most harmful to Bitcoin? most harmful to Bitcoin. The VAT case, for instance, the European court defining that VAT must be charged on Bitcoin or the propositions of BIT license. I think it's the VAT case. Absolutely. I think the bid license stuff is, while annoying and a pain, et cetera, et cetera,

I mean, it's a problem. I don't think it's as big of a problem as the VAT case. I think the BAT case, if VAT is charged, that would just be really, really, really bad. My way of thinking of this is, I mean, if that doesn't go through, there's no way that the regulators are not aware that this will kill the ecosystem. Well, they don't care. First of all, this is not the regulators, right? This is the justice system interpreting the existing law. It's not like someone making new law. They're saying like, hey, this is Bitcoin thing.

Where does it fit in your existing VAT tax law? well, it should be in that category. Hence, VAT needs to be charged. So these are not people coming up with new regulatory frameworks for Bitcoin. So far, I don't think there is really an initiative to do that in Europe. But, yeah, but they don't care if Bitcoin is going to have a problem. They don't care if, you know, some companies will have to, you know, grid out of Europe or close shop, et cetera.

But I honestly don't think Bitcoin has the weight, the prominence, the mind share for people to really take that into account. I may be wrong about this. Maybe did you care? No, no, I think you're right. I think that there is definitely not the mind share. There's definitely not the weight or lobbying power or anything of that. So, yeah, one more thing to mention on this is that in this court case, different. countries could submit their positions, right?

So Sweden submitted their position. They said VAT should be charged on Bitcoin. And other countries could sort of also put in their positions because in the end, what they decide is going to apply European-wide. And the only countries that have put in or submitted their stance on this issue have been Germany and Estonia. And both countries have said, yes, VAT should be charged. There hasn't been a single country that has said,

No, it should be exempt or no, this is too important of a technology industry. We don't want the scarce service. Nobody has taken this position in front of the court. I mean, the only one who can take that position is the guy who's actually doing the lawsuit, the Swedish guy. But no country, no official government authority has taken that position. So, yeah, it certainly is occasion to worry about, but I guess we will see where this goes. We might be out of jobs in a few months. Oh, and one more thing on the regular story front that I think it's going to be very interesting to watch is the whole issue of crowd sales.

So there was recently a coiness article. I don't know how much attention it got, but I think it's kind of a big story in a sense. So some guy had some Bitcoin exchange and he sold, let me pull this up, Bitcoin Trading Corp or something like that. It doesn't really matter that much. But this guy sold some sort of crypto shares for Bitcoin, and now he got a fine, which was equivalent to like all the profits he ever made with his company plus $10,000 or something like that. Pretty a hefty fine, right? So the question is, to what extent are these crowd sales legal? Like if you talk about, for example, Ethereum or the thing Swarm have done, some of those things, it's worrying, right?

we certainly hope this should be legal, but it's kind of unclear. And it's unclear to what extent the SEC is going to go after people who have organized crown sales. So that's definitely something that worries me and that probably worries a lot of people. And I think we don't know where it's going to go. And of course, the line is sort of you're not allowed to sell shares, but you are allowed to sell products. So, and with some of the things we're talking about.

talking about here, let's say Ether for Ethereum's currency, the lines are sort of blurred. Is it the product or is it a share or is it? I mean, it's not technically a share. It doesn't pay dividends, but it's also maybe one could say it's a share. Some people treat it as if it was a share. So it's something else to worry about. And I don't know where this is going to go, but it will be. I think that if 2014 states have started being aware of Bitcoin and thinking of ways

they might be able to regulate or at least fit it into existing regulation, 2015, I think we'll see more of that focus on DAPs. Now, I guess the next phase of that is when we start getting into regulated professions. So take, for example, and that's already happening now with just like the regular financial system or the regular startup ecosystem with companies like uber Airbnb being confronted with existing regulation with regards to regulated professions you know when you have the ride sharing service the bitcoin ride sharing service or the bitcoin version of air bn b or the bitcoin version of god knows what other regulated profession then you start getting into like a whole other

a whole other area of regulation that has, like, lobbies and, you know, that are protecting their interests. Absolutely. I think, no, you're totally right. The whole DAPS issue is going to bring up a whole other host of questions that people haven't even followed about yet and that I think regulators and law enforcement have literally no clue about. So I think to some extent this may become a topic next year.

