 My name is Karen. I'm on the blockchain center in Australia. Hello, Karen. Hi. I just wanted to ask you your your view of Cryptocurrency in the future because it seems to me that we've moved away from this idea of using digital currency in the day-to-day And now it's all about making money on Bitcoin. What's your view in the future of where this is going? Well, I think the two things are not mutually incompatible I just think they're different stages in the maturity of this technology so if you think of money as having fundamentally three different functions store value medium of exchange units of account We're closest to and able to achieve store value over long periods of time and you know with a few asterisks on that definition We're not very good at doing medium of exchange the velocity of transactions on Bitcoin is not good enough and the ones the blockchains that are much faster sacrifice decentralization in order to do that and As a result, that's not a sacrifice. I think is worth doing So we're not ready medium of exchange requires much lower fees much more capacity much faster transactions We do have some technologies that are building towards that and I think eventually we will have that Right now we don't Right now when this technology goes mainstream in these little spurts of excitement and the fees go through the roof It kills every retail application because the system starts groaning out of the pressure We don't have the ability to do these burst scales that are required when everybody gets excited about cryptocurrency And so retail after dying on the cross a dozen times over the last four years Eventually gives up right and you see places where they adopt cryptocurrency in order to Get the quick marketing boost and the put the little sticker on the window and be very you know Progressive and cutting edge and cool and hip and whatever And then a year into the project. It's failed They can't find any customers or they do for a short period of time and then it dries up Plus the costs of training staff etc. We're just not ready for retail. That doesn't mean we won't be ready for retail It's exactly the same thing as saying in 1992. We're not ready for Facebook We're not ready for Netflix if you launch Netflix in 1992 one person downloading one movie would melt down the internet Done I Did a video conference Between London and Los Angeles and when I say I did what I mean is the research department of UCL in Collaboration with the research department at UCL about 20 members of staff in each location in a five million dollar studio It did a very low quality low resolution low frame rate video conference between the two universities that actually had dedicated fiber optic transatlantic connections and It took them two years to set it up so that they could demo it to us the students and 15 years later. We're doing Skype on a mobile all of us simultaneously, so That's just a matter of maturity. We will get there and of course unit of account unit of account is the absolute last milestone Unit of account is when people ask you how much is a dollar in Bitcoin now where we start measuring value in Cryptocurrency where we use it as the unit of measurement of value and we don't always refer to something else Now that doesn't happen and there's nothing Inherently magical to the US dollar that allows it to be a unit of account or to the euro It's simply a matter of volatility if volatility is low enough And you can start getting comfortable with the units and they don't change radically from day to day Then you can start pricing cups of coffee and Satoshi's and then you'll really have an idea of unit of account And it takes a while. I think on average it takes about six months For community to adapt and use unit of account. How do I know? I've seen it in practice. I Remember when they dropped the drama and introduced the euro in Greece and at the time One euro was 3,000 drachmas and I remember every time someone went to buy a cup of coffee and they said one euro and they'd be like oh Yes, and They do the math and that happened for six months after it was introduced until people stopped doing the math My dad still does the math when I ask him about prices. He quotes me in drachmas Drachma has been dead for 20 years Hell the euro is almost dead. Which use cases will accelerate Bitcoin adoption in Western countries more than pure speculation Hi, Andreas. I'm Alan. I'm trying to sell cold wallets charged with Bitcoin at local corner shops here in Germany I think the current path to acquiring Bitcoin as a novice is super complicated Therefore easy access for 10 to 20 euros of Bitcoin should be great for people to dip their toes How could I best sell the features of Bitcoin on a poster? Do you see besides remittance speculation any other opportunity to make the technology interesting for the broad? public Alan honestly, there are times when your business plan and what the market work wants don't match and There are times when what you're trying to build is something that the market is not ready for the simple truth is that when you live in a place like Germany and you have a Functioning system of cash cash is very very popular in in Germany and accounts for the majority of transaction You have banks that are not yet Predatory mafios the organizations you have a government that is not yet a totalitarian nightmare you have You have a public that has a very high degree of access to banking and financial services At low costs with a few compromises You know, is that really the right? Demographic for distributing this technology and when you say the only application is speculation or pure Speculation I don't think that's entirely true and pure speculation isn't necessarily a bad thing people are using speculation because they understand that Strictly limited issuance currency Represents the most sound money that has ever existed so from the perspective of Austrian economics and Bitcoin maximalists and the perspective of sound money economics and monetary policy If you're the average German and you're looking at all of the array of risks that you face economically politically, etc A censorship resistance and free speech access to banking infrastructure the ability to Serve the unbanked etc. Those may be low priorities. Your market isn't suffering from those problems however You are using the euro currency and one of the great risks of the euro currency is the unrestricted issuance of enormous amounts of debt And enormous amounts of currency injection into the market enormous liquidity injection 10 years after the previous crisis still pumping money like crazy into the economy trying to revive it That represents a risk and that risk can be somewhat hedged by taking a small position in cryptocurrencies in the form of having a store value and For some reason we're calling this pure speculation and and also seemingly with a negative connotation Germany isn't you ready for retail use of Bitcoin because Germany doesn't need retail use of Bitcoin Germany is ready for hedging currency risk by buying and holding an alternative currency that has fixed issuance and Alan you're trying to fight the market and present it through the solution to a problem It doesn't have and unfortunately you're not going to succeed in that you have to be patient Maybe in the future Germany will need retail solutions Maybe when we have applications that cannot be done with the existing financial system or cash applications such as online Micro payments, which we might see coming with the Lightning Network in three four five ten