CoinGeek Conversations

Bequant is a London-based financial business that describes itself as “a one stop solution for professional digital assets, investors and institutions.” 

Its founder and CEO George Zarya explained how the business offers a range of services, including prime brokerage, exchange, custody and fund administration, that mirror the way a more traditional financial services business. And yet Bequant works exclusively with cryptocurrencies, simplifying access to that market. 

“We’re trying to bring in more professionalism, a more established type of approach and apply it to this new emerging market,” George says.

There’s an irony about trying to bridge the gap between the crypto business and the financial establishment because, as George says, Bitcoin began with the idea of decentralization “and removing the intermediaries from the whole cycle”.

And yet Bequant is a kind of intermediary, for which George offers no apologies: “in the institutional world, the intermediaries play a very important role. That's why we feel that the prime brokerage solutions, the professional exchanges that aggregate source liquidity, brokers, liquidity providers - are very important to facilitate these functions.”

But it’s not just a question of mirroring the structures that George knew from his previous work in more traditional financial institutions: this is a new field and there’s also the chance to introduce innovation that’s appropriate for the world of crypto:

“We shaved off a lot of inefficiencies, if I can judge from my experience in the traditional space where we had an army of operations people, an army of onboarding people and a handful of IT guys sitting in the corner. Now things have changed tremendously: you have an army of IT guys and zero in operations. Everything is automated.”

With offices in London and Malta, Bequant has been in business since early 2018 (although “it feels like a decade”, George says). It hasn’t been hard to attract experienced people from the City to join, and the staff now numbers about 35. They like the novelty of the new world of crypto: “I think that part of the reason why a lot of people move into the industry is the dynamics of the space. The traditional space is becoming utterly boring.”

Bequant is a big business already, with the exchange having a monthly turnover of  “roughly eight hundred million to a billion” and volumes on the prime brokerage averaging more than a hundred million a day. “These numbers are maybe shocking,” George says, “but again, from the institutional perspective, it's a normal sort of size that your typical quantitative trading fund would generate.”

When it comes to BSV, George is supportive of efforts to promote adoption through its scaling capacity and the ecosystem’s development: “adoption is one of the most important things for the industry, generally speaking. And we support any project that is working towards that goal and offers the tools to to build upon and grow the industry.” 

Recent news about the possibility of nano-payments on Bitcoin SV is inspiring ideas for a whole new field of applications. Calvin Ayre, founder of Ayre Group and CoinGeek, describes it as “commerce between machines”. Just as micro-transactions have, “this is going to create even more new business models”. 

The technology will take the ‘Internet of things’ to a whole new level through the application of smart contracts: “corporations most likely will own machines that will be conducting commerce with each other. So the value will eventually go back to the shareholders. But these little bits of business can be agreed in advance and then rolled out across little pieces of equipment scattered all over the globe. And then they can just start doing business with each other.”

Until now, the billions of transactions between sensors, for instance, have either had no monetisation associated with them, or if they are monetized, it’s in big numbers and likely to be inaccurate. Nano-payments would change that: “this will optimize things and allow value to be tied to actual services, not estimates of them”.

Calvin is more sceptical about other new ideas that are attracting attention at the moment. He’s not completely dismissive of all DeFi (decentralized finance) projects, “but of course, as always, the ones that actually do make sense would work better on BSV than these other platforms that don't scale.”

But most of DeFi is to be avoided, Calvin warns: “for sure the majority of the people that are going to be trying to trot out some kind of a programme around this new marketing buzz around DeFi ...are going to have no interest in anything but a scam. So it's unfortunate that a lot of people are going to lose money.”

As for central bank digital currencies (CBDCs), “every country in the world could actually operate their central bank currency on top of BSV - in addition to all the other stuff we can do.” The danger is that CBDCs will start to be established on different systems “and you'll get these siloed central bank digital currencies. And if the vision of how the world unfolds follows the course that we're predicting, then eventually that won't make sense - because they were using a technology that doesn't seamlessly integrate to the rest of the world.”

