The power of Bitcoin
Every week I get together with a brilliant mind shaping the near future to understand where our world is headed.
This week, I speak with Meltem Demirors, Chief Strategy Officer at CoinShares, a digital asset investment firm that manages $4B in assets on behalf of a global client base. We explore the potential and politics of cryptocurrencies: from the ideological origins of Bitcoin to the new wave of decentralized financial products that could disrupt traditional finance.
Below is an excerpt from our conversation. Listen to the full episode here.
Azeem Azhar: One of my friends who has just been getting into this field said to me, I've just realized Bitcoin has holders and Ethereum has users. Is that a fair characterisation?
Meltem Demirors: "I disagree! And here's why… I'll preface this by saying I'm not in the Bitcoin or Ethereum camp. I'm in the Bitcoin and Ethereum camp. We work in both at CoinShares.
But I think one of the most pervasive myths is that Bitcoin is not innovative, and that smart contracts and other types of programmable functionality are not possible on top of Bitcoin. They are!
For example, there's an innovation called Stacks. They created a smart contracting language called Clarity that allows you to build and deploy smart contracts with Bitcoin.
That's a ‘Layer 2’ on top of Bitcoin.
So these things do exist. It's just where you implement them: do you implement them at layer zero - in the original base code - or do you implement them as extensions of the original protocol?
Another myth around Bitcoin is that it's limited to seven transactions per second. We hear this all the time. I don't know where that number came from, but it’s dated.
There is now an innovation called the Lightning Network. I was one of the first investors in the company building the open source code for it. It’s a payment network built on top of Bitcoin that facilitates multiple millions of transactions per second at very, very low cost. So that's another example of using a ‘layer two’ to extend Bitcoin further.
The way I think about it is that Bitcoin is layer zero. Bitcoin has some really unique characteristics that make it extremely well suited to being the base layer and sort of the core layer of truth for all other chains.
It’s true that Bitcoin prioritizes consistency and Ethereum prioritizes is flexibility and experimentation. But the idea that Bitcoin is not innovative is simply not true."
Co-Founder WineWarp Founding Partner at Crypfinitiy.tech
3 年I am in a number of "camps" - To provide a little history, myself and some others started to experiment on coins back in 1998. We are now creating banking interfaces with banks in most countries, although we have a strong trading/futures focus with autonomous bots and crypto mining, the next level is to get crypto adopted as a general payment utility...