Is Bitcoin really the most successful blockchain?

Okay, so I just would like to put things into perspective. It sounds amazing what Rafael said, that we would like to change the world and everyone will have access to the financial system because now they are excluded. Utopia, perfect, but it will not happen soon. First of all, decentralization, it's not easy part. We have to deal with regulations, we have to deal with internet access, we have to deal with so many things that maybe let's now talk about what is happening now and where we are now. Because you said the technology will change the world, but is it? Okay, so later I will tell you who am I. So is it actually so big? Is it actually so incredible it changes the world? Well, we are over there. It's the small dot, the blue one. I just zoomed that to just give you guys a perspective. So the total market cap of Bitcoin is €200 billion. Actually, it went down a couple of days below €200 billion. The Bitcoin has 50% of that. It depends for a day. Sometimes it's 51%, sometimes 54%, sometimes 50%, but more or less. 50%. Bitcoin is 100 billion, the total cryptocurrency 200. We call Bitcoin digital gold. So let's compare it to the gold. Gold, it's 8 trillion almost. Well, bigger, right? Then a stock market, 77 trillion. Then let's move to the money in the world. We think that the current cryptocurrency will change the world. Still, 50% of the whole money in the world, it's cash. And now we want to move everything to crypto. Like next year probably, right? Well, I don't think so it will happen so fast. It will, but we need a couple of different things to make it happen. I will tell about it later. Real estate also, $217 trillion compared to cryptocurrency, what we are doing now, it's really small. Global debt, curiosity, 10% belongs to US. Not mention about derivatives, which is over $500 trillion. So guys, we are not even a schoolboy. We are an infant. So let's be a little bit more humble and think how we can grow faster because now in 10 years we don't grow fast enough. Okay, so first of all everyone talks that blockchain is actually Bitcoin, that everything, all the things which we build on a blockchain are this distributed ledger technology. So not every square is a rectangle and I wanted to tell you that we have a couple of things. So distributed ledger technologies, they have a blockchain as one of the solutions. So other solution we have at DAG called Tangle or Hashgraph. So different types of decentralized technologies. Blockchain is just one of them. It happens that it's so popular because Bitcoin was built on that and Bitcoin is the consumer face product. That's why everyone hears about it. But there is so many things which are not consumer-faced product and a lot of solutions are built on that kind of technology. So just to sum up that every square is a rectangle but not every rectangle is a square. It's quite easy then to understand that blockchain, it's definitely not a, it doesn't equal cryptocurrency or blockchain doesn't equal DLT. Just to give you examples, what is the difference? So blockchain, as the name actually says, it's one block after another. We have some forks sometimes, so some kind of a block on the side. So, and it works quite simple, it's structured. Then we have a Tangle. I truly recommend you to go to tangle.glam.de. You have a real-time, real-time transaction visible. It looks like an ant farm. It's incredible. Seriously, it looks amazing. It's not It's actually the web block, so block web. So it's kind of a huge, huge system where every transaction accepts 2 other transactions, and then all those 2 other transactions accept 2 other. So we build a huge web. It's like network, like internet a little bit, not like a chain one after another. And also we have a Hashgraph. Hashgraph is, this is what we discussed before, So the only minus with Hashgraph is that actually it belongs to one company. So it's a private solution. But it's extremely fast, extremely efficient. It can make 24,000 transactions per second, which is even more than Visa, exactly the same, let's be honest. And how it works, it's about the gossips. So probably all of you understand the gossip, gossip technology. Semat, kind of. So every transaction gossips to the other transaction about themselves. And then the other transaction, because they like to gossip, they actually gossip to the other people. If we have a big enough room where the gossips are the same, then we validate the transaction. So we don't need to ask everyone to accept the transaction. We just simply gossip. And this is like a huge structure where everyone talks about everyone. That's why this is so efficient. So we already established that we don't have only blockchain. We have also Tangle, we also have Hashgraph. So we have different solutions which maybe don't have a consumer-faced brand, but actually one has, and I will tell you in a second which one. But also blockchain doesn't equal decentralization. We already discussed that, okay, the full decentralization is happening with Bitcoin, Litecoin, or cryptocurrencies which we have. But we have something like a consortiums or a private blockchain. Consortium is the famous Hyperledger, which 50% of our speakers mentioned and work on that, or maybe Corda. I truly recommend Corda as well if you want to start and build something in your company. Also the private blockchains like Monax or Multichain. So there are different types of a blockchain. All of them works, all of them actually build something different. Because sometimes it's not possible to build fully decentralized solution. It's about the security, who is responsible for data, who should have the access. So Niko mentioned on the previous presentation a really interesting comparison between internet and intranet, and this is exactly what is happening now in my opinion. So intranet, this is kind of a consortium of blockchain. 