Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Garrick Hileman: CoinDesk’s State of Bitcoin 2015 – Ecosystem Grows Despite Price Decline

Episode Date: January 12, 2015

Every quarter, CoinDesk releases its excellent State of Bitcoin Report proving an accurate benchmark of where the Bitcoin ecosystem stands. We were very fortunate to be joined by the man who compiles the State of Bitcoin Report, Garrick Hileman. As an economic historian at the London School of Economics and a frequent contributor to CoinDesk, Garrick is best know as an expert on Bitcoin and other currencies. We would like to pay our respects to the 17 innocent people who lost their lives in the recent terror attacks in Paris. Our thoughts are with their families and loved ones. Je suis Charlie! Topics covered in this episode: The recent $5m hack on Bitstamp Startup activity and VC investments The continually slumping Bitcoin price Merchant and user adoption What we should look forward to in 2015 Episode links: Garrick's Website Stake of Bitcoin 2015 Report (CoinDesk) New Index Ranks Argentina 'Most Likely' to Adopt Bitcoin (CoinDesk) This episode is hosted by Brian Fabian Crain and Sébastien Couture. Show notes and listening options: epicenter.tv/061

This episode of Epicenter Bitcoin is brought to you by Shapeshift.I.O. With no account of signup required, it's the easiest way to buy and sell light coin, doge coin, 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 Sebastian Kutjua. And my name is Brianv, and my name is Brian. And we're here today with Gary Kielman. Garry Kahnman may be known to a lot of people or sort of known because of the state of Bitcoin report.

So, Konyk releases his report every three months, every quarter. And we've actually done a show before on that, just kind of discussing the report and discussing where we are sort of in the evolution of Bitcoin. And today we have him on himself. So thanks for joining us today, Garrick. Thank you guys for having me. It's a pleasure to be here. And also, thanks for this wonderful report you're writing. I think it's always, it gives one a very good sort of comprehensive overview of where we are at and where Bitcoin is at.

Well, it's been well received. And we really appreciate the community support of the state of Bitcoin reports and the feedback we've received since we first launched these a year ago. And we try to improve them each quarter. And please, if you have suggestions on how we can make them better, we'd love to hear from you. I also think that it's a good way to sort of gauge the evolution of Bitcoin. So not only is it a good opportunity to see where we are in the evolution of Bitcoin, but looking from from report to report, it allows you to sort of track a timeline of where Bitcoin's at. Absolutely. We're trying to benchmark where Bitcoin stands at, you know, predefined junctions

in time. And so taking a quarterly view of kind of where Bitcoin it is. and where it's come and try to track how it's performing is very much a big part of the objective with the state of Bitcoin reports. So before we get started, I just wanted to take a second to, well, to talk about what's been happening recently in Paris. Everybody's probably aware now of the terrorist attacks on Shaleebdo and recently in Paris. And so it's really horrible what's happened. Of course, I'm in France. So we've been sort of watching the news for the last two days. And it seems that it's over now.

But unfortunately, there are 16 innocent people that have died. And among those journalists and people fighting for freedom and of expression and liberty of the press. So our thoughts are with them. And so we thought that it would be appropriate to add, to talk about this just briefly, and to add the user's specialty. banner to our screens here. Yeah, no, absolutely. I think it's a horrible, a horrible thing that happened.

And definitely one thing I'm worrying about a lot is to sort of, at least in my view, increased risk we are seeing, know, that with all this wonderful technology is happening. And I think Bitcoin is very much a part of it. You know, that brings so much progress at the same time. And maybe this is not so much related to that because it was technologically, primitive thing, right? Some guys have guns, but it just seems like risks are really increasing. It might be at least. And I think we will have a lot of very eventful years and decades ahead. And Bitcoin will play a role in this. And I'm sure there will be many other things of less pleasant

nature that will play a role in this as well. And speaking of less pleasant things, one thing that has been happening in the last days is the bit stamp hack. I personally haven't looked into this in great detail, but Garek has a good bit of more insight into this because I think he has spent some time digging a bit deeper in this story. Can you just briefly share with us what you've learned? Well, I don't have too many more details than what's out there. and people can go to CoinDesk, you know, this website right now and see the latest piece of analysis on the theft wallet that was used to actually move BitStamp Hot Wallet into, you know, an account controlled by the hacker, and how close to almost $2 million in additional bitcoins were almost stolen. But obviously, this is coming at a, you know, coming up on the one-year anniversary of the Mount Cox.

meltdown, for lack of a better word. This obviously has a lot of people concerned. It very much reminds people that, you know, Bitcoin is, as Gavin Andreessen and others talk about, is still, you know, a beta technology. There's still, you know, things that, you know, need to be sorted out. And, you know, it's an unfortunate event for people who have been, you know, cheering on Bitcoin and hoping it's going to move past, I think, some of the Mount Gawks-type things that have happened in the past. But hopefully we'll have some more answers. about what really took place. There are some questions that I have about the timing aspects of the case. We don't know too much about what's happened with the bitcoins that have been stolen.

Who the hacker is, obviously, what other things may have taken place in conjunction with the hack. But it has been reported that the hack started on the 4th of January. But if you look at the Coin desk Bitcoin price index in the very early hours on the third, a day before the hack supposedly began, we start to see a pretty steady, heavy sell-off beginning. And it's interesting to to kind of see how the price started declining, you know, a day possibly in advance of the hack. You know, one theory that's been suggested is the hacker, you know, may have been selling Bitcoins or the Bitcoins that were stolen, you know, with knowledge that the hack was going to take place or after the hack occurred. There's, you know, some information in the story that I

mentioned on... Possibly some insider trading. I mean, if you knew there was going to be a large breach of BitStamp, maybe you would want to get out in front of that, front run that breach and start shorting, you know, Bitcoin in advance. You know, we don't know what kind of resources the hacker may had, maybe they had a bunch of bitcoins already and dump those in anticipation of being able to steal a large sum of bit stamps, BitSams, Bitcoins. A lot of interesting kind of possibilities for those who enjoy thinking like a James Bond villain and want to think what they would do as a potential hacker in a case like this.