Next week’s CoinGeek Live conference from New York and London, will be a great chance to take the temperature of the growing BSV ecosystem, with three days of presentations from the worlds of technology, finance and enterprise. So, does Calvin expect to see incremental growth across many different fronts, or is he waiting for a big breakthrough that will change everything? 

“I think what you find is that the momentum of the slow, incremental change is happening right now and it's going to continue to happen,” he says. “But every now and then, there's going to be a solar flare, something that's, like, coming out - because I know a few things that are being worked on that I think when they come out, people are going to go, ‘holy crap!’”

A few weeks ago, we spoke to the co-founder and CEO of Centbee, Lorien Gamaroff, about a range of new services that are now available on the BSV wallet, allowing users to buy utilities and other products directly from well-known providers.

This week, we’re showing a live demo of exactly that from the same recording session: how to buy prepaid mobile airtime using Centbee. Lorien is joined by Centbee marketing consultant Heidi Patmore, who has a personal example of just how useful the new services can be. 

Heidi explains that in South Africa, where Centbee is based, if you need to top up your prepaid electricity credit, it’s usually a question of using a banking app or visiting a local shop and paying at the till, in return for which, you’ll be given a code to enter into your electricity meter at home, to prove that you now have credit.

So what happens if your banking app doesn’t work? That’s what Heidi discovered one evening:

“A couple of nights ago my banking app went down. Now that’s the only way I usually buy electricity. And there was a bug at FNB [a big South African bank]. Everything went down, and my electricity started beeping at half past nine at night.”

Thanks to the new services on Centbee, Heidi was able to prepay for her electricity with BSV. “Thanks Lorien for building that because I was able to top up my electricity. Otherwise I would have had to get in my car and drive somewhere at half past nine at night to try and somehow figure out how to buy electricity.”

Heidi predicts this will be a game-changer for Centbee, and for BSV: “the convenience of this is going to be massive. People are going to start doing this. We’re going to shift consumer behaviour by having brought out this product.”

Lorien is confident that electricity is just one example of what users want: “there's a big market for electricity, but there's also a big market for people like teenagers, for example, who right now, if they want to use Uber or they want to have a PlayStation subscription or something like that ...they have to go to their parents or whoever and get that transaction made. But I have noticed with my own son that he now has the ability to not only top up his data on his phone, but also to have a PlayStation subscription or or get an Uber ride without having to now phone me up and ask”.

It’s a big step towards the much-discussed use of Bitcoin to serve the “unbanked”, as Lorien explained: “I think that this is going to open up a market that hasn't been accessible before. And I think that there will now be users that come on board. There's no statistics around those types of users, because they've always just been not part of the system. Now there's a digital payment system that they can easily be a part of.” 

How do you explain Bitcoin to a general audience? That was writer Liz Louw’s challenge as she set out to produce What is Bitcoin?, an ebook for the London-based Bitcoin investment company Bitstocks.

Liz is not the first to confront the problem. She quotes Satoshi Nakamoto himself, who found that “writing a description for this thing for general audiences is bloody hard. There’s nothing to relate it to.” 

As a digital marketing and content strategist, writing about business was already one of Liz’s professional skills, but this job meant more to her than just another assignment. The book represents “the fruit of at least three years of research” and is not the kind of “impersonal, objective piece” that she is sometimes asked to turn out, she says.

Liz decided to address the complexities of the subject by looking for narratives. So to help readers understand the principles of Bitcoin she went back to the story of Craig Wright’s work for casinos, before he wrote the White Paper as Satoshi Nakamoto. 

How could he solve the problem of making the gaming in online casinos auditable, and making players confident that the system was fair? The principles of Bitcoin were designed to answer those questions. Centrally, designing a system that was “open, public” was key to the solution: “its simplicity - that is the breakthrough”.

When it came to maintaining the computer network behind Bitcoin, again, it is the principle of honesty that makes Satoshi’s system work: “the marvel of Satoshi’s creation is that it enforces honesty through an incentive scheme that makes it more worthwhile to play by the rules than to play dirty.”

Having looked at the origins of Bitcoin and the way it works, Liz’s book ends with ideas about the future. She writes about Bitcoin enabling “the fourth industrial revolution” - the other three being, in order, machines powered by water and steam, electricity, electronics and information technology.

