The Killer Apps of Bitcoin

Published on
14 December, 2016
Topic
Crypto-currencies, Technology
Duration
32 minutes
Asset class
Crypto-currencies, Cash, Currencies

The Killer Apps of Bitcoin

Featuring Tuur Demeester

Tuur Demeester, Editor in Chief of Adamant Research, returns to Real Vision TV to continue his Bitcoin series, surveying the landscape for the potential killer apps of Bitcoin which are set to drive adoption of the cryptocurrency. In this presentation, Tuur identifies these applications based on the characteristics of Bitcoin that make it a disruptive technology and not just digital money or a shared database.

Published on
14 December, 2016
Topic
Crypto-currencies, Technology
Duration
32 minutes
Asset class
Crypto-currencies, Cash, Currencies
Rating
18
Sharing

Comments

  • bs

    bob s.

    18 1 2018 12:24

    0       0

    ANY CHANCE OF UPDATE INTERVIEW? WHAT IS THE PROGRESS OF THESIS? IE WHY BUY NOW?
    PS. very interested and bullish on crypto. TY

  • fT

    forecast T.

    31 5 2017 02:42

    0       0

    The India banking perspective just changed everything! Whatever your parity savings account for an average Indian in US = 's will = that in India as brain drain reverses and first gen / 2nd gen indian

  • RD

    RP D.

    5 5 2017 22:13

    1       0

    Please get Tuur Back!

  • DF

    Dan F.

    3 1 2017 23:03

    0       0

    I'm way behind on understanding Bitcoin and blockchains. This definitely helped.

  • SS

    Sam S.

    27 12 2016 15:25

    1       2

    Lost profits on Bitcoin listening to TUUR last time he was on. I'll pass on potential, maybe's and I thinks. Opps.

  • jg

    james g.

    24 12 2016 03:05

    2       0

    outstanding presentation and answering questions made it doubly so

  • TA

    Trevor A.

    21 12 2016 09:18

    0       0

    @Gregg B.
    "How does the concept of colored coins/digitizing assets on the Blockchain play into your valuation of bitcoin, if at all?"

    This concept is essential to determining a Bitcoin valuation. Bitcoin based asset protocols such as Counterparty are making up a growing portion of the total Bitcoin transactions per day. Recently, that level is as high as 3-10% of total BTC transactions. Private blockchains are generally a mirage and that is a conversation too complex for a comment section.

    Bitcoin based asset protocols extend the promise of Bitcoin to finance more broadly.

  • JT

    Jayne T.

    20 12 2016 17:27

    0       0

    Just to clarify-you mentioned that -there are an estimated 15 million users and the user growth is estimated at 30,000 per week (or 1.56 million yearly)? This equates to roughly a 10% growth in users. Does this seem low?

  • de

    dale e.

    18 12 2016 02:18

    0       0

    This was amazing Only on RV would you ever here about this. Im just to old for this. When they flip the switch on the net your Bitcoin is gone. I will still have my Double Eagle. Super smart Kid. Wish i had a brain like his. Problem is can he change a flat tire?

  • KT

    Ken T.

    17 12 2016 17:29

    0       0

    Thanks for the presentation. Updates do serve a purpose. However, I wish you were more clear on the distinction between a bitcoin payment or remittance process/system and one that uses the block chain technology developed by the bitcoin developers. As to the later, you mentioned several including those related to real estate transactions and a few others. For me (I am not a trader) the use of the bitcoin developed block chain (not utilizing bitcoin the digital currency) is the most significant development and the one with the most promise to revolutionize current single source process/systems such as real estate transactions where ownership identification, validity and security is key.

  • T~

    Tshort63 ~.

    17 12 2016 00:50

    2       0

    I appreciated the video. I work in technology for > 30 years and have seen good concepts work as well as fail. I'm not bought into BitCoin only for the portability of value. In case of War or significant disruption gold and jewels have been use as portable wealth. I'm thinking in some of the hyperinflation locals where or in a war with EMPs and the shutdown of communications. I just don't see the concept playing out but I have been wrong many many times before.

  • TD

    Tuur D.

    17 12 2016 00:02

    2       0

    "Thoughts on playing $GBTC?"

    With a premium over net asset value of 38%, one could try to short $GBTC while hedging the position with an equally large long position in actual Bitcoin bought on an exchange. The obvious risk is that there aren’t a lot of securitized Bitcoin assets out there, causing a bottleneck.
    If there’s a big Bitcoin rally, a stampede into $GBTC could push the premium much higher. That said, the premium has already dropped from above 60% to just below 40% now. And the desireability of $GBTC will drop significantly once a Bitcoin ETF is approved.

  • TD

    Tuur D.

    16 12 2016 23:58

    3       0

    “Assume all of China miners go offline. What effect does that have?"