But the Bitcoins are supposedly being run through mixers. You know, it's probably going to be a while, like with Mount Cox before we know what really happened. And unfortunately, you know, I hope, one thing. I hope for the Bitcoin ecosystem, and I think there's a lesson here. You know, we see a lot of times large corporations after a hack has taken place, kind of really circling the wagons, you know, not talking about the hack for many months, sometimes eBay, for example. It was many months after they were hacked before we found out the details around that. And I think Bitcoin really could,

you know, set an example, I think, for consumers, for people who are using the system by trying to do one better and being more open, more transparent, which is part of the, you know, the Bitcoin ethos, I think, and talking more openly about what's taken place and quickly rather than trying to make things look less bad or delaying announcements. So hopefully BitStrapt soon will come out with a full report on what's taking place. I think they may have to know, because it seems to me, and I don't follow the Bitcoin exchange space very closely, but if you sort of looked at the trading volumes known like a year ago or when Mount Gogs declined,

Bittsam was the leader now. And this isn't the case anymore. Right now, other exchanges have much bigger volume. And so it seems to me they have been sort of under pressure. And now with that, that looks like quite an existential threat to me. Right.

Well, Bitsamp, I mean, definitely kind of filled the gap, I think, that Mount Gox's decline in the ultimate failure, kind of created. but as you mentioned, you know, BitFinex, another exchange based in Asia has been, you know, gaining on BitStamp for a while. I think, you know, we also need to keep some perspective here with this case of a BitStamp. It isn't Mount Cox 2.0. Malkox was a much bigger disaster. It sounds like BitStamp has done a much better job of securing the vast majority of their bitcoins in cold storage. And so that, you know, as bad as this may seem, this represents progress.

the price hasn't reacted, you know, anywhere close to how it reacted after Mount Gox. So I think, you know, the ecosystem is kind of taking this event in stride and realizing, you know, this is bad, but it's not nearly as bad as Mount Gox, and in some ways we could think of this as progress. That's definitely a good way of it in terms of taking this news. That's the, I'm out in California right now, so that's the California view on bitstorm hack, where it's always sunny. Sort of leading into our discussion of the Coindex report.

And I think that there was a quote on the current disc article, and I really agree with that assessment. I think actually also the last time you called it the quiet building phase, and I was like, yeah, that's very accurate. I think what was sort of going on was required. And I think this time there's this phrase, the tail of two bitcoins. So on the one hand, you have the sort of price,

which keeps on dropping and dropping and dropping. And then, at the other hand, we have a lot of VC activity, a lot of startup growth, where things look pretty rosy. So I thought this was a very nice, a very nice and succinct characterization of where we're at.

And it's sort of how we've been characterizing it this last little while too, right? We've seen this growth, this growth of startups, this growth in investment, this growth in, I mean, what seems like anticipation for something to come in, but the price just goes stagnating and falling. So we've been very curious about, you know, why that might be. And, you know, what would like to get your impressions on what is the, what are the factors behind that? Well, first let me say, I'm glad to hear the reference to Dickens is appreciated. I'm sure many have read the book, Tale of Two Cities. You know, Coin Desk based in London, we've got Sebastian here in Paris.

You know, it's, but it seemed like a fitting metaphor also for where CoinDesk is at. I mean, I'm not the only person who is picked up on this theme of two bitcoins or kind of this divergence we're seeing between, say, ecosystem progress and price. You know, my friend Gil Lurie at Wedbush Securities recently touched on this as well in his report. A lot of people, you know, still equate kind of Bitcoin's progress with how the price is doing. So I think there is a perceptional challenge that Bitcoin with a capital B kind of faces in terms of getting people to see Bitcoin's progress beyond, say, the price is going up and up. I mean, obviously one of the things that put Bitcoin on the mainstream media's radar, screen was, you know, the incredible price action we saw, you know, after the Cyprus deposit tax

or after, you know, Ben Bernanke's comments that it may hold promise a little over a year ago and the action in China. And so I think the media got, you know, very much wrapped up and kind of associating the health of Bitcoin with the price. But especially with the way Bitcoin is being used today, it may, in my opinion, continue to be used more for smaller transactions. rather than, say, large institutions moving funds through Bitcoin, the price doesn't necessarily have to increase for, say, Bitcoin to be healthy as an ecosystem to really grow. If it's primarily being used, well, at least in the short run, because if it's primarily being used for, say, remittances, international remittances that are in the few hundreds of dollars, you know, per transaction,

you don't need a massive market cap to be able to kind of absorb those kinds of flows. Now, if bigger institutions, though, want to get into the game, want to start sending tens, hundreds of millions of dollars through Bitcoin, then arguably the market cap will need to grow to really kind of to be able to absorb those kinds of flows without increasing the volatility. but but I think it is it is important for I think Bitcoin again capital B Bitcoin the community to kind of start to talk about how the price can decouple in some ways from the progress that's that's being made with the ecosystem with tools and you know merchant adoption and these things I want to come back to this point towards the end and talked a little bit about the sort of, you know, exactly, exactly that point you're making, you know, to what extent

this can be decoupled, to what extent we can have, maybe Bitcoin succeed in a sort of a larger sense, but Bitcoin, the currency, not doing so well. But let's try to just briefly touch on some of the different areas. So if he talk, I think the first part is about VC and the startup activity, can you tell us how that has developed over the last, in the last quarter and especially relative to before that? Right.

Well, so one of the comparisons we've made in the state of Bitcoin reports that's gotten a lot of attention is this comparison we did with Bitcoin venture capital investment in 2014 and VC investment in the early internet. unfortunately the

earliest year we have data for is 1995 probably people remember Mark Andreessen's point about a year ago he made in the New York Times article about how he saw the state of kind of Bitcoin as being very similar

to where the internet was in 1993 so a couple years before the 1995 period that we have internet VC data for but one of the things we did is we looked at how much... By the way is this data adjusted for inflation? This data is not adjusted for inflation. And this question has come up. So let me

actually comment on this. So if you do adjust for inflation, the 1995 figure would exceed, you know, the 2014 figure for Bitcoin, which was $334, if you round up, $335 million invested in Bitcoin startups in 2014 compared to unadjusted, $250 million invested in early stage 1995, internet companies. So why don't we show that with an inflation adjustment? Well, there's a couple reasons. One is, if you start going down this path and making adjustments, you'd want to start making adjustments for other things. So for example, you know, the cost of launching a startup has actually changed quite a bit between 1995 and today. It's actually quite a bit less expensive to launch a new startup than it was back then. How would we adjust these figures for

that? The other thing I mentioned, already mentioned, was the fact that we don't have 1993 data. You know, what was the figure in 1993? We don't know probably less than what it was in 1995. So, again, we didn't want to try to turn this into, you know, an exercise which, where we went too far down a rabbit's hole where we'd raise too many questions and concerns about methodology. We've been very kind of upfront that this is an unadjusted figure, but I think it's still an interesting figure just to get some sense of kind of what the level was back in 1995 and what it is today. And, you know, again, there's all sorts of other methodological questions we could talk about.