In particular, Liz describes a grand vision of what the data-recording capabilities of Bitcoin will enable: “sooner or later, we will get to the stage where we can interact with computers with access to all of the data that humans have emitted throughout the entire history of humanity. Everything humanity has ever produced will be on the record, available for us to interact with.” 

Liz hints at some big announcements to come from Bitstocks that will build on this idea - a pivot from money to data, it seems. “We’re starting to refer to Gravity [Bitstock’s app] ...as a data bank.” The buying and trading of Bitcoin, “that’s the first offering we have,” she says, “but there is much more being built behind the scenes.”

A former technology analyst on Wall Street, John Pitts brings his experience of assessing Internet companies to making educated guesses about the prospects for Bitcoin SV and BTC. And he’s confident that it’s possible to make valuations based on the existing information: “it's my belief not only that you can, but if it cannot be valued, then it probably isn't anything.”

In an article on CoinGeek, John worked through a series of calculations to assess the value of the BTC network and compared it with BSV. He started by taking transaction fees across the network as the ‘income’ of the network - equivalent to sales in assessing the value of a tech startup. With small blocks, and therefore limited potential for transaction fees, BTC comes off badly, with the whole network being worth as little as $45,000 according to John’s calculations.

John is unapologetic: “that's about where I think BTC is going, which is effectively zero. And the reason for that is because BTC isn't using the most important thing about Bitcoin, which is the data, the information.”

When it comes to BSV, it’s a different story, because the blocks will be much bigger: “if you adjust those numbers and you start using one gigabyte instead of one megabyte or you use one terabyte ...you get very big numbers.”

But John is cautious about predicting too much too soon for BSV: “these things take time. They always do. You know, it took Apple 40 years to get to a trillion dollar valuation. Maybe it doesn't take BSV that long because it's more important than what Apple has done. But the point is, it's going to take a lot longer than people think. However, the valuations can be astronomical for BSV. So there's good news and there's bad news.”

John goes on to compare the value of data stored on BSV to the relative value of land and the buildings on them in a city. When the city prospers, land increases in value and that makes it worthwhile for real estate developers to replace smaller, cheaper buildings with new ones. In the same way, as the BSV network grows in value, with a limited supply of coins (21 million), data that’s not valued by its owner can be replaced by more valuable data, making better use of the ‘real estate’ on the coins.

But John’s interest in BSV is not just theoretical, nor even just financial. He is also an app developer, with SLictionary (above) now available to users. It’s a BSV-powered dictionary, whose marketing describes it as the “biggest advancement in dictionaries since books”. 

The idea is to invite users to create competing definitions and upload photos and videos to help explain words too. Popular definitions will be rewarded with BSV. Although the user has to pay a small search fee, John says, the money “takes away all the bad entries and accentuates the good ones.” Unlike with Wikipedia, “people can’t spam it. People cannot manipulate it. I think that's the beauty of the whole thing.”

At the moment, there are still thousands of words waiting to be defined on SLictionary. But for John, that’s not a problem. He’s in BSV for the long run, based on his research into the potential of the network. It worked when he made that kind of judgement on the young Amazon.com. Now he’s getting the same kind of feeling about BSV, as he said in his article: “this is one of those times I’m betting my life, my good name, and even my children’s destiny on a set of research.”

“Destiny” is still waiting to be defined on SLictionary.

For the final addition of Top Picks from CoinGeek Conversations past, it had to be Dr. Craig Wright. Who better than the candid inventor, aka Satoshi Nakamoto, to set the Bitcoin story straight?  

Let’s start with his explanation of what Bitcoin is and why it is not a cryptocurrency. As Craig puts it: “Cryptography is secret writing. Bitcoin is the exact opposite of that. Bitcoin is basically a public ledger. So, it’s designed to be private, but it doesn’t actually encrypt things. You can encrypt data and store it in the blockchain; but the difference here is, Bitcoin itself is a set of digital signatures, it’s a chain of evidence and it’s everything that those other systems that aim for an anonymous transfer is not.”