    That’s a great question! All Chinese miners offline in a day, that means that the hashrate of the network would instantly drop by about 60%. Because the difficulty of the network only adjusts every 2 weeks, the 40% of miners that remain would initially not be financially incentivised to try and increase their hashrate, and the discovery of new bitcoin blocks would (off the top of my head) slow down by an average of 60% — i.e. transaction confirmation would take an average of 16 minutes rather than the current 10 minutes. However, within a span of 2 weeks, the difficulty of the mining algorithm would automatically adjust downward, and transaction confirmation times would approach 10 minutes per block again. Profit margins of the non-Chinese miners would massively increase in this time (provided the price didn’t crash), incentivising them to invest in more mining equipment. In the span of perhaps 6 months, the hashrate would start approaching the difficulty levels from before China went offline, and the difficulty level would gradually be adjusted upwards as well. As far as security of the network goes, a drop of 60% would not significantly increase the risk of a 51% attack, except if the Chinese miners that went offline are under government control and are all at the same time switched on to try an attack. Even so, the damage a 51% attack can do is not insignificant but still limited. The 51% attacker can “hold the network hostage”, but it can’t change historic transactions. It’s also expensive to maintain and there are many strategies possible to counter the attack once it’s identified by the community.

  • TD

    Tuur D.

    16 12 2016 23:26

    1       0

    "Any suggestions on what platforms are best/most secure to buy bitcoin?”

    For buying there are many options (in the US there is Coinbase & Genesis Trading, in Europe there’s Kraken for example - disclosure: I'm an investor in the latter). But the exchange ecosystem is still very young, difficult to ensure, and hacks have happened quite frequently. So I recommend diversification and holding a substantial amount in your own control, by the use of a hardware wallet. For that, have a look at Bitcoin Trezor for example. One of the more trusted Bitcoin custodians in the space is Xapo.

  • TD

    Tuur D.

    16 12 2016 23:10

    4       1

    "With a war on cash starting, rumblings of limiting gold ownership in some countries and a general herding of wealth into controlled and taxed institutions,... Do you think government/institutional interference is a major threat in the next 3 years? Can you foresee bans or limitations being imposed?"

    Yes, I think that in the slipstream of “bans on cash" we will see “bans on bitcoin” in several countries - in the next 3-5 years. Just like with gold in the past, I expect these bans/taxations/limitations to be ineffective and thereby a source of embarrassment for the governments trying to enforce them. At the same time we’ll see other governments embracing Bitcoin as a source of financial & technological innovation, even encourage its use - sometimes as part of monetary foreign policy strategies. Because Bitcoin is an open source, decentralized protocol, it cannot be effectively outlawed, just like peer-to-peer filesharing was never effectively outlawed. The end result will be a leaner legacy financial system that adapts to the new reality, like the music industry adapted to a world in which it had to compete with extremely cheap file sharing communities.

  • TD

    Tuur D.

    16 12 2016 21:32

    3       1

    "Assuming unbanked customers in India with smartphones will adopt Bitcoin is crazy thinking.”

    You may be right, I could be overestimating the potential for Bitcoin to catch on among the unbanked. Still, I think it’s not a ludicrous hypothesis.

    I look at Kenya as an example of mobile cash adoption may happen. In 2007, local telecom company Safaricom launched M-Pesa there, a form of digital cash people can use from their mobile phones. It’s been a massive success, with currently over 20 million using the currency (Kenya population of +15 year olds is 26 million, total population is 43 million). Research by Tavneet Suri and Billy Jack shows that "in 2008 fewer than 20 percent of the population outside the capital living on less than $1.25 per day used M-PESA, but by 2011 this share had steadily expanded to 72 percent.” Kenya has a literacy rate of 78% compared to India’s 74%. Of course, there may be particular factors that I may be overlooking in the case of India, my knowledge of the country is limited.

  • TD

    Tuur D.

    16 12 2016 21:19

    3       0

    “What are the risks to Bitcoin in terms of the decision around increasing the blockchain size?”

    I assume you refer to the block size debate here. The main risk is that we get a controversial hard fork, where one cohort of miners moves to a new version of Bitcoin with bigger blocks, while another cohort stays mining the old 1mb block protocol. Long term the market would sort it out, with one chain gravitating towards very low market value and another towards market dominance (due to the network effect), but short term it would likely cause confusion and a price slump. I think this is an unlikely scenario though, there is little division among the ca. 100 core devs that make up the “Bitcoin core” group, and there’s a broad consensus to move towards a segwit soft-fork with high volume produced on the lightning network, i.e. to keep the block size small for the short to medium term.

  • DS

    David S.

    16 12 2016 19:34

    0       0

    With so many illegal uses of Bitcoin, a major risk seems to be governments using Bitcoin information to track criminal transactions or making Bitcoin transactions illegal. I purchased Bitcoins, but I am worried about governmental risk. DLS

  • JD

    Josh D.

    16 12 2016 15:30

    1       0

    Thoughts on playing $gbtc?

  • SL

    Steven L.

    15 12 2016 20:07

    0       0

    Tuur, for the sake of discusssion, assume all of China miners go offline. What effect does that have?

  • KS

    Karthik S.

    15 12 2016 18:12

    0       0

    hi. Great presentation and very informative. Any suggestions on what platforms are best/most secure to buy bitcoin? Not able to find one that has generally good reviews. thanks!

