CoinGeek Conversations

“Three is kind of a lucky number,” says Jack Liu, “you’re not really going to get a fourth chance, fifth chance, a sixth chance - so I look at it as like this is all or nothing.”

Hong Kong based entrepreneur Jack Liu sees the opportunities offered by Bitcoin SV (BSV) today as being the third and final chance to realise the potential he’s always seen for cryptocurrency.

After the decision was made, years ago, not to scale Bitcoin (BTC) and then the problems with Bitcoin Cash (BCH) that followed, Jack is now pinning his hopes on BSV. But to work, he says, reliable revenue streams must be developed for BSV - and fast. 

“I think as much as today we sit here with amazing optimism for BSV, if we cannot get BSV adopted on a transaction level, you’re going to see divisions again within BSV. So you’ve got to get transactions going as soon as possible - and that’s where the urgency comes from.”

To that end, Jack and his team - formed since he left Circle just a couple of months ago - have already released two products, FloatSV, an exchange, and RelayX, a ‘superwallet’ that connects BSV with existing payment platforms such as Alipay and WeChat.

Jack’s concern is that transactions must sustain the network of BSV miners by providing them with micropayments. The danger is that the rival version of Bitcoin, BTC, is used purely as a store of value: “the great thing that banks would love to see is if they can make Bitcoin merely ‘digital gold’ - they would love that because it would not alter the world that we live in ...which is really not that interesting at all. If that was what you told me Bitcoin was going to be, I would never have joined this industry.”

Instead, Jack’s vision is to have BSV playing a part in every aspect of our lives, with micropayments being sent and received between people all the time - during work, rest and play: “I think in the future, if someone notices that you haven’t made a hundred transactions in a day, they might call the police and look for you - because just by living, you’re going to be making transactions.”

Although we may find ourselves making micropayments for things we now think of as free, Jack says that on the other side of the equation, “you probably will have hundreds more income streams daily”. But that doesn’t mean they’re all going to be big money-makers: “I mean income streams as in maybe you open a door for someone and they tip you one cent”.

But small payments made to people in developing countries for providing casual digital services, for instance, could make a big difference in those economies. The aim, Jack says, is for people to be able to start using RelayX with no BSV or fiat money. Instead, they would earn money through the app, and it would get into circulation that way. 

BSV is uniquely able to make this possible because its rivals “never had the vision that Satoshi did for the entire system”. Instead, they’re marketing individual use cases, which, when the market changes, will have to pivot: “they’re kind of opportunistic blockchains” whose protocol will inevitably change, making them unsuitable for established businesses to build on.

The low transaction costs of Bitcoin SV (BSV) are paying dividends for a startup called FiveBucks. It’s a digital marketplace that connects service providers round the world with customers. The starting price for a job is just $5 US, paid in BSV.

The entrepreneur behind it is Getar Hoti, who started the business last year and has already attracted almost 500 people offering their services - everything from “I will create a powerful logo for your business” to “I will record a professional British voiceover” and “I will talk to you in Italian on Skype for 15 minutes”. 

Thanks to the use of BSV, no money goes to payment processors. FiveBucks only charges 10% for connecting the freelancers with customers, not the 20% that “most freelance platforms charge,” according to Getar, “and long term, with what’s happening on BSV, we plan to decrease this more and more”. 

Since the arrival of BSV after the hard fork from Bitcoin Cash last year, “we have been doing great, because in BSV you have this stable ecosystem, stable protocol, a strong market.”

WeatherSV uses the Bitcoin SV blockchain to store data - detailed hourly weather readings for thousands of locations around the world - and to collect payments from its users via MoneyButton. It's a project of Paul Chiari, director of Tableland IT in Queensland, Australia. Paul is interested in how 'internet of things' systems could be used in his rural area to collect and amalgamate data for farmers. WeatherSV is an experimental project through which he's been learning about the potential of BSV, in collaboration with developers like unwriter, who have contributed open source software for BSV blockchain users. Paul says that the work of unwriter and others means that "the heavy lifting is being done, and you've just got to jump on board and have a go". So far, WeatherSV has received 500 subscriptions to activate weather reports in different locations.  

There’s no question the corporate world is serious about blockchain technology. Exhibitors at the recent Blockchain Expo in London included multinational tech, finance and consultancy firms. 

But what stage have big companies reached in developing blockchain projects? And are they ready to accept the original Bitcoin vision of public blockchains - rather than working on ‘in house’ private blockchains? Many in the Bitcoin world see the latter as like the so-called ‘walled gardens’ of online services such as AOL and Compuserve, which were popular before the Internet overtook them as the public grew more confident about going online.

