 Hello everyone and thanks for coming to my talk about Bitcoin and money When I look at the development of cryptocurrencies in the last decade, I ask myself a serious question What is the driver behind that development? Bitcoin has come into life from a bunch of tech nerds. They are just a few numbers in the computer database and Still people are putting in money and electricity and even they develop specialized computer hardware for them Why is that? Why are they rising and why do people give them value? Bitcoin is a new technology based on the so-called blockchain a distributed database on the internet it is cryptographically secured and You can transfer money worldwide and without any delay Somehow my pointer is not working properly you have no government control of a crypto and You also need don't need a bank account. You can store them on your smartphone and can carry them around like cash Some people say Bitcoin is the future of money They claim that it is better than the money we actually use in this talk. I want to look deeper into that Let's see if that is true So to understand the advantages of Bitcoin we first have to understand what money actually is and That's works best with a small story. So imagine a farmer. Let's call him Bob and Bob breeds chickens and They're cute and fluffy and also delicious But Bob doesn't want to eat chicken all day. Sometimes he wants to eat some bread So he could go to the bakery and trade one of his chickens for the bread But then Bob and the baker they have to agree on some exchange ratio between chicken and bread some price And you would need this price for every pair of goods on the market That means lots and lots of prices and because Bob doesn't want to get confused about prices all the time People in the past agreed to use some good as money for a long time. They use gold and other precious metals and With that you have only one price for the chicken one price for the bread and so on and Now Bob can trade his chickens for money and then buy all the other stuff he needs Technically speaking money is a good on the market with certain properties Which allow this good to be used as a global means of exchange So heads of let's have a look at some of those properties our money good needs Economists claim there are six properties of money in total Today because of the limited time I will concentrate on three of them, which are most important for us first money must be limited in supply an Example for very bad money is sand Everyone could just go to a beach and fill up his pockets. It would have no worth for trading anything Second money must be acceptable Nowadays a certain currency is usually accepted within the borders of a single country You notice this property every time when you travel when you go to a vacation and when you exchange your money to another currency and When some currency is accepted in multiple countries, it's more easy for travelers The euro is a very good example here For almost 20 years now you can travel within the you without exchanging any currency And the third most important property money must be portable you want to carry it around Imagine everyone would pay with big and heavy stones and All the people who are not as strong as our overlakes here They would have a real problem when they want to go to the supermarket For roughly 5,000 years we used gold and other precious metals as money What about the property of that as a physical good gold is limited in supply It was accepted as means of payment until roughly 150 years ago Today it is replaced by paper money and this is because of the portability Gold is heavy and carrying it around can be dangerous and that was one of the main reasons why paper money came into place So what about our actual money? Paper or plastic is portable. It was designed to be that way It is acceptable because the government has created all the necessary laws for that And it is limited in supply because there is a central instance Which can control the amount of money in existence the central banks But control means also that this central instance can temper with the money supply For decades now the central banks have increased the total amount of money in existence and this leads to inflation and rising prices Let me show you what inflation does with our money When you increase the amount of money by 3% per year then after 25 years it has lost half of its value Let's make an example Today for 10 euros you can buy a decent pizza In 25 years from now for the same 10 euros you will get only half of that pizza For the full pizza you have to pay 20 euros in the future and That means if you want if you want to sustain your lifestyle only sustain You need to double your income every 25 years Otherwise you're getting poorer year by year and The tragedy is this process of our money losing value is so slow that you barely notice it So inflation is the fundamental flaw in our current money Bitcoin claims to do it better. Let's have a look at its properties First it is limited in supply by design Bitcoins are created by computers and as soon as a total of 21 million Bitcoin is made the creation of new coins will stop and Then the total amount of Bitcoin in existence is fixed for all eternity And that means in the long run inflation is impossible with Bitcoin They are portable as soon as you have installed a wallet app on your smartphone. You can carry them around like cash It's a little bit like Google pay or Apple pay. You need some technology or an internet connection But as long as your battery has some energy left we can check the portability And what about the third property? Well Bitcoin has not yet reached much acceptance as means of payment There are some shops online and offline who