Peter Diamandis event in Vancouver (X Prize, Singularity University)

Peter Diamandis talk for EO Vancouver (April 14, 2014)

Earlier this week I was invited to a talk by Peter Diamandis at the Vancouver Aquarium (thanks for the invite Praveen). I read a lot about Peter and his activities over the years but I had never attended one of his talks, so I was very excited to see him in real life.

In case you don’t know Peter Diamandis, he is a well-known serial entrepreneur who among others co-founded companies like the X Prize Foundation and Singularity University. He is both an engineer (MIT) and a physician (Harvard) who thrives on disruptive technologies that can change the world and outer space. And he is a great speaker!

The event was extremely inspiring to me and was probably among the best presentations that I have ever seen because of the topics he discussed. It’s one of those talks where I could imagine that one might end up quitting his/her job right after the presentation – at least when you happen to work for a large company in a job where you are not doing anything that could potentially change the world. I am lucky that in my daily business life I am able to make a difference in at least some of the investments that we do, but not nearly as much as Peter is doing.

In his talk Peter discussed 3 topics, Exponential Technologies, Incentive Competitions and Abundance. I will try not to go into too much detail, but just write down some of his statements and examples, and combine those with my own thoughts.

Exponential Technologies

The world’s biggest problems are the world’s biggest opportunities. Humans are linear thinkers but technology is exponential (=doubling year over year), which leads to disruptive stress and opportunities: 10 years from now 40% of the Forbes 500 companies will likely no longer exist!

As a VC I see new ideas every day and I see the world changing around me, but most people are so focused on their daily lives that they totally miss what’s happening out there. Especially large companies underestimate the rate of change in technology, they think that they can keep up with their R&D, but that’s a big mistake.

A good example is the digital camera. The first digital camera was developed in 1976. Between 1976 and 2014 the resolution of a digital camera increased 1000 times, the camera has become 1000 times lighter and the device is 1000 times cheaper. That means that current cameras are 1 billion times better than the first ones developed. But the exponential growth does not stop here of course, technology keeps on improving so in a few years from now resolution, size and price will be many times better than they are today. Fascinating!

The same thing you see with sensors, they are so cheap and small nowadays compared to just a few years ago, that they can be used for things that nobody thought of before. Artificial intelligence and robotics are other examples where you see exponential growth. My kids may never need to get a driver’s license because by then all cars will drive themselves. Is that boring? No, not only does it save you a lot of time (it’s like having a private driver, something I sometimes miss from China), but autonomous cars can race as well as you can see in this YouTube clip.

Artificial intelligence develops so fast that supercomputers like Watson can now easily win game shows like Jeopardy from human beings. Last month at SXSW Watson was given 35,000 cooking recipes and information about 1000 chemical flavor compounds. Based on this it created amazing recipes, for example with unusual combinations of chocolate, coffee and garlic. A normal chef would likely never try these, meaning that Watson is in a way more creative already than expert human beings. And this is just the beginning!

Peter gave 5 critical insights that he discusses with multinationals that are spot on in my opinion:
- The rate of innovation is exploding
- Innovation comes from everywhere
- If you don’t disrupt yourself, someone else will
- Competition is no longer a multinational overseas
- If you depend on innovation inside your company you are dead

So where do you source your innovation? Well, for example through incentive competitions!

Incentive Competitions

I am not sure if Peter is the inventor of incentive competitions, but for sure he is the one who made the concept big with the X Prize Foundation. It basically means that you define a challenge and give a huge prize for the person who can first solve the problem. The first and probably most well-known example is the Ansari X Prize for the first team that would be able to send a 3 person crew to space (=at least 100 km altitude) twice within 2 weeks. The winner would get $10 million. The result: 26 teams participated and together spent more than $100 million, and within 8 years a team won the prize. In total there were 10 billion media impressions worth more than $120 million because of the competition!

X Prize

It turns out that giving a huge incentive can solve a lot more challenges that otherwise may be neglected, and that’s what Peter is working on with the X Prize Foundation. He focuses on big problems, for example putting people on the moon (the Google Lunar X Prize, $30 million dollar prize)or finding better ways to clean up oil spills (the Wendy Schmidt Oil Cleanup X Challenge, the winner improved the technology by a factor 6!).

Other examples of prizes that have been launched or will soon be launched are for example a prize to increase global literacy, a competition to make carbon dioxide from waste into an asset, one to predict earthquakes, and a prize to cure Alzheimer’s.

It’s amazing to hear him talk about these grand challenges. Big companies are not interested or not smart enough to solve these problems, but incentive competitions might do the job. They tap into the world’s smartest people and cost a fraction of what it would cost corporations to try to do this.

Incentive competitions can be used for both local and global problems, and for that reason Peter helped to co-found another company, HeroX. This business calls itself the world’s problem solving platform and already has quite a number of interesting ideas and challenges on it. It’s as simple as defining a goal, fund the challenge (through name sponsors for example) and others might solve the problem. I love the idea!

Abundance

The third and final theme that Peter talked about was Abundance: the future is better than you think. This is also the title of a book that he wrote (and that I bought but did not read yet), in which he argues that the progress that we make in exponential technologies will allow us to make greater gains in the next 20 years than in the past 200 years. Every basic need of all human beings on this planet can soon be met and we will live in a world of abundance.