But, yeah, just look at. like proof of existing protocols, like Factum, for example, you know? What will notary services think of that? Yeah, so I think Factum is not that common, like, probably not going to be that controversial. I think other areas are going to be much, much more. But yeah, we'll be very interesting, definitely. I think, I suspect it's probably more going to become an issue, maybe 2016 or something. like when those steps actually start getting a lot of users

because probably next year is still going to be like people developing things people figuring out the user experience people doing all those things maybe you start having some users but I personally kind of doubt that we will see kind of breakthrough gaps especially if you talk something like Uber like complicated things but yeah afterwards yeah definitely going to be interesting So moving on to the next topic, adoption. So we've sort of seen the thing with adoption is there's a divergence in incentives. So we've seen strong merchant adoption in the last year.

I mean strong, you know, reasonably strong merchant adoption with large merchants starting to accept Bitcoin, Microsoft, overstock, Tiger Direct. You know, there have been some big stories of merchant adoption. but user adoption has been sort of weak. I guess one thing that you can attribute to that is that there's a strong incentive for merchants to start accepting Bitcoin because for them, it allows them to gain new customers potentially. We're still sort of in this period where there's a novelty aspect to it, which will get

you all the publicity and everything and potentially new users within the Bitcoin community. However, for new users entering the space or even outside of the space, there's very, little incentive because for them it doesn't cost them anything to use a credit card, whereas the charges, the costs are usually taken by the merchant. So there's incentives haven't been aligned there so far. I think there are a couple things that will sort of change this. You know, one of the ways that companies are trying to bring new users to the ecosystem are projects like gems, right? So creating an altcoin which has an actual

use case within an application. One other interesting area that we've been looking at or we've been closely looking at is change tips. So I don't think this has the same sort of impact as a product like gems for the time being. I think, you know, it's mostly used within the Bitcoin ecosystem, people tipping each other. Once you start to see, you know, once you start to see. sort of widespread tipping where people with Bitcoin are tipping people that don't use Bitcoin. I think that's happening.

Definitely. That's happening, but I don't know to what extent it's happening. I think there's I think apps will play a large role. So we may see other apps enter the space,

like other messaging apps like gems, for instance. Or Cloud storage, you know, that's another space that is due to be disrupted and where people have a strong incentive to use the currency. So, you know, those are two areas where I think in the developed world we might see an increase in users. Remittances, well, it's a little unclear, right? We really thought that remittances were going to take off in 2014. At least I really thought that this would be the case.

hasn't really turned out that way so far. I guess there hasn't really been a strong increase in adoption in those countries where where we send the most of our remittance payments. So it's hard for people sending money there to change their money back into local currency.

So that has been a barrier. Some companies are trying to change that. But yeah, I mean, I think, you know, you face a correct. So the basic, the main basic challenge is that today, if you talk to your grandmother about Bitcoin, to your parents about Bitcoin, someone, some random person about Bitcoin, especially if you're in the US or if you're in Europe or someplace like that, you cannot give them very strong reasons to use Bitcoin. I mean, there are a few, right?

So one is buying drugs on these dark markets. That's just something you need Bitcoin for. And if you are interested in that kind of product, it makes sense to actually go out and buy Bitcoins and do it like that because you know you don't have to go out and meet some guy etc so you actually have a strong reason there and I think the other strong reason that the main reason actually has been speculation right people buy Bitcoin's because they think it's going to succeed and then their value is going to increase and they're going to get rich right so that I think that's absolutely the number those are the main reasons then you also

have maybe some ideological reasons like I love this in the and like money free from the government, that kind of thing. So some people are drawn by that. So if you have those three reasons, they are, they tend not to be enough to, they tend not to be the right reasons to sort of get the broad mass of people. The broad mass of people don't want to speculate in some like weird currency they've never heard of. They don't want to buy drugs and dark markets.

And they're not ideologically driven that they're like, oh, I want to have this new currency throughout the government. So the question is, then how do we get them to take Bitcoin, right? How do we get them to start using Bitcoin? It's a real challenge, I think. And yeah, change tip can be something, I think, possible. Gems could be that start using that, right? Payments, you know, I think once you set up, for example, paying online is actually kind of more convenient with Bitcoin than with credit card, entering all those details. Now, the, The problem is it's not enough more convenient to make sense to go out and get some bitcoins just to buy things online.

But at least it's a small advantage and maybe over time this can become a bigger advantage. Let's say if it's integrated in your bank account and you can automatically buy Bitcoins and then you pay and it repurchases so you don't have to worry about the volatility or something like that. Then maybe you could say I'm going to start using some Bitcoin even if I don't care. in this developing countries. I think one interesting space we've talked about before, but haven't really looked at as a plausible means to bring,

you know, sort of lots of people into the spaces. This idea of using cryptocurrency as fidelity points. So say for existence, for example, an existing brand creates a fidelity, loyalty program. Like the loyalty, yeah. Yeah, right, a loyalty program. Sorry, I'm using the French word. And they use cryptocurrency to do this. And then they start advertising that on TV.