How much is CPI inflation have to do with the cost of launching a startup? You know, what about the NASDAQ bubble, you know, of that time and how much that affected valuations, et cetera? But the point is, is that, you know, the level investment in Bitcoin is quite large, historically speaking, and I think does back up the point that Mark Andresen was making, you know, that VCs are really kind of walking the talk here and putting the money where their mouth is, they think Bitcoin, you know, is very much on level with the internet in terms of the size of the opportunity. Yeah, no. I mean, I think there's no questioning that it is very, we have seen a lot of, a lot of

investment, a lot of activity. And one thing that really stands out to me, this is a lot of, time and that wasn't even so aware of, it's just how much investment in Europe has increased because when you looked at the past reports, it was super low and sort of my impression knowing, I would say the European Bitcoin seen pretty well, is that we still do lag massively behind the US in many ways that, you know, there's so many new startups and there's also a bit of a at least that's my impression, a bit of a disconnect, that here the tech scene and the tech, the startup scene, are not as, not as enthusiastic about Bitcoin, right? So like most people are very skeptical about that, and there's a bit of a disconnect. You have to a Bitcoin scene and you have the startup scene, but there's not so much mixing.

And from talking to people, it seems to be a bit different, especially in California and Silicon Valley, where it's sort of common knowledge that Bitcoin is a big thing and people believe it. And there's a lot of enthusiasm for doing kind of Bitcoin related things and much more openness for that. I don't know what's your impression is there because you spend some time in Silicon Valley as well? Yeah, so I split time between California and London. So it's interesting. London, though, I think, is, you know, probably, you know, closer to say California in terms of its outlook on some of these things, or at least the circles I run in London, than maybe other parts of Europe and the continent. But, yeah, certainly, I think, you know, here in California, you know, where, you know, change is very much perceived as this positive thing.

And, you know, there's very kind of optimistic the future is going to get better. And Bitcoin's a part of that, potentially, you know, I think you're going to have a more receptive, naturally more receptive. audience here than probably in most anywhere else in the world. But it is interesting to see, as you say, that Europe and the investment level is increasing. I was also curious here. For example, blockchain, is that a European company in your... Well, that's what I was going to comment on. So one of the things we rely on is publicly reported information for these reports. Here's a chance for me to actually make an advertisement. these reports can only be as good as the data we have to work with.

And so when companies like blockchain, you know, actually deliberately hide where they're domiciled, that's actually a corporate secret. They won't tell you where they're legally incorporated. Maybe they've since actually come out with that. But, you know, talking with their attorney, Marco Santoria in the past, I mean, that's a big secret, actually, or it was. maybe you just revealed it, Brian. But we have to do things like where's the CEO-based. We kind of work with the data we have to try to make some of these determinations.

And we always try to do the best job we can. As your audience probably knows as well, there's been a lot of VC investment that has not been publicly disclosed, which is not in the report. and so the real numbers are probably significantly underestimated by some, you know, millions, I don't know what. I hesitate to actually speculate on what the number is, but we know that I know of deals that have been done that are not publicly disclosed and therefore I can't include them, you know, in the data. But Europe has been gaining traction, and that's been interesting to see. Yeah. Now, just to kind of wrap up this topic, what I'm worried about, I guess, or concerned about is when we see these 1995 investment and sort of the same growth in Bitcoin investment, now we all know how that like end of 90s internet ended up, are we, are we potentially in the same scenario here with Bitcoin? Or is there a bubble growing? Well, I mean, you know, I'm an economic historian. Let me just say this. It's a lot easier to spot the bubble in retrospect than it is when you're in it. So I'm not going to say whether, say, Bitcoin is it a bubble or not. I mean, obviously, there are some things. I was in San Francisco in the late 90s, you know, working at a tech incubator when all of that went pear-shaped. And, you know, there's things that you see in San Francisco.

Cisco in terms of like real estate rental prices, you know, the comments that people are making about, you know, things that actually aren't directly tech related but are indicative of kind of a frothy market that does give one some reason to be a little concerned about, say, tech in general and perhaps Bitcoin, you know, as part of that. But, you know, if you look at what happened after the internet bubble burst, you know, a lot of great companies came out of that and are still with us today, and they've gone on to be much, you know, worth even more than they were. So, you know, will we see something like that with Bitcoin where there's a handful of survivors, the big, big Amazon's, eBay's, et cetera, Googles that come out of it?

You know, we might. We might. I mean, one thing we've talked about since the beginning of the state of Bitcoin is, excuse me, I'm just recovering from a little bit of a cold here, that we'd likely see some consolidation. And I think we started to see that a little bit in 2014 in the mining sector with some announced deals. There's been a few other deals. I think one thing we might look to see more consolidation in in 2015 is the exchanges. I mentioned that.

And CoinDess actually wrote an article about that recently. I mean, trading volumes are up. There's still a lot of volatility with the price of Bitcoin. Traders like volatility. So there's still a lot of reasons for high transactions. but, you know, we saw Valta Satoshi recently decide to kind of close their doors, go on and pursue something else. There's been a lot, there's a lot of exchanges out there. And I wouldn't be surprised to see, you know, some consolidation in that space. Well, we'll cover that in just a second.

I want to talk about startups. We've got a lot of topics here as well, merchants, you know, what's going with the price as well as some other topics. But before we do that, we'd like to talk about our sponsor, ShapeShift. If you ever have, if you've ever tried, try to buy alt coins, you know that it can be complicated. You have to find a reputable exchange that supports the alt coins that you want to buy. You have to create an account there, potentially have to give them a bunch of personal information, place an order, wait for that order to be fulfilled, and that can be annoying and that can take a long time.

