It’s been slightly over a year since TM and I started working on CoinGecko. Many good things have come about since we got together in early 2014 to explore opportunities in the Bitcoin industry.
There have been many lessons learnt and many doors opened as a result of this venture. I will save that for another blog post but today I would like to make a quick update to say that our work in collecting cryptocurrency data have brought us to write a research journal with Professor David Lee and Guo Li of Singapore Management University and this journal has been published by Elsevier in a digital currency handbook.
At over 600 pages, this handbook is a big encyclopedia exploring the still nascent digital currency ecosystem.
Here’s my proud moment when I opened the DHL parcel a few days back.
If you are interested in buying this book, it’s retailing at USD150 with free worldwide shipping.
Thank you very much to all those who have supported me in this journey especially Prof. David Lee, Guo Li and TM Lee.
One of the things that I really enjoy about being in the cryptocurrency scene is how quickly the industry moves in terms of innovation. Almost every day, something fresh and new is launched. I have to admit that many of the new coin launches are scams and one has to be very careful with these.
However with every passing day, I start seeing how the industry attracts more professionals and successful entrepreneurs to bring this blockchain technology to the masses.
Ziftrcoin and Ziftr
When I first received an email from Chris Dunleavy of Ziftr for me to check out Ziftrcoin, I wasn’t expecting much. Being in the cryptocurrency scene, I am very skeptical to most new coin launches as the scam artists have become very elaborate lately and truly innovative coins are very few and far between.
The first thing that struck my attention to Ziftrcoin is how professional the website and whitepaper is. It certainly did not look like a one-man scam operation to me. Researching further, I soon found out that Bob Wilkins, the CEO of Ziftr is a very successful entrepreneur and Ziftr is the sixth company that he founded. Ziftr is a tool that helps shoppers find the best deals online. There is a 35-man team operating out of New Hampshire and the CVs of the Ziftr team looks very impressive as well.
Video Interview with Bob Wilkins
Having pique my interest on why a company would want to launch their own coin, I requested an interview with the CEO to learn more about Ziftrcoin. What transpired was a great conversation on cryptocurrencies and blockchain technology. I recorded this interview with the permission of Bob and here is the 30+ minute interview for your research.
Of course this being crypto, don’t believe everything that you read or watch. I am not trying to hype or endorse this coin but I thought of sharing the conversation that I had with Bob as it feels like I am one of the first people that Ziftr contacted. The concept looks interesting to me and the team is very professional. Do your research and analysis on whether this coin giveaway and concept will work.
Of course do read in detail the 21-page whitepaper of Ziftrcoin. This whitepaper is one of the better written whitepapers out there.
What do you think of this coin? I would love to hear your thoughts in the comments below.
UPDATED (19 Sept 2014): Interview with Stephen Morse on the Technical Details of Ziftrcoin
I followed up the earlier interview I had with Bob with an interview with Stephen Morse, a software engineer at Ziftr to find out more about the technical details of Ziftrcoin. In this interview, Stephen talked about Coin Age Destroyed followed by Sign to Mine, a new mining algorithm that will change how mining pools are structured. Sign to Mine essentially requires the miner who solves a block to be able to spend the reward for the block. This means that pool operators need to trust the people in their pool and this will hopefully solve the mining centralization problem that Bitcoin is facing.
For those of you who I had the opportunity to meet and talk in the past one year, you would have known that I have been completely obsessed over cryptocurrencies such as Bitcoin. If you do not know much about Bitcoin, you should learn about it here, here and here and also watch this video.
I first heard and bought my first Bitcoin in 2013 after the Cyprus financial crisis. Still fresh out of university with an Economics degree and actively teaching myself web development, I started taking Bitcoin seriously when Bitcoin-related articles started appearing more frequently on HackerNews, a news board for programmers.
Like many other people who first found out about Bitcoin, I was skeptical of the idea at first but decided to look deeper into the underlying technology to understand why other technologists are excited about this concept.
