Jun 14, 2021 • 11M

Ep 27. Bitcoin 2021: What I learned? (Part 2 of 2)

Freedom and prosperity. Not just profits.

 
1.0×
0:00
-11:16
Open in playerListen on);
Some say Crypto is a scam. Others swear it's a breakthrough technology. But which is it? Join us, as we explore Crypto in real life (IRL).
Episode details
Comments

This is a special edition of the 5x5 Crypto News focused on the Bitcoin 2021 conference.

Reflecting after Bitcoin 2021 Conference

Last weekend, I attended the Bitcoin 2021 conference in Miami. My goal was to learn and connect. I figured I could watch the presentations on YouTube on my own time but I could not recreate the networking opportunity. Therefore, I focused on walking around the exhibition hall and connecting with companies and people. I found myself chatting with NFT creators on the beach and hobnobbing with newbies and VCs alike in multi-million dollar gated communities. Here are a couple things I learned.

1. El Salvador adopts bitcoin

I was in the room when Jack Mallers took the stage. He wept as he discussed how bitcoin and the lightning network was bringing relief to people in El Salvador. For context, 20% of El Salvador’s GDP is from remittances. However, folks receiving funds pay up to 50% transaction fees because 70% of the population does not have access to banks. Strike and the Bitcoin lightning network enabled instant and free cross border payments. This meant families received more money to buy medicine, food, school fees and so on. This deeply resonated with me.  

The atmosphere was already charged when we watched a special message from President Bukele of El Salvador. He announced that the country would be adopting bitcoin as a legal tender. The room erupted in a standing ovation. Strangers hugged each other, high fives were exchanged and tears flowed freely. It was electric. I got to experience history! In some ways, it reminded me of the night President Obama was elected to his first term in office. It’s not the same but I will never forget how it felt to be in that room. 

I finally got it. While I may have entered into this space for investment purposes. I am learning and experiencing that bitcoin is also about freedom and making the world a better place. That is a vision that I can get behind. 

2. Bitcoin mining

Earlier this year, I jumped in and became a miner. The conversation about carbon emissions is not just an academic one, it has now become personal. I believe mining can become a force for good by subsidizing energy investments that might not have been economic otherwise. I have first hand experience with energy poverty. It is a terrible thing. This has informed my support of a multi-pronged approach to power development. Yes, I 100% support low-to-no carbon power sources like geothermal and solar. At the same time, I am not going to scorn natural gas.    

It was exciting to learn that Square is partnering with Blockstream to build a $5M solar powered bitcoin mining facility. At the same time, it was also exciting to connect with Upstream Data on their solutions to capture flared gas to power bitcoin mines. One of my contacts shared that these natural gas set-ups have a payback period of about 2 years. I also learned that some of these facilities use older bitcoin miners (S9s) because they handle irregular power supply better than the newer models. Upstream Data is working on integrating carbon credits into their solution. They are also developing modules suitable for offshore applications. These systems would need to be corrosion resistant and sturdy for that use case. 

Lastly, I met the ePic team. They produce machines to mine Siacoin. Sia works as an “Airbnb for hard drives”.  It is a cryptocurrency software that allows any computer running it to rent out unused hard drive space to users looking to store files. I have not done extensive research on Sia but I thought the use case was interesting. Additionally, the team shared that the estimated payback period for a Siacoin miner was 6 months based on $2k miner investment. ePic is struggling to keep up with demand for these miners. There’s currently a 3-6 month wait for machines. Learn more here.

3. NFTs

There is a lot more to NFTs than art and NBA Top Shot. I learned about virtual reality projects, gaming, movie production and other projects. NFTs are here to stay. They will be one of the most effective on-ramps for the next billion crypto users. The beautiful thing is that many of these users may not recognize that NFTs are crypto solutions. I really enjoyed connecting with NFT creators, investors and technologists. I have a lot to learn here but it has certainly gotten more of my attention. 

4. Privacy

I also learned about the Secret Network. As blockchain solutions continue to evolve into a myriad of applications, it would become increasingly important to protect user privacy. Data on a users transaction history could be paired with other data sets ex house address to produce unnecessary criminal exposure. The Secret network is the first public blockchain with privacy as a default. Learn more here

5. DeFi

Decentralized finance (DeFi) repeatedly came up in my conversations. For context, DeFi is focused on removing the middle man from transactions and enabling people to obtain financial services for lower costs, greater speeds and anytime (24/7/365). It is more closely associated with the Ethereum blockchain. However, DeFi applications are now being built on Bitcoin too. A number of crypto OGs encouraged me to dive deeper into both Bitcoin and Ethereum DeFi protocols. Their hypothesis is that DeFi is going to be the killer application of cryptocurrency. DeFi will also be a major on-ramp for the next billion users into the cryptosphere. I am taking their advice in digging in. 

Ray Youseff of Paxful “Africa is leading the global cryptocurrency adoption”

Closing thoughts

I learned much more than I highlighted here. I had a number of interesting conversations about payments, custody and much more. I would like to leave you with links to some of my favorite presentations from the conference. 

  1. Bitcoin for billions, not billionaires by Lynn Alden and Elizabeth Stark

  2. How Bitcoin can stimulate the green transition by Steve Lee and Aaron van Wirdum 

  3. Bringing innovation home to America by Senator Lummis and Rep Davidson

  4. How to onboard a billion people by Yan Pritzker, Bobby Lee and Ray Youseff

  5. Banking the unbanked by Jack Dorsey and Alex Gladstein

Let me know if you have any specific questions. I am always happy to engage.