Abundance - The Future is Better Than You Think - Peter Diamandis & Steven Kotler

I tend to be a bit more pessimistic about whether we can achieve this, but according to Peter that is likely because of the negative tone in the media. He says that media are drug pushers: we are fed massive amounts of negative news, because that’s what people pay more attention to. The ratio of negative to good news is 10:1 according to him.

I feel we are on a downward slope in the way we rob our planet from its natural resources and hope it’s not too late to make changes. But Peter is very optimistic and is sure that technology will solve all problems.

Energy? The sun provides 5000 times as much energy as we need, we just need to find a way to tap into it. Not enough water? We are close to new technologies that can make salt water or even highly polluted into drinking water for just 1 cent per liter. Three billion people will come online in the next 10 years and because of the Internet we will able to tap into their collective minds to find solutions for the world’s problems.

I for sure hope he is right, and given his achievements he may very well be. It’s quite something what he has done in his life so far and he keeps on working on new things. Like I said at the beginning of this post, I am very inspired by him and I hope to learn more from him at a Singularity University program later this year.

Bitcoin price predictions

Government banning BTC picture

(Picture source: Reddit)

This is not investment advice, but just my personal opinion!

After China made it even harder for Bitcoin exchanges to do business the price dropped significantly today. Lots of people who don’t follow Bitcoin on a daily basis are probably afraid that this is the beginning of the end, but I completely disagree with that. This blog post gives some background on what I see happening in the market right now and where I think Bitcoin prices will go.

The past couple of days I was in New York City for the Bitcoin conference there (see here for coverage on Coindesk, day 1, day 2). It was a very different conference from the ones that I attended in Las Vegas (Dec. 2013) and Miami (Jan. 2014), because the audience were mainly people from the financial world and lawyers.

Bitcoin is growing up quickly and not everybody likes that. The Bitcoin pioneers love the cryptocurrency because they do not like the financial system and want a (semi-) anonymous currency. However, the recent months have shown that the financial system is slowly getting interested in Bitcoin and governments are starting to regulate it. That is something the early adaptors are not too happy with, but which is probably unstoppable.

New York Bitcoin Conference (April 2014)

A few pioneers who were at the conference were clearly not amused with what was said on stage in most of the panels and keynotes, and in a way I felt a bit sad for them. They truly believe in freedom without regulations, and they had not expected that Bitcoin would develop in the direction of a regulated asset. At least they probably got rich from the coins they mined or bought when prices were still at much lower levels.

I think regulations are a good thing if Bitcoin wants to become a global currency or a new asset class. At the Miami conference I already mentioned on stage that I think regulations are necessary in order to make Bitcoin big. Without it venture capitalists will be hesitant to invest in it and the financial institutions won’t touch it. I therefore think it’s positive that there is some more clarity on how Bitcoin will be treated and taxed by financial authorities. The downside is of course that people will need to pay taxes on their Bitcoin (capital gains tax), at least in the US.

Now that initial regulations are in place I think a new era of Bitcoin has started. The past 4 months have seen a gradual decline in Bitcoin prices, mainly due to the potential ban of Bitcoin in China, but also due to the non-stop flow of negative news about Bitcoin. A lot of the early entrepreneurs turned out to be frauds, crooks or criminals, and even some of the newer ones seem to be doing the same thing (unfortunately the CEO of the Cyprus Bitcoin bank NEO BEE seems to be the next example).

Most of the decline in price is due to the fact that speculators left the market and that the Chinese BTC holders are selling their coins. People see the news, don’t fully understand it, get scared and decide to sell their holdings. Typical behavior in a market crash.

Bitcoin has shown that it is quite resilient. After the Mt. Gox disaster many people predicted the price would go back to mid-2013 levels ($100), but that did not happen. Each time the price dropped others started buying. That happened for a while at the $400 support level, but that was broken today. Nobody knows what will happen over the next days (especially China news can give BTC another dip), but because there is a lot of smart money waiting to buy in I think it might be back above $400 sooner rather than later.

The short term is not so interesting, however. Where it gets interesting is what will happen to prices once Wall Street gets on board. After the New York conference it’s not a question anymore of whether it will happen but only of when it will happen. It seems almost inevitable to me.

Panel at the NY Bitcoin Conference 2014

And what does that mean for the long term price of Bitcoin? In my opinion it’s simple: the only way is up! It’s Economics 101, supply and demand. There are currently only 12.5 million BTC on the market, which gives BTC a market cap of around $5 billion. That is nothing, it’s about the same as the value of Youku Tudou right now. But if you compare how much the media and analysts write about Youku Tudou and how much they write about Bitcoin it is clear there is a huge discrepancy there!

Out of these 12.5 million BTC maximum 1 million coins are in the float (meaning that they are not stored in cold storage wallets by investors, but that they can be traded). If Wall Street gets in these firms will not invest just a million dollars in the currency. They may start off relatively small with maybe $20-50 million in BTC for the early firms. But what will happen if a few firms would do that?

It’s simple, if supply is more or less fixed and demand goes up, the price has to go up. I learned that an order of 1000 BTC (less than $400,000) can already move the Bitcoin price up by $10. What will happen if people try to buy 10,000 or 100,000 BTC? The price will have to go up. The float is too small and in order to convince others to sell BTC the price has to go up even further.

The exact same thing happened when China entered the Bitcoin game in October and November this year: the price went up 10 times from $120 in early October to $1200 in early December because of increased demand. In my opinion this will happen again, but then the price won’t stop at $1200.

