Circle CEO Jeremy Allaire gave the opening keynote address at Inside Bitcoins New York on 7th April as part of a talk entitled ‘Mainstreaming Bitcoin: The Next Phase of Digital Currency Growth & Value Creation’.
The two-day conference will feature a number of notable speakers from the industry, including Blockchain’s Nicolas Cary, GoCoin’s Steve Beauregard and Kraken’s Jesse Powell, and is expected to draw roughly 1,000 attendees.
The second annual Inside Bitcoins New York conference and expo kicked off on 7th April with a keynote address from Circle CEO and founder Jeremy Allaire that addressed how the industry should seek to take bitcoin and its many benefits into the mainstream.
During the half-hour speech, Allaire bristled through a big-picture vision of, not only where bitcoin is today, but the steps he feels it needs to take to reach the mass-market acceptance of other technological breakthroughs like the Internet.
The most notable of Allaire’s many points was perhaps his emphasis on the fact that reaching this goal is likely to require the bitcoin community to make fundamental changes, while at the same time becoming more open to involvement from stakeholders, such as governments and commercial banks, that may have traditionally been treated adversarially by the community.
The future, according to Allaire, will require bitcoin to work with traditional financial institutions so that the technology can reach its full potential.
“Bitcoin needs greater levels of governance around it. I do not believe this industry will grow without collaboration from governments around the world.”
At the same time, Allaire also stressed that such changes will need to take time.
For example, he drew notice to the fact that e-commerce makes up just 5.8% of retail sales, and that though many have been heralding the death of broadcast television, it has not yet been replaced by new technologies.
‘We’re in 1994’
Allaire likened the state of the bitcoin industry to the Internet of 1994, but the comparison was not entirely positive, as he stressed that “these transformations take a really long time”.
The keynote speaker noted that bitcoin is still waiting for a killer app, and that bitcoin has still achieved only limited consumer adoption.
“There is not yet the equivalent of a killer app for bitcoin” – Jeremy Allaire of @circlebits
— CoinDesk (@coindesk) April 7, 2014
Allaire estimated that 90% of bitcoin users are holding the digital currency as a speculative investment, and that few are using it for everyday payment.
‘Architecture will need to scale’
The Circle CEO also noted how the fundamental bitcoin technology has still not caught up with the larger ideas proliferating in the space.
Specifically, he stated that, today, bitcoin can handle only about nine transactions per second.
“That’s not going to scale and not going to work. The fundamental aspects of the architecture will need to scale.”
Further, he indicated that the companies that use the technology will need to evolve to associate identity with transactions, thus providing all governments and businesses the ability to enforce laws while the system maintains anonymity.
He also discussed the future of mining, suggesting that this industry will need to evolve toward an industrial scale while incorporating hobbyists, adding: “I believe that as […] the monetary base gets into the trillions, governments will introduce regulations for global mining.”
‘We need mainstream commercial banks’
Despite recognizing these shortcomings, Allaire also offered bold predictions about bitcoin’s potential should it meet these challenges.
For example, he noted that he believes major online processors such as Chase Paymentech, First Data and PayPal will have adopted bitcoin within three to five years’ time.
In his talk, Allaire stressed the need for added governance in the community. However, he notably used governance as a broad term, extending beyond government enforcement to encompass the steps the community at large will need to make to ensure consumers can use bitcoin.
But, Allaire also attacked early bitcoin adopters, who he characterized as looking to capitalize on the increasing value of bitcoin, while at the same time harbouring ill will toward the institutions that would allow them to capitalize on exchanging their bitcoin for capital.
Allaire indicated that these users should see the middle ground that he believes the industry will need to establish, one that balances the privacy of cash with the needs of governments and authorities, and recognizes that paper currency is not likely to go away.
‘If you think that paper money is going away soon, you’re smoking something.’ J. Allaire #bitcoinconf
— CoinDesk (@coindesk) April 7, 2014
About Jeremy Allaire
A tech entrepreneur since the mid-1990s, Allaire was notably the CEO of online video platform Brightcove until 2013, when he stepped down to start a bitcoin company, Circle Internet Financial.
Allaire has been outspoken about the need for increasing regulation in the bitcoin space, and given his prior business success, has quickly assumed a leadership role in the industry.
After a long tenure as bitcoin’s most notable stealth startup, Circle unveiled new details about its business model on 26th March, along with $17m in new Series-B funding.