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I also, when reading the report, thought it would probably, we can expect to happen in the next year. We've seen a lot of growth and investment in financial services, in wallets, also in mining, sort of infrastructure, but not so much in the universal space. You know, there are many universals. By universals, we mean these companies that are involved in many aspects of Bitcoin, whether that be buying, selling, trading, wallets, ATMs, etc. We haven't seen so much investment in those. Do you expect that in 2015, we'll see some of those universals start acquiring these smaller financial services companies, these smaller wallets and integrating them into their internal service set? It's a really good question. When would the universal start going on an acquisition spree?

I mean, there was, just to speak to the investment side, there is this rumored $60 or $100 million round that Coinbase is currently fundraising for. That hasn't been announced in 2014. You know, don't know if that's coming soon or not. But that certainly would move the investment needle for kind of the universal category significantly if that round is announced anytime soon. You know, it's, you know, I think Bitcoin still can probably generally be described as being in a kind of land grab, you know, kind of mode in terms of there's a lot of wide open opportunity, I think, for a lot of companies to continue, say, building rather than buying. And so, you know, I think we're going to see maybe some consolidation in other areas outside of the exchanges. But it wouldn't surprise me if the universals are still in more of a build mode, right? rather than buy.

I think they can do a lot still in terms of building things in-house. But we'll see. I mean, it's going to depend on the pressures, I think, that come to bear on these companies. You know, is Coinbase running into trouble raising that round at evaluation that they're happy with? Would they be better off with less competition, more consolidation in certain areas? and can they do they want to pursue something like that. I think we could see, you know, some of these conversations taking place in 2015 around some subjects.

But I'm hesitant to say, oh, I think there's going to be a big merger of some sort between, say, a coin base and a, you know, a circle or something like this. I don't know if that's going to happen or not. Yeah, I think it's still too early for probably for those types of deals to be taking place. I think all these companies think there's a lot of growth still and they can do more in-house. My impression of these acquisitions was almost more that these may be companies that, you know, sort of failed,

maybe failed to raise money, felt like attraction, or just didn't see the outlook, but had, you know, good teams, good IP, et cetera, and then, you know, they're just sort of taken over and gone. I mean, I don't think we are at the stage, any company. I mean, okay, you could say today maybe it could be interesting for a company like PayPal to acquire Coinbase, right? That kind of thing. One could see that maybe someone from outside comes and buys one of the big Bitcoin companies.

But within the Bitcoin space, I mean, I don't, I totally agree with you. I don't think we're at the stage where like there's really, it makes sense for anyone to acquire another company. And not least because I think no company has really also achieved a lot, very large customer base, right? Brian, I'm not sure I agree with you there because, I mean, if you just look at, for example, Coinbase is an acquisition of Blocker, you know, if a company like Coinbase wants to integrate a Block Explorer and you've got this tiny little startup with, with, you know, IP and a good team, and they're acquiring, you know, potentially. eventually $100 million in VC money and they can just throw $2 million to have this, this startup integrate with their services, why wouldn't it do that? So I personally, I think that in 2015, we're going to see a lot of these universals start and acquiring these small companies that are just popping up and acquiring their teams,

acquiring their IP and integrating their services to provide more services. They are universals. That's what they, you know, that's their. No, no, I agree with you. it just seems like it's a really a very minor thing right and it's it's not too different i mean you know you could also say they maybe they i don't know if they even want to ip right maybe they threw it away maybe they just want it the people and they said oh we're only going to come if you give us a million for this thing we've been working on for a few years and and that's something you see a lot

in silicon valley of course and i i agree with sebastian i think these kind of targeted acquisitions will continue to happen they may even accelerate um you know one of the fascinating things for me at least is to see you know 44 we talk about this in the state of Bitcoin report you know 44 applications build on top of the Coinbase API you know I mean that's that's I think a pretty significant development and and you know that I think to some degree speaks to maybe this kind of consolidation theme we're talking about you know certain API is getting more traction and in companies looking to kind of align or build around those well yeah let's talk about that because I I had noticed

noted this as a topic that I wanted to discuss. So, you know, I've mentioned before that I think an important component that needs to start being built is, you know, APIs. So companies need to start integrating APIs. A lot of them have. And also app coins having interoperability between their services. So Coinbase is one example of, you know, having integrated an API. And like you said, having about 45 apps built on top of it.

I think that this is an important component to building the infrastructure. What are your thoughts on that? Yeah, absolutely. I think anything that's going to make Bitcoin easier to use, I mean, if you want to, if you have a Coinbase account, you know, you trust the Coinbase brand, and I'm sorry to be giving such a lot of free advertising to Coinbase here. I don't have any official relationship with them, just full disclosure, but I'll use them as an example.

you have a Coinbase account. You're not sure about the exchanges out there. You're maybe wondering, you know, I see BitFeedex has got the highest volume, but they're not based in the United States. I don't know who these guys are. You know, I want to just kind of keep doing things with Coinbase, but I want to be able to put in a stop order. You know, I want to be able to buy Bitcoins on the dip. Well, now you've got Stopcoin, this app that was written, you know, that's on top of the Coin desk API, that you can do that. it's all making it much easier for, I think, consumers to do more with Bitcoin and kind of stay within this kind of trusted brand.

And I think that's an important part of making Bitcoin easier, I think, for people to use and getting it out there to a broader audience. Well, let's move on to the merchant topic. And that's, I think we can sort of use that also to circle back or in a bit. I think, well, let's put it like this. I think we can put sort of merchant and consumer adoption together under the umbrella like adoption, you know, to what extent is Bitcoin seeing traction as a means of payment, as a payment network, and as a currency as money, right? So because, of course, we do know there is traction in terms of people building startups,

now whatever they're focusing on. Some are very closely dependent on the currency, the money, right? Some may not be. But I think the one place where we really sort of see, and I think it's a great measurement of the health of Bitcoin and the development, is, you know, how many merchants are there? How much volume are they doing? And, you know, how many wall, you know, how many users are here, right? And as well, I think on the user side, how much activity are they actually doing? because, you know, it's one thing to have a Bitcoin wallet,

and it's another thing to actually use Bitcoin sort of integrate in your life and pay things with it. Yeah. Well, merchant adoption is something that, you know, I think you could, this is kind of, again, staying with our tale of two bitcoins theme. We could say, you know, in 2014, there was a lot of really incredibly positive news on the merchant adoption front.