When will this be? That’s anybody’s guess, but I would not be suprised if we will see the start of it this year already. What’s needed is a trigger, until then the price might remain quite flat. It looks like Bloomberg might add Bitcoin data to its terminals in the near future, which could be the first trigger for the financial world. Once prices start increasing they may quickly go up 5-10 times again, just like a few months ago. A price of $3000-4000 at the end of this year is therefore not unlikely if instruments to invest in BTC become available (they are not there yet).

At a cocktail party at the SecondMarket office in New York City

At a cocktail party at SecondMarket’s headquarters in NYC

At the conference predictions were made about the long term fair value of Bitcoin and insiders like the Barry Silbert (CEO of SecondMarket) think that the price may go to $500,000 or even $1 million per coin if BTC becomes a new asset class. These figures are mind boggling right now, but because BTC is so scarce and truly unique it may indeed happen one day (within the next 10 years according to some well known people in the Bitcoin space). I personally don’t see that happen yet, but because of limited supply and potentially huge demand it is theoretically possible.

For me buying BTC is almost comparable to buying a call option right now: there is limited downside (you can lose your investment, but not more than that), but the potential upside is virtually unlimited. And Bitcoin has an advantage over a normall call option in that there is no expiration date!

Despite the lower prices and all the problems Bitcoin faced over the past months I remain extremely bullish on the cryptocurency. The New York conference convinced me even more of the fact that more regulation will be a very positive thing and could lead to a price explosion.

Rockefeller CenterRockefeller Center, NYC

There are still risks that Bitcoin could be ‘banned’, but the more regulators and governments learn about Bitcoin the smaller that chance is. There is also a chance that other altcoins could take over, but because of the network effect I don’t really see that happening either. A fatal flaw in the Bitcoin protocol is still possible of course, but it’s more and more unlikely and the community has shown that they can solve these problems if they occur.

We live in interesting times and I will keep following Bitcoin news closely over the next couple of months!

Lost iPad

I lost my iPad mini

The Find My iPhone app

When we were staying in the Legoland Hotel 2 weeks ago I could not find my iPad mini. I looked everywhere for it, but it seemed I had lost it somehow. I knew I had used it the night before in our hotel close to Disneyland, but I was quite sure that I had not left it in the room. I used to travel so much that I have a standard routine of checking my hotel rooms before checking out and I normally don’t forget anything.

Luckily I had the Find My iPhone app installed on my laptop, so I ran it to see where my iPad was. Turns out it was still in the Hyatt Regency next to Disneyland. I had not idea how I could have missed it and I questioned Scott whether he had hidden it somewhere. He had done that once with my iPhone: I thought I lost it in Whistler but he had hidden it in his playroom and had totally forgotten about it.

I remembered using the iPad before going to sleep the night before. I normally read the New York Times from the next day (that’s the advantage of living in the Pacific Coast time zone) and that’s what I did there as well. But I could not remember what I had done with it after that.

Hyatt Regency, Garden Grove, CA

Hyatt Regency Orange County

I called the Hyatt Regency to check whether they had found the iPad, but they said the cleaning staff had not seen it and there was no iPad at lost and found either. I normally tip the cleaners well (also when leaving the hotel), so I hoped that they would hand in an iPad that they would find.

With the Find My iPhone app you can play an alarm on the iPad, but because it was quite late already I decided not to do that. New guests had checked into our suite already and I did not want to wake them up or scare them late at night.

The next morning we called hotel security again and they sent someone to the room. There were no guests present in the room, but the security person did not want to enter. He listened at the door while we played a sound on the iPad, but he said he did not hear anything. My app, however, showed that the iPad was still in the hotel and very likely still in our room (the app is quite accurate with the location).

I decided to forget about it, but when the kids were in bed at night I started to play the sound again remotely. From about 8 pm to 10 pm I played the iPad alarm every 15 minutes, but nobody seemed to hear the device. I put a text on the iPad screen as well, offering a $100 reward to the person who would find it (in case the cleaners had found it and had hidden it this may be an incentive to hand it in).

The next day we drove to Palm Springs. I could see on my iPhone that my iPad’s battery was draining quickly, it was below 10% during the drive and less than 5% after we arrived in Palm Springs. I had sort of given up on the iPad and wanted to remotely wipe all data and apps from the device before it would be completely empty. But right before I did that I decided to let the alarm sound one more time.

Three minutes later my wife’s phone range and guess what: someone had heard the sound and found the iPad! A woman from Florida had checked into our former room and heard a sound coming from the room safe. Turns out that the iPad had ended up against the back wall of the safe, and I had not seen it while emptying it. The safe had been closed the day before, so security could not hear the sound.

My iPad mini was found!

My iPad was found!!!

I was very happy, especially because I had almost given up on the device. I offered the finder the $100 reward, but she said she was not interested in that and was just happy that I had my iPad back.

By sheer luck my parents had just landed in Los Angeles and would drive by close to Disneyland the day after, so I gave them a quick call. They did not mind to make a short detour and picked up the iPad for me the next day.

When I installed Find My iPhone a while ago I didn’t really think the app would be very useful, nor that I would ever need it. But it turned out to be the most ‘valuable’ app that I have, because without it I would have lost my iPad.

I was thinking about changing my iPhone and iPads to Android devices because of Apple’s rejection of all Bitcoin wallets (I hate Apple because of this and think they made a huge mistake), but after this experience I have become a bit more reluctant to change. Does Android have apps like this? I assume they do, but do they work as well as Apple’s own app? I have tried to switch to Android several times already over the past years (and some of these attempts are recorded on this blog), but so far I always went back to Apple.

