It’s time for more bitcoin conference porn! The fall schedule (glut) kicks off today in London with an Inside Bitcoins conference. Unfortunately, I’ll miss it. Instead, I’ll be at MIT giving a presentation on how students there can scale from “Zero to One” in Bitcoin.
My favorite slide of the short overview, which is also relevant to #bitcoinconf attendees is without a doubt how to simply “sound smart” as a newcomer to Bitcoin. That’s really half of the battle; I’ve learned from personal experience. Leaders in this industry who are exponentially smarter than me were willing to talk to me as a peer mere weeks after I first learned about bitcoin last November, mostly because I faked it ‘til I made it.*
So I feel a moral responsibility to share ten things that can make any newb sound like a seasoned vet. Much like a pick-up artist**, you’ll have to craft your own style and will look silly occasionally, but at least you can sleep easy knowing that you will fool 99% of onlookers with this framework.
Here are my top ten tips for sounding smarter than you really are when it comes to Bitcoin…
1) Know simple BTC grammar.
Discredit anyone who misspells bitcoin as BitCoin or bit coin, and gently correct those who conflate Bitcoin the protocol (capitalized) with bitcoin the currency (lower-case). This is a slam dunk, I’ve-been-here-a-while, pro tip. Don’t be a jerk about it, but politely help this other newcomer scale to your level of intelligence.
Congrats, you’re already ahead of the curve.
2) Acknowledge that bitcoin is a crappy currency, but a high-potential commodity.
Bitcoin is volatile and will be for a very long time. It’s designed to appreciate in value or to fail — without much middle ground. As a unit of account or store of value, it’s terrible, but it is also a very high-potential commodity. Holding the “currency” means (among other things) that you are betting bitcoin displaces gold as a long-term reserve — that one inherently worthless commodity (gold) will be replaced by another (bitcoin), because bitcoin will at least be tied to a very valuable network. You also believe that as the critical exchange, investment, and derivative infrastructure is built out, mainstream people will use what are essentially fiat-denominated bitcoins anyway (thanks to hedging wizardry). Oh, and on that last point, you’ll stop referring “dollars” and instead reference “fiat.”
3) Point out that all currencies fluctuate in relative value, but at least BTC appreciates.
This is in some ways a close corollary to #2. People like to criticize bitcoin’s “extreme” volatility, but the truth is that the currency’s volatility is falling and will continue to fall steadily as it grows larger. Moreover, it will look less volatile relative to the currencies of many smaller, developing economies, especially those with high inflation like Argentina or Nigeria. (BTC is the 90th most popular global currency
by M1.) At least with bitcoin, you have a ~50% chance on any given day that you’ll enjoy upside volatility, instead of slow and steady devaluation. Many people outside of the US and Europe are going to play those odds.
4) Understand that Bitcoin is not decentralized, it is distributed.
There are basically 10 people in the world who ultimately control Bitcoin right now, so it’s not decentralized. You’ve got 5-10 Bitcoin core developers who contribute updates to the code base only if they are accepted by the 5-10 mining behemoths that call the shots. In theory, anyone can “fork” the Bitcoin core if they don’t like the miners’ rules, but most people will agree that this is infeasible at best. It doesn’t help that no one knows who controls most of the global mining power or even who invented Bitcoin. Sounds shady, and in truth, it is more of a black box than most will admit. The good news is that the block chain is universally distributed, so at least people can see the global ledger of transactions, even if they don’t appreciate that a group smaller than the Fed actually controls Bitcoin.
Brownie points if you know who Gavin Andresen is, because many newbs don’t! I’ll put it to you this way: Gavin is bitcoin’s Mark Zuckerberg to Satoshi’s Winklevii — if only the Winkevoss twins had come up with a clever seigniorage model for social networking and faded to the background gracefully once they had Zuck on board. Gavin and the other core developers aren’t household names by pure chance — the media is simply too obsessed with the mysterious Satoshi.
5) Admit that Bitcoin is not cheaper than credit cards.
A common pitch is that bitcoin is much cheaper than credit cards, but this simply is not true in most real-world use cases. Bitcoin merely appears less expensive for most retail transactions because those charging the transaction fees - the miners - care more about the large 25 BTC / block mining reward subsidies than they do the variable transaction fees. For now. As mining gets more expensive and the mining reward shrinks over the next decade, bitcoin’s transaction fees will start looking a heck of a lot more like interchange rates. In addition, if you go up one level to the payment processors like BitPay and Coinbase, either the merchant or the consumer (or a combination) is paying 100-150 basis points to cover bitcoin transaction costs - not a tremendous price difference from card networks.
