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Inside Bitcoins NYC Recap – Bitcoin Future is Bright, But Uncertain
Bitcoin Conference Speakers Share Mixed Views on the Future, But Optimism on Work Underway
“Bitcoin looks like Facebook today, but so did Friendster in its day.” — Brock Pierce, Managing Director of Clearstone Global
The Inside Bitcoins NYC conference dealt with a broad swath of topics from business models and profitability concerns to how Bitcoin can be an enabler of social freedoms.
And yet, much of the speaker focus and audience concern surrounded how Bitcoin can become more mainstream, how will it interact with or change the current infrastructure, and what (and who) will be the winning business model.
While there were discussions by the VC panel (Gold 2.0) and the keynote speaker, Charlie Shrem, on altcoins and other fiat currencies, the overwhelming consensus is that Bitcoin will be the dominant currency in the space.
As Brock Pierce, Managing Director of Clearstone Global, cautions “is Bitcoin Friendster, Myspace or Facebook? It looks like Facebook today, but so did Friendster in its day.”
Looking at the state of the Bitcoin community today, many of the companies are still nascent – a number of the represented firms have had recent shutdowns/relaunches or are soon to launch private betas. There continues to be a strong interest in education about legal and regulatory issues, today particular emphasized by the interest in the overview of major legal topics by Jacob S. Farber, Senior Counsel at Perkins Coie LLP.
Also represented on the post-lunch panel was James White, Director Tax Issues for the US Government Accountability Office, demonstrating how the government is taking a more active interest in the space.
Overall, the conference explored the major topics that entrepreneurs and potential financial investors are grappling with. Among the motivations discussed by Anthony Gallippi, Co-Founder and CEO of BitPay (site), is the reduction of credit card payment fraud (estimated at $100 billion per year) and ability to accept payments from a much larger international consumer base.
Stephanie Murphy, from Let’s Talk Bitcoin, and Alan Safahi, founder and CEO of ZipZap, see the value in enabling freedom of speech through transactions outside the control of governments or without third-parties recording personal information.
However, for Bitcoin to become a mainstream monetary transfer mechanism, a number of issues need to be addressed, such as the noted legal uncertainties or the evolution of the current legacy infrastructure discussed by Maria Sparagis, President of DirectPayNet.
Ultimately, the major questions of adoption, future direction and industry winners continue to be hashed out.
Authored by Michael Smouha and Ronan Murphy, Contributors to On Bitcoin
Read other articles from the conference:
- Inside Bitcoins NYC Keynote: Is Bitcoin the New Financial Order?
- Finding Business Model Opportunities in Bitcoin – Inside Bitcoins NYC
- Building Bitcoin into the Core Architecture of the Web – Inside Bitcoins NYC
Building Bitcoin into the Core Architecture of the Web – Inside Bitcoins NYC
How to get Bitcoin into the hands of 2.4 billion people not using it today
Bitcoin has plenty of room to grow. With a market cap of roughly $1 billion USD, Bitcoin represents but a fraction of the United States’ $16.3 trillion USD money supply. Manu Sporny, founder of Digital Bazaar, is one of the people actively seeking to close the gap.
At the Inside Bitcoins NYC conference, Manu Sporny shared his answer to accelerate growth and provided a vision of adding 2.4 billion people to the Bitcoin ecosystem within the next five years.
Where might one find a market that large that can be on-boarded that quickly? To Sporny, the answer lies in the 2.4 billion people with access to the web and in the sheer global dominance of four popular web browsers: IE, Safari, Firefox and Chrome.
The challenge that naturally follows is how to integrate Bitcoin into the browser. Sporny is tackling this challenge by pushing for new W3C standards for the browser that will allow for more simplified transactions over the web.
The argument is that exchanging funds over the Web is far more complicated than it needs to be. While we can exchange massive quantities of data nearly instantaneously, financial transactions are slowed due to the speed of old money, credit card numbers, waiting for block chain verifications, PCI compliance and the like.
Exploring a Bitcoin Web Payments Solution
Sporny articulated two paths to easier and faster financial transactions.
The first is PaySwarm, a currency-agnostic standard for Web Payments. PaySwarm, being commercialized through a system called Meritora, is the first open, universal standard for payments on the Web, allowing users to execute zero-click payments of USD, Euro, Bitcoins or any other currency of their choosing.
The second option described by Sporny is the WebPayment API, another standard for browser-based payments being developed by Mozilla. The API would enable one-click purchase directly from the browser.
Sporny is very bullish on Bitcoin and with the potential creation of new W3C standards that will spur Bitcoin use, it’s now “time for entrepreneurs to get in on the ground floor.”
Authored by Michael Smouha and Ronan Murphy, Contributors to On Bitcoin
CC image by jurvetson
Finding Business Model Opportunities in Bitcoin – Inside Bitcoins NYC
Trends to watch and how to think about Bitcoin as a business
At the Inside Bitcoins NYC conference, Coinsetter CEO Jaron Lukasiewicz spoke to a packed crowd. His message: the current financial system is outdated and relies on critically dated infrastructure. He believes that “people involved in Bitcoin [are saying] this is not acceptable anymore.”
Exploring the current financial system he points to three to five fund transfer times under ACH payments and drawing experience from his previous startup in ticketing, companies paying over 40% of revenues out in credit card fees. Basically, in 2013, it is still exceptionally difficult to send money to a friend and this is leading to a customer revolution.
Today, he proposes, Bitcoin is the dominant virtual currency. Not simply in terms of transactions and value, but based on awareness – including awareness outside current users of the market. The first mover advantage is significant and Mr. Lukasiewicz asks us to spend time thinking about how it has the potential to become an “IP address for money.”
