If anyone had any doubts that Bitcoin and cryptocurrencies would ever amount to anything in this world, after the events at Bitcoin 2013 it is safe to say that most of these doubts are now gone. Roughly a thousand people were present, dozens of booths featured businesses with products of such high quality that they may be indistinguishable with something from a mainstream corporation, and the organization of the conference itself was nearly flawless. Presentations and panel discussions featured dozens of speakers who are experts in matters of technology, business and regulation, and the topics were equally interesting; among the discussions were subjects involving cryptocurrency-based stocks, using Bitcoin for digital charity, two implementations of decentralized mixers, regulatory and security challenges and creating whole new nations. For every conceivable application to which cryptocurrencies can be put, there are at least two projects implementing it, and for every problem with Bitcoin that still remains to be solved there are at least three projects working hard on a solution. Altogether, the conference has been almost universally applauded as a huge success. As Sean’s Outpost founder Jason King described it after the fact, the halls of Bitcoin 2013 were filled with a “hopeful energy” and excitement that he had not seen since the first conference of the World Wide Web itself.
Independently filmed videos from the conference are available on Youtube already, and the Bitcoin Foundation’s own videos will soon be available on their website. Summaries of key announcements can be found scattered throughout the internet (some content has been posted and more will be added on our own website). Here are some of the key takeaways that I personally found important:
Bitcoin is being taken seriously
One observation at the conference that could be made right from the first day is just how fully the American liberty movement has embraced Bitcoin. Free State Project-associated charities and businesses are responsible for two of the conference’s booths, and Free Talk Live, a popular radio show, took the opportunity to broadcast directly from the conference’s center stage for three days in a row. At the nonprofit panel on Sunday, Fr33Aid’s Teresa Warmke described how last month her organization had abandoned its application for non-profit status with the IRS to become an essentially Bitcoin-only organization. New Hampshire may well become the Bitcoin Kiez, or even the Israel, of the Americas with its rapid, and rabid, acceptance of the currency.
Sean’s Outpost founder Jason King has now started the Bitcoin Homeless Outreach Center, rapidly expanding its operations using the currency and its associated community as an epicenter. The Electronic Frontier Foundation had agreed to accept Bitcoin days before the conference started, and another panel discussion at the conference featured the EFF’s Rainey Reitman, among others, discussing the topic of regulation and financial privacy. Business attention was also very clearly present. Since the start of the month, three major Bitcoin businesses had received a total of nearly $8 million in investment: Coinbase got $5 million from Y Combinator, BitPay $2 million from Peter Thiel’s Founders Fund, and BitInstant $1.5 million from the Winklevoss twins (who were, incidentally, present on the first day of the conference). At the conference itself, the Bitcoin investment group BitAngels had its first meeting. Altogether, the message is clear: Bitcoin is not a toy, it is a rapidly maturing, $1.3 billion economy that a rapidly increasing number of people are taking the plunge to base their lives around.
Bitcoin is here to stay
Of course, the conference did include a number of discussions on some of the weaknesses of Bitcoin that still remain. Ease of use, security and regulation were three major topics that analysts inside and outside of Bitcoin cite as weaknesses, and with good reason. However, for every problem that Bitcoin panelists in the presentation rooms were discussing, in the exhibition room there were three businesses working hard to solve it. Buying and selling bitcoins too hard? Coinbase’s exchange and Lamassu and RoboCoin’s Bitcoin ATMs are rapidly solving the problem. Bitcoind not user-friendly enough for enterprise use? Bitsofproof is working on that. Security? Butterfly Labs’ BitSafe, Slush’s Trezor and BTChip are all present, and the latter was even handing out free samples. Regulation? BitInstant, Coinbase and Tradehill are all well on their way to full compliance.
The alternate chains, and especially Ripple, also make clear that even if Bitcoin itself, for whatever reason, happens to falter, other cryptocurrencies will quickly take its place. The value of the Ripple currency’s total money supply is already higher than that of Bitcoin, and currencies like Litecoin are seeing their value grow even more rapidly than Bitcoin. Bitcoin alone may have fallen to half of its peak since the crash, but a balanced portfolio of Bitcoin, Litecoin and XRP is now stronger than ever.