15 years ago, companies, they were creating intranet because they were afraid of internet. And then they started to trust internet and they put everything into internet and just made the security around it and give the access to the people. So of course, in the long term, the success of blockchain depends on the ability of the company to put their private business in a public shared economy. It has to happen to make a blockchain successful. But now we are in the phase of the intranet. So people are afraid to put everything to the public space because they don't trust it yet. They just have to make sure it will be secured enough. Also on Tangle, because not every cryptocurrency is on blockchain. Everyone thinks that all the cryptocurrencies are on blockchain. Well, no, there is one, you probably know that cryptocurrency, it's IOTA. It's built on Tangle and IOTA works perfectly, right? It's a backbone for For the technology, for biggest companies in the world in automotive, for example. They work with IoT, so Internet of Things, and they are built on Tangle. It's not blockchain. That's why they are also so efficient and they communicate with the cars in real time. Okay, but let's talk about the real use cases because everyone repeats the only thing which actually works is Bitcoin. Well, I think that you should guys dig deeper because there is a lot of things which already happens in the space, but they are not consumer-faced brands. So that's why probably it's not so popular because media are not writing so much about it. So for example, Civic, I'm not sure if you are aware of the company and it solves real problems. So 15% of the world economy is actually fraudulent. This is the global statistic. So this is a huge problem. 1.1 billion people, they don't have an ID. That's incredible, and mostly in emerging markets. So up to 2020, so in a couple of years, over 50% of the population will be from emerging markets. Simply, the people there, they grow a little bit faster. So that's why 50% of all the people will be there. If you want to run the business, you have to have a bridge to connect with them. Because it will be your market, your customers will be on emerging markets in Africa, in India, in Latin America, in Russia. So you need to run the KYC over there. You need to keep it safe. So Civic already have 100 partners. This is the data from the end of this quarter and 100 partners which use their solution. The solution, it's about security. So KYC, AML, checking the identity of the people, building a database of all IDs. They even created identity.com. You can go to that website and check its marketplace. It already works. You have a lot of IDs over there and the companies can simply connect and ask, ask for the ID and check if it was verified by another company, if it's legit, if they can accept that customer or that company. It works. It is already working case. Also, they started to work in Bermuda where they started to create the digital economy. It will be e-government system. So you can also read about that work. It's amazing project fully available online. And they also signed a contract with Telefonica and Telefonica moved their data to— it's just a pilot, so the last one is just a pilot— moved the data of their customers to the blockchain and Civic actually secures the data. Telefónica is the biggest telecom in Spain. So guys, this solution is fully based on a blockchain, but it's still a consortium, so there is some centralization in it. They didn't put everything into a public blockchain, but for example identity.com, yes, it is fully Another thing, just quickly, because you already heard about it. So this is IBM, IBM with their food, fair food solution. And you see what kind of companies are involved. So it's Nestlé, it's Unilever. They just signed the agreement with Carrefour. Carrefour already published the roadmap from which countries in which they will start shops, the app will be available. So you will be able to track your coffee or whatever you will buy from the farm through every part, just to the stage when the particular product is on the shelf. So it is happening. They already started launch in France. There is Spain and Brazil on the roadmap. It works. You can just go, you can scan. Unfortunately, with Walmart, it's only available in China and US. But if you by an accident will be in China and US, just go there, scan your mango, and you will see from which farm the mango actually is. It works. Another one already, I will not spend a lot of time. So this is the TradeLens. We had a guy from IBM who showed that. Just wanted to show you that already 94 organizations is in TradeLens. It's not only Maersk. You have 20 ports and terminals. You have 234 marine gateways. You have also Pacific International Lines. So all of those people, they already work in that environment with their shipments. So they scan the goods when they go to the particular port. They are part of that project, and it works. Yeah, you can, you can track everything. Another solution— so it's not only that IBM is so big that they created consortium and now they earn the money because you just develop something on their environment, but there are other companies who are doing that. The example, it can be WeTrade or Chronicled. Chronicled actually solved a really cool problem in a healthcare system because they just track from where is the particular medicine. I will have a slide about healthcare, so I will show you how huge it is and how big problem in a healthcare can be the medicines which is just a fake one. Also the companies like Roche or Pfizer, they are involved in that