Craig believes that Bitcoin will be widely used by world states, in time. But how do we get there? Craig lays out his idea of how governments will use Bitcoin technology to print traditional currencies.   

The conversation also addresses Craig’s use of the term blockchain in the original white paper. Some have noted that the term did not appear at this crucial stage in the development of the Metanet. Craig answers, “If you look at the original code in the comments, ‘blockchain’ is used twice. Although it was block (space) chain”, noting how he used a space between the two words back then, as can be seen in much of his writing.   

Another question that was asked regarding the early years: why was there no patent on the original Bitcoin? There appears to be a few reasons. “There’s no way to pseudonymously patent” says Craig, who goes on to note the high cost factor as well as another key reason “any software that is based on complex cryptographic algorithms: digital signatures, hashing… needs to be open source. People need to be able to find where the errors and vulnerabilities are.” Later on, in the interview, we learn how far his patent ambitions have come. Having filed several thousand already, Craig has a new goal: “by the time I finish I want to hit ten thousand.”   

In looking at Craig’s colorful career, we get a glimpse of what might have guided the creation of Bitcoin. Laying out his own work motivations, Craig says, “it’s more about the world we want to live in. I don’t think it’s about altruism, I think we all have a duty and we all have to pay the cost of being in a world that we want to be honest and open.” 

Towards the end of the conversation, Craig conveys the ultimate purpose of Bitcoin: “Bitcoin, with a stable protocol, takes away power…” he says, “money is all about power and this is one of the things Bitcoin has done. It has removed that power. It will remove that power globally.  

This timeless interview between Dr. Craig Wright and CoinGeek’s Charles Miller originally took place in 2019. Charles will be kicking off the 4th season of CoinGeek Conversations, next week, speaking to those who are propelling Bitcoin into its future.    

For the next few weeks, CoinGeek producer Natalie Mason is introducing her own Top Picks from CoinGeek Conversations, giving us another chance to enjoy previous episodes of the podcast series. 

Natalie’s choice this week is Lise Li, discussing the opportunities for Bitcoin SV in China. Lise is the China Manager for the Bitcoin Association. She has worked in ecommerce and been Chief Operating Officer for a Bitcoin mining pool, but, most important, she believes in the potential of BSV in China.

It’s partly a matter of culture. As a resident of Beijing, she says that when she’s had foreign friends visiting they are “shocked” to see that Chinese people will take only their phones when they go out. They don’t bother with wallets because they’ll be able to pay for everything with apps like Alipay and Wechat Pay. Whereas, in Europe, especially in Germany, she’s noticed that “everyone loves to pay in cash”. Their phone-friendly lifestyle will make the everyday use of Bitcoin less of a change for Chinese people. Besides, “the young generation accepts new things fast, and they love tech”. 

Whilst there are still regulatory restrictions slowing the development of Bitcoin in China - such as the ban on converting fiat currency into crypto - officialdom appears to be softening its attitude. The new Special Economic Zone announced this year for Shenzhen is to include plans for research on cryptocurrencies. 

Lise describes her job at the Bitcoin Association as one of “gathering pioneers” to share their expertise and experience with Bitcoin SV. She believes that BSV development in China is “a more active field” than in other countries - with many university students taking part in projects. And in terms of hardware, she says that “almost all” the manufacturers of mining equipment are in China. 

Lise predicts that data storage will be the most important use of BSV, more important even than its use as money. And although she is promoting BSV activities in China, her vision for the future is international, nothing less than to “build a globalised business ecosystem”. 

For the next few weeks, CoinGeek producer Natalie Mason is introducing her own Top Picks from CoinGeek Conversations, giving us another chance to enjoy previous episodes of the podcast series. 

Natalie’s choice this week is Jimmy Wales, talking about his phenomenally successful creation, Wikipedia. 

Jimmy spoke at CoinGeek’s London conference, where he reflected on what Bitcoin SV supporters have in common with the early proponents of a free, online encyclopedia - since Wikipedia’s feasibility was just as much of a challenge to conventional wisdom as the notion of a global Bitcoin economy is today.