You know, think of Facebook and Twitter back in like 2005, 2006, when Brands started using social media and started advertising on TV, like TV commercials, like follow us on Twitter or, you know, like us on Facebook. I think this sort of brought on awareness of social media to the general public and sort of bringing it down to the common denominator. I think when brands start utilizing cryptocurrencies in this way for sort of like new innovative fidelity program, that might be one of the ways that we'll see an increase in use in crypto. Yeah, no, I agree. I think that's an interesting use case and I think yeah, I think that's

a very likely that will actually happen at some point, right? The question is when and but yeah, I think that's actually not quite feasible that right now companies like, I mean, and that's something if you talk about adoption

that's actually sort of surprised me because I had expected that user adoption would sort of be faster than merchant adoption. You know, I really thought that they would first have to be a significant user base before a company like Microsoft would say, oh, we start taking Bitcoin has been totally

the opposite way. It really surprises me. It makes sense if you think about incentives, right? Like them having the payment fees and also them sort of thinking ahead more. But yeah, I think it's not far fetch to think that like, oh, now Microsoft or Dell or the best example of this is Reddit, right? So Reddit is planning to have its own cryptocurrencies that will be backed or, something along those lines by Reddit stock so that people can actually sort of, you know,

valuable Reddit users get rewarded and if Reddit succeeds, they get some money and like that kind of thing is cool, really innovative. And I think if that we may start seeing, we must see on a much broader level and that could actually make a big difference. I agree. And I guess the one last thing sort of in adoption that will be interesting to see, in 2015 is or as a at this

I've been thinking about this quite a bit is the whole question of the financial sector so this is

we talked about this with Daniel Galancy in a podcast about Solid X because his company is essentially tackling

that problem so right now you know for example if you invest your retirement money you can't

buy Bitcoins but maybe you could say it actually wouldn't make sense to put in let's say half a percent of your retirement fund in Bitcoin because maybe it works out then it would be worth a lot right and if it doesn't you didn't lose a lot so that kind of role as

an asset as an investment asset hasn't happened yet but it could happen soon right I think the Winklewurst ETF is one aspect one tool that could make that possible and if it does happen that's not going to lead to a ton new users but I think it could lead to a ton new sort of indirect Bitcoin owners and it could lead to an increase in price. And I think that could indirectly have a really big impact on Bitcoin as well. And perhaps that's going to happen. I think I'm actually pretty optimistic that this will be something in 2015. Yeah. So there's some up, there isn't like one area where, which can drive adoption. There are sort of multiple areas that are pulling people into the space, very different people.

and yeah i guess we'll we'll see which ones are more effective right it's very much open question i think how because there are so many different angles right this can happen is this sort of increase in adoption driving adoption and we just don't know where it's going to it's going to occur i think in contrast with last year last year we were sort of expecting adoption but not really knowing what were the levers uh what what what would uh what would uh what would uh what would uh cause that adoption to occur. Now I think we're seeing more of the pieces of the puzzle as the puzzle kind of falling into place.

And yeah, so, you know, like I said, there are multiple areas where adoption could grow. So shall we move on to our next topic? Totally, yeah. DAPs and Bitcoin 2.0. I don't know about you. I don't like the term Bitcoin 2.0. Although my Twitter handle is Sep 2.0, I hate when people use 2.0 to define something new. and innovative.

Yeah. I mean, I think it sort of works in terms of people understand we do talk about. But it definitely has its flaws, the term.

So, I mean, if we look at the Bitcoin 2.0 space, there have been multiple developments in the last year. We've definitely seen an increase in the amount of protocols building on top of Bitcoin. And, I mean,

Some of those have sort of died off, I guess you could say. Some have taken more prevalence. Counterparty has definitely developed into this kind of huge platform for crowdfunding. You know, Ethereum has had their crowd sale and a very successful crowd sale. I mean, in the history of crowd sales, like Indiegogo, Kickstarter, everything, it's in second place. According to this article we found on Wikipedia, I mean, that's pretty impressive when you think about it. And there also have been many real feasible use cases for DAPs. So we've mentioned a few of them already.