project. They already work on that and the MediLedger project, you can check, it's online, it works, it's on a blockchain, and if you will put your medicine over there everyone can track it. Another thing, so this is a guard time which is big, which is amazing. So they have a couple of things. First one, Insurwave with Ernst& Young, with Microsoft. It's the interest. So we already have a supply chain like with Maersk because Maersk also is a partner in that project. So if something will happen, yes, it's quite easy to track on which, in which port, on which place something happened, some goods missing. And Guardtime actually gave the insurance of that. So this is a pure insurance solution, and then they will just give the money. Okay, something happened, please, here you are. Everything is also connected with the supply chain in blockchain provided by IBM. So everyone can insure every step. Also a big thing which they introduced this year, it's MyPCR. They already signed the agreement with NHS in UK. This is the public healthcare in UK. And all the mobile data, so everything when you have the application of NHS, it's the public healthcare, so everyone can just download it if you are a UK citizen or just live there and pay taxes. And all your data from that app are stored in a blockchain. So I just put the information that 30 million people have access to that. It doesn't mean that they use it, of course, but it means that everyone who is using the mobile NHS app in UK actually is putting his data into a blockchain. And another amazing thing, this is Estonia Healthcare. So they build a solution for Estonia, and all the healthcare data of Estonian people are kept in a blockchain with a guard time. So guard time actually makes sure that it's secure. And if we are talking about Estonia, which is your neighbor, guys, and Estonia, it's a purely digital society. This is amazing what is happening in Estonia. I'm a huge fan. We cooperate closely with Estonia. We have the banking accounts over there. It's really cool what is happening over there, especially that you can do everything online. Okay, besides, as you, as you can see here, besides marrying, divorcing, and a notary, the rest you can actually do online. You can vote online, you can establish the company, you can also be a kind of a resident of Estonia. It doesn't mean that you are a citizen and you have to pay taxes, but it means that you can open the company, and a lot of people are doing that because in Estonia you have a very favorable tax system. So if you don't take the money out from your company, you just work with that money, you don't pay taxes. So to become an e-resident, I am an e-resident of Estonia, proud one, you have to pay €100 and you can apply online. So that's it. Okay, so we have 3 e-residents of Estonia. But this is, I truly recommend you to check e-Estonia and the e-residency system. You have a couple of movies which shows how it works. It works perfectly. It is kind of a centralized blockchain because of the security reasons. But if you are talking about the healthcare test, they start to put everything into a public blockchain. In Dubai, it already happened. So in Dubai, in healthcare, they started to put into public blockchain credit card data. So it is already happening. That's what I mentioned. I think that that's semi-centralized blockchain is just the first step, as we experience with intranet, and then we will move to internet, so fully decentralized solutions, which will be secured by that kind of a company as GuardTime, because everyone needs to secure the data, and also you need to have a particular permission, so you need to build a solution to give the permission. Another company which I really like, because the co-founder is from Poland, and I'm originally from Poland as well, It works amazingly in Africa, especially in Kenya. They are quite big also in Germany since now they are headquartered in Germany and main investor is from Germany. It's a Bitbond. I just put it here because I would like to tell you the biggest problem. So when they started in 2015, they put the information on the website, we do everything with cryptocurrency. So you apply for the loan, then what they do, they just buy crypto, then they have an exchange which just changed the crypto to the fiat money and sent to the customer account. And they thought that people will be really excited about having a loan and also in crypto. It's kind of a cool loan, right? But unfortunately not. So last year they just hide that information. Still, they work like that. So there is a crypto involved. They just buy cryptocurrency. If someone will take a loan, then they give the money to the bank account, but the customer doesn't even know that he got the loan using cryptocurrency. And they already work. They— so last week I checked, over 3,200 loans were granted. They have the volume in the last 3 years over $14 million. Now they got a huge financing from the German investor venture capital, so I believe they will go much bigger, especially that they already have the agreement signed and they are integrated with Jumia. And Jumia, this is eBay in Kenya. So this is a huge marketplace, a really recognizable brand in Africa. So now they have the access to the million of customers. And now let's come back to the healthcare for a second. So also a huge problem. And what is happening in healthcare, it's incredible because that industry needs a proper database. needs the database which will never be changed because we are talking about humans' lives. So I just put here the 8 my favorite examples, but probably I can, I can come up with the 10 others which already works because as mentioned on the beginning, those things are live. It's not a pilot. It's not that they just