CoinSummit kicked off at the East Wintergarden in London’s financial district, Canary Wharf, today. The bitcoin confab is pitched as the place for serious players in the emerging cryptocurrency economy to talk shop.
The space, a large, split-level glass vault, provided a suitably transparent backdrop to an event largely dedicated to conversation about transparency and other pertinent issues.
The first half of the two-day event featured 10 panels and keynotes, plus a slot for startups to pitch the assembled investors, media and fellow entrepreneurs.
The man dubbed ‘bitcoin Jesus’ kicked off the conference with his keynote speech ‘The Future Is Ours’ – an appropriately grand title. Ver began by asking the crowd who among them were “bitcurious”, or who wanted to learn more about bitcoin.
His talk skimmed through the highlights of bitcoin’s explosive growth from the time he became involved in it three and a half years ago, imploring them at the end to tell friends and family about bitcoin’s benefits.
Part evangelical sermon and part travelogue, Ver spoke of his regular presence at conferences worldwide to spread the good word about bitcoin. Most recently he was en route to London from Hong Kong, via New Jersey. 20 hours of traveling demanded a restful night. What better way is there to book a room than through Expedia.com, and paying with bitcoin? He said:
“Not only is bitcoin a fair money system, it’s also a hell of a lot easier to pull out your smartphone and hit ‘send’ when you’re jetlagged rather than pulling out your credit card and typing all those numbers.”
Venture capital involvement in bitcoin was high up on the schedule, following Ver and Garrick Hilleman’s presentation of the highlights of CoinDesk’s State of Bitcoin Q2 report.
On the panel were Barend van den Brande of Hummingbird Ventures; Jan Hammer, who led Index Ventures’ investment in BitPay; Founders Fund’s Geoff Lewis and Steve Waterhouse of bitcoin hedge fund Pantera Capital.
Lewis was probably the most outspoken member on the panel. Having been bullish on bitcoin’s development this year, he likened the activity in the startup scene to the rise of Web 2.0 and its massive social networks:
“It’s like how merchants were trying to figure out social in 2006, 2007. It’s on everyone’s mind. When I talk to people at large companies, they’re trying to figure out the strategy. They’re not doing much yet, but they’re trying to figure it out. This will be a watershed year, and it has to be a watershed year to keep things moving forward, for widespread merchant acceptance.”
Van der Brande highlighted the difference in attitudes toward bitcoin investment in Europe. “We’re outside our comfort zone now,” he said. “There are lots of moving parts [with bitcoin ventures]. It’s fashionable but most of the VC community in Europe is more in ‘listening’ mode rather than going out and taking big bets.”
Hammer underlined the different rates of growth between merchant and consumer adoption. He said firms in the bitcoin space should focus on the latter because efforts to sign merchants up have created an imbalance.
“We’re seeing a lot of catch-up on merchant services; a lot of developer and infrastructure type of companies,” he said. “We need more great consumer applications. The merchant side has advanced ahead of consumer adoption.”
Swarm CEO Joel Dietz asked the panel what value venture capitalists added to portfolio companies, considering the existence crowd-funding options now available. Swarm itself raised crowdfunding for its ‘crypto-equity’ concept. Lewis responded:
“VCs tend to overstate their value-add. Entrepreneurs should assume that the VC’s primary value is writing the cheque.”
The big question on market-watchers’ minds is when the financial bigwigs of Wall Street will participate in the cryptocurrency economy.
So far, funds like Pantera Capital have been the exception rather than the norm. Discussing the topic were Chad Cascarilla of Liberty City Ventures – who was recently appointed chief executive of bitcoin exchange itBit – and the Bay Hill Capital trader Alec Petro. Michael Terpin of marketing firm Social Radius moderated.
Terpin began by addressing the question of bitcoin and Wall Street, asking the panel to rate the US financial center’s attitude on a scale from one to 10.
Cascarilla gave it a 3.5, arguing that in spite of Wall Street’s nascent interest in digital currency technology, the practical difficulties involving the integration of bitcoin, banking and other financial services complicate their involvement.
“Custody of bitcoins yourself is a significant pain point. You can’t just fire and forget. If you could, we would be talking about Wall Street at 7 or 8 or even 9,” he said.
Terpin asked if institutions like sovereign wealth funds and family offices would become involved in bitcoin investing. Petro, whose firm is a market maker for bitcoin options, said he had speculated that a sovereign wealth fund would have emerged as the winner of the US Marshals Silk Road auction:
“I was betting it was a sovereign wealth fund. I know of some funds that are looking. For a sovereign wealth fund, [that amount of bitcoin] is a drop in the bucket.”
The panel on integrating bitcoin with the financial services industry featured Matthias Kroner of Fidor Bank; Tim Parsa, chief executive of BitReserve; and Avish Bhama of Vaurum, for whom Tim Draper famously purchased the Silk Road bitcoins to help provide liquidity.
For Kroner, bitcoin is just part of the overall picture of financial education. In his view, people aren’t talking about their money enough. After several World Cup jokes, he said:
“Whoever is talking about bitcoin is extremely educated [about financial matters]. They are not afraid of volatility, unlike the ones who are not in bitcoin. If I don’t eat meat, why should I bother about any sort of cow disease?”
On whether bitcoin would become a national currency in the United States, Parsa was sceptical.
“I’m an American,” he said. “We couldn’t even get the metric system to be adopted in the United States. So no, it’s never going to be adopted as currency.”
Parsa also attacked the ideologically-driven boosters of bitcoin, saying that they were being “religious” about the cryptocurrency. He likened bitcoin boosters to the promoters of esperanto, a language that was designed to be used globally, but which never really gained popularity:
“When people get religious about things, it’s hard to respond without hurting anyone’s feelings or getting people upset […] Money is like the air we breathe, it’s the language we speak. I don’t speak esperanto, but it was a language that people wanted to introduce that was incredibly easy and fast for everybody, but the problem was, people already had a language.”
Here’s a quick selection of where today’s speakers and panelists see the price of bitcoin going:
Steve Waterhouse: “Strong indications that the price is going up.”
Jan Hammer: “Not in the business of predicting foreign exchange prices.”
Geoff Lewis: $2,000 sometime in 2014.
Chad Cascarillo: $1,850 by end of 2014; $18,500 by 2017.
Alec Petro: $1,200 by end of 2014, $3,000 by 2017.