Bitcoin is already introducing alternate centers of power into this world
Especially in the United States, from watching mainstream television and media one gets a very particular stereotype of how a wealthy bsiness owner is supposed to look: a 40+ year old white male, with a large body over 180cm tall, and always wearing a suit. For those who have not been steeped in Silicon Valley culture, at first Bitcoin 2013 was even slightly unsettling in terms of how quickly and utterly that stereotype was dispelled. Even the most prominent business owners were surprisingly average in weight and height, more likely under 25 than over, and equipped with a T-shirt as often as anything else.
This observation is mote than a minor detail; more than anything else, it clearly shows how Bitcoin is enabling individuals and businesses to succeed that would never make it elsewhere. In the “real world”, studies repeatedly show that factors like race and height can be even more important than any measure of the objective quality of a candidate in predicting success and failure. In the world of Bitcoin, wealth is generated from behind a computer screen, and many (although certainly not all) of these biases simply disappear. As the saying goes, on the internet nobody knows you’re a dog.
One of the reasons why wealth in the world in general is so centralized is that producing it requires not just talents and ideas, but also contacts – specifically, contact with the organizations that already have it. Being able to offer the lowest prices to one’s customers requires knowing the right people and having the skills to negotiate the best deals, and among those businesses that seek to interface between Bitcoin and the world outside this remains painfully clear. Inside of Bitcoin, at least in this early phase of development, product is all that matters, allowing people who were nobodies before to suddenly enter the limelight through talent, hard work or even simple random luck.
What’s more, this new wealth is physically, and socially, decentralized; although many firms now are located in Silicon Valley, many more are from regions as diverse as Florida, New Hampshire, France, Israel and China, and as these businesses grow local communities around the world will benefit. This may well prove to be a one-off effect, but even still it can be appreciated as part of a larger process of positive disruption through technological change. And in that regard it is very significant; the only other technology that has had a similar effect in the past thirty years is perhaps the internet itself.
It’s more than just Bitcoin
The topics at the conference were not just about Bitcoin itself. Perhaps the most commonly discussed alternate application of the underlying idea of cryptographically secured blockchains was that of smart property and crypto-stocks. There are now actually three distinct ways to implement both of these ideas in the works: OpenTransactions, Ripple and colored coins. OpenTransactions relies on centralized servers, although cheating on the part of servers is detectable, but it offers full anonymity through a construction known as blind signatures. Ripple is an alternative currency system that offers the ability for anyone to issue their own currencies, with features like a decentralized exchange built in. The main targeted use case is currencies representing fiat currencies like the US dollar, but making a currency to act as a stock or even to represent a piece of property is entirely possible. Colored coins provide a way to accomplish the same thing from inside the Bitcoin blockchain itself.
The most radical idea of all, however, has nothing to do with Bitcoin itself – at least not directly. The conference saw two distinct projects seeking to accomplish what can only be described doing for the offline and the political what Bitcoin did to the financial: creating entirely new, politically independent, city-states. The first of these, Blueseed, will work by maintaining a ship close to California just outside the international waters line, and will be particularly targeted to solving the difficulties in US immigration. Both employees and entrepreneurs interested in working in Silicon Valley face an uphill battle getting the visa to do so legally, and the process often takes years. By working on Blueseed, it will become very easy to circumvent the problem, and Blueseed residents will still be able to frequently visit Silicon Valley itself through a half-hour ferry – on a personal or business visa, which is much easier to obtain. The zone will also be particularly attractive to Bitcoin businesses seeking to remain easily accessible to US customers but avoid onerous US money transmitter regulation. The second, yet unnamed, will be a full-scale, Manhattan-sized Hong Kong-like free zone in a yet undisclosed country in the Caribbean, and the promise to the Bitcoin community that the project’s ambassador Edan Yago has brought is that the zone’s legal system will be specifically designed for cryptocurrencies right from the start. Exactly what that entails, well, watch the presentations to find out.
The overarching theme of the conference is this: 2013 is the year of Bitcoin’s coming of age. In 2012, we were still, as Reuters put it, “the city traders’ anarchic new toy”. Now, we have highly skilled and well-equipped teams of not just programmers, but also businessmen, investors and lawyers, ready to take on the challenges of finally pushing out Bitcoin to large-scale, real-world use. Bitcoin is increasingly carving out a role not just as a project in itself, but as part of a larger movement for technological and financial freedom and privacy around the world. Twenty years ago, ideas like those discussed at the conference were the topic of science fiction; today, we are already living them. Welcome to the future.