issued the token and seeking for, for financing. So for example, with Patientory or with DocEye and EncryptGen, you can simply download the app now and earn on your healthcare data. Because with EncryptGen, this is kind of a marketplace. You can also tell, okay, so this is my data, and researchers, companies, if you want to use my data for some statistic reasons, just pay me. And there is an instant payment in cryptocurrency. For example, in Patientory, it's It's Dash, as far as I remember. With DocEye, they have their own currency. But you can earn on your health data, you can share it, it works. Just download the app and just, guys, make the money sharing the information. Of course, there is a lot of different things which helps the world a little bit better than you making the money. For example, if you will upload your DNA tests, then you can match with other people and find the donor or become a donor as well. So this is something what can help globally to find the match for people who just need a match. I don't know, the kidney, whatever, blood, etc., etc. It already works. So just you have to register there. And what is happening now, those companies, they are looking for the mass adoption. So they need to have a customers and people start to feed the applications with the data, and then we will be talking about the working systems. But it's not only about helping people, it's not only about changing the world. Yeah, it's cool, but it's also about simply making money. And there is one industry which, which is obsessed with blockchain. It's a diamond industry and also the whole jewelry and art. But I just focus on the biggest player. It's Everledger. I'm pretty sure that if any one of you are interested in diamonds, heard about the guys. They are huge. They are on the market from forever. And now what are they doing? They just build it on blockchain. So they just build a database where they track the jeweler with diamonds. So you know from where is the diamond, how much it cost, what is the quality, what is the provenance. So everything already works. They have the partnerships working one with Rare Carat and Brilliant Earth. And if you, if I don't know, you want to give to your girlfriend the diamond ring, you can check it. You can check it thanks to the Everledger. Or if you gave it, you can check if you weren't, if someone didn't cheat you. Now they want to extend the database. So they are focusing on diamonds and jewelry, but they already signed the agreement with Spink. And Spink has partners in the mentioned countries with the groceries. So the next step for them is to actually do a similar thing which IBM did with Walmart, so to track the groceries. But the working solution, it's about diamonds, it's about jewelry, and the precious metals. Okay, so I can actually go and a lot of a lot of other examples I can give you, but in my head the most important to start the mass adoption are 2 things. First one, you have to have early adopters. So early adopters have to come to the space, start making transactions, then you can make your solution better and better, improve it, say okay, it's good enough. The second thing which have to happen, the big players have to come to the market. Because if the big players will come to the market, the small ones will follow, and then the customers will just start using that. For example, if Amazon tomorrow will enable payments in Bitcoin and it will be 10% cheaper, all of us will be, will be using crypto to pay for the goods on Amazon. And those are that kind of players which we need to make mass adoption happen. And I just showed you guys that it's already happening. So Alibaba and IBM Have the most blockchain patents in the world. And Alibaba, even though that Jack Ma always repeats that he doesn't understand exactly how blockchain works, but if it can make at least 10% of what people are saying that it's capable of, he wants to be in that industry. Yeah, of course everyone wants to be in that industry. Amazon Web Services also partnered with Qtum. It's about the smart contracts, so they just want to sign the agreements with with the developers, etc., for Amazon Web Services. Binance, if we are talking about the profit in the second quarter 2018, made a bigger profit than the whole Deutsche Bank. So crypto industry already is making bigger profit than the bank. And I'm talking about one crypto player. I'm not talking about Revolut, who already overcome the banks a couple of times, but Binance, the one crypto exchange. Bitmain will have the revenue of $10 billion compared to $4 billion last year. That's amazing growth. Bitmain, if you are not aware, this is a company which owns mining pools, and they already have 53% of the hash power. So, if we are talking about a 51% attack, they are able to do that. It's a difficult discussion. I can explain you later why they will not do that. Coinbase, 2 months ago, Eight billion dollars. This is the value of the Coinbase one exchange. Yeah, Goldman Sachs, one of the biggest banks, baked cycle cycle. So also the crypto exchange, which now is showing stablecoins connected with the fiat money. So guys, I'm not sure what do you want to convince you that it is happening. It's not only Bitcoin. The technology is already changing couple of industry. Definitely supply chain. Definitely healthcare, definitely jewelry industry. It's, and of course identity, identity which solves a lot of problems around the world. It's not only a fintech solution, it's not only about storage of the value. Of course Bitcoin still, as I mentioned, is the consumer face brand, so we know it the best, but other things are coming. Thank you so much. And now maybe we can talk. What do you think? Is it only Bitcoin or maybe something is cooking behind it?