years capabilities to do Decentralized applications decentralized content sharing and things like that the web three Model for a redescentralized web then Germans will have a need to use these systems Because they will give them applications that can't be done with a visa card and cash But right now we don't have those yet We're not yet at that stage in the maturity of the technology where we can build Second and third tier applications above the basic application, which is money So be patient it might happen sooner than we think but in the meantime don't try to force something that isn't there Najib asks Do you think there's a possibility that Bitcoin will become the world's reserve currency? essentially digital gold and that there will be other coins which will use for everyday currency I don't know and I think that It would surprise me actually if Bitcoin could only do and could only fit into the niche of digital gold I think Bitcoin has characteristics of Divisibility transport ability Flexibility that make it much more flexible than digital gold one of the reasons why gold isn't a good direct medium of exchange is That it's difficult to verify. It's real. It's heavy to carry and the more you make it fungible and divide it Into smaller amounts the harder it is to verify that those are real gold pieces and so it ends up having this effect where It's easier to assay and verify gold in larger amounts that are stamped by reputable third parties Which creates this entire trust infrastructure, and then the cost of storing and securing gold Is is so high that that it's it's better to do it in a custodial manner where you put it in a vault And you have professionals guarding it and you end up with a little paper Certificates which causes other problems like herpothecation and and makes it difficult to use directly as a medium of exchange Bitcoin doesn't have any of these problems. Yes, there is a greater cost and complexity to securing Bitcoin Than Some forms of custodial digital money, and yes, that's going to cause some pressure towards third-party custodians, but If that pressure is less than what we have in our current traditional system where almost everything is third-party custodians that's still a more decentralized future and The ability to transport Bitcoin very quickly In very small amounts and even with second-layer networks even faster and at the level of microtransactions means I think Bitcoin can be a medium of exchange a very effective medium of exchange And if it's a medium of exchange and the store value and and through use and volume and size If it reduces volatility to to the point where you don't see very big fluctuations in price and it's less speculative in nature Then it can also be a unit of account. I think all three of those capabilities are within the reach of Bitcoin And that doesn't mean there won't be other coins which we use for everyday currency. I think there will be But I don't think Bitcoin will be just digital gold And it may become the world's reserve currency I think the concept of a world's reserve currency a unitary world reserve currency is No longer relevant. I think it will be one of the many reserve currencies that can be used to Underpin value on other things and it there doesn't have to be only one anymore I think that's the the the switching cost between reserve currencies forces to only use One and I don't think we live in that world anymore. We'll see Yep Do we incentivize spending Bitcoin if it's Yes That's a great question As someone who has spent a whole lot of Bitcoin And then being wracked by guilt and regret for every single one I have ever spent I can tell you that the instinct to hoard even if you know that that is true Doesn't apply people people say all the time Just just hold just just hold right just hold you you were able to buy Bitcoin at $3 Why don't you just buy a thousand and hold them for 20 years? Just hold the reason is because when you buy Two three hundred Bitcoin try bought at $3 and you you buy that kind of Bitcoin and you're like This is gonna go to the moon at that point of the moon Is $25 Right like maybe you will hit a hundred. Oh come on. Don't be silly. That's not gonna happen So what happens is it gets to $25 and you're like I should probably sell some and then you do So if you look at it from an investment perspective holding is actually hard because the perspective keeps shifting I mean now obviously you're like well not selling for anything less than 20 because you've just seen that Right, but a 21 that it's just gonna start Very like maybe this is the peak and then your your descendants will be laughing at you You're like grandpa. You could buy Bitcoin at $21,000 and you didn't What's wrong with you? So hindsight is easy and the other aspect to this is that what we call hoarding in the English language hoarding the English language in the vast majority of the rest of the world they use a different world is called Saving now. I know Americans are not familiar with this language barriers and all But the idea of actually saving your money so that you buy things like houses cars consumer goods or Perhaps even an education for your children that doesn't cost half a million dollars Maybe you should do that with cash instead of debt And that's how the rest of the world works So what economists in a Keynesian environment call hoarding Is actually the sensible act of building wealth for the next generation? I don't think that's necessarily a bad thing The economics of Bitcoin are really strange in a world where we're used to massively inflationary currencies that are being printed with reckless abandon where you know That the value of the currency tomorrow will be a lot less than it is today now if you think that's the experience in the I'm not talking about the US I Remember Greece when it was having a devaluation When I had relatives who had two washing machines not because they were doing a lot of laundry One of them was shrink wrapped in perfect plastic pristine condition and was their nest egg washing machine Now this makes no sense to an American But at that time when the currency had just devalued 30 percent buying a washing machine that obviously people are gonna need To wash clothes and then being able to resell it on a secondary market a year later for man problem That was saving right in Argentina There are people with four cars three of them are shrink wrapped under tarps because it's the only thing they can buy that retains value They drive it off the lot and it loses half its value But in that time the Argentinian peso lost three quarters of its value. So It's all a matter of relative perspective in the case of Bitcoin you've got to start thinking about the broader ecosystem and if Bitcoin really remains the System that gives us a monetary policy that is as Hard as gold hard money that will serve a very very specific purpose And if that purpose is saving that is the app people keep asking me does Bitcoin have a killer app? It doesn't have a killer app. I can't use it to buy coffee Well investing till my future is a killer app saving myself from the Venezuelan Economy is a killer app. It's just not a killer app for you right and so Be aware what you wish for Let's hope that as Americans we never have to look at hoarding away our wealth and Burying it in an asset while our national currency gets completely destroyed in the period of one year through hyperinflation Well, let's hope we never have to experience that Because we might It's happened to every single other fiat currency in history that is the norm