accept them But they are few and also very few people use Bitcoin to pay So let's summarize what we have heard so far Every system has its flaws Gold is not portable. It's to have it to pay with Paper and credit You can't pay with them, but there is inflation. It loses value over time. It's not entirely limited in supply and Bitcoin is not limited But it has not yet reached full acceptance So in theory it is the better money But how can we come to a point where everyone can benefit from that? Is there any means that Bitcoin can become the next payment in the supermarket? To predict the future we first have to understand the past Bitcoin exists since 2009 and they have gained massive value over time The price of a single Bitcoin rose from absolute zero to more than ten thousand dollars How did they come that far? Let's answer this question first, and then we can have a look in the future So how does value come into Bitcoin? There are Bitcoin miners and they create the coins by spending real money for electricity and specialized hardware And they do that because they speculate on higher prices in the future to make some revenue This higher price comes from a growing demand when more and more people see the advantage of Bitcoin versus paper money And this growing demand hits a limited supply So basic market principles like supply and demand cause a value transfer from paper money to Bitcoin and Until today this value transfer seems to work totally fine Bitcoin has gained much popularity over the last decade. Let me show you some milestones In 2010 the first Bitcoin exchange emerged since then you can officially trade Bitcoin for money over the internet In 2013 the first Bitcoin ATM was opened in a coffee shop in Vancouver And since then you can withdraw paper money from your Bitcoin account from your Bitcoin wallet like you can withdraw money from any bank account In 2016 the cabinet of Japan Officially recognized Bitcoin as similar to paper money 2017 the Chicago Board Options Exchange started trading Bitcoin futures 2018 Bitcoin gets accepted for tax payments in the Swiss town and today Bitcoin has a fixed place on certain news portals and mainstream finance websites like CNBC or Yahoo Finance You find news about Bitcoin and other cryptocurrencies not only on specialized niche websites But also on mainstream news portals They are not yet treated like gold or blue chip stocks They are not yet on the title pages of the big players at least not that regularly But they are existing in a way, which was not the case some years ago Now we know the past Let's have a look in the future What about the acceptance as money? Bitcoin has come very far, but it has not yet reached mass adoption This will happen when everyone starts to actually own Bitcoin When at least half of you guys here in the audience have a Bitcoin wallet We can talk about mass adoption and acceptance as money But how can we come to that point? For the rest of the talk, I will show you some reasons which prevent Bitcoin to be used by a wider public and Also a possible solution one reason for the missing acceptance of Bitcoin is the fear of the unknown Most people don't know yet how to handle cryptocurrencies When you want to buy them you have to register some exchange And you have to trust that exchange that it does not disappear with your money, which has happened in the early days Or that it gets hacked which also has happened in the past When you have bought some bitcoins you have to store them somewhere There are safe methods like hardware wallets or paper wallets, but you have to know that and use them Otherwise your risk that your bitcoins get stolen by a computer virus or that you lose them when you lose your smartphone So all in all there are certain dangers which prevent mass adoption and a breakthrough on a larger scale Right now Bitcoin is still a toy for enthusiasts for traders and tech nerds for people who know exactly what they are doing The question is what could happen to remove this obstacle of fear Fact is since the beginning of this year. There is a new law in Germany which allow banks to offer crypto services and This law could be a cornerstone for Bitcoin banking accounts if Some trustworthy company takes care of all the hassle with the technology and with the safety That will make it a lot easier for a wider public and this could bring them one step closer to mass adoption So let's summarize what we've heard Paper money is the best money. We have so far. It is more viable than gold But it there is inflation. It loses value over time We have learned that Bitcoin is designed to be money is that all it has all the necessary properties Especially it's immune to inflation It's gaining value, but it lacks acceptance for payments in my opinion The most pressing reason for the low acceptance of Bitcoin is this fear of the unknown and I showed you a possible solution for that if banks start to create Bitcoin accounts This could be a new driver which brings them to the next level of mass adoption Fact is there is an inherent flaw in our current money system the ones who made the rules can change those rules for better or for worse With crypto currencies like Bitcoin, it works slightly different the rules are programmed into an algorithm So they are fixed and known for everyone If you use this system, you know what you can expect all the time Without worrying that some time in the future someone takes something from you against your will and I sincerely hope that more and more people see that and start using crypto currencies like Bitcoin I think in the long run, they will benefit us all Thank you for listening Marcus, thank you for your great talk. I even started installing the Bitcoin wallet, but I guess I'll