Yo, testing, testing. Does it work? Yeah. We could take some questions from the audience if you guys have some for either one of us or for both. Just shoot it up.

Yeah, the problem I see with many blockchains and many currencies is that it is very hard for the end user if you have like multiple currencies and tokens and apps where you have to use. So

it's a problem with what?

It's very hard for normal like everyday user if you have multiple currencies and apps and you have to use.

Hey, so do you know that we already have multiple currencies? We have a euro, we have probably 50 different ones.

But there also, like, we have euro which is now in many countries, so it's much easier to pay in euro in other countries.

Okay, it's discussion because it's only European Union. If you are talking about Latin America, Africa, you have a different currency everywhere. So we don't want to live in a bubble. We in Europe live in a kind of a bubble. But you have the whole world over there. If you want to run a global business, just go out from EU. It's too small to make money.

My answer on that is that the world will finally have, in due time, it will have some smaller quantity of different kind of coins. These are all not going to last. People are going to want to use the best one. There's an open competition going on right now. People have been choosing to use Bitcoin for whatever reason, and yeah, let's see where it goes.

Actually, following up on his question, doesn't— if people fall in the same ways that they have multiple currencies and so on, that would mean that we get transaction costs at some point between the cryptocurrencies, if I'm, you know, listening into this. Because what you were showing is a perfect example. I really like this presentation. What you were showing also is a perfect example of a network that can create transaction cost between it, because we already live in a, in a network which we don't see see that well, but now we are starting to see the data behind the network. And I just wonder, do you think that this will happen because people tend to go in circles and build the same but just with different technology?

Yeah, well, I would say that different kind of companies would actually like to put some kind of extra fees on doing transactions or whatever because it's profitable for them. But in an open system like, for example, Bitcoin, I would hope that because it's controlled by people and made for people, it would actually, you know, just put fees that are actually necessary and they would have some kind of a real function, not just because that someone would like to make some profits. It's— if there is profits, it's going to be for miners, and those are going to be the minimum that we can I'm gonna just say one word to you, right back.

Linux was also free in the beginning. What is it now?

Oh, Linux is a— I love that, you know, the topic of Linux. Let's ask like this: how many of you guys use Linux day by day? By the raise of hands.

All the mobile phones.

Yeah. Unfortunately, all of you— I mean, it's not unfortunately, fortunately— you all use Linux, even if you know it or not. It's just a system that runs in the background and nobody even sees it. And that's really the power of the open source system. Nobody wants to go on and promote it, that, you know, you are using Linux, look at this logo, or whatever. You know, it's just a protocol that is free. made for people and it's open and it keeps quiet, you know, it doesn't need to promote itself.