Storage, Factum, and gems within, or among those use cases. Now, where is this all going? One area that I see really developing in the last year, in the next year, is inoperability between these DAPs. So what that means is the ability to, I mean, I think these DAPs will develop develop on top of their existing platform APIs, which will allow them to operate together in a decentralized way so that, for example, I mean, you can use gems to send a message to, say, factum to embed some sort of information into the blockchain. chain. You know, perhaps also using, I mean, I'm using examples that we have so far, but factum having an API, which allows you to send proof of existence from, send a file from storage

into factum chain so that you can have proof of existence. So I think these are the types of things that we'll see develop in the next year, interoperability. Also, one thing that I think, coming back to adoption, that's very important and that will definitely grow awareness of decentralized applications and cryptocurrencies in general, is seeing more DAPs in App Stores. So I think when GEMS enters the App Store, you know, if it is successful, if it does gain traction, having a DAP in the App Store is one big step to gaining more users. You know, there are many app stores. There's the Apple iPhone and iPad app store.

There's the Play Store. There's the MacOS store. I think there's also a Windows store. So if we have visibility in those app stores, that will definitely help increased adoption and increase awareness in cryptocurrencies in general. Crowd sales is also an important area to be looking at. So we have seen multiple crowd sales this year and many successful ones. Ethereum is definitely probably the most successful.

And, you know, there are others that have proven to be successful. This model is being, is being, we're sort of proving that this model can exist and that it is successful, that we don't have to go through platforms like Kickstarter and Indiegogo, that we can start a, create a product and start a company and build it entirely on crypto and run a crowd sale without having to go through any platform and so just run our own marketing and I think that will grow in the next year now will we see uh I guess now the um what we have to be careful of is so identifying good crowd sales and bad crowd sales you know now that we've seen this model work and we've been able to test it and see

that it's actually effective, some people will probably try to take advantage of that and, and, you know, create scam coins. So, I guess, you know,

building reputation around a product is sort of an important component to being able to start a crowd sale. Yeah, I think it's a very interesting. And of course, Ethereum launch is going to be a big thing. I think, well,

I don't think we will see, like yet, probably in the next year, like actually Ethereum apps. I mean, people will develop them, but probably not to the point where people actually you know, use Ethereum apps on their iPhones and stuff.

But it would be very interesting to see how it's fully seen in the developing community, people on developing cryptocurrency apps, and you know, to what extent it competes with a counterporty and things like that. And I do think, yeah, the crowd sales, you were mentioning that definitely something, a model that just

works, it just makes a lot of sense for this. And I don't think it's going to go I mean a lot of people criticized it but it just makes so much sense so do you if you is there something else you want to cover on regarding DAPS well I think the next logical applications of that's well there's one I think that we'll see be tackled in maybe 2015 perhaps 2016 is Wi-Fi sharing So we've started to see storage or cloud storage be applied to DAPS, you know, messaging, proof of existence, Wi-Fi sharing I think is an interesting area that we will start to see being addressed by startups.

And maybe carpooling, I don't think like Uber-style ride sharing, but perhaps like carpooling. would be an interesting area to, to decentralize, because it is, you know, really like a peer-to-peer economy. So I think all of the existing incumbents of the peer-to-peer economy are sort of up next, if you will, in terms of models that need to be decentralized, that will be decentralized. I think if we start getting out of the software space, like the first ones that will be centralized, probably like carpooling or Airbnb. I think we've actually, there have actually been examples of that. Yeah.

No, I agree. I think the whole sharing economy business models are very interesting to think about, you know, how they will turn out if you start integrating Bitcoin or start building them. I think rather than integrate Bitcoin, if you start sort of building them as decentralized applications as things with its own token sort of baked into it. Just very briefly, we've had some questions in the Q&A, and I suggest we cover those very briefly. So Anna Kurt, so she is running one of the other meetups in Berlin.

She's running a meetup for girls or for women. so I think it's one of the only ones to do that and she does that big once a month and it's very successful too so she was asking so she's feeling that a lot of meetup organizers put a lot of energy in it and are running out of power after a year or six months running it so what about personal experiences I think Sebastian did sound a little bit like this was your

this was your experience maybe to some extent right if your difficulties finding people yeah i mean i don't know if if i was running like a quantified self-meadup for example if if i'd be experiencing the same thing but uh yeah it's been my experience it's been hard to find speakers at least people in my community that have been um willing to uh to speak like i really have to get after them and tell them yeah so i mean personally it i would say I mean, it is sometimes tiring, especially because somehow I haven't been able to find someone else who wants to sort of, you know, be a co-organizer and actually, like, be sort of engaged with it. So it can sometimes be a bit tiring to do it, you know, every two weeks because it's a big frequency. But overall, I think it hasn't been a big issue because, first of all, I think it's just pure luck by being in Berlin where there is a strong Bitcoin community already.

