Bitcoin: The Internet of Money


Today I am posting a presentation I gave with my brother Tyler at the Value Investor’s Congress (VIC) on September 17, 2013; just over a year ago (53 weeks to the day to be exact). For those of you who are not familiar with this conference, it attracts some of the most skilled and experienced public market investors in the world. They are a skeptical bunch by training and we were fully expecting a tough crowd with hard-hitting questions. Our goal was to educate these investors on the origins of Bitcoin, the powerful  implications of the protocol (decentralized, open-source, peer-to-peer) and its investment use-case as a long-term store of value.

On the day of our presentation the price of Bitcoin was $132.27. Yesterday at 4pm EDT the price was $432.26. I generally don’t like to talk about price too much (admittedly breaking my own rule here), and as I’ve stated in my Reddit AMA.  Most days I don’t check it at all, but in the context of this presentation and using the granularity of a year, I think it’s a reasonably worthy exercise. Rome wasn’t built in a day, and Bitcoin won’t be either, but I still feel very bullish about its long-term value both as a technology and an investment. Despite all the ups and downs of the past year, including the Silk Road bust (15 days after our presentation); a November price run above $1000 (which has since been called into question by the possible discovery of trading bots on Mt.Gox); the collapse of Mt.Gox in February 2014; pending regulation (most notably from the New York Department of Financial Services); and Paypal’s announcement yesterday to start integrating Bitcoin, the price is ~3-4x higher today.

Source: WinkDex.com. The orange line represents the price on Mt.Gox.

The price increase over the past year certainly bolsters the thesis of all long-term believers, but even if the price was the same as it was 53 weeks ago, I would be saying the same thing. I am a believer in this technology – I have yet to sell a single bitcoin and continue to invest in Bitcoin-related companies, develop our index and build our Bitcoin ETF.

Last week, I was asked on CNBC if I thought Apple Pay would compete with Bitcoin; I don’t. Aside from the obvious differences (closed vs. open system, centralized vs. decentralized, etc.) the bigger question IMO is whether things like credit cards and Apple Pay will ever reach the 2.5B unbanked adults (half the global population) in the world anytime soon. Will their sphere of operation grow beyond the 7-10 countries that they fully serve? Will they continue to lower the costs of transactions and sending/receiving money? Will they be able to handle micropayments or even contemplate nanopayments? Will they be able to integrate with autonomous agents? I believe the answer is and will continue to be No. It will be incumbent upon Bitcoin (or some new, yet to be developed protocol) to solve these problems going forward. If this coming year is anything like the last, expect big things from this innovation as the smartest minds in the room build applications and companies on top of and around the Bitcoin protocol.

*The quote on the regulatory slide has been updated, as well some some aesthetic improvements, however the content is the same as what we presented on September 17, 2013.

  • Neal PaImquist

    You guys are awesome.

    • http://www.nicholasconfer.com/ Nicholas Confer

      Here here. It would be great if you did another AMA once you can publicly disclose more news on the ETF. Thank you for being such a strong supporter and doing your end to push Bitcoin forward.

  • ParsnipCommand

    I don’t get why the Winkles get such shit. These guys are a 1,000x more eloquent at speaking, and 100x more confident than Zuckerturd. They’re sticking their necks out with Bitcoin, it takes a lot of courage.

    Thanks guys

    • JamesKirkby

      only because they are trying to jump on anything after they lost out to facebook

      • ParsnipCommand

        ‘jump on anything’ ….They are very well connected, and know a lot of smart people. It’s not too hard to find out what the next great technological innovation will be, and invest in it. **rolls eyes**

        • Harvey Dentist

          yar they didnt jump on TWTR like i thought they should have

  • GM1

    I would die laughing if ZUCK made a bitcoin etf before the Winklevoss’. Now thats a movie sequel I’d LOVE to see :P

  • Nolan W

    Amazing work!

  • stckpkr7000

    Well done gentleman….Please get this ETF up and running asap as I know tih certainty the retail segment will jump all over it! Good luck guys!

  • SmartThoughts

    To be honest, I did not like the Winklevii after I watched the the facebook movie. I thought they extorted tens of millions (now worth hundreds of millions) from Facebook without deserving hardly any of it and still do. But given they are using those millions to push virtual currencies into the mainstream I can only say I am so glad those hundreds of millions moved from Zuck to the Winklevii and I hope they make Billions with a B on their virtual currency investments. And to diversify I’d like to encourage them to investigate Proof of Stake mining as it mines a coin without needing electricity like Bitcoin mining does. The Proof of Stake coin I’d recommend they also invest in is this one, http://www.vericoin.info as it’s also laying the groundwork for a world utilized currency and you don’t need tons of electricity and special miners to mine it.

  • disqus_U7ay2IYeLC

    awesome!!! well done guys!

  • jwatcher

    The price hit 350
    any progress?

  • Anthony Linn

    I feel like you have overlooked the political side of currency. Our currency actually belongs to the government so why would they allow the current system to change? Also, since the dollar is the worlds reserve currency, a lot of other nations support the dollar and its continued use far more than bitcoins.

  • orangewizz

    if 10,000 tiniest pieces of bitcoins are distributed via a phone or other type of electronic device the bitcoin could be distributed to anyone with a phone

    2.5 billion without phones could then be BTC users

    that’s 25 trillion mini pieces out of 11 million x 100 million bitcoin pieces [1.1 quadrillion] or about 2.5% of total bitcoins out there [which at 300$ a bitcoin x11 million bitcoins = 3.3 billion$] or $3.3 billion/40 = about 82.5 million dollars…chump change to apple and samsung and their service carriers….

    until then it will be very limited in use except as something used to buy a currency or to teach trading at high schools

    bitcoin may have to be piggybacked or trojan horsed into the mainstream or frontier/no man’s lands…through phones….

    so, it is up to device and service creators

    phones and phone services now cost too much a month or a day for the 2.5 billion without a phone or laptop

    cheaper ‘service’ and ‘device’ needed in somalia, cuba, bangladesh and pitcairn…to name a few…

    how many phones are out there?

    now?

    can a 5$ phone be created?

    or will a bitcoin card have to do? swipes?

    hmmmmmmm

    colleges as place of introduction?

    must be 18 to use?

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  • Camaro

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