I mean, getting companies like Microsoft, Dell, you know, etc., I think we all know the big brand names that have come on board and chosen to start accepting Bitcoin as a form of payment. 180 billion, these companies, just the top 10, you know, are close to 180 billion in total revenue. And these companies, the other thing that's really important, I think, to know about this development is that these companies are very brand conscious. They're very reputation conscious. And, you know, a lot of people have claimed that, say, the Bitcoin brand has been dealt to mortal blow with all this fraud and the Mount Cox failure, etc. the arrests. But that's clearly, you know, not stop a company like Microsoft or others that are very reputation conscious from coming out and embracing Bitcoin. And that's a really important

development. I think that says a lot about Bitcoin's future and how these companies see the, you know, the innovative aspect of the technology. Having said that, our Bitcoin accepting merchant forecast for 2014 came in short of what we originally were forecasting. We originally came out six months ago with a forecast about 100,000 Bitcoin accepting merchants by the end of 2014. We cut that last quarter to 90,000. And we only have bit paying Coinbase's most recently updated numbers to work with, but it's not looking like we even got to 90,000, you know, here by the end of 2014. So I think the number of merchants came in below, what we were kind of forecasting originally.

Of course, and we know, these are not including mergers that accept Bitcoin without using a payment processor, right? Exactly. And so, so probably the real number is, again, significantly north of that,

but we don't really have a great way of, you know, aggregating up that data. We've tried through, you know, sites like CoinMap to kind of untangle, you know, who's processing, you know, payments on their own versus doing it through a BitPay or Coinbase.

Unfortunately, Bitpay and Coinbase don't publicly disclose their full list of merchants for competitive reasons, I believe. But we know that there's probably more than obviously the numbers we're showing who are accepting. But just based on those two companies' kind of reported figures, it looks like growth has slowed, basically, is the point I was trying to make here towards the end of the year. And we also saw, you know, overstock.com announcing that their sales, came in below what they were originally hoping. So I don't think this is too surprising, though.

And I think if the Bitcoin community was putting a lot of hope in faster kind of merchant adoption and more traction in commerce, I think that may have been a little bit misguided to be completely frank about it. You know, as someone who, you know, works in the economics space, you know, I'm more interested in kind of cold, hard economic logic driving adoption. And when I look at, you know, the merchant side of things and why I would want to go to a pub and pay for a pint with Bitcoin, you know, at least in the West, advanced countries, which have for all their warts and all, you know, financial systems and currencies that are relatively stable and work, you know, reasonably well, it just doesn't make as much sense to me to want to use Bitcoin for that versus, say, something like international remittances, where, you know, if I'm in Kenya and I'm looking at 12% of, you know, are more transaction fee and the money's got to go through three banks to get to me and take three, it takes three days. I mean, that to me is, again, cold, hard economic logic,

good reason to use Bitcoin, much more so than, say, going and paying for my burrito at a, you know, a food stand with Bitcoin. And so I think maybe there's been a little too much emphasis or optimism around merchant adoption at this stage. I think something like Apple Pay, you know, you know, just to make a comparison, which hasn't, by the way, people should know this, has not signed up nearly as many merchants as Bitcoin has. They've got obviously some big names,

and you can buy a lot of stuff at those big names with Apple Pay. But Apple Pay does, you know, offer something that's compelling in some ways. I don't like having to haul my credit card around with me all the time. I can just bring my phone and pay. You know, that's making more cold. hard economic logic sense to me than say doing

a merchant transaction with Bitcoin at this point. Yeah, but I think you're pointing on something interesting here and and I think there is a this is a discrepancy when you look at incentives between the

consumer and the merchant, right? For the merchant I think actually Bitcoin is a great argument. Like this makes so much sense for merchants to say like, yeah, I want to take Bitcoin, right? because I mean, saving 2%, I mean, we've mentioned this example a few times. I think overstock is the best example because they are in such a low margin business. And I think they, you know, because they're a publicly traded company, the profit margin is like 2%.

And now if they pay, I don't know, 2% for credit card fees versus Bitcoin, which is basically free, you know, that's an excellent argument. Like I think that's why we have seen. I would still say the merchant adoption has been pretty good. And especially if you look at the big companies, personally that surprised me. I always thought that it was going to be a different way, right? Like there would be a more wider adoption and then these companies would come. But it's been the other way around, right?

They were first to come and we haven't seen that wider adoption, right? Because on the consumer side, I think that is much weaker actually than the merchant side even, it seems to me. I think, Brian, you make an excellent point, and I agree with everything you just said there. Great point. My experience when talking to merchants and all the, you know, perhaps not large merchants, but, you know, smaller merchants like bars and restaurants and things like that. And when I talk to them about Bitcoin, they, their reaction is like, who's going to use it? I mean, you know, and I'm not talking, you know, and I'm talking about, you know, people that are,

like, you know, young people and people that are. and people that are maybe like, you know, interested in the internet and like, you know, kind of hip with this kind of thing. The overall reaction that I've gotten when talking to people around town here is like, who's going to, like, it just seems like a hassle for me to start accepting this other currency. One should put like some, you know, caveat here. So for merchants, this is a great, a great sell, very easy to sell. I think as long as there are people actually using it, right? But you need some people using it. I mean, I don't know where the barrier is.

I guess the larger the company is, the smaller the percentage can be. And maybe for a large company, they can say, oh, if only 1% of the people pay in Bitcoin, it makes economic sense for me. Whereas for Barr, maybe it will be lower, whatever. But, of course, there has to be a certain number of people using it. And we'll probably not even have enough of that. I mean, Gary, do you know, are there any, do we have any data on that on the volume these people are seeing? Yeah, unfortunately, you know, BIPPAY and Coinbase have, you know, who obviously have the data,

they've been reluctant to want to be very open with that data. And again, I'll make another plea to the powers that be at these companies to be, you know, within reason. I mean, obviously you're in a competitive space and you want to protect things that you think, your competitors can use against you. But at the same time, I think the more open the ecosystem can be on, on, you know, with the data, then the more we can explain, I think, to the broader public how Bitcoin is being used.

And so, but unfortunately, long story short, we don't have as much data here as we'd like on use and velocity in these things. Do you think there's a possibility that they're not sharing that data because it's so bad? I mean, you know, obviously companies want to try to put a positive. spin on things, you know, and keep, you know, people's, you know, expectations, you know, kind of moving in the right direction. So I don't have any reason to suspect that the numbers that they are reporting in terms of number of merchants that are accepting it, et cetera, are being, you know, inflated or...