CoinGeek spoke to two executives from the Boston Consulting Group (BCG) at the conference to understand their perspective on blockchain adoption. 

The podcast also includes a detailed example of one blockchain project in an interview with Aisling McGibbon, senior product manager with PWC. It’s called Smart Credentials, and is a platform which allows users to get their qualifications validated by the bodies that issued them. 

In a wide-ranging interview with CoinGeek, the businessman Calvin Ayre, a major supporter of Bitcoin SV and the work of Dr Craig Wright, says that a forthcoming legal case being brought to prove that Dr Wright is Satoshi Nakamoto, the creator of Bitcoin, could also lead to a ruling that would stop other cryptocurrencies using the name Bitcoin. To do so would constitute "consumer fraud", Ayre warned. 

At London's Blockchain Expo, 16,000 people exhibited, networked or just gawped at stands promoting businesses that were too complicated or obscure to get their heads round. In this podcast Charles Miller tries to make sense of it all with the help of Osmin Callis from nChain, Richard Kastelein from Blockchain News and Sergio Rigert from Gingr - a Swiss startup that's putting prostitution on the blockchain.  

Co-founder Widya Salim describes her business, Cryptartica as a cryptocurrency-based design platform. Designers can upload their work and put it on a product (just tee shirts at the moment, but with more kinds of products promised for the future). Then Cryptartica will produce the physical product, and either ship it to the designer to sell, or designers can just invite their customers to go to Crypartica and order the product for themselves. All transactions are done in Bitcoin SV (BSV) or Bitcoin Cash (BCH). 

For now, Cryptartica’s website offers a range of designs around BSV and BCH - and even Craig Wright on a tee shirt -, but Widya is hoping that one day, the site will be “less niche” and its users will offer a wider range of subjects: “our whole idea is to have designers who are not just into cryptocurrency.”

Widya has been interested in Bitcoin since 2013. But in recent years, she’s been more involved because there’s been more emphasis on promoting adoption than just currency speculating. 

By requiring her customers to trade in crypto, Widya may be limiting her market at the moment, but she says that she wants Cryptartica to help lower the barriers to entry for new users. For instance, if you’re a designer whose product sells, all you need to receive your payment is a wallet: you won’t need to use an exchange in order to acquire your first Bitcoin. 

To set up the business, Widya has established links with a network of suppliers around the world who will manufacture and ship the products. In terms of sales patterns, Widya has noticed that when the value of Bitcoin decreases against fiat currencies, “people are less willing to spend, because a lot of people a lot of people still think in fiat currency”. But when the value of a cryptocurrency rises, then people start buying.

A London business incubator, State Zero Labs, has just completed its first programme, in which seven blockchain startup businesses were given 13 weeks of support, both human and financial. At the end, there was a Demo Day, in which each of the startups was invited to present their business to an audience of prospective investors, partners and employees. This week's Coingeek Conversations was recorded during the Demo Day and features interviews with three of the entrepreneurs on the programme, together with State Zero Labs' co-founder, Tazz Gault (pictured).

If you have ideas for a blockchain business, there's much to learn from the experience of these programme participants. And you could apply to State Zero Labs to take part in their next programme, or, if you can't wait until the Autumn, take part in the Bitcoin SV Virtual Hackathon, and perhaps win yourself some money and a trip to the CoinGeek conference in Toronto. 

Mark Allison has been a freelance IT consultant for 20 years, specialising in data. He works for investment banks, retailers, insurance companies, hedge funds and payment processors. Many of the people he deals with are sceptical about Bitcoin - and have been more so since the crash in its value last year. 

But Mark is optimistic about Bitcoin’s prospects and has been following the sector closely. Now he’s spending his evenings and weekends building products for Bitcoin SV (BSV). 

“I see huge potential”, he says. Bitcoin could allow governments and banks to be more transparent. “If we do move over to Bitcoin as a currency ...I think everyone’s going to be better off.” 

He understands the scepticism among his City and IT colleagues: “because BTC [Bitcoin Core] has these limits in place, it couldn’t scale, so people who did go out and buy Bitcoin and try to use it, were like, ‘well, it’s not actually very good, is it?’.” With transaction fees rising to around $50, its prospects for being used as a global cash seemed “ridiculous”. 

But Mark says the limits on transactions and high fees were artificial and the appearance of Bitcoin SV (BSV) has given him even more hope because it returns to the ideas of the original Bitcoin White Paper, of which Mark is a huge fan:

“When you consider Bitcoin as a whole, I see it like a Michelangelo painting: it’s a thing of beauty. If you look at the economics behind it, all the incentives behind it - how the miners are incentivised - if you look at the computer science breakthrough that happened to solve the Byzantine Generals problem, if you look at the game theory behind it, if you look at the law: all of these elements all come together in one package, and it’s just a beautiful thing.”

