Jeremy Gardner, Founder at Augur – The North American Bitcoin Conference 2017

Bitcoin did not start when Satoshi Nakamoto released the coin white paper, in fact it started over a decade before we tweekin day back to when Adam back and budget hashcash which introduced the concept of proof of work kind of like the original Bitcoin without a finite supply of coins and it was mostly used for email protocols took over a decade to get to a true cryptocurrency 2008 when Bitcoin was introduced but even then 2009-2010 the early days you know what I call adolescence Bitcoin was an inherently political act it was founded with this Genesis block having bad times of headline type of London headline Chancellor and brink a second bailout for banks this was an act that went against banks and one against government and at first Bitcoin wasn’t interesting and he didn’t have value now what gave the coin value can make a lot of different arguments could say it was a great technology or that it was more efficient than any money we’ve seen before that really didn’t lead to adoption this is what led to adoption black market it was Ross Ulbricht who created a kind of online drug Bazaar Global accessible that anyone could use that got people first using this technology not a bad thing but it took some time then you get the wild last year’s Charlie Shrem who’s here started the first major Bitcoin company called bitinstant he got funding Eric who I don’t believe this here started Satoshi dice another semi legal or illegal platform that allowed you to gamble online this gave rise to popularity of Nicolas you know the ability to buy Bitcoin maybe a handful of people several handfuls of people saw it as an incredible investment quality we’re just trying to buy drugs or gamble online not a bad thing but it took time to move forward with the adoption of this technology September 2013 very important month I discovered Bitcoin and this is when I kind of got catapulted into this industry Bickley with all that people were talking about we’re talking about anything else um then a couple months later before I got to meet Charlie she’s now one of my good friends he went to jail I remember walking home from school and seeing the guy who was on Bloomberg being led away in handcuffs and that was not the most remarkable image but it actually indicated a shift in thinking about this technology but first we had to get to Mount doc Mount Cox was and the end of the Wild West years of Bitcoin this was the largest exchange in the world doing over 85 percent of volume and in a matter of days it was realized that almost a half billion dollars worth of Bitcoin had vanished and from there and a lot of people that were interested in this technology began to recoil especially the banks there were many initiatives to move the technology forward but for the most part the big institutions were scared there’s actually presented an opportunity for venture capitalist however so you started to see a lot of VC investment beginning around 12:00 midday late 2014 you have executives such as place masters who was a top dog at JPMorgan enter the industry less scans and con artists are present especially at the conference if I remember baculum that you would go to a conference everyone was just trying to pump you their coin now a has a haven’t once or twice a conference which is a massive improvement let’s move to today generally speaking this technology has evolved at a pretty extraordinary rate it may not be like the adoption you see with Facebook or Google that’s because it’s kind of a protocol improvement to our lives not a front-end consumer facing improvement one that has these massive Network effects immediately the development is happening you’ve got investment from every major financial institution in the past couple of years you have the launch of aetherium which is significant because it adds a new feature set that doesn’t currently exist a Bitcoin some will argue that psy can exist in the future but truly robust smart contracts and decentralized applications are not possible to really build on Bitcoin I can say that because I tried Thunder the company called augur and that company we tried building it on Bitcoin and you can share a white paper for doing it and we thought it out really hard and then we tried doing it and it was really really really really tough pretty much applause and so etherium introduced a very novel concept the ability to build these contracts that exist outside the realm of our current paradigm for contracts and these we use for applications or actual legal agreements thus we start to see a massive spike in interest in this underlying tax blocking why is it because as many people began to see with Bitcoin when just looking at the token aspect was that this was a novel dimension this was pretty much game-changing in the world of finance whether picked up or not was another matter but the reason why it was novel was and I think most Bitcoin maximalist as they’re called would agree with this is that Bitcoin allowed you just like the Internet allows you to share value or share information with anyone in the world ah Bitcoin and is underlying innovation the blockchain allow you to transfer value to anybody anywhere in the world with an internet connection that is revolutionary and I say that because that can affect every single person with a phone today I mean you can send Bitcoin to anybody with the dumb phone that is novel and and this is where you start to see the peak of inflated expectations on the Gartner hype cycle now right up at the top right before you begin to realize that all these crazy ideas people have to the blockchain actually don’t work and that’s what kind of the people that kind of bash blockchain excitement over our seeing is a lot of these ideas won’t work but there are ideas that will so today we’ve gotten to the point where you have a huge amount of hype over blockchain technology and you as a result you have a rekindling in the interest of Bitcoin to tokus and virtually every major company in the world has a blockchain task force I’ve met with many of them they don’t really know how the technology may affect them but they know there are use cases that they need to explore companies in the 21st century are very aware of this kind of token term disruption and so they greatly want to avoid it if they can I want to go back to I say give this talk every year this is my third I’ll go back to my major prediction from 2016 don’t worry this year I have a lot more we may need your prediction lacks here let’s say entrenched incumbents will directly and indirectly fuel the next stage of development in this industry and people kind of scorned me and said no to me the startups we’re going to do it nice like you guys are going to do your thing and you may have these partnerships with these incumbents but if we want to move the technology forward the Vista ecology is going to move forward it