It makes everything much, much easier. And the other thing is because I'm, you know, I think I'm going to be doing cryptocurrency things for years to come. So I'm not so discouraged. You know, I have a very long view as well. So I think that all the effort putting in now is something that makes sense. Yeah, I feel the same way. So Anna also mentioned, yeah, other media posts having decreasing numbers. yeah, I can definitely see that happening

and so recipe for hosting successful meetup you know, I think meetup.com is great it really works especially when it's used. I recently met some guy from Liechtenstein and he wanted to start a Bitcoin meetup there he came to Berlin and sort of I met up with him and the problem there is nobody

uses meetup right so you have to find different ways but if people use meetup in your place you can put up a meetup group and people tend to just enroll because they get notified here is a new meetup. And over time, you have a certain number of people, you can launch a meetup,

and I think that works well. And then I do think probably if you don't have speakers, it would probably make sense to just do it like monthly drinks meetup. You know, Sebastian, I would probably do that if I was you, you know. And then have speakers as, you know,

whenever there are speakers. Because I think people in Berlin, for example, they really appreciate that monthly drinks, at Room 77, it's popular, it works well, it's been there forever, and it's no effort to organize, right? All you have to do is put in the meetup event. You don't even have to go there yourself as the meetup organizer. It's really unstructured and I think that's a good, it's a good thing. Yeah, so the other question is the smart contracts. I think we sort of address that. I think we are

pretty far away from having DAPs, Ethereum apps on the phone and all that kind of stuff. I think that's going to probably take longer than people think. So I think with that, do you want to, should we do the ShapeShift hat? Sure. So before we move on to our next topic, we'd like to talk about Shapeshift. So, I mean, when you buy Bitcoin for the first time, there are all these roadblocks, right? You have to, I mean, the, the interoperability between fiat currency and Bitcoin is known to be complicated. But I think most people expect that when you're in the, when we have Bitcoin, it shouldn't be, it shouldn't be hard to get other currencies, you know, once you're in it, once you're in there.

And that's still very hard. I mean, up until recently, it was still fairly complex to buy light coin from Bitcoin or sell doge coin for like coin, et cetera, because you still have to deal with exchanges. And exchanges in most cases will ask for you to create an account. will ask for you to prove your identity, you'll have to place an order, wait for the order to be fulfilled. That takes a long time. And it's not easy. It's not the best way to do it. The best way to get all coins is to use ShapeShift.

So ShapeShift is at Shapeshift.io. And the way to think about this is Google Translate for cryptocurrencies. And I really love this analogy. Actually, Alan Scott kind of coined this in one of our recent episodes. And so I'm going to show you exactly how Shapeshift works. If I could just share my screen here. We're having a hard time with the Hangout today. Indeed.

Okay, so ScreenShare is not working. Well, that's a shame. Okay. So, so Shapeshift.io, it's very simple. You get a Shapeshift.io. And basically, you see like a Google Translate sort of thing where on one side, you've got the currency that you want to convert. And on the other side, you've got the currency.

that you want to convert to. So for example, let's say we want to convert Bitcoin into Dogecoin. We set the amount. So we'll say we want a thousand doge or 10,000 doge or whatever. And then you put your Dogecoin address. You hit start. And then ShapeShift will show you a QR code and an amount. So you use your mobile wallet. You scan the QR code. You send the amount to their address. And they take care of the rest. In about 20 seconds, the Doge coins, transferred onto your account there's no assignments required you don't even have to give him your email address and uh it's just really really easy and simple to use so um i have it oh you there you there this is this is what it looks like i don't think we have time to do a demo now but um

yeah it's really like google translate for for for cryptocurrency yeah so there are a lot of different uh they've added a few more coins yeah they recently added uh bitcoin dark quark what are the other ones pay coin and red coin i have no idea what these are but they must be they must be significant if uh if shape shift has added them to uh their list of cryptocurrencies and who knows you know maybe one day you'll be able to buy app coins on this like ether or gems or storage coin totally i think that's one thing i'm actually excited i think there are a few things in the future they're excited at this right but yeah i think having crowd sales on there another thing

is and we've actually been thinking about doing something like that. Well, one thing is cool they have this browser plugin. So if you, let's say you're on a site, like for example our site and there is a Bitcoin donation address with the ShapeShift browser plugin, it can pull it up and you can donate, let's say Dogecoin to that Bitcoin address and then ShapeShift on the back, you know, trades the Dogecoin for Bitcoin and send the Bitcoin equivalent of those doge coins to that address. So that's really cool, right? Because you can essentially use Dochecoin or some other currency that they have.

And you can pay with it instead of Bitcoin and a variety of site. And Shapeshift sort of does the... It's a bit like BitPay, right? So with BitPay, you pay with Bitcoin and people get yours. Well, with Shapeshift, you can do it on your end, and you can pay with Deutsche coin and the people get Bitcoin, right? So I think that's really cool, right? Because it really opens up the usage of altcoins.