  • JM

    James M.

    15 12 2016 15:35

    4       0

    Tuur, thanks for the video. With a war on cash starting, rumblings of limiting gold ownership in some countries and a general herding of wealth into controlled and taxed institutions, do you think government/institutional interference is a major threat in the next 3 years? Can you foresee bans or limitations being imposed?

  • FH

    Fai H.

    15 12 2016 11:20

    2       0

    like to hear more about blockchain - thats where I see the most value - esp. smart contracts - smart CDS anyone ; )

  • PN

    Paul N.

    15 12 2016 07:07

    0       1

    The Winklevoss Twins would also have a good insight into the bitcoin system, seeing as how they've been working for 3 or so years on launching the Bitcoin ETF (COIN) which is going to be traded on the BATS exchange.

  • BC

    Ben C.

    15 12 2016 05:46

    2       0

    Excellent presentation - thank you Tuur and RVTV!
    I have been following Tuur on Twitter since his first RVTV presentation, and have found him to be the most informative voice of reason for cryptocurrencies on Twitter.
    Tuur - thank you for your constant self-fact-checking and reporting updates on your views and predictions.
    Raoul - I'm also interested to hear more about your reasons for selling BTC recently.

  • EF

    E F.

    15 12 2016 05:35

    2       0

    Excellent, could be made a monthly update for those not directly involved in the btc world. It would also be great to hear an opinion on what effect regulation or a straight exchange ban in certain countries might have.

  • RR

    Raj R.

    15 12 2016 04:58

    3       1

    The whole world is not like the west. Such thinking is biased

  • RR

    Raj R.

    15 12 2016 04:57

    9       0

    Assuming unbanked customers in India with smartphones will adopt Bitcoin is crazy thinking. These are people without much education. They will run to gold before they run to Bitcoin. The whole world i

  • TD

    Tuur D.

    15 12 2016 03:08

    1       0

    "How does the concept of colored coins/digitizing assets on the Blockchain play into your valuation of bitcoin, if at all?”

    In my view Colored coins/digitizing assets play an important role when thinking about a +4y horizon for Bitcoin. Using the Bitcoin blockchain to securely issue and register financial assets is one of the great promises of the Bitcoin second layer protocols, enabling Bitcoin to leap from “digital gold” and “payment rails" to “internet of property”, which would deeply disrupt legacy finance models. If the colored coins infrastructure layer is actually built (which I think it will, only perhaps not as fast as many would hope) I think this would increase Bitcoin's potential value by at least another order of magnitude.

  • TD

    Tuur D.

    15 12 2016 01:52

    4       0

    "Isn't GBTC a bitcoin ETF?"
    No, it's an over the counter security, backed by a fixed amount of Bitcoin (about 172,000 btc). This is unlike ETFs, which purchase more of the underlying asset as demand rises and so tend to mimic the price. Because of its fixed underlying value and it being the only accessible securitized bitcoin product so far, $GBTC currently trades at a premium above net asset value of 39%. More here: http://grayscale.co/bitcoin-investment-trust/

  • GB

    Gregg B.

    15 12 2016 01:16

    1       0

    How does the concept of colored coins/digitizing assets on the Blockchain play into your valuation of bitcoin, if at all?

  • WE

    William E.

    14 12 2016 22:02

    1       0

    Isn't GBTC a bitcoin ETF?

  • Nv

    Nicholas v.

    14 12 2016 21:44

    0       0

    Great presentation as usual, thanks Tuur.
    A question for you: what are the risks to Bitcoin in terms of the decision around increasing the blockchain size?

  • GG

    George G.

    14 12 2016 20:53

    1       0

    Tour is a good rep for bitcoin but I agree with Paul that Andreas A is probably the best spokesman and explainer of crypto
    ...btw I would like to know why Raoul sold half is btc recently according to a tweet?

  • TD

    Tuur D.

    14 12 2016 20:25

    5       0

    Hi everyone, happy to hear your comments or questions. Two small corrections: Satoshi Dice launched in 2012, not 2011. And Malware Bytes' survey found that 47% of US companies was affected by ransomware in the past 12 months (not "over 50%").

  • PN

    Paul N.

    14 12 2016 20:21

    6       0

    I think interviewing some of the top core developers working on the bitcoin protocol would also be great e.g. Adam Back, Peter Todd, Eric Lombrozo. Not to say that Tuur doesn't know his stuff - great presentation!

    Some additional resources for people wanting to learn more: The Bitcoin Knowledge Podcast (Trace Mayer) and Andreas Antonopoulos' channel on Youtube (aantonop).

  • GC

    Gary C.

    14 12 2016 20:14

    5       0

    Turr, great job, appreciate your honest appraisal of all aspects, even dark uses. For other readers Andreas Antonopolos has good Youtube lectures and 2 published books.

  • PN

    Paul N.

    14 12 2016 20:08

    10       3

    Interview Andreas Antonopoulos on Bitcoin. Best voice in the industry.