needs to be embraced from above this is not the sort of underlying technology that can be implemented without some acknowledgement from major players and sure enough we’ve seen massive partnerships these are partnered with chain odd to create a business a business international payments platform you have hyper ledger which is one of the largest open source working groups in history getting all sorts of institutions together to figure out how to take this block chain technology make it work for enterprise and then just a few days ago was it digital so I’m not even a chart analysis the Depository Trust clearing committee I don’t know pretty much they do a lot of clearing of major settlements has partnered with many startups in IBM to use all credits that put all his credit default swaps on the blockchain this is NASA and it moved me to my prediction we will see in the next year blockading technology becoming real we are going to see proof of concepts that have existed within large corporations enterprises even in some government actually come to fruition this is going to be a catalyst for putting Bitcoin upwards because when the protocol shows value and now not all these proof of concepts exist on the Bitcoin protocol of course the biggest and other block chains when when the protocol becomes validated the underlying value of the token attached to the protocol goes up ah this is how you give security the watching by having a valuable token that in people are incentivized to validate fairly logical I and this is something that we’re going to see in the next year we are going to see the price push past 2000 dollars we saw what happened around new year and we’ll see it happen further probably I mean I’d like to say $3,000 but we’re going to see significant movement over the next year as this technology continues to be validated in the real world by large enterprises that people trust it’s going to be something that hedge funds look at that people are going to look at for IRAs for retirement there’s a lot of potential when people see this in the news all the time and they see it really working importantly you guys may not care about this but I just published the Orem about the published magazine called distributed 100 page magazine all about blockchain technology and we’re writing all these articles articles about every possible every fathomable application of blockchain technology and people have really been able to validate so far and yet we don’t know what to call anything is it a private blockchain it is a permission blockchain is it a hybrid block chain or the contortion block it like is it even a block team we actually had to make a decision tree at the very end of the magazine where you kind of just ask questions saying do you need a database and if the question is now low you don’t need a block game so all people don’t realize that yet and so I think over the next year there’s going to be a much greater our extensive understanding to how this technology actually works lastly governments have been looking at this ah we’ve seen the governments of Georgia across Latin America really that it actually Sweden the other day announced they’re going to do their land sale registry on the blockchain or at least and proof of concept we’re actually going to see the largest institutions in the world government starting to deploy this technology and that I believe is probably the ultimate validator and showing that even the largest most powerful institutions in the world see the potential to be disintermediated now in the short to medium term future in order for this technology to really flourish especially at the kind of let level that satoshi nakamoto the early adopters of this technology and vision you need consumer applications that are truly decentralized augur which I helped found was is a prediction market platform pretty much like a stock market then to the buying and selling shares and what you believe the future price of the company will be you buy and sell shares in what you believe that future outcome of an event will be so there’s a political election a sports match of the matter open Bazaar to decentralized marketplace allows you to buy anything form anyone without any sort of third party arbitrating that transaction this was first this is partly a trail blazed by a Silk Road and well I don’t think the creators would endorse that statement ah it is the next step forward and having a truly global and free marketplace now in the long term we’re going to see a lot of interesting development um private blockchains I don’t know if any of you guys are building them or believe in them but they’re probably going to die ah if you have a database that you need to have used only within your institution you probably don’t need a blocking blockchains have to do with trust and if there is trust as there should be within any single institution that you don’t need a blockchain so those are going to die consortium block chains you will probably still survive an enterprise long chains will still survive i imagine if we build this technology correctly we will actually see those contortion block chains being attached to public block chains such as the theory amor bitcoin whatever makes that work polka dot introduced by Gavin wood the technical of white paper creator of etherium just introduced this block chain and what it allows is for you to have both a public blockchain which is attached for the theory of network then also these consortium block chains as I spoke about so this is very cannibal it may take some time to get there I see these consortium and private blockchains very much being like the early internet where large corporations were kind of scared of the internet and so they won the thrones of training wheels for it that’s kind of how I see this technology then there’s going to be widespread consolidation you don’t need a Bitcoin exchange for every single country in the world in fact you don’t really want one if you were a Bitcoin user and you do not want to hold your own Bitcoin or cryptocurrency you probably want to be able to use whatever service used to buy and sell and hold your bitcoins crystal country wherever you are so I think we’re going to see consolidation we’ll see the month of the payment processors see among API providers you know if you look at the technology landscape of the day so the 90s were littered with Internet companies and many of them flourished early on but today we have some Goliath I mean who really does their online shopping outside of Amazon I don’t know not me I pretty much get everything there and that’s kind of how I see this technology evolving the long term but there’s gonna be plenty of time the short term for many of these companies to flourish and figure out kind of who the real market leaders are we’re going to be a big sale some of these smaller guys will be bought by banks or large institutions that’s good thing I’m a venture