Planet of the Kids@WorldAffairsCouncil Digital Currencies Talk
On March 25th, Planet of the Kids went to a fireside chat on Digital Currencies at the World Affairs Council in San Francisco. The fireside chat was moderated by Cory Johnson, Bloomberg West Anchor and Editor, and featured Brian Armstrong, CEO and Founder of CoinBase, Elizabeth Stark, Founder of StartBitcoin.org, and Joyce Kim, Executive Director of Stellar. The discussion primarily focused on the existing condition of digital currencies, its uses, and how the technology could move forward in the future to benefit the global community. We highly reccomend watching the video and reading our notes below!
Below are notes from the event!
Cory: What are the biggest problems with payments right now?
Brian: It is easy in the US to say that payments work well, but we need to be thinking on a more global scale. The reason that I like BitCoin so much (and am such a big supporter of it) is that it is an open, cheap, and fast payment system that enables financial inclusion globally. Sure, there are some problems with volatility, accountability, and security, but as the technology evolves we can solve those problems.
Elizabeth: There are issues in payments right now, like credit card fraud, taxes on payments (especially micropayments where fees often eat most of the transferred money), every time you swipe your credit card you are giving out your personal information, and financial inclusion
Joyce: The main three problems are fees, payments are hard and slow, and most people don’t have access to the necessary financial tools.
Cory: Where does change in payments start?
First, where the next option is worse and the overall conditions are drastically bad. For example if there is a village in Africa that has only one method of transferring money and it has very high fees, most of the money being transferred will be absorbed and therefore the recipient will get significantly less money. Using technology to solve these problems is what will help grow the sector. The second is where new payments technology enables a new case for financial inclusion and accessibility. If there are no other options, people will adopt to digital currencies to suit their needs.
Cory: Why is digital currencies the way to solve these issues?
Any currency can become digital and the developing world will lead this change because they are the ones that need it most. Eventually after the ubiquity of digital currencies throughout the developing world, the developed world will have to adapt.
Currently digital currencies like BitCoin are not completely solidified, but because of the necessity for digital currencies, it will evolve to meet the needs of all.
Joyce: Fragmentation eventually leads to unification. What I mean by this, is that because the market is so disparate and fragmented right now, eventually the innovations in smaller market sectors will disrupt the conventional means and everyone will adapt. For large banks and corporations, there is no incentive for them to lower the cost of their services until digital currencies become a larger player in the global economic landscape. The big economic powerhouses are fairly unified, but the biggest benefit of BitCoin is that it is fragmented and open-sourced, so it is more open to all.
Brian: “OPEN NETWORKS WIN”
Joyce: I wouldn’t necessarily say that it is a competition between open networks and closed networks, but whichever network can adapt and incorporate the other network will win.
Cory: A lot of people are worried about the security of digital currencies like BitCoin, what are your thoughts?
Brian: There are plenty of potential pitfalls of BitCoin right now. For example all transactions are irreversible, so if someone is able to access your information, there is no way of getting your money back, there is no way of recovering lost BitCoins, there is no insurance for BitCoins, and some people can use BitCoin for money laundering or other illicit actions, but all of those things will eventually be addressed. There are also a lot of benefits to BitCoin, like counterfeit coins are not possible and there are a bunch of different protocols you can use to store your BitCoins (both physically and digitally). You can also have multi-signature transactions, which means that you have complete control of your money, while still having access to financial services. There is also a log of all transactions stored publically, but it is impossible to identify the other people in the blockchain.
Elizabeth: Pretty much what Brian is saying is that “geeks have won,” in that they’ve been able to create technology that will revolutionize payments.
Brian: BitCoin shifts power away from governments, regulators, and big corporations to consumers and the individual. Government wouldn’t have as much power with the economy.
Cory: So if we have a lot more ubiquity of BitCoin, we will have a lot more volatility of the world economy, correct?
Brian: Well it depends if existing infrastructure is actually supporting individuals or governments/corporations
Cory: Is BitCoin the ultimate capitalism? Because it takes away power from the government and democratizes payments
Brian: BitCoin will lead to a freer world, that’s all I have to say about that
Joyce: We need to have discussions with all parties involved in order to understand how to move forward in the future.
Cory: How do you bridge the gap between the technologically advanced world and the people who actually need this revolutionized financial technology?
Joyce: At Stellar we are working on a project to create mobile wallets through phones, which is an example of how digital currencies can be accessible to those who may not have as much access to connect devices.
Elizabeth: Digital currencies especially help with remittances and transferring money across the world because less will be lost.
Brian: One other great thing is that larger corporations have started to adopt BitCoin, leading to more ubiquity and accessibility for digital currencies. Most popular use case is online shopping, followed by remittances, and lastly by an online gaming community.
Cory Johnson: there are a number of other digital currencies other there, but do those alternative currencies stand a chance against BitCoin?
Joyce: Different altcoins all serve different functions. Things are iterating and moving forward as technologists we should never say we’ve solved it and it’s not going to change, that is anti-technology, things continue to evolve. We need these different experiments to figure it out what moves forward. It makes the survivors better.
Elizabeth: Although most will fail, we need some experimentation to see greater growth overall.
Cory: Where do you see the value of BitCoin going in the next few years?
Elizabeth: I think that people and the media put way too much focus on the price of BitCoin, but the real value comes from the network and technology. One of the coolest things about BitCoin is that the currency is an incentive for the miners who are solving the complex problems hindering the growth of BitCoin. Sure there has been some volatility, but we’re starting to see that stabilize. The real-world monetary value isn’t as important as using the BitCoin protocol or using the technology for reinventing law, marketplaces, and finance.