Interestingly, after losing my iPad mini and finding it back I started using it more frequently. When you don’t have something you suddenly realize the value of it. I mainly used it for the New York Times and occasionally for Twitter, Facebook or to try out a new game. But now I also put NextIssue on there (Netflix for magazines) and I synced my Spotify playlists with it. Last night I was on a flight from Vancouver to New York and spent half the flight reading magazines on my iPad while listening to Spotify!

If you have iOS devices and don’t have Find My iPhone installed, do it right away. It’s free and it just works!

Spring Break in California

Laguna Beach, CA

Laguna Beach, CA

Last year we stayed home during Spring Break, but this year we decided to take the kids to a warmer destination. We decided on California, because it’s in the same time zone as Vancouver and the flights are relatively short.

Disneyland California

Scott’s favorite part of the park was Cars Land

We flew to Los Angeles where we started our holiday with a visit to Disneyland California. The kids had been to Disneyland Hong Kong a few times, but this was their first time to the park in Anaheim. Disneyland California is quite similar to HK, but the kids loved it anyway. We bought tickets for both Disneyland and the California Adventure park next door, and we visited both parks.

I personally like the California Adventure better than Disneyland. I had been there a few years ago with my sister during a road trip in California, and since then the park had grown a bit and now also includes Cars Land (from Scott’s favorite Disney movie Cars & Cars 2).

Disneyland California

Scott and Elaine with Mater

What surprised me is how many obese persons there were in the park. Not just overweight, but really obese, in the sense that many of them needed an electric scooter to get around the park. So many people were using these things that it almost became normal to ride on one. Good for them I guess, but it’s kind of shocking to me. This kind of obesity is still a typical American thing (mainly thanks to the food and sedentary lifestyles), but I see a trend towards it in Europe and in China (especially with spoiled kids in one-child families) as well.

Because we booked quite late we could not get decent rooms in the Disney Resort anymore, but the Hyatt Regency where we stayed turned out to be a good alternative. Most people stay there for Disneyland, and the suite we booked had a bunk bed for the kids in their bedroom. They loved it, but it was a bit hard to get them to sleep the first night. The kids also loved the outdoor pool, so even after a full day in the resort they still insisted to go for a swim with me.

Legoland Hotel (Carlsbad, CA)

Legoland California Hotel, Carlsbad CA

After Disneyland we drove along the coast on Highway 1 to Carlsbad for a visit to Legoland. There we stayed in the Legoland Hotel, which was a big hit with the kids. Not only was every room full of great Lego models, but there were Lego bricks to play with in the room and the kids had their own TV next to their bunk bed. Our room had a medieval castle theme, and the decoration was very well done. We had a room next to the pool, so the first thing Scott wanted to do upon arrival was to swim. If you plan to go to Legoland with kids you should consider to stay in the hotel, it’s next to the park’s entrance and your kids will be very happy.

Legoland California

Entrance of Legoland California

Legoland itself is very different from Disneyland. It’s a great park for young kids, but for parents it’s less interesting. Everything feels a bit less well maintained, especially after just spending time at Disney where everything is perfect. The attractions are not as good, but the park entrance fees are also a lot lower than Disney. For young kids it doesn’t matter, however, and Scott and Elaine had a great time.

Legoland California

With Scott in one of the Legoland rides

After the 2 parks we drove to Palm Springs where we stayed in a villa with a nice pool. Palm Springs is one of those places that you either love or hate. 10 years ago I probably would not even think of going there, but right now I love it. The climate is great, 350 days of sunshine and it’s always warm (except maybe at night during the winter months). While we were there temperatures averaged about 28 Celsius during daytime, which I find very pleasant.

Downtown Palm Springs

Palm Springs, CA

My parents also joined us in Palm Springs and it was nice to have them around. The main thing we did during the few days there was relax at the pool, play with the kids and have dinners in good restaurants. Palm Springs and Palm Desert have some very good restaurants, actually better than the restaurant scene in Vancouver (which is already not too bad). When the kids were in bed my dad an I often had a nice bottle of wine at the outdoor fire place in the back garden.

After a 22 km run in Palm Springs

After running with my dad

We compensated the food and wine with some running. I found a nice 11 km route around the airport where there were hardly any traffic lights or side streets. My dad an I ran it a few times and one morning even ran the loop twice. Because Palm Springs is almost completely flat running was quite easy there, very different from the hilly courses that I normally run back home in Vancouver.

Grace went shopping a few times with my mom. There is a great designer outlet close to Palm Springs and El Paseo in Palm Desert can compete with Rodeo Drive in Beverly Hills. Lots of high end brands of course, but also a lot of nice galleries. We didn’t buy any art this time because Scott and Elaine are not big fans of galleries, but maybe we’ll do so in the future. The cars on El Paseo are great as well, there were more Rolls Royce and Bentley Convertibles there than I had ever seen before in one day!

Working in the shade @ Palm Springs

My temporary office in Palm Springs

I also did a bit of work, and created my own office in the shade in a corner of the backyard. From there I had a good view of the pool where the kids were normally playing, but they would not interrupt me too often.

Malibu, CA

Malibu Beach at sunset

We flew back home again from Los Angeles and spent the last night there. In the late afternoon we walked around Marina del Rey and Venice Beach and later had dinner in Malibu, which has some nice restaurants and obviously great ocean views. It was a nice end of a great holiday!