No, no, I don't believe that, right? I'm sure those are accurate. But, of course, the question is maybe I misremember this, but didn't Big Pay last year publish how much volume they did, like also in terms of transactions for Black Friday? And this year they said, oh, this many emergency transactions, that number was higher, but they didn't say how much money it was actually spent. And then it was like, well, why wouldn't they say that? I mean, the only reason I can think of is that it was worse than last year, right? Well, yeah, I wasn't going to, yeah, I think I think you're,

you're barking up the right tree here. And, you know, companies will be quiet private company. Oversstock is a publicly traded company. It doesn't have the luxury of kind of only revealing the positive data. They've got to come clean and talk about stuff and a more open, you know, framework than BitPay does. But, yeah, I think you're probably on the right track with your theory there. One interesting, I just want to point out this slide here. So apparently people buy trash bags and instances.

formula with Bitcoin? Is that a hack for it? Well, this data is from PERSC. Purse.I.O., which I don't know if you've talked about on your show in the past or not. No, but which we use quite extensively to buy all our gear. Yeah, no, it's an amazing, amazing service. And, you know, you want to talk about reasons to use Bitcoin. A lot of people shop at Amazon.

Again, I'm going to, I guess, make another free, free advertisement here for another Bitcoin company. but, you know, purse is not the only company to do this. Brocker, which CoinDest recently wrote a review of...

French company, by the way. French company. I think. Interesting. I believe, I may be wrong about them. Yeah, yeah. I think I met the guys

that the... Well, they, both these companies offer you the option of kind of trying to buy something in Brockers case anywhere on the internet and then, you know,

getting up to a 20% discount on that for your Bitcoins. So someone who wants to, they serve as a middleman. And, you know, these are, again, thinking about the cold, hard economic logic, these are reasons to actually want to use Bitcoin.

You know, I know there's some questions around, you know, who's on the other side of these transactions? And, you know, Perse recently came out with an announcement that one of their customers had had his house searched in Germany, I believe, for transaction done through Perce, stolen credit cards are always a concern. You know, always check the local regulations and wherever you are, you know, to make sure you're... I think that was Brocker, actually.

No, Pers, they announced an email. They've come out with a new program to protect actually users of their site with $10,000, I think, in response to this search. But again, I mean, you know, I think if you want to, I think, I think Brian, you hit the nail on the head. merchants have great reasons to start adopting Bitcoin. Consumers need better ones, discounts, you know, putting money back in the pockets of consumers because they're saving merchants money on transaction fees. That's something we need to see merchants doing more of. You know, consumers respond to things like frequent flyer mile credit cards. You know, or saving even a percent or two on a large transaction can make a big difference.

You know, and it's got to be easy. It's got to be, you know, I've talked about this from the beginning. If I went to Amazon's website and there were two prices on a large ticket item, one I could pay with my credit card on file, or the other, I could save a couple percent by just clicking this box, you know, clicking this button, clicking a box and accept certain terms. And a lot of the complexity of Bitcoin is just done on the back end and is invisible to the end user. I think that's where you'd start to see more consumer use of Bitcoin. It's just got to be really push the button simple, and there's got to be a good, cold, hard economic reason, I think, to do it from the consumer's perspective. Absolutely, yeah. And yeah, I agree.

I think this is being, you know, there are a lot of things, different things happening in different contexts, and sometimes we do have these incentives, and sometimes we don't, and overall, largely, we don't enough in the West, right, to use Bitcoin. And, um, Unless, I mean, I think the one exception is for speculative purposes, right? Like if you believe in the potential, then that is a great reason to buy Bitcoin. And I think that's why we are seeing most of the, most of the people buying Bitcoin today. I mean, it's speculation. It's not, it makes very little sense to buy Bitcoin suspend Bitcoin.

But maybe that can change, right? I mean, I think in the US already, if you have Circle or disconnected of your bank account, Maybe you could have an automatic buying when you purchase something with Bitcoin. I think then you can start slowly getting into the direction where maybe people have enough incentive. But I don't know. The progress seems very slow in this area. And it is worrying to an extent, right? And maybe that's a good point to sort of bring up my point that I kind of wanted to allude to earlier.

when we look at the numbers you guys have there for wallets and for merchants and you also project it out right to the end of next year you're sort of projecting this linear growth and to me it seems if this is true and you know even if we do see that growth rate like I say it doesn't get even worse than this but we assume we do see that growth rate it seems very plausible to me that will be actually this will be really, really bad for Bitcoin, that this could be a terrible situation. And the reason why is that I think when VCs and companies invest today in Bitcoin and people start project, people build products,

they build it under the assumption that will be reaching a mass adoption, right? So, I mean, I think, you know, that comparison with the internet is the best example for that, right? And I think the reason why a lot of VCs invest in that and are excited about that is because exactly, as you pointed out, they see it's sort of as something that could be as big as the internet. So if you see these linear growth, then that is not going to get us there any time soon, right? And we have a lot of investment 2014. And, of course, with VC investments, they don't get... that much money, right? So they get usually enough money for a year, a year and a half, let's say, to keep on building.

And then they either have enough revenues or they have to raise more money. And the general course, in the sort of startup world, they're going to raise more money then. So just if you look at all this investment has come, right? If you calculate that out, it means they will have to go back to raise more money, probably late 2015 or early 2016, many of these companies. And my sort of fear is that if we do see those growth rates that you guys are projecting, they will have a very difficult time raising money, right? So I think it has to be better than that, you know.

Yeah, it's an interesting point you raise. I mean, you know, Mary Meeker, who, you know, writes the Internet Trends reports for Kleiner Perkins now, formerly at Morgan Stanley. You know, she had a Bitcoin slide in her Internet Trends report from last year. And she remarked on how anything that grows as quickly as Bitcoin has, you know, from zero to

north of 5 million or so wallets, I think, at that time, you know, is something that gets on her radar screen as you know, something that's interesting. So, but you do make a really good point. Okay, so Bitcoin's, you know, achieve this miraculous thing. I mean, alternative currency aren't supposed to work if we look at history and it's already gotten millions of people using

it, a global brand. But how does it go from that 5 million level or so to 50 million to 100 million users that it really needs to kind of stay with this kind of growth comparison to the internet? And that's a really, really good question. I think the industry needs to kind of really think hard about where they're putting their emphasis on, say, advanced countries on the West, if that's in fact really what's going on. I'm much more optimistic about Bitcoin's prospects and places that have very poorly performing currencies, that have a track record of using alternative money, that have systems like M-Pesa in Kenya already kind of in place that Bitcoin can integrate with.

give a plug for another company, BitPesa. You know, is working very hard on the remittances industry in Kenya, you know, and integrating within Pesa. But how do they and how do other companies like them kind of really get that critical mass that you need to kind of make Bitcoin the preferred way of sending money to Kenya? Do they need to link up more with ATM firms? Do you need to really scatterbomb ATMs across Kenya or in a particular district? in London to link with Kenya.