“I think that there's definitely parallels and there's differences as well. So one of the huge parallels has to do with the idea of decentralization generally,” Jimmy said. When you think of an accounting ledger, you might imagine that would involve “one big server somewhere with a big bank looking after it”. But with the design of Bitcoin, “we can do that in a completely new way, in a decentralized way, in public. That's pretty cool. That's pretty fascinating. And I think a lot of those kinds of vibes around decentralization are something that are held in common.”

Jimmy is adamant that blockchain would not be a good idea for Wikipedia. That’s partly because he’s sceptical that there is a demand for a micropayments technology: “the consumers don't want it. They don't like it. It feels funny to them. One of the great things about, say, Netflix is you pay your monthly fee, which is quite nominal, really ...And there's something nice about that it's already paid for. And I just watch as much as I want. A lot of Amazon services could be implemented on a micropayment level because they've already got our credit cards. They can sum it all up and bill us at the end of the month for our usage on Kindle or something like this… It seems to me that by and large, consumers are sceptical of that model. It doesn't feel right to them.”

For all that, Jimmy admits to being interested in Bitcoin technology and compares what’s happening to the kind of enthusiasm he saw around the open source movement: “I think that now the energy around blockchain and a lot of the people, they are quite optimistic people and they are looking for new innovative solutions. And I mean, this is the important thing, I'm known as a critic but one of the things that's really important here is to say, look, I find the technology fascinating. I mean, the whole idea of blockchain is just... I mean, when I first saw it and first understood, I was like, well, this is the first, like, really different idea I've seen in a long time. It's super-interesting.”

Welcome to Top Picks. Throughout the month of August, we will revisit past CoinGeek Conversations. With so many great interviews to choose from, our first Top Pick is Lawry Trevor-Deutsch, of United Corp, who has a greener way to mine Bitcoin.

The World Economic Forum does much more than organise its annual Davos meetup. The not-for-profit foundation calls itself “the international organization for public-private cooperation”. As such, it investigates and promotes ways to make the world a better place, including in the field of blockchain. 

Sheila Warren is the WEF’s Head of Blockchain, Digital Currency and Data Policy. She talked to CoinGeek about her view of the prospects for the blockchain economy solving some of the problems of ‘surveillance capitalism’, by letting individuals own their own data. 

She admitted that she doesn’t see any revolution happening in the short term: “am I optimistic about it? No, I would not say I'm optimistic about it. I'll just answer that question bluntly. However, that does not mean I don't think it is very much worth paying attention to and even fighting for.”

It’s partly that, through contacts with big companies and governments, Sheila has become aware of “the sheer volume and flow of that data”. But individuals have to take responsibility too: “I don't necessarily feel like the vast majority of people really care. And the reason I feel that way is because I think we've all seen how quickly people are willing to sign away their rights.”

But Sheila is ultimately optimistic about new data practices that blockchain will allow, and has “a short to medium term pessimism”. In the long run, she believes a new generation is coming that will “really take advantage of the elements of the blockchain ...to do this in a different and better way.”

But WEF isn’t waiting for that day to arrive. Sheila’s group is responsible for several blockchain field trials, such as one in Columbia called the Transparency Project, which worked with the government’s Inspector General's office to set up a blockchain procurement process for the awarding of contracts to provide school meals across the country. 

Blockchain would help ensure that the bidding process was followed correctly, with a mechanism to time-stamp bids, for instance, so they couldn’t be changed retrospectively - which had been a problem in the past: “there'd be almost a mock proposal, if you will, like a straw man submitted that would then get changed out with corrupt actors, with different motivations for that. So the idea here is the immutability of the record provided an opportunity to basically ensure that there wasn't that kind of change happening downstream, or if there was some sort of change of the record, you could see that. It would be recorded in a way that was very easy to spot.”

The aim was to keep the technology in the background as far as possible, which Sheila believes is a general principle in encouraging mass adoption: “we'll have arrived when it's invisible and you don't need an understanding of blockchain to use most systems.”

“Our goal really is to normalise this technology and take away any fear around it and get people to understand that really it's like any other technology. It's got significant benefits, new benefits. It also has some challenges - and those are being addressed. But our hope is that over time, people will stop talking about blockchain, they'll just be using it without even knowing it.”