finish later So it's the same drill if anyone has any questions about Cryptocurrencies or anything else to Marcus raise your hand and I already see the first one The guy over there Hello, I'm Abdul. Thank you for the interesting talk I was just wondering About the pros and cons of different currencies. So as you said that with the paper money We have a problem with inflation and with time the money gets deprecated. So I think it will be the same case with Bitcoin in future because more and more Bitcoin miners will emerge and they will start mining it and then it will also Be deprecated or it will have also have an inflation. What's your take on that? Yes, you're totally right right now still bitcoins are created by miners that means there is an inflation But this will decrease year by year There is some some saturation curve which brings Bitcoin closer to this 21 million and This goes slower and slower. So right now the inflation that you can calculate the inflation in the Bitcoin system This is at roughly 1.8 percent and in four years from now There will be some something called as a half thing maybe you have heard of this and this is a method which in which decreases the amount of bitcoins which are created and This is half and half and half until this 21 million coins. I mentioned are created and Since this point you don't have any inflation any more in the system So right now we have inflation but inflation decreases step by step until it is at zero and Then no more coins are created So thank you. There was one raised hand in the corner and I noticed this hand as well You're next Thanks for the talk. So isn't inflation just the lesser of the evils if you compare it to deflation or this huge volatility Bitcoin shows That is a very good question. The question was if deflation is the bigger evil as inflation I most people refer to the big depression in the 1930s There was a massive deflation there What most people don't know that this deflation was caused by a massive inflation in the years before that So we have cycles in the economy which are caused by inflation and then we come into a bubble and when this bubble bursts We have deflation so the deflation is not a problem. The deflation is the result of the inflation and There is also another theory which states that right now We have a slight inflation of money loses value over time and you can cope with that because this loss this value loss is so slow There is also a theory if you have a slight deflation with Bitcoin You could have that because you have also technology advancement and when you fix the money supply you have a slight deflation and That leads to a decrease of prices of three percent per year Let's say four percent two percent per year and then This pizza example would reverse it would become the opposite what I showed you if you pay ten euros for pizza today And you have a slight deflation over time in 25 years from now you would only have to spend five euros for the pizza So I think a slight deflation is very good for the people very good for your pocket very good for your wallet But a hyper deflation is also as bad as a hyper inflation for the economy So we'll have our time for the last question Think over there reserved a spot Okay, I actually have two first of all, thanks for your talk one follows on the question right here You said that Bitcoin theoretically is the good currency But if you fix the amount of money and the amount of goods in the economy grows You're gonna hit deflation anyway And it theoretically Can't be a good currency you always have to find the balance between the amount of goods in the economy in the amount of money that you have right and Maybe I'll ask the second right away. What makes Bitcoin different from so you've you said that It increased like you valued Bitcoin in dollars now What makes it different from shares from trading shares on the stock market? Mm-hmm. Okay So to answer the first question Yes, if the amount of goods increase and the amount of money stays fixed then the prices gets lower and lower But I don't think this is a problem Bitcoin is divisible to an amount where you can always add zeros at the end so the price will get lower and we'll get lower and we'll get lower and you can always add zeros and Well, let's say today you have to spend one Bitcoin for something and in 100 years Maybe you have to spend 1.0 0.1 Bitcoin. So so 101 100 millibit coins. I Know this is a really big debate in economy. There are scientists who say that's impossible that does not work in the long run There are others others who say that works perfectly. So I think it's it's a long process I think we have to see how that works and The second question the difference between Bitcoin and stocks Well Bitcoin is designed to be money It's not backed by physical good. It's just numbers in the computer database. So the value of Bitcoin is in your head It's the same with paper money It has value because you know you can spend it tomorrow for something you want to buy and This value has not yet established in the brains of people with Bitcoin yet But we might come to a point where this is the case and then you have this You know if you have a bit coin in your pocket tomorrow, you can buy some food for it with stocks is a little bit different a stock is a Share of a company. It's a physical. It's like a physical good You own a little bit of this company and this is yeah, well, it's it's another kind of thing It's it's more similar to gold, but let's let's call it virtual gold. You have you have some substance behind it So Marcus, thank you for your answers I think after the event you will find many people in the audience curious to hear more preaching about bitcoins and Thank you for your marvelous talk