And you can say, oh, I prefer some old coin, and then you you can keep using it. So yeah, so head over to shapeShift.io. Give it a try. Tell us what you think. And we want to thank Shapeshift for their support of Epicenter Bitcoin. Yeah, security. Tell us about security, Sebastian.

Well, I mean, security is an interesting topic because there are two areas of security we can look at. We can look at security of the network and we can look at user security and to a certain extent user security kind of overlaps into security of Bitcoin startups. I guess I'm more interested in the user security side. So what we've seen in the last year, if we look back at our January, our first episode in January of last year when we were looking at sort of where Bitcoin storage was going to go, at the time, the only real option to store your Bitcoin's, I guess, in an easy and semi-secure way was to store them in an exchange, you know, if you didn't want to have

to deal with paper wallets and things like that. And at the time, our predictions were that, you know, hardware wallets would sort of prevail as the sort of best practice standard way to secure your bitcoins. There have been multiple hardware wallets that come out in the last year. And we've seen the treasure wallet. The French company, Allegra, just released their smart card wallet. And, you know, that is still a viable option. It's definitely a very secure option.

But I think it still remains sort of a technical. a very high-tech way for the sort of like the, you know, really hardcore enthusiasts that really wants to keep his own keys and, you know, the tech savvy guy. I don't think that's accessible to most people. What we have seen emerge in the last couple months, and a lot of companies started doing this, you know, we've seen BitGo, Coinbase, and other companies like Coin Kite is start developing really simple and easy to use multi-sig options. I think Armory and Electrum, you know, desktop wallets are also doing multi-sick now. And what multi-sig sort of tackles is the security ease-of-use trade-off.

So you have the security, I guess sort of you could say as high as security as having a paper wallet or a hardware wallet or even more secure because, you know, you have two out of three or three or three out of five keys. And you have ease of use. So if you look at companies like BitGo, like their solution is really easy to use. You've got, you know, they hold one key, you hold one key, and then you've got a backup key. And, you know, to top it off,

you've got two-factor authentication. So it's really secure. But, you know, you can use it for day-to-day transactions. So I think many companies have been tackling the security issue and trying to build a user experience and really nice user interfaces around this so that one can easily set up a secure wallet, hold their own keys in multi-sig, and really be sure that their coins are secure. Now, there is a trade-off to that. And the trade-off, I guess, is that as companies develop their old multi-sig platforms, technology, it sort of promotes proprietary technology. One example is that, for example, with BitGo, you know, if you get the premium account,

there are some sort of proprietary components to that. If you want to use multiple users, you know, Coinbase does their multi-sig completely. differently. Like it's off-block chain multi-sig, unless you use the advanced features. So, you know, I think what we'll see is a lot of companies are going to start offering multi-sig, but, you know, either they'll be using a proprietary off-chain multi-sig, where basically your coins are secured and insured. No, multi-sig is always on.

Well, no, that's not true. I mean, if you look at Coinbase, if you take the regular Coinbase multi-sense, multi-sig, I don't think that's on chain, you know, they just send you two emails to two different places. If you take the, if the, the, the, the, the, the regular, uh, non-advanced user, basic version of multi-sig on Coinbase, I'm quite sure is off-chain. No, that doesn't make any sense. Because you're sending to, uh, you're sending to a regular Bitcoin address. You're not sending to an address. Yeah, but then it's not a multi-sig, right? I mean, multi-sig is very clear

and, but I mean, of course. it's not multi-sig. Right. I mean, they have to walk. I think you have to distinguish, right? So they have the waltzing, which is off-chain and which is, which is not a multi-sick thing. And that's the thing where you have to authenticate with different devices and that kind of thing. Right.

So you're right. So that's not really multi-sig. It does provide an actual error security because it allows you to have multiple signers, but it's not a real like Bitcoin protocol multi-sig. Yeah. And then you have the multi-sick, which is just multisig. Of course, they still have their proprietary software, but they also have an open-source software,

which you can still use their spending yourself. So I think it's a nice balance. But, yeah, I think overall, right, it has been interesting, right? I think a year ago, we fought a treaser was sort of coming out, and then we talked a lot about hardware wallets. And now there has definitely been a lot of development, especially in the multi-sick area. And we did a fairly prediction

during our episode with Ariana about the number of bitcoins that were going to be held in multi-sick addresses. Of course, you can check that on the blockchain. And that has been going up like crazy. So I think even a year ago it was like a thousand bitcoins

or something like that. And today it's like a 600,000. I don't know what it currently is, but it has dramatically increased. So if you want to check that out, go to Fairlay and look at the Multisic prediction. And there's a nice side to.