The following weeks saw me spending hundreds of hours devouring literature, videos and lessons on Bitcoin and its potential for the future. I have to admit the learning curve is quite steep but the investment in understanding this technology is definitely worth it.
Let me sum up some of the reasons why I am very bullish of the potential of cryptocurrencies in the coming decades.
1. Existing money transfer procedure is cumbersome
Bitcoin is a digital asset that cannot be counterfeited and can be transferred from one account to another account. There is no limit to the amount that can be transferred and almost zero transaction fee. Recipients can be anywhere in the world and can receive the money almost instantly anytime of the day.
A simple illustration of the potential of Bitcoin would be two guys halfway across the globe, say in Canada and South Africa transferring money to each other on a Sunday afternoon. Guy A has 10,000 BTC (roughly US$6 million at time of writing) in his Bitcoin mobile wallet. Using the Send functionality, he sent 10,000 BTC to Guy B’s Bitcoin address. Guy B received the roughly US$6 million almost instantly. Guy A paid about 0.0001BTC (roughly US$0.06) as transaction fee.
Can you see why Bitcoin is awesome? Here are few of the things not possible with traditional banking.
Not possible to send money halfway across the globe on a Sunday afternoon as banks are not open for business
Not possible to receive money almost instantly
Not possible to pay almost zero transaction fee
Not possible to transfer huge sums of money without much scrutiny
Transferring money across borders is costly and is a pain. Millions of low wage earners pay fat fees to Western Union to send their hard-earned cash to their families. Bitcoin has the potential to reduce these remittance fees.
2. There is demand for Bitcoin by people who do not trust the government
One of major subjects that I studied in university is the concept of bank runs. Because of fractional reserve banking, banks do not actually have all the deposits of savers in their vault. So if all the savers were to go to the bank at the same time to withdraw their money, the bank will definitely go bust.
To prevent such an outcome from ever happening, governments can increase trust by introducing deposit insurance where depositors below a certain threshold (say US$100,000) can rest well knowing that the government will act as an insurer for their deposits.
The Cyprus financial crisis set a huge precedent in the world because it showed the world that regardless of whether there is a deposit insurance scheme or not, the government can at the stroke of a pen decide that this deposit insurance will not apply fully. Even though the end result did not result in a haircut for depositors below €100,000, talks about a 6.75% haircut for small-time depositors is bad enough for this trust to be lost forever. Large depositors took a big hit with a 40% haircut.
There will be people in this world who does not completely trust the government because of all the financial risks present and will be looking for alternative ways to safeguard their assets from being seized. Bitcoin offers one such liquid cash-like alternative.
3. Lower fraud rates for payment processing
One of the features of Bitcoin is that transactions are non-reversible. This means that transactions only go one-way from sender to receiver. This feature is good because it allows merchants to reduce fraud. You may be very used to paying for goods and services online using credit cards and believe that this system works very well, right?
With the lower fees for payment processing, lower cost due to fraud and lower cost to invest in fraud-prevention technology, can you see how much money e-commerce merchants tend to save with the use of Bitcoin as a payment gateway? Low-cost retailers like Amazon and budget airlines would pass on these cost-savings to consumers through cheaper prices and this is a gain for consumers.
5. Cryptocurrencies make microtransactions possible
The smallest unit of account for Bitcoin is 1 satoshi (0.00000001 BTC). This means that technically I can send someone 1 satoshi to do something for me. Maybe this is too difficult to explain. Let me try to illustrate this example using US$0.01. Say I watched a video on YouTube and I really like the work of the producer. If I was on the street and watched the performance of some street performer, to show appreciation, I am able to tip some coins at the end of the show. However in the virtual world, it is impossible to do so.
Hello I'm Bobby. Great to see you here. I'm the co-founder of CoinGecko, a cryptocurrency ranking website. I also curate AltcoinWeekly, a weekly cryptocurrency newsletter and Fintech Street, a fintech newsletter.
On this blog, I share my thoughts about entrepreneurship, life and happiness. Connect with me via social media below or drop me an email anytime at email@example.com. I would love to hear from you.