Bitcoin has many advantages over credit cards — security, interoperability, universality, etc. — but cost generally isn’t one of them.
6) Remittances aren’t a near-term killer app; cross-border transactions are.
As much as bitcoiners like to bash Western Union and Money Gram, and as despicable as some of these remittance platforms can be, they still exist for a reason. Doing safe, secure and legal remittance is more expensive than it seems at first glance. And while it’s nice to think that crypto could flow freely to those already familiar with mobile money, this theory has one big flaw: the infrastructure and awareness for bitcoin isn’t even close to there yet in developing economies. Sure, a migrant worker could send bitcoin to a relative’s mobile phone in Zimbabwe, but good luck safely exchanging that for usable day-to-day currency - especially at a cheaper rate than the evil remittance empires.
Business to business cross-border transactions, on the other hand, are infinitely more likely to succeed on a faster timeline. More sophisticated parties, with better access to bitcoin exchanges and financial services, solving a more straightforward and nominally larger problem.
7) Pick at least one bitcoin company to hate, and know why you hate them so much.
I honestly don’t think I’ve met a single person in this industry who hasn’t completely crapped all over at least one leading bitcoin company behind closed doors. In fairness, even when I’m not playing devil’s advocate, I have still been legitimately guilty of giving the business
to all of these companies myself. But for most non-bully-pulpiteers, it’s simply easier and less abrasive to whisper criticisms. It doesn’t matter whether you pick Circle (“Wall Street sell-outs”), Coinbase (“young, naive and overextended”), Xapo (“shady insurance dealings”), Blockchain (“short-sighted ideologues”), or BitPay (“first, but not best”). All that matters is that you hate at least one of them.
8) Tell everyone how much you love Andreas, but that he’s too political for your liking.
First you have to watch an Andreas Antonopoulos presentation
and learn how to spell Antonopoulos. He speaks beautifully and sincerely and intelligently, and if Aaron Sorkin ever wrote a show about bitcoin, Andreas would be the protagonist, a la President Bartlet (West Wing) or Will McAvoy (Newsroom). He’s a perfect embodiment of what bitcoin should be — indeed, it’s fun to believe in his type of future — but the realist in you knows to just eat popcorn while watching this artist at work. You don’t actually need to believe what he says for bitcoin to go mainstream. In fact, if you are easily influenced, you probably shouldn’t because many of his most strongly held beliefs simply aren’t practical.
9) Learn the defensive pitch for the Bitcoin Foundation.
It goes something like this: “You know, it’s not that easy to herd cats in this industry and these guys have been very valuable in serving as a voice for such a diverse community. At the end of the day, none of the leading entrepreneurs have time to do much advocacy work outside of their own companies, and the Bitcoin Foundation is crucial in promoting investment in the Bitcoin core technology. It’s easy to criticize them — and look, they’ve definitely made some mistakes — but like most non-profits, these guys are underpaid, overworked and only get criticism, never praise.” The more you say this, the truer it sounds. (See TBI, March 2014, for why this is ironic.)
10) Rehearse this phrase or some close iteration of it."Ethereum is really interesting, but it just seems like they will have an uphill battle to beat out Bitcoin innovations like side chains and tree chains given Bitcoin’s network effects."***
If you want to immediately be deified like a core developer, state this with confidence and maintain eye contact with your listener during cocktail hour, then just shake hands and walk away. This is a newb trump card, and it sounds smart on so many levels that you will leave your audience with no choice but to admire your crypto fluency. Uttering this phrase without stammering usually comes with an admission ticket to any conference VIP after-party you’d like. (I usually just use one of my several aliases, until one of them is on the list.)
*Still trying to make it.
**There are actually a surprising number of former and current pick-up artists in bitcoin. No joke. (I’m not one of them.)