It's a P2SH. info. Yeah. Yeah. So pay the script hash, which is a technical name for Multisic. You can look up what the statistics of how many coins are held a multi-sick. Oh, at the moment, it's 6%. Wow, that's crazy.

It's gone up. I think it was like 1.5% when we did. did the episode with Ariane Assimption, which was just two months ago, not very long ago, right? So it has dramatically increased. Yeah, I think 2015, I think those will probably stay in many areas, right?

Like we'll have multisig and we'll have hardware wallets and there will be a lot of advances in both. And the main challenge is no are user experience, I think. And for hardware wallets, another challenge has been priced, right? Because the Fraser has been expensive. And I think our cheap alternatives, I'm sure Tracer could be way, way cheaper if it was mass-produced, right? But at the moment, it's just a demand for that.

I think one thing that happened in the last year, and definitely we can attribute the Mount Gawks debacle to this, is the general consensus that just keeping your, having access to your keys is, is, is really, really important, if not mandatory. And, you know, we recently had sort of like another scare with blockchain. dot info that got hacked. You know, luckily, that was a white hat hacker that returned the coins. But that really, I mean, that really discouraged me to use blockchain. dot info, which, you know, I think general consensus in the community was that they were

quite secure. But, yeah, I mean, I think Mount Gawkes definitely illustrated that having your own, keeping your keys is essential. Well, I think with this, we've sort of come to the end of our main topics now. Yeah. So we also wanted to take a few minutes. just before we wrap up to talk a little bit about episode of Bitcoin, we did do a bit at the beginning.

We've been going for a year now. This has been a very time-consuming project. We spend a lot of time on that, like whether it has been producing episodes, developing content, getting guests on, doing research for shows, etc. It's been a lot of fun. I think we were very grateful for everyone listening.

We're very grateful for everyone who's been supporting us, whether it's through tips, through just listening, through living reviews, through sending us feedback, through sponsoring us, through being on the show, through sending us questions, suggestions for episodes to do all those kind of things.

So first of all, a big thanks to everyone. So it has been a lot of fun. I think it has been a great success. We've learned a lot. We've spoken to so many interesting people. And I think it has, we have also been very lucky in this context because I and Sebastian, we didn't know each other when we started this. It was quite randomly that we were two of the guys, two of the only guys, who joined this

conference call with Adam Levine about doing some episodes and somehow we decided to do together and that has worked out way well. I think the only criteria, I think we just said, oh yeah, we're both in Europe. Let's start together. Exactly. That was the amount of research we did before launching into this. So given that, I think, has been a fantastic success. Yeah, I mean, when I talk to people, recently I was talking to some old colleagues

or people that out of work with that were entrepreneurs and were associates and, you know, told them about our adventure. And like, you know, I said like, well, I didn't know him when I first met. Like, what? Are you crazy? Yeah, no, totally. Three months later. yeah yeah no i mean i think i honestly would not recommend this to anyone i think it's uh it's probably

a very risky i think the risks are probably like too big you should you should do but somehow here it worked out so yeah um yeah so i think for next year you know we we're going to continue working on this and we have plans to you know do a lot like in terms of growing our audience in terms of improving a quality uh improving a brand improving the quality of whether it's video or audio quality. Sure. If I could, just before we start getting into next year, I'd like to point out sort of the major milestones that I think we've had this year.

One thing that I think was a defining factor in our success as, well, to produce interesting content was we changed our format. So when we first started, the idea was sort of to create like a Twitch style show where we would cover news and, you know, perhaps at some point have. like regular guests on, which would come on and, and discuss the news topics with us. And that's really changed since like episode seven or eight where we, I don't think consciously, but, you know, inconsiously decided to change the format and, you know, progressively started just having guests on every week and doing interviews.

Now, I'm personally a little skeptical about how that will play out in the future if we'll be able to keep doing this just as, you know, at some point, will it become sort of redundant to have startups all the time? I don't know. I mean, maybe not now, but maybe in a year from now. Or will we have to sort of like branch off into other topics that are, you know, still related to crypto, but somewhat on the periphery? I guess we'll see. One other major milestone was, you know, doing video, which is what we're doing now. I think that was like a pivotal thing. We should should have started, I think you agree, we should have started doing this way, way before. Absolutely. Also, shout out.

I should start doing this at the beginning. Yeah, absolutely. Also, I would just want to briefly say thanks. And to all those listening, please check out Singularity One-on-One. It's a fantastic podcast, really high quality. He's also done some cryptocurrency episodes. He did one with Italic Petraean as well, and one with Andreas Antonopoulos. I was Skyping with him in the summer or something. And he is like, if I know one thing, it's like do video. So afterwards I talk with Sebastian, we started doing video and it has been extremely successful.