capitalist I like that then what we’re going to see as I explained before is that assuming these protocols are employed or employed such as a third area and bitcoins networks they’ll inherit they’re inherently undervalued now because they have to secure such a large amount of value in the future their inherent value has to go up so I have very long bets on these sorts of tokens don’t date rate then there’s decentralization mind reduces industry three years ago people were shouting decentralize all the things and I was like what really needs to be decentralized money was good so the governance is fine I think mesh networks are awesome but for the most part the use cases people were talking about Lee could be centralized Twitter’s like my Twitter already sucks it’s not going to be better if you decentralize it it says social networks might work and I think things like social networks such as reddit or Facebook we’re going to truly have decentralized versions of those it’s going to be part of this broader evolution where where these protocols evolve in such a way that they’re truly accessible and usable and furthermore I think these decentralized applications are going to need tokens this goes event again against what I’ve said in the past but I’ve really kind of had my mentality change because if you want there to be an incentive for these decentralized applications to really work there has to be underlying value incentivizing that Union Square Ventures came up with this chart that I really loved this is the Internet today you’ve got the protocol layer um you have HTTP you have HTML all those things all those multi letter kind of configurations that make the internet work not very valuable people that invented them are not very rich well some of them are but that wasn’t from creating the protocol I don’t know if Justin Newton’s here from net key but he was an early architect of the internet and nobody made a lot of money building that it was the applications that were built on top so pets comm or Amazon those are what created value in the 21st century and the eras of blockchain the paradigm is shifted hopefully what we’ve kind of discussed before will help you reach the same conclusion that I have but that is actually the protocol in the industry paradigm that is valuable because the protocol is what gives the applications value I mean just think of the underlying infrastructure that the web didn’t work we don’t really be using it and this has created an incentivization layer in blockchain technology then Abel’s applications to work totally globally but maybe not actually be the main sources of value in the network that’s okay we’re just kind of shifting the paradigm but those applications can still exist because as long as you create a token that underlies your application you actually can capture a massive amount of value and you have less of misalignment of incentives as well because if people creating them applications are also managing the protocols so they have a very game theoretical incentive to make those applications and the protocols work really well whereas as we’ve seen kind of with the free internet war that occurred ah what happened was a lot of large internet providers in the United States was that the incentives between the protocol and the applications were misaligned so I think this is actually a better paradigm but of course only time is going to tell now lastly the biggest battle here has been one philosophy technology has been acknowledged and accepted as something that works I mean the DTCC doing all the credit default swaps like I think like 11 trillion dollars of value on to the blockchain is that that’s validation we know that this technology is here to stay but where it goes and how long it will take for the apply to each of our lives he’s not a few years I think I rome wasn’t built in a day and neither will any really complicated back-end technology such as blockchain since that coin and crypto currency now if you’re willing to exact today and not wait for to become a part of your life there’s a massive amounts of opportunity I mean you guys are all here so that’s the first step some of you are building fabulous companies but acknowledging that this paradigm takes time to be realized is incredibly important for actually achieving the value that we spoke about before now this is something that it took living in Silicon Valley for me to believe but it’s 100% true the future is open source open source enables technology to be more secure more robust and allows people to collaborate more if you look in the field of artificial intelligence so much of what’s being created in that space is open source in this because it’s for the greater good of everyone even for the corporations competing against each other that’s going to be true in the world of blockchain it may not be acknowledged yet but as we move towards open source we are going to live in a more robust internet connected world and then lastly as I just went over and probably most importantly if you guys are here to make money I don’t know if you all are I’m not much of a capitalist by being a VC the tokens are going to be what gives a massive amount of value in the next stage of the internet the blockchain state thank you I’ll take two questions if anybody wants one one it’s the only truly secure and robust blockchain is a publicly verifiable and in secured one one that’s secured by a token and until governments are okay creating globally of validating crypto currencies by random miners in China that’s really not going to happen so yeah I don’t I don’t see government government towards that when I entered this industry when the market capitalization was much lower I mean there was there was a real threat and when there was a lot less miners the hash rays it’s through the roof now the amount of money would take to kind of destroy Bitcoin or etherium would be really remarkable but III think government’s are seeing this more as a compatible technology with their kind of current state of existence right than trying to create a real competition one more I think it’s much higher yes how many bitcoins have been lost in the system because if you lose your private key to bitcoins and in your loo only one copy that’s gone I say oh I I’m much more bullish on this I’d say up to maybe a quarter of all bitcoins be not are will never be accessed again and that is something that people have not accounted for in the price and I think as we begin to recognize that if there’s a huge drive for demand this Bitcoin hits let’s say ten thousand dollars they’re just not going to be that much to go around and that could catalyze price moving even further my friend David Bailey the CEO of BTC media thinks we’re gonna hit $50,000 this year I wouldn’t be so bullish however I think $50,000 bitcoins in the next decade totally tenable just saying thanks so much you

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