More pictures of our holiday here in a set on Flickr: https://www.flickr.com/photos/chijs/sets/72157643198799293/

OKCoin Raises $10 Million to Become China’s Largest Exchange

Bitcoin is far from dead in China and that was proven by the fact the Bitcoin exchange OKCoin just announced that they raised $10 million in a Series A round. I wrote an article on Coindesk about this, that I copy/paste below. The original article is here.

OKCoin, the exchange claiming to be China’s largest by trading volume, has announced a $10m Series A funding round.

The investment round was led by Ceyuan, one of China’s earliest venture capital firms, followed by Mandra CapitalVenturesLab and numerous high-profile angel investors.

Despite the nation’s recent crackdown on cryptocurrencies, it seems Chinese venture capitalists are still bullish on bitcoin exchanges and the currency itself.

Bitcoin in China

Back in November 2013, the focus of the bitcoin community was on China – the world’s hub for bitcoin trading. At that time, BTC China was the biggest exchange in the world, having managed to raise a $5m Series A funding round from Lightspeed Venture Partners (Snapchat, Nest). There were even rumours that a bigger round was in the works for the young company.

However, things change quickly. After the Chinese government began regulating bitcoin in December, trade volume plummeted and the world’s top exchange was no longer Chinese.

Local exchanges came up with creative solutions for customers to continue to buy and sell bitcoin, and players like Huobi and OKCoin claimed to pass BTC China in their daily trade volume, although these figures have been the subject of much dispute.

OKCoin has grown rapidly over the past few weeks and is now the biggest Chinese exchange, according to its CEO Star Xu. He claims the exchange’s current daily trade volume is approximately 50,000 bitcoins per day.

Interestingly, on top of that, the exchange allegedly trades 5 million litecoins per day. The company claims that at its peak it reached over 300,000 bitcoin and 13 million litecoin trades.

Future growth

Mr Feng Bo, founder and partner at Ceyuan, commented that he has a tremendous amount of confidence in the future of bitcoin and the continued growth of OKCoin:

“We are delighted to invest in the pioneer of China’s bitcoin exchanges; given the company’s leadership under Star Xu and his team, we know there is much more good news ahead.”

Ceyuan is a well-known fund with investments in successful Chinese companies like Qihoo 360 (NASDAQ: QIHU), Light in the Box (NASDAQ: LITB), UC Web andVANCL – among others.

Interestingly, Silicon Valley investor Tim Draper was involved in the round, as a partner of VenturesLab. He and his son Adam remain active in bitcoin-related investments, mainly via Adam’s Boost.vc incubator where Tim is a mentor. Tim also invested in OKCoin’s angel round.

OKCoin overseas

The investment in OKCoin will be used to expand the team, fund product research and development, further security enhancements, but also to expand OKCoin’s operations beyond China.

This a different strategy from the other Chinese exchanges and it may prove to be a smart move, given the current regulations in the state.

Mark Mai, VentureLab’s China partner, stated that as the regulatory environment in regions such as Singaporethe US and Hong Kong becomes clearer, it will open up opportunities for OKCoin to operate in geographies where it can offer maximized safety and protection for OKCoin clients.

Mai said that the growth of virtual currency is inevitable, and that many countries are coming to terms with the fact that they have to regulate these currencies, because their citizens are using them regardless.

He added that OKCoin welcomes oversight because he believes it will help the company to serve its customers better, allowing them to open up regulated bank and trading accounts so it can engage in third-party clearance and settlement.

All eyes will be on OKCoin’s global expansion in these uncertain times. Will the exchange make it as a large player outside China? Only time will tell.

 

Auroracoin: Innovative experiment or innovative scam?

Auroracoin logo

A new cryptocurrency was created in February, the Auroracoin. It is comparable to Bitcoin (actually it’s based on Litecoin, but that would be too technical for this blog post) and on March 25 every citizen of Iceland will get 31.8 Auroracoins. For free. Just by using their ID number.

That in itself is an interesting experiment, because what will happen when everybody gets a small amount of a crypto currency? Will people start using it and create a second economy or will it not take off? When I first heard about it last month I did not really believe it would work but I still followed the coin a bit.

When Auroracoin was launched the value was very small, so 31 coins did not have a lot of value. But then something unexpected happened: people outside Iceland started to buy the currency before it was even distributed to the citizens of Iceland and the price shot up. Last Friday it was worth about $7 I think, so the total value of the 31 coins would be about $220. At that amount of money it would be likely that most people would claim their coins and maybe start using them.

Auroracoin market cap

But what happened over the weekend is unbelievable. The coin’s price exploded, and from $7 on Friday it is now worth over $66 per coin! (Update: while writing this post the price went up to $80 per coin!!!) That means that each person in Iceland will suddenly get over $2000 at the current market value. What might happen now, is that most people will sell the coins the moment they receive them and so the price will plummet. And of course traditional media will pick up the story saying that a Bitcoin experiment showed that people do not want to use Bitcoin.

Or something else might happen: maybe, just maybe, the hackers who created Auroracoin are just some very smart guys who created a hype to get rich quickly. The total value of the coins that they created last month is now worth over $700 million. Today over $17 million was traded, so they have a huge incentive to just forget about the whole experiment and slowly start selling their coins. They could earn a few million dollars per day over the next 22 days (until the coin should be launched on March 25). Not bad for a few weeks of work.