The developers at nChain are removing many of the limits imposed on BTC, and then “Bitcoin can really realise its potential”. It will make business more efficient by reducing their costs. All it will take it one large business to start using it. 

Dr Craig Wright, Jimmy Nguyen and others have spoken of the need to achieve massive scaling on the BSV network - and Mark agrees: “we need to scale now”. With the mining block subsidy being halved again next year in line with how Bitcoin was set up, eventually “if there’s not significant volume, then the miners are going to leave - so we’ve got this ticking time bomb”. The answer to that problem is BSV, Mark says. It’s not only a stable platform in terms of the protocol, but nChain is committed to scaling. “If we don’t scale, it’s going to fail,” Mark says. “We need to see consistent large blocks though real world usage”, for instance for data that needs to be immutably stored with proof of existence. 

To help things along, Mark has been making his own applications for BSV. The first is a Chrome extension for the Handcash wallet. To make it, Mark had to teach himself Javascript, among other things, over two or three weekends. After about a month, he says, he “managed to cobble something together that kind of worked”. You can try the Handcash Handle Converter for yourself: it converts a Handcash handle into a Bitcoin address. Or, thanks to fellow developer Derek Moore, who made use of Mark’s open source project, you can get the same functions on a website, handcash.to.

Mark’s second project is an analytics database, SVCharts, which produces Bitcoin trends, such as mining fees: “ultimately what I want to have is a self-service analytics platform.” The project includes an interesting monetisation model using MoneyButton. 

Dr Craig Wright is the Chief Scientist of nChain and the main creator of Bitcoin, he says, as the pseudonymous Satoshi Nakamoto. In a wide-ranging interview, Wright takes the chance to correct a few myths about Bitcoin’s origins and purpose. 

First, he says that Bitcoin is not a cryptocurrency: “cryptography is secret writing. Bitcoin is the exact opposite of that. Bitcoin is basically a public ledger”. Wright makes a distinction between Bitcoin and ecash systems which use technology to “cryptographically hide something”. Instead, Bitcoin is a “chain of evidence” that is “pretty much everything that those other systems that aim for anonymous transfer are not”.

What’s more, Wright doesn’t even accept that Bitcoin is a currency since that implies a level of official acceptance - “something that’s used by the state”. In time, Bitcoin will be currency, he says. But first, he predicts the release of “tokenized fiat” by states, which will “use the capabilities of Bitcoin to print their own money on top of it”. 

Thirdly, Bitcoin is not about “democratizing finance”. You can’t do that with Bitcoin, he says. The only kind of decentralizing that works will be achieved by sticking to a stable protocol: “you pull the developers from ever making a change”. In that sense, it’s about taking away the power of developers. Developers “are the cancer in Bitcoin”. 

Two more corrections to conventional wisdom: Wright is sceptical about the potential future threat to crypto systems from quantum computing. “to create something that could attack Bitcoin in the mythical quantum computer world” would require an unrealistic area of quantum computer space: “it’s fud, it’s snake oil ...none of it will ever affect Bitcoin.” 

Finally, on the widespread criticism of mining as a profligate user of electricity, Wright says Google uses “thousands of times more”, as do Visa and Mastercard. “People who want to attack the system make things up”.  

Alongside Bitcoin as money is the use of the blockchain to store non-financial data. Wright is developing the blockchain-based Metanet, which he says that has the potential to threaten the ubiquity of the Internet and the dominance of the tech giants: “it changes everything in giving people control of their own lives. Rather than having people like Twitter or Facebook owning everything you’re doing, it now allows you to start creating your own space”. The bargain that users currently make with the tech giants, to sell their data in return for the services offered, is one in which users don’t really have a choice, Wright says: with the Internet so important in our lives, to decide not to use the big tech services would be “like saying ‘don’t use electricity’...You have to use it for work etc.”

But there is an opportunity for the Metanet because “the [online] model for advertisements is incredibly inefficient”. It leads to clickfraud, which the tech companies have to spend money fighting. He believes users would be prepared to make micropayments for search results rather than being stuck with the ad model in which they are selling they data. In time, he says you might only have to pay a thousandth of a cent for a set of search results.

He is currently writing openly about being Satoshi because, he says, “unfortunately I’ve got a whole lot of greedy con men who all want money”. As for the choice of Satoshi as a name, he says that it’s “a bit silly” but it’s the Japanese for ash. The idea, which he originally saw in The Economist magazine, is that new money will rise from the ashes. As for Nakamoto, that’s the name of a Japanese 18th Century philosopher. He doesn’t see any value in the figure of Nakamoto remaining enigmatically anonymous: “the myth