So it's definitely absolutely, I think, so if you all listen to this, and you're thinking of doing a podcast, definitely do video, do YouTube as well. So that's definitely one of the lessons we've learned, and we're very excited about this going forward because we are seeing, I think most of our growth is from video. Yeah, so speaking of growth,

I mean, we haven't really set objective yet, but I mean, let's not set this in stone, but I think we have the potential to grow our audience two to three times over the next year. So I think that's a reasonable number. I think in the end, a lot of it is also going to depend, of course, on the Bitcoin ecosystem, right? Like, what's going to happen with Bitcoin? Is it going to explode? Well, everything's going to be very easy, right? Or much, much easier. If it's not, then everything's going to be much, much harder. so to a large extent it depends on that but at the same time we do think there are a lot of people still in the big on space who haven't heard about us ever who've never listened to an episode but who would like to who would be interested so one of the focuses one of our focuses is going to be reaching those people no another area is just improving quality you know when you're when you're doing a podcast with very little resources like using 50 euro lights and 70 euro cameras and over ADSL connection and just consumer

grade gear you know you can produce good quality content but you know if we don't have a producer who's here all the time who's going to make sure that our mics are running okay so that I think that has been sort of a challenge is keeping the quality level consistent, whether that be audio quality on the audio version or preventing like mishaps on the hangout and things like that. So I think improving that quality, improving the brand quality and just streamlining processes is also going to be very important in the next year. And so we're definitely looking at that. And those are things that we'll be working on in the next couple months. So yeah, but like you said, building community. And one area that I think will

also start to endeavor in is how we can diversify epicenter as a platform, whether that means developing new types of content, new formats, bringing more correspondence or hosts on. You know, these things are not defined yet, but I think over the next year we'll have to start looking at how can we build new things on top of this existing platform that we've built. So being at the end of our show, sort of our year-end show, Sebastian, what are the two areas that you are most excited to watch in 2015? DAPS and UI. DAPS and UI.

And specifically, UI around security. Yeah. So what I mean by DAPS, so we talk. about DAPs. I'm excited to see more DAPs in the App Store, more DAPs that are sort of, you know, appealing to a wide audience where people could just kind of hop on and start using it and get into the cryptocurrency ecosystem. I think JEMS is a really good example of that. I really believe in what they're doing. Storage is another one. And I think we'll see more and more examples of just really high quality DAPs where you don't even, I mean, people coming into it perhaps don't even know that they're using a decentralized platform. and start using the currency within it to, you know, getting the cryptocurrency. The other area, you know, UI, so whether that be UI around creating smart contracts, for example, creating crowd sales, but then also around security, I think that we've come a long way in improving UI.

around security, but that's definitely one area that needs to keep improving. And I think we'll see some interesting examples of that in the next year. Yeah, absolutely. So with me, I think two areas are for me, the regulation is just, I think that hopefully 2015 is going to be the last year, that I think regulation is going to be so front and central, but I think 2015, I probably won't be, but 2015 definitely, I think it's just going to play really big role and it's going to determine a lot about where things are going. So that's definitely something I'll be paying a lot of attention to.

And the other thing is I think the adoption by financial institutions is something I'm really interested in. I think it could have a big impact sort of indirectly. But one thing I'll be watching a lot. And I will be watching you pay attention to those topics. Exactly, yes. Yeah, so with that, I think it's time to wrap up. It's time to wrap up in 2014 and time to wrap up this episode.

So thanks so much for listening. We do appreciate it very much. Also, thanks for the questions submitted. There was another question we didn't get to. You knew him, some guy from crypto articles mentioned that he had something to say about the drop off in traffic. Maybe he can email you about it and hopefully we can cover it in some way. We'll discuss it.

Sure. Yeah, so thanks so much for listening. And thanks for following us this year. Now, we do our next episode, as we mentioned, is coming up exactly a week from now, same time, same place. It's going to be with Robert Sams, and it's going to be about creating a sort of a stable cryptocurrency. It's going to be very, very interesting.

Really look forward to that. And if you want to support the show, you can follow us on Twitter at EPSEN and BTC. You can leave us an iTunes review. It helps new people find the show. so we would totally appreciate that we would love that you can also leave us a tip

an episode and bitcoincom slash tips and oh yeah and subscribe to us on YouTube as well I mean I think you know if you subscribe to us on YouTube you get the hangouts automatically right right right good point yes do that too do all of it right now

and so to you our listeners have a you know great end of the year I have a great start into 2015 and we look forward to seeing you next week.