I am not saying that this will happen, but after the Mt. Gox disaster last week nothing surprises me anymore. It turns out that the name of the person that created the coin does not exist in reality. That does not mean that this is a scam, because Satoshi Nakamoto, Bitcoin’s creator is also a pseudonym. Coincidentally Sathoshi holds about 1 million Bitcoins which as today’s market prices is alos worth about $700 million!

Let’s just say there is a big incentive for the creators not to distribute the coins and make themselves rich beyond belief. If they decided to do so, probably nobody would even be able to sue them. The perfect financial crime!

We will find out on March 25 whether the so-called Iceland airdrop will really take place. I personally think it will happen (I still believe that most people are intrinsically good), but I would not be surprised if the whole idea turns out to be a big scam.

Youku Tudou is profitable!

Youku Tudou is profitable!

Today Youku Tudou released its Q4 2013 results and the online video site is now officially profitable! It’s almost 10 years ago since I entered this sector, at that time I had not expected that it would take so long to reach this milestone. Although I have not been involved in the company for quite some time it’s still a nice feeling to see that the company is doing so well.

I dialed in on the earnings call a few hours ago and was impressed with how the company is doing and with their expectations and plans for 2014. The share price immediately reacted, during regular hours it went up by 3% and after the results were published by another 8.5%. Let’s see what will happen when Wall Street opens on Friday!

Youku Tudou share price Feb. 27, 2014

I am quite happy with this and from the pictures on Weibo I can see that the people at Youku Tudou are also celebrating this result in their office.

Youku Tudou is profitable!

Current.ly, the best way to quickly consume trending news topics

Current.ly

What’s the best way to quickly see what people on the Internet talk about right now? You can go to Twitter and scroll through your timeline to get an idea of what’s important, but your results depend very much on who you follow. It also takes time before you can distinguish between what’s important and what not. Twitter’s trending topics may be a better way to find out what’s going on, but there is a lot of noise there and some topics are covered multiple times.

Today a new app was launched in the app store, Current.ly, that solves this problem. I have been beta testing it for a couple of months already and I must admit that I love it. The app gives you a quick overview of what’s trending on Twitter right now, and you can even choose the country that you want to see the trending topics for.

The user interface is very well designed, so you can swipe from topic to topic and get all the information you want in just a few minutes. If you want to dig deeper into the topic you can do that with one click, if not you just go to the next topic. A great app for anybody suffering from information overload.

Current.ly was created by the team behind PeerReach, a company that I invested in about 2 years ago. Zlatan Menkovic and Nico Schoonderwoerd did a great job with this app, and I am proud of what the team managed to achieve with their limited resources. Congrats on reaching this milestone guys!

Give Current.ly a try, it may replace the way you consume some of your news. I am of course a bit biased (but I would never promote something I don’t like or don’t believe in!), but of the many news apps that I downloaded, this is one of the very few that I now use on a daily basis. You can either go the Current.ly website or you can download it from the Apple app store here.

Snow!

Snow on the beach (Feb. 23, 2014)

It’s Monday lunchtime and it has been snowing non-stop in Vancouver since Saturday morning. Even at our house (which is close to the sea) there is a lot of snow and it looks great. Downside is that it’s hard to drive in this kind of weather, we don’t have a heated driveway so last night I could not even drive our family car up to the garage anymore.

Snowshoeing with Alfred at Mt. Hollyburn

Alfred, a long time friend from Holland, is visiting for a couple of days, so we decided to grab the opportunity and do some snow sports over the weekend. On Saturday we drove up to Hollyburn Mountain where we went snowshoeing. It was snowing hard it was not too cold, so perfect weather to enjoy the trails through the woods.

Snowshoeing on a black trail at Mt. Hollyburn

So far I had only done green and blue snowshoe trails, but this time we also tried some black ones. Because of the fresh snow they were not hard at all, just a bit steep at some places. The scenery was amazing with huge amounts of snow on the trees, and when you stopped it was completely silent. We were surprised that we hardly met anyone else on the trails, despite it being a Saturday afternoon. After the snowshoeing we had a glass of wine in my rooftop terrace hot tub, while it was snowing hard. We ended the evening at The Boathouse in Horseshoe Bay for excellent sea food dinner with local a Pinot Blanc.

Dinner at The Boathouse with Alfred

On Sunday Scott had his weekly ski lesson on Cypress Mountain, so Alfred and I decided to go skiing as well. The snow was fantastic with a huge amount of fresh powder. Finally some of the black diamond slopes were open, so we tried some of them. Pretty cool to be skiing through the trees with your skis invisible under a thick layer of snow.

Alfred and me on Cypress Mountain (Feb. 23, 2014)

When Scott finished his lesson he also wanted to ski through the trees, so we took him on an easy trail. He loved it, despite his basic skills (he only had 7 lessons of 2 hours each so far) he was not afraid at all and had a great time. After that he was so tired, however, that he fell asleep in the car on the way back!

Skiing on a trail through the trees with Scott

The snow was supposed to stop overnight, but this morning it was still snowing hard. According to the weather report it should have stopped snowing by late morning, so I decided to stay home until lunch time in order to avoid the snow and the traffic jams. But instead of less snow it started to snow even harder…

Sunday afternoon walk over the golf course

We kept the kids home from school today: the school sent us a text message at 6:30 AM that classes would start an hour later, and then our kids’ teachers advised us by email that the roads up the mountain were in very bad condition so that we should consider to keep the kids at home. That was turned out to be a good idea, because the heavy snow caused a power failure and parents had to pick up their kids before lunchtime already!