You know, I think, you know, maybe there's been a little bit too much focus on trying to get people to use Bitcoin in places that really don't have great reasons to use Bitcoin or as much great reasons as other parts of the world. And that's partly why I put together this piece of research called the Bitcoin Market Potential Index, which we can talk about. You're introducing your own topic. We were going to interrupt you now and say, like, well, I think this is a great moment to move on to your Bitcoin.

market potential index, but you've done it yourself. Well, I'm looking at the clock, and I know we're getting a little, we're running out time, so I wanted to make sure I plug my own research as well as every other Bitcoin company. But so I've got a paper that I've, that's going to be presented at the PDP financial systems conference at the Bundesbank. The first, I think, Bitcoin-related conference taking place inside a major central bank or any central bank possibly, as well as at the second Bitcoin Reuters. Research Workshop in Puerto Rico here at the end of January.

And this paper, which I wrote about on Coin Desk when I first developed the first iteration of the index in July, tried to think about, you know, what are the reasons for why Bitcoin might gain adoption and which countries around the world are more attractive or more fertile ground, if you will, for Bitcoin than others? And Argentina top the list. The things that are driving the index are things like inflation, as well as a lot of as a history of financial crises, size of the international remittances market, size of the black market, level of technology penetration. Bitcoin obviously needs technology to thrive and some other

things. And Argentina was number one, Venezuela, number two. Interestingly, when you add in the size of the remittance fee, the average fee that people are paying, sub-Saharan Africa starts to look like a really attractive region for Bitcoin, as does Latin America, as does many of the post-Soviet countries. So those are the areas that at least according to the index that I've developed, which again, I would qualify and say as, you know, an interesting conceptual piece of research, but I wouldn't want people to hang too much, you know, on the results of the index yet. I think it's still a work in progress. But it is interesting that these regions, are popping up as the places

where Bitcoin, I think, could be more useful than other regions. And I think the industry might want to think more about that and how they can target those regions more. Do you take into account also the regulatory environment because I think exactly the countries you named, for example, Argentina and Venezuela, I personally, like, if I was building,

I would never build a big, I would not build a Bitcoin exchange in Argentina. Argentina. Even if you're right, right, and there is a lot of potential and reception there, it just seems to be almost guaranteed that the government, as soon as it gets traction, it was going to step in and just shut it down, confiscate it, put you in jail or deport you or whatever. So did you, I mean, I presume it also is a very difficult variable to include in the research, right, because how do you quantify that? Right. I talk about this in the both in the article and in the paper,

which should be posted soon, by the way, on the second Bitcoin Research Workshop website if you're interested in reading it. So regulation was excluded specifically for now for a couple reasons. One is the data on regulation, I think, is very much, well, it's, we don't have a lot of data yet. Further, we, we, regulation is something

it's still very much evolving. And this builds on the data point I just mentioned. In other words, we know China, for example, was cracking down on Bitcoin, you know, earlier this year with the announcement that banks, you know, shouldn't be using or interacting with Bitcoin companies. But China has continued to be, you know, by far and away, the place where we see more Bitcoin exchange volume, you know, than any other place. So what is the impact of regulation?

We don't really know that. It's very hard to kind of think about how to score that variable in this index at this point because in some ways, like you say, regulation could be the end of Bitcoin in, say, a country like of Venezuela, which has maybe an effective regulatory regime. On the other hand, a regulatory crackdown could also be a signal from a country that Bitcoin stands actually a better chance there of gaining adoption. And therefore, you know, that country should move up the rankings because, they have a hostile regulatory environment.

So in some ways, we need to have a better sense of how effective regulation is and also what it really means, because regulation may actually be a positive thing in terms of a country's adoption prospects. Well, I'm looking forward to that report, and perhaps we can have you back on at that time to talk about it. When is it coming up? So the conference is taking place here at the end of January, and they should. be publishing the papers on their website soon. This is a part of the Financial Cryptography

2015 conference. This is the second Bitcoin Research Workshop associated with that. Gavin Andreessen is going to be there. The Bitcoin Foundation sponsors it and other academics who are doing work on Bitcoin. So it should be a great event. Cool. And so we'll add this article you spoke of. We'll add that link to the show notes as well. So we've kind of come around full circle here. Now, the report also makes some, some, that's kind of looks forward to 2015. Before we wrap up, we'd like to sort of talk about some of the things that we can look forward to in the next year. What are the most interesting areas? Where are the areas that you most find interesting for 2015? Well, I think, you know, obviously price is going to continue to, I think, be something that people are

focused on. And, you know, just, you know, that's the question. that often comes up. I think, you know, even inside the ecosystem, you know, we look at like, for example, the stories at CoinDest that get a lot of traction. I mean, the price stories oftentimes get, you know, the most interest. There's still a huge, huge interest in what's going on with Bitcoin's price. And, you know, I think it's going to be interesting to see what happens in 2015 with the price. I mean, it's, you know, the audience, I'm sure knows, you know, the blockchain, you know, new reward for, for, you know, solving blocks. is not going to have until 2016.

So this nearly 4,000 bitcoins per day of new supply, that's, you know, being mined into existence, there's no letting up from that pressure on the price until 2016. And so unless something fundamentally shifts with the Bitcoin economy where reminces start getting more traction or something, you know, more speculators come in, yeah, I think there's going to be a lot of, you know, price pressure still on Bitcoin. Having said that, I'm certainly a lot less comfortable, you know, recommending that people short Bitcoin than I was a year ago when I was recommending that people do that.

