The Bitcoin 2013: The Future of Payments conference is being held from Friday, 17th May until Sunday, 19th May at the San Jose Convention Center. The unofficial start to the conference was the GigaOM and Ribbit Capital Bitcoin Meetup on Thursday evening at The Tech Museum of Innovation. Paul Walborsky, CEO of GigaOM, introduced the meetup and Jeff Roberts led the discussion in a packed auditorium.
First up was David Barrett, CEO of Expensify. Expensify is an expense reporting solution. David talked about Expensify's support for Bitcoin reimbursement. The feature allows companies to manage reimbursement to international contractors through Bitcoin. It is a lightweight integration. Nonetheless, its inclusion in a mainstream business application such as Expensify is very exciting. David also pointed out the lack of innovation in international payments in recent decades.
Next up was Mike Hearn from Google and Bennett Hoffman, co-founder and CTO of Buttercoin. Their discussion was centered on the infrastructure and technical aspects of Bitcoin. They dismissed any near-term impact of quantum computing on Bitcoin. They argued that the Bitcoin core is very secure but there are weaknesses in the periphery (hosted wallets, exchanges, malware and viruses, etc.). Mike also spoke about the upcoming identity features where a Bitcoin merchant or receiver can use an SSL certificate to prove their identity so that a sender can know exactly who they are sending a payment to. He also spoke of a hardware device for securely storing Bitcoins that is safe from malware or viruses. They discussed Bitcoin thefts. Mike noted that thiefs are generally hoarding stolen Bitcoins. It is difficult to say whether this is due to the difficulty in exchanging Bitcoins for other currencies without revealing the thief's identity or if they are simply speculating on the future value of Bitcoins. Bennett suggested that there may be a stratification of Bitcoins in the future due to their provenance. For example, some may be tainted if they were reportedly stolen.
Peter Vessenes, CEO of CoinLab, Wences Casares, founder of Lemon, and Meyer "Micky" Malka, Managing Partner at Ribbit Capital covered the business and disruptive potential of Bitcoin. Wences, an Argentinean, made the case that people who live in countries with unstable currencies understand and appreciate the value of Bitcoin more readily. He gave an anecdotal description of purchasing a property in Argentina through funds held in an offshore account, usually in US banks and the expense this process incurs on both the buyer and seller. Meyer explained one of the reasons why Ribbit Capital is the largest investor in Bitcoin startups: more people have mobile phones than bank accounts and they too need to conduct financial transactions safely and securely in countries with unstable currencies. There was also a short discussion with three representatives of the Bitcoin Foundation: Peter Vessenes, Executive Director, Roger Ver, CEO and Founder of MemoryDealers.com and Patrick Murck, General Counsel.
Finally, Jeff called all of the speakers back on stage where they answered questions from the audience.
- How can an individual contribute to Bitcoin, other than donating to the Bitcoin foundation? Peter answered that the process is much the same as with any other open-source project: download the software, make a transaction, see what works and what doesn't. Then, try to make it better.
- Why are there so few instances of m-of-n transactions in the block-chain even though they have been supported for over a year? Peter answered that it will require more work on the user interface and more adoption from business entities with internal controls before we see widespread usage.
- What is the panel's view on Ripple? There were conflicting views around Ripple and alt-chain currencies. David believed that there was room for many competing currencies. Bitcoin will probably be the "gold" but there may be a silver and a platinum. On the other hand, Peter viewed Bitcoin as a protocol, much like TCP. It can be compared against other protocols, and perhaps improved upon, but it is far more likely that these improvements will be layered upon Bitcoin.
- What is the biggest threat to Bitcoin? Interestingly, Meyer believed that the biggest threat in the next year or two was a bubble, not just due to currency speculators but also due to VCs investing too liberally in Bitcoin-related start-ups.
- Will Bitcoin be able to scale in the face of exponential growth? Mike answered "yes" and without the need for "Bitcoin banks" or supernodes.
- What else can be layered upon Bitcoin other than contracts? Mike described autonomous agents. These autonomous agents could act like companies and spin off subsidiaries where only the profitable ones will survive. A member of the audience proposed the idea of self-driving cars allowing other cars to overtake or use faster lanes in exchange for passing fees. If Bitcoin sufficiently reduces the friction of payments there will be many more applications such as this.