Driving was quite a challenge, especially because I did not put winter tires on my car and because the roads in our area were not cleaned or sprayed with salt. I like snow a lot, but I don’t mind if it would stop snowing soon. It looks great but when you live in a city with lots of hills it can disrupt life quite a bit. One thing is for sure, next year I am going to get winter tires for my car!

Why do Google and KLM give different arrival times?

Google says KL 681 will arrive at 1:41 PM, but KLM says 2:23 PM...

This afternoon I will pick up a friend from the airport, so at breakfast I checked Google to see what time the plane will arrive. Scott, who was eating his oatmeal next to me, wanted to see where the plane was at that moment, so I showed him the location of the plane on the KLM website. However, then I noticed that there was a difference in arrival time of more than 40 minutes between KLM and Google.

Google says KL 681 will arrive at 1:41 PM, but KLM says 2:23 PM...

I assumed it was just a glitch that would be gone after refreshing the page or by just waiting 10 minutes, but that was not the case. It’s now about 5 hours later and both sites still show a different arrival time. Who should I believe? If Google is right I need to leave 40 minutes earlier than planned, but if KLM is right and I leave early I have to wait 40 minutes at the airport.

I normally use Google for arrival information and so far they have always been right, but because this is a KLM flight I would assume KLM’s information is more accurate. I wonder where they get their data from, I guess there should only be one feed for this information (the plane’s on-board computer)?

Update:  KLM’s information was right and Google was wrong, the flight landed at 2:22 PM. Good to know for the future. I still don’t understand why they give different arrival times though. Even after the plane had landed Google still showed 1:41 PM, and for tomorrow’s flight it now shows 1:49 PM, even though the flight has not even departed yet.

The management of Mt. Gox created a money machine for themselves!

Mt. Gox seems to be in a dead spiral. The management is not only incapable of running the company but also of communicating effectively with its consumers. Today’s announcement that they have nothing to announce forced the Bitcoin price on the exchange down even further. People seem to be losing all trust in Mt. Gox, despite the fact that this is not the first time the exchange screwed up big time and each time they managed to come back.

Personally I think Mt. Gox still has a 60% chance to survive so if I would still have fiat money in the exchange I would say ‘buy, buy, buy’! I know some people who are trying to buy at these prices, but this is no investment advice to my readers. There is a big risk that you will lose all your money or that at least it will be tied up for a long time to come, so stay away if you have no extreme risk tolerance and don’t understand Bitcoin well.

BTC at Mt. Gox 5 times cheaper than Bitstamp

But why is the management handling this so badly? Are they just plain stupid? Maybe, or maybe not. They might actually be geniuses, because they created a risk free money machine for themselves. Does nobody see this? The management can now buy BTC at $112 and sell it at the same moment for 5 times that amount on other exchanges. And they can do this continuously, this is an amazing opportunity for them and I would be surprised if they don’t take advantage of it.

It’s speculation, but today’s announcement only creates a larger opportunity for them. It made the price drop even further and they have more time to continue their trades. Wouldn’t it be possible that Mt. Gox lost a lot of money with the transaction malleability and is now using this to earn this money back?

The volume on the exchange seems to be about 70,000 BTC (source: bitcoincharts.com), which means that theoretically they can earn about $30 million per day risk free (assuming rates won’t change too much). Keeping their customers in the dark for a few more days could be extremely lucrative for them and might actually save the company if they would put the money back in.

Like I said, this is pure speculation, but these guys are entrepreneurs and if an entrepreneur sees an opportunity…

Olympic cheers

I’m a global citizen, so over the years I have cheered for many countries during international sports events. I am generally not a huge fan of watching sports (I prefer to do sports myself), but it’s always fun to watch a Dutch soccer game with friends (and a lot of beer) during the World Cup.

But I’ve also watched China play with Chinese flags painted on my face, for example when I was in Seoul for the soccer World Cup in 2002. So far I have not cheered for Canada yet, but that may come soon when watching the Olympic (ice) hockey semi-finals on Friday!

The day before the Sochi Olympics opening ceremony, Scott and Elaine were allowed to were civvies (as opposed to their daily uniform) to school, in the colors of their home country. When I read that they had to choose their country I was looking forward to which country they would choose.

The kids are both Dutch, in the sense that they have a Dutch passport, speak Dutch, watch some Dutch TV programs and go to Holland about once a year. But they never lived there, so I was not sure if they would choose Holland.

The more obvious choice would be China, where they were both born and raised until they moved to Vancouver about a year ago. They are both fluent in Chinese, they still love Chinese food (we mainly ate Chinese food in Shanghai) and they have a lot of Chinese friends in Vancouver as well.

So when they had to make the choice they both said… Canada! Frankly, at first I was a bit surprised. But when I thought about it a bit more it’s actually quite logical. They have only been here a year, but for them it probably seems like their whole life. They don’t really remember their life in China anymore and all their friends are now here. They probably don’t realize that they have a Dutch passport and they also never see me wearing orange for sports events. They now sing the Canadian national anthem in school every week and learn everything about Canada, so it’s logical they feel Canadian.

Thinking about it, I am happy that they made this choice, because it shows they are developing roots here. Over the years I have seen too many expat kids who lived all over the world and don’t know where they belong anymore. At least Scott and Elaine will likely feel completely Canadian when they get older. And I will cheer for Canada with them this weekend if “we” make it to the hockey finals!

