Bitcoin, blockchain and the future of money
We regularly host events for founders and other members of the ecosystem such as Lightspeed Knowledge Series, Office Hours, founder dinners and others. To stay updated, follow us on Twitter here
As a part of our ongoing Lightspeed Knowledge series, where we have eminent speakers sharing their views, we were pleased to host Nicolas Cary (@niccary). Nic is the co-founder and Vice-Chairman of Blockchain which is a Lightspeed portfolio company in the US.
We were pleasantly surprised by the audience turnout of about 50 people who were from startups, government and regulatory bodies, advocates and strong blockchain community enthusiasts.
Sandeep Srinivasa(@sandeepssrin) who is co-founder of RedCarpet, a Lightspeed portfolio company based in Gurgaon which is a credit lending platform for the large student community in India moderated the session.
Nic spoke about the future of money.
Here’s his presentation deck. Below the deck is a short transcript of the fireside chat.
Sandeep Srinivasa: “Starting from the past (and I’m referencing the Wired article here) — learnings from the time you started Blockchain. It was a time which was very similar to what is happening in India now — Bitcoinica had been hacked, there were regulatory pushbacks, etc. Yet you came out of that time successfully and grew Blockchain to what it is today.
What were some of your learnings and experience from that time that you can share with some of the founders trying to navigate similar circumstances ?
Nic Cary: Dont sit in silos, engage with the public, the government and other stakeholders. One of the most important things I did was to fly to dozens of countries talking to governments, regulators, etc. Another thing — change your product to be something that is over compliant with what people may fear and tell them about it. This is why Blockchain is a wallet because it came out of the problems of exchanges getting hacked
SS: At RedCarpet, we are especially interested in the future of credit in the era of the blockchain. Given that blockchain causes the death of business models like payments, what is the future of banks in this world ? Banks are systemically important to the overall health of the credit system. How do you see their role changing?
NC: Well, we will hire all the bankers! No, seriously — at Blockchain we are working with some of the smartest people who come from traditional banking and regulators. It is a hard question to answer — let me throw it back at you, what do you think?
SS: Well I think, the most exciting development here has been the birth of futures and derivatives like what Goldman Sachs and Morgan Stanley are doing. It also opens a path for large institutions to participate in the blockchain
NC:I think so too.. and we will see a lot more evolution here
SS: Talking about products and business models, what is the future of exchanges given the rise of decentralized trading protocols like 0x. Do they represent a threat to the business model of companies like Coinbase?
NC: I love the people at Coinbase. There have been a lot of attempts to build decentralised marketplaces over the last 7–8 years. The biggest challenge is the integration of various systems like your normal credit card payment systems, to different token protocols, to customer support to KYC. A lot of these players have raised a huge amount of money and they are some of the sharpest minds in the blockchain field… however we are no closer to having a decentralised exchange.
SS: One of the most controversial questions in the Bitcoin world is around Bitcoin scaling.
Bitcoin scaling is a huge issue that can make or break the future of Bitcoin. And there are a huge number of solutions and forks which claim to solve this problem. Segwit, Segwit2x, Lightning, Bitcoin Cash, your very own Thunder, Ethereum’s sharding. What is your vision of how will the Bitcoin world solve the sharding and transaction cost problem?
Interestingly just two days ago, Roger Ver won a bet against Felix Weis on the fact that Segwit+lightning sucks! Does it mean that BCH was right all along ?
NC: At Blockchain, we will be agnostic to whatever solution won out and we will support them
SS: But if I had to insist that you pick a favourite?
NC: I think segregated witness will be a good move forward. The blocksize increase controversy is overblown. We have solutions in the lab today that will get us to 100–200k transactions per second. But that will only get us to 3–4 years of scale. The problem is that the math needed for millions of transactions per second has not even been invented yet … and maybe only 10–15 people around the world understand it. One of the ways that Blockchain.com is helping the community is funding pure R&D efforts by universities and private individuals to build something better here. And we are doing this in an opensource, non- proprietary way.
SS: Proof of work vs proof of stake — Vitalik has been a long critic of “mining” and proof of stake as burning through the world’s electricity supply What is your opinion on that? Do you believe that proof of stake is a more viable and eco-friendly future for the blockchain?
NC: I will ask these same people the amount of energy needed to build huge offices and stock exchanges and conference calls all day long! Security needs energy that is wasteful. And the wastage of energy protects the Bitcoin network. I wish it were better, but today there is no real way to go around it
SS: Blockchain startups — should everyone be making private blockchains where the amount of hashpower is questionable…Or will the future be technologies like Colored Coins or merged mining which build on top of large existing blockchains?
NC: Well, its not for me! I would much rather build something that is based on top of the Bitcoin or Ethereum network than build private blockchains with doubtful value.
We regularly host events for founders and other members of the ecosystem such as Lightspeed Knowledge Series, Office Hours, founder dinners and others. To stay updated, follow us on Twitter here