So if I can answer your question in some kind of a psychological way. So you know why this is happening, why actually someone came up with blockchain? In my opinion, because we failed with protecting our data. We are angry on those banksters who charge us 10% of the transaction transaction to send money from Russia to China, and we have to wait 3 to 5 days to actually receive that money. So we just said, no, come on, it's, it's not true that it has to be like that. We want to change. And in my opinion, that's why it happened. So yes, we are coming back to the beginning somehow. And of course, again, the second thing is the human nature. We want to earn the money. Of course it will, it will be based on that. So a lot of companies who will come to the industry, we'll put a fee on that. And maybe end of the day we will also have to change this one because we will get to the same place as we are now. Of course it can happen, but this is the regular lifecycle of every product. Then we will come up with a different technology and probably it will be like that because I don't believe that everyone will just put their heart to the blockchain and say, I will not charge anyone because I want to have a free fair world and I want to have everything for free, it will not happen. But on the other hand, that the whole decentralization, it's amazing because we will open each other to the whole world. Now with the system which we have, it's not possible. It's simply not possible. Everyone has a different technology. It's really difficult to speak to each other. So that one will solve the issue. But of course, I truly believe that we will be paying fees, especially that it's so difficult to store your blockchain hardware that 90% of the people, they just give their cryptocurrency to the third parties to make sure that everything will be safe. So this is already happening, and those players like exchanges, wallets, they are like small banks. So we are building similar system, but it's a little bit better system than what we have now. We all want to make money, right?

Go ahead.

So what would be the best way to invest into this technology, or is it just to buy cryptocurrencies, or—

Well, I would say that the best investment that you can do in a cryptocurrency scene is actually to just use your time to read about it. Just go on through and read everything you can, you know, like learning the stuff, because the most important thing is the change that it could bring for us and the technology behind it. You know, it's not actually— it can— it might not be Bitcoin that will be the bigger, you know, game changer or something like that, but technology itself is the main thing. And right now, the best application that I know, for example, is Bitcoin. So sure, I would recommend you to go on and find out more about that.

All right.

I will not give you financial advice, of course, but you have to also remember that every cryptocurrency has a different reason, and Bitcoin was created by like a store of value, right? So it's just like digital gold. You just buy it and you wait till the price will go up, or maybe you will just play against the price and you will earn the money. But you have a bunch of other cryptocurrencies like Ethereum, and now we are talking about the smart contracts. So this is a whole different space which can help to run your business. If you have a company, you can just sign the contracts with your customers via Ethereum. So Bitcoin, it's a different cryptocurrency as a store of value, but other cryptocurrencies have different reasons. So it depends what you're looking for, and if you want to do something with blockchain in your company. You just can simply put a database, and blockchain is kind of an Excel or SQL, whatever it is, but it's just immutable, it's safe, and you can exchange the data with everyone. So it's not about investing in crypto, it's about the whole technology, right?

Can I just— I just wanted to correct something. You mentioned that Bitcoin was created as a store of value. I don't think that's accurate. I think it was created as a peer-to-peer electronic cash. And store of value is what it has become because the people chose that. But yeah, we had a question here.

It's kind of a continuation for a previous question, the where to invest. You showed company names and patent numbers on your slide over there. Could you return that one? I think that that's the place where to invest.

Yeah, and I would like to add that investing in cryptocurrencies or these companies or whatever, It really depends about your risk profile. I mean, if you're willing to lose it all and want to take a high-risk bet, yes, you might have some kind of a better percentual income gains on that particular project. If that's your case, I would like to recommend these small-cap coins, but I'm not really— personally, I'm not into it. I'm looking for an actual way to store my value, my money. And, you know, that's why I recommend Bitcoin as a store of value. I use it as a hedge in— well, actually, I'm just waiting for the fiat system to collapse.

So if you are talking about the volatility of Bitcoin and the risk which is behind that, so I actually now regret that I didn't put one slide to my presentation to show you other assets. So other assets, I mean oil, grain, stock exchange, European one, US one, and the gold. And if you will check the volatility on other assets, it's not so cool. So the average volatility on Bitcoin, it's around 95% on a daily basis, if you will take into consideration last couple of years. On gold, it's around 30%. On stock exchange, European one, it's 28%. US is more stable, so it's around 25%. So So still everything is volatile. If we are talking about the return of investment, also it will be similar. So return on investment, it's over 140% on Bitcoin. On other assets, it will be lower. So it's around 15-20% maximum in stock exchange and with gold. So if someone is interested, I have the table to show you the comparison with all other assets, just to show that all other assets actually They act in a similar way, so they are volatile, and especially in the beginning they were volatile. So this is the natural process of establishing the price, the volatility. It's normal. Yeah, and if you invest on a stock exchange, I'm pretty sure you will not call Bitcoin really volatile.

Yeah, the main volatility daily in Bitcoin since the beginning, I think it's around 3.5% or 4%. So, it depends. I mean, like, some days are better than others. Thank you very much.