***Full disclosure: I have said this verbatim and still don’t know what it means. But it sounds smart.
Upcoming EventsMoney 20/20 (November 2-5 in Las Vegas)
Money20/20 is the world’s largest event enabling payments and financial services innovation for ‘anywhere, anytime’ connected commerce at the intersection of mobile, retail, marketing services, data and technology. With 6,500+ attendees, including more than 500 CEOs, from over 2,250 companies and 50 countries, Money20/20 is critical to realizing the vision of disruptive ways in which consumers and businesses manage, spend and borrow money. The next Money20/20 will be held on Nov. 2-5, 2014 in Las Vegas, and will be preceded by the Money20/20 Hackathon, which runs Nov. 1-2. Register here
!Inside Bitcoins Conference (September 15-16 in London and October 5-7 in Las Vegas)
The CCN has partnered with Inside Bitcoins to offer 50% discounts on conference passes to students! Just use the code COLLEGECRYPTOSTUDENTS. (You will need to provide info that you are a full-time student, so send an email to firstname.lastname@example.org
with copy of your student pass after registering.) Inside Bitcoins London and Las Vegas are the latest Media Bistro conferences on the calendar following shows this year in Berlin, Hong Kong, and New York. For more information on the London show, visit here
. For more information on Vegas, you can sign up here
Russia May Ban Cryptocurrencies By 2015http://rt.com/business/187440-bitcoin-ban-russia-cryptocurrency/
Russia is looking to become the third country to ban bitcoin and all digital currencies. The law is expected to pass; at it’s very latest, by the spring of 2015. The Russian Deputy Finance Minister Aleksey Moiseev told journalists, “The overall concept of the law is set in stone.” The ban will extend to miners, exchanges, and online stores that accept bitcoin. Russia claims the move will help prevent illegal transactions and protect its citizens from the currency’s price speculation. TeraExchange Unveils First U.S. Regulated Bitcoin Swaps Exchangehttp://online.wsj.com/articles/teraexchange-launches-bitcoin-derivatives-exchange-1410543989
TeraExchange, a bitcoin derivate exchange, announced on Friday that its trading platform has received approval from the Commodity Futures Trading Commission. Investors can now list and trade dollar-denominated bitcoin currency swaps. All contracts on the site are written, quoted and settled in dollars, which may have helped TeraExchange’s regulatory approval process. The bitcoin swap contracts on TeraExchange themselves are still pending CFTC approval. Bitcoin Expert Andreas M. Antonopoulos Joins CoinSimplehttp://coinsimple.com/bitcoin-expert-andreas-m-antonopoulos-joins-coinsimple.html
Andreas M. Antonopoulos has joined CoinSimple as an Advisor to the Board. CoinSimple is a service that makes it easier for e-commerce merchants and consultants to accept bitcoin. CoinSimple’s payment processing solution can be integrated through BitPay, Coinbase and GoCoin. Antonopoulous has been involved with CoinSimple since it’s formation. Bitcoin AngelList Syndicate Tops $1 Million in Investor Backinghttp://www.coindesk.com/bitcoin-angellist-syndicate-1-million-investor-backing/
Brock Pierce, a Bitcoin Foundation board member, runs a digital currency focused AngelList investment syndicate, which has raised more than $1m in backing from its pool of investors. AngelList’s syndicate allows angel investors to raise capital for projects while earning return off the project’s performance. Pierce is pleased with the overall performance of the syndicate, but is disappointed that it won’t hit its original goal of investing in 12 bitcoin startups in 2014. The syndicate has 78 accredited backers, and has been a top 10 syndicate on AngelList since February. Tim Draper: Bitcoin’s Price Still Headed to $10khttp://www.coindesk.com/tim-draper-bitcoins-price-still-headed-10k/
Tim Draper, the winner of the 30,000 BTC Silk Road auction, revealed he has been surprised by bitcoin’s recent price decline, but remains optimistic in the long term. Draper says, “I have a price target of $10,000 in three years. Even that may be pessimistic.” The 56-year-old investor has also recently contributed to funding rounds for BitPagos, Korbit, and Volabit. Bitso Targets Mexico’s Mobile Phone Users With SMS Bitcoin Buyinghttp://www.coindesk.com/mexican-exchange-bitso-enables-mobile-credit-card-payments/
Bitso through a partnership with mobile financial services company Pademobile will work to bring bitcoin to Mexican mobile users. Pademoble users can now buy bitcoin from Bitso using credit cards through its SMS-based system. The exchange takes a 1% commission. Bitso is also partnered with Compropago, which has more than 130,000 locations across Mexico, allowing users to fund their accounts at any Compropago terminal.