Coinsetter is a leveraged forex trading platform, focused on active traders. Originally he questioned the number of exchanges being set up at the moment and why there isn’t an original business model. On reflection he thinks this is actually important. The more liquidity that comes into the Bitcoin system, the better. It will draw more users; innovation and a greater focus on customers. The latter being a key concern for Mr. Lukasiewicz, there is “room for a lot more exchanges to come online, but it is important to focus on a particular customer.”
Bitcoin Companies Working with Government and Banks
Focusing on the themes that will lead to business opportunities, he has concerns about government regulation and how banks will interact with Bitcoin. One of his theories is that anonymous financial transfer systems will not be easily integrated into the current banking system. Know Your Customer concerns and regulations will be a significant hurdle, along with security for institutions with large holdings. When challenged on these points during Q&A, Mr. Lukasiewicz clarifies that he sees this as layers added on top of the current system, rather than a change to current Bitcoin protocols – apparently to the great relief of the audience.
In conclusion, he sees the best opportunities for those companies that firstly, concentrate on Bitcoin as a payments protocol, and secondly, have a strong focus on having a strong customer proposition and delivering an appealing experience.
Authored by Michael Smouha and Ronan Murphy, Contributors to On Bitcoin
Inside Bitcoins NYC Keynote: Is Bitcoin the New Financial Order?
Charlie Shrem Calls Bitcoin the Currency of the Future, Wants to Grow the Bitcoin Ecosystem
In his morning keynote at the Inside Bitcoins conference in New York City, 23 year-old Charlie Shrem described Bitcoin as spurring a paradigm shift in the financial sector. Shrem is Vice Chairman of the Bitcoin Foundation and CEO of BitInstant.
The growth of Bitcoin—the digital currency that allows for feeless and instantly settled transactions–is directly related to wider acceptance by traditional retailers, assuring the security of transactions and combatting some of the less than favorable press that Bitcoin has garnered.
However, the growth of Bitcoin is also dependent on entrepreneurs like Charlie. Once laughed out of every venture capitalist’s office in New York City, Charlie Shrem convinced his mother to take out her life savings in order to start BitInstant, which solved the problem of “how do you buy bitcoins?” Today, as a result of Shrem’s efforts, you can walk into any 7/11 and buy Bitcoin in addition to your daily coffee or Slurpee. Later the famous, or infamous, Winklevoss twins invested in the startup.
Shrem’s latest endeavor is named Bitcoin Wireless, whose aim is to allow for the exchange of mobile airtime minutes as a currency (reminiscent of the virtues of mobile transaction pioneer M-Pesa).
Another innovation cited by Shrem in his talk was that of the Harvey brothers out of New Hampshire, who are launching the first Bitcoin ATM network; the ATM’s will allow for virtually instant cash-for-bitcoin exchanges.
With so much optimism and innovation surrounding Bitcoin, Charlie Shrem was quick to also point out some less rosy realities. Bitcoin has reputational issues to address; while these are due to Bitcoin’s “early days” when the currency’s environment was akin to the “Wild Wild West” and have been amplified by some members of the media, these issues are very real.
Next, is the issue of how Bitcoin might play with respect to traditional banks and financial institutions. In his talk, Shrem was hopeful that Bitcoin would one day be harmoniously incorporated into the traditional banking system, co-existing alongside credit cards, cheques and other more traditional instruments of financial transactions.
On the net, does Bitcoin’s future look bright? According to Shrem, “Bitcoin is doing to the world what Email did to snail mail.”
Authored by Michael Smouha and Ronan Murphy, Contributors to On Bitcoin
Conference photo tweeted by @saumvaish
Bank of Thailand Advises That Various Bitcoin Actvities Are Illegal
Bank of Thailand Officials Call Bitcoin Activities Illegal
Thailand-based Bitcoin Co. Ltd. issued an alarming release today, asserting that senior members of the Bank of Thailand advised the company that various Bitcoin trading activities are illegal in Thailand.
The company runs an exchange, allowing users to buy and sell Bitcoin, and has suspended operations after the guidance by the Bank of Thailand.
Below is the full release.
Trading suspended due to Bank of Thailand advisement
July 29, 2013
During the past several months Bitcoin Co. Ltd., in Thailand, has been in the process of registering with the various Thai government agencies in order to operate in a lawful manner. Included in this due diligence was to reach out to the Bank of Thailand, the governing body that regulates financial transactions in Thailand, and ask for guidance as to any applicable licenses in buying and selling bitcoins.
Initially the Bank of Thailand had bypassed the company’s money exchange license on the basis that Bitcoin was not a currency, however the company was invited back, on July 29th, 2013, to participant in a conference about how Bitcoin works in general, and business operations of Bitcoin Co. Ltd. The conference was held with about 15 members of the Bank of Thailand in attendance. During this conference directors of Bitcoin Co. Ltd. gave a presentation about the workings of Bitcoin, the benefits of Bitcoin, incite into the company’s operations and future implications of Bitcoin.
At the conclusion of the meeting senior members of the Foreign Exchange Administration and Policy Department advised that due to lack of existing applicable laws, capital controls and the fact that Bitcoin straddles multiple financial facets the following Bitcoin activities are illegal in Thailand:
- Buying Bitcoins
- Selling Bitcoins
- Buying any goods or services in exchange for Bitcoins
- Selling any goods or services for Bitcoins
- Sending Bitcoins to anyone located outside of Thailand
- Receiving Bitcoins from anyone located outside of Thailand
Based on such a broad and encompassing advisement, Bitcoin Co. Ltd. therefore has no choice but to suspend operations until such as time that the laws in Thailand are updated to account for the existance of Bitcoin. The Bank of Thailand has said they will further consider the issue, but did not give any specific timeline.