Wait, to short the price of Bitcoin. I was comfortable telling people to short Bitcoin at the beginning of 2014. I'm a lot less comfortable saying that now. I think the bare case is still pretty strong for Bitcoin's price as we go into 2015. but I certainly feel like a lot of the you know with a 67% decline I think the price

has taken a pretty big hit and I'm not I don't know how much further it would fall I just I don't know but price is going to be I think still a big focus to me so my view on this is it can't really fall it doesn't make sense for it to fall much further because

you know to a large extent like if you look at all this VC investment I mean, I think to a large extent you still can say that there's an extreme correlation between the success of these companies and the success of Bitcoin, the currency. And maybe that's going to change at some point, but I think at this stage, that's still the case. So, you know, for that to be true, it's just at some point, right, you have to say, like, it's a better, a better choice. At some price, you have to say it's a better choice to buy Bitcoin than to buy a

shares invest in some companies. So there's a disbalance there, I think. Well, it's, yeah, it's hard to know what's going on also in the minds of some of the players who whole lot of Bitcoins who are maybe looking at this from a lower long-term perspective. I mean, think about what's going on with Saudi Arabia right now and the price of oil, you know, and the Saudi is really trying to drive out a lot of the high cross producers from the market. You know, I mean, would that strategy make sense for certain, say, players in the mining industry to want to consolidate you know, push out some of the higher cost or, you know, players with, you know, don't have as deep pockets, you know, in the interest in reducing competition and block difficulty and the pressure to say upgrade hardware, you know, on this, you know, regular basis. I mean, I don't know. But, but I would caution people to be aware that I think the price of Bitcoin could fall quite a bit more. I think that's not an impossible thing by any means. Brian, I want to ask you, what are the areas that you're most interested in for the next year?

You know, it's a hard question because I think there's on the one hand, there's a sort of side. I want to, how does the space develop? What's the technology? I mean, I think I have been getting a better sense of some of the economics and maybe problems or proof of work. And those kind of things are very interesting. but I think when it comes to when it comes to the sort of adoption, that's another area that I think is very interesting. And I also want to mention sort of the counter case to what you just mentioned, Gary, that, I mean, of course it's very possible the price is going to decrease further and maybe much further. It certainly can be excluded.

but I also see a very significant chance of the opposite happening. I see a very significant chance of the price going up dramatically. And I think the way I could see this happening is if there is an increasing number of financial institutions, hedge funds, etc., who are starting to take maybe small positions in this just because they say, well, maybe it works, and then we make a ton of money, or if it doesn't, it doesn't matter if it's like half a percent of our portfolio or something. Because I think for a lot of investors, this is just a gamble you want to take, right? Even if you say like that there's an 80% chance it's not going to work,

but the 20% chance that it is going to work and a 5% chance that is going to be huge, then this is just, I think, something that this is an investment that you have to make. make. And I think that understanding is there to an extent. And then, you know, we had Daniel Galancy on from Solid X and who are trying to actually help sort of financial institution hedge funds to be able to do that because it's, it's complicated because their systems aren't built for that. Their compliance isn't built for that. Like, it's something different, right? So I think a Bitcoin ETF would be a big thing. But I think if that happens, you know, it doesn't take very much, right for if if some funds a few of them put in 10 million there 10 million here this is a lot for

bitcoin and it's not very much for them so i think very quickly you can see the price going up and then of course the whole thing with bitcoin is that it has this sort of you know self-perpetuating thing right if people get excited about it they think like oh now i need to buy it too and then it keeps going up and so it has this self-fulfilling effect of course it to some extent also on the downside. So I attribute a fairly significant probability to that kind of thing happening. But to be quite honest, I thought this was going to happen this year already at the beginning of the year and it hasn't.

So maybe I'm going to be wrong again. Well, yeah, I don't want to sound too bearish. I mean, I think Bitcoin's got tremendous potential. I think what's going on with New York and, you know, getting some clarity around that's helpful. I think there's a lot of reasons that Bitcoin could perform spectacularly well price-wise. But it's just important that people be aware of this kind of steady increase of supply and the effect that that can have. So yeah, good points, Brian.

What about you, Sebastian? Well, I mean, I mentioned this in one of our recent episodes. I mean, what I'm really looking forward to is the growth of DAPs and specifically app points. So, you know, I'm I installed gems. I've been telling all my friends to get it and I've been using it to talk to my family, for example. So, you know, getting DAPs in front of regular consumers. So seeing more DAPs in app stores, for example, I think is an interesting thing to look forward to. And just generally improve customer experience.

So, you know, getting people to be able to use cryptocurrency and, you know, through simple applications. and and securely. So, you know, one thing we mentioned earlier was Universal's kind of growing their feature sets. I think that that will

greatly help adoption. So once you've got a company that you can install their wallet and you've got access to, or install their app rather, and you've got access to this wealth of services that allows you to do just about anything. And then you've got like merchant adoption merchant adoption plugged into that as well, or merchant services rather.

I think that will help adoption in a way. And I'm really looking forward to seeing what are some of the new and interesting ways that companies in the Bitcoin space can innovate in terms of UX and UX security and all that in the next year. And I think an interesting thing about what you mentioned, the whole DAP space, is that That's also a space that can sort of succeed independently of Bitcoin, right? I mean, I think it's totally possible that Bitcoin price can do terribly, but they may still do very well.

And then I think there we may also see that kind of mainstreamed option coming then, right? Because you could see like somebody like James could have totally mainstream appeal. And also the people who don't use Bitcoin, but just see this as some sort of cool like points that are fun. like people like getting points when they play games, right? So I agree. I think that's going to be a very, very interesting area to watch and hopefully we'll see some good things happening there.

But yeah, I think we're at the end of our show. So thanks so much for coming on, Garrick. It was a very interesting reading report and it was especially interesting talking with you about it and talking a bit about Bitcoin and where we're at. It was a pleasure, guys. Thanks so much for having me. And do come back on when the Q2, or sorry, the Q1 2015 report comes.

Yeah, yeah, yeah, we can come back a few months and see how right or wrong we've been. Always a fun thing to do. Yeah. So our show notes will have a link to the report and we'll also link to, I think, maybe Gehrig's website, where people can have a look at his research. And of course, you know, you can also find a report on CoinDisc. If you, we will be back a week from now. And we're going to have an episode with Preston Byrne and Sean Jones.

And it's going to be on the startup that Preston is working on, which is a very interesting, a DAC related thing. And, you know, if you want to support us, you can subscribe to us on YouTube so you get updated for the next show's next hangouts. And please leave us review on iTunes because that helps new people find the show. And we tremendously appreciate that. So thanks so much for listening and we look forward to being back next week.