The third annual Inside Bitcoins conference in New York City kicked off with revelations on how the Bitcoin eco-system is evolving and now and future prospects for the Blockchain technology.
In his introduction of the first keynote – Pantera Capital’s Dan Moorehead, Mecklermedia founder Alan Meckler noted the definitive proportional relationship between the Bitcoin price and number of conference attendees over the past few years. When the price high, the number of attendees is also.
However Meckler emphasized how there was much more to the technology behind Bitcoin than the currency itself.
We all know it is more than just about the price of bitcoin… that’s why we are here.
Morehead, who is Pantera Capital’s CEO and founder, re-affirmed the importance of the underlying technology by noting that technology or protocol is “a serial killer as it can disrupt a lot of things.”
Morehead identifies Bitcoin as the “Internet of Money.” The internet is an interlocking web of protocols. All the other protocols move content, data, communications. As Moorehead indicated, the only thing missing in that web was something that moved e-cash. None of the other protocols, like TCP/IP, SMTP, HTTP, could provide a price feed like Bitcoin technology does.
The venture capitalist provides a simple description for bitcoin – Money over Internet Protocol or MoIP.
Of course, with the volatility of bitcoin, there has been a massive deluge of expectations, and now there is considerable disillusionment and negative hype, as Morehead described in his keynote.
We had a bubble in the price of bitcoin. That price bubble begat a bubble in mining. There was also a bubble in hype.
Moorehead however pointed out that, even now when the Bitcoin price is down to around US$220, the venture capital raised in the bitcoin ecosystem reached around $350 million in 2014, which is more than was raised by Internet ventures in 1995 – around $250 million.
The head of Pantera also described how the current global banking system was archaic:
The correspondent banking industry today is exactly the way the Medicis set it up in the 14th century.
Morehead believes that Bitcoin will revolutionize the global financial system, particularly in the developing world where much of the population is “Un-banked”
Kenya is the world leader in cryptocurrencies. About 45 percent of transactions are already processed over cell phones.
Morehead also believes that the development of blockchain applications will be important in the bitcoin ecosystem’s development and a component in the Bitcoin market capitalization. He attributes that market cap to both the price of the currency, venture capital investment and the ecosystem development as a whole.
Pantera has a portfolio of investments across the cryptocurrency space that includes 21, Align Commerce, BitPagos, BitPesa, Bitstamp, Chain, ChangeTip, Gliph, Korbit, and LaunchKey.
Morehead is bullish about the bitcoin space and outlines the Bitcoin ecosystem’s evolution in the following five phases
|I||2009||Early Adopters||Belief that bitcoin is currency, gold 2.0|
|II||2013||Infrastructure||Exchanges, payment networks, wallets|
|III||2015||Creating new use cases||Bitcoin enabling new participants addressing new pain points… micropayments, cross border flows, remittance etc.|
|IV||Soon||General blockchain applications||Using Bitcoin for non-payment applications|
|V||5-10 years||Disrupt payment oligopolies/monopolies||Visa/MasterCard users have no pain. Swipe and get “free” airline miles|