What doesn’t kill you makes you stronger

The negative news about Bitcoin does not seem to stop. Central Banks keep on warning for the crypto currency, but that does not really have an influence on the market anymore. The Charlie Shrem arrest had a chilling effect on the community, but was not directly related to Bitcoin. The problems at Mt. Gox because of the transaction malleability caused another round of negative articles in mainstream media that do not understand the real issue (“Bitcoin has a fatal flaw”).

Next came the ban of Bitcoin in Russia, which was unexpected for many Bitcoin fanatics. After that news came that many more exchanges would be affected by the transaction malleability bug and a lot of them closed temporarily. Shortly after that there was a DDoS attack on the Bitcoin network that slowed things down considerably. And when the whole BTC community thought everything was finally settling down a bit, news broke that Silk Road 2.0 was hacked and 4400 coins were stolen out (or maybe the operators stole the coins?).

If Bitcoin had been a business it would have been bankrupt by now. But interestingly Bitcoin went down about 25% over the past week, but not more than that. A year ago this news would have led to a major crash, like the one in April where Bitcoin lost 70% of its value in one single day. To me this is a very good sign, Bitcoin has become a lot more mature and not everybody starts panic selling anymore even when there is such a long string of negative news.

What doesn’t kill you it makes you stronger, and that’s the case with Bitcoin as well. It will take more time to gain acceptance among the general population, but it’s certainly not the end of Bitcoin. The currency has once again proven that it can solve its own problems and most exchanges have adjusted their code for the transaction malleability bug.

Although I don’t like to speculate about the Bitcoin price too much, I think the value will go up again fast once more positive news comes out. It may take a few weeks or months, but I personally believe that unless something huge happens this might be the last time you can buy BTC below $600.

Bitcoin in the middle of a transformation?

When you’re interested in Bitcoin and follow its daily news you won’t be bored. Not a day goes by without a Central Bank warning of the potential dangers of the cryptocurrency, but the market hardly reacts to that anymore. It is to be expected that that the institutions that may be replaced by Bitcoin will try to slow that process down.

Same thing for banks, some are punishing customers or trying to stop them from buying Bitcoin (this happened to me). Most don’t want Bitcoin-related businesses as clients, for reasons that are not always entirely clear. Sometimes I think something bigger is at play here to stop Bitcoin. But it does not really worry me because if you understand the Bitcoin protocol you will realize Bitcoin can’t be stopped because of its decentralized nature.

What does worry me more though, are the recent scandals in Bitcoin land. For example, Bitcoin Foundation founding member Charlie Shrem who was arrested and charged with money laundering, while on his way to the Miami Bitcoin Conference. Charlie is only 24 years old and that may have led to business decisions that he would not have made had he been a bit more experienced.

He also publicly made remarks like “I won’t hire you unless I drink with you or smoke weed with you”. I don’t have a problem with someone saying that if he runs a small start-up, but the problem is that Charlie also represents the Bitcoin Foundation. This foundation protects and promotes the use of Bitcoin, and therefore all negative news about Charlie reflects negative on Bitcoin itself. Luckily Charlie saw that himself as well and he resigned within a day of his arrest.

Another, more worrying, scandal is that of Bitcoin exchange Mt. Gox. This used to be the biggest Bitcoin exchange in the world until a few months ago and its price has been the reference price for Bitcoin until very recently. It turns out that its software had a flaw which made it possible for people to double spend their Bitcoins by changing the transaction ID. This is obviously a big problem for Mt. Gox and makes Bitcoin look even more dangerous to the average person.

But what’s even worse is that Mt. Gox tried to blame the Bitcoin protocol for this. It’s true that Bitcoin has an issue (transaction malleability) that has been known for several years, but that can easily be overcome if you program your wallet software correctly. The core developers of Bitcoin are aware of it and will eventually work on it, but it’s not a high priority for them.

However, Mt. Gox is now spinning the story to make Bitcoin look bad and trying to hide that it’s actually the company’s own fault. Can you blame a company for that? Yes, especially when your CEO is a board member of the Bitcoin Foundation! Mark Karpeles, the CEO of Mt. Gox, is a founding member of the Bitcoin Foundation and still serves on its board. One of the Bitcoin Foundation’s core tasks is to make sure no inaccurate reporting about Bitcoin occurs and what Mark did today is therefore unacceptable. In my opinion the Bitcoin Foundation should remove Mark from its board right away.

Actually, both scandals may be a blessing in disguise. Young guys like Charlie and Mark are great to start a movement and to evangelize it in the early stages. But Bitcoin is now close to a breakthrough into the mainstream world and then you’ll need different people to run the show. If the Bitcoin Foundation is smart (and I think it is) they will replace them with more experienced people with credibility in both the Biticoin community and the business world or government.

I think Bitcoin is in the middle of a transformation. The organization was started by libertarians with great ideas, but who can’t change the world without the help of people from the establishment. Many of the early Bitcoin people are young and idealistic, which is exactly what you need to get something new off the ground. But just as with a business, the people who started it may not always be the best people to lead it in the growth phase.

And that’s what’s happening now with Bitcoin. You can’t build a new global financial economy on systems that can’t scale. Mt. Gox was not built to handle the huge traffic it was getting and therefore will not survive. As Andreas Antonopoulos put it a few days ago “Mt. Gox has built an exchange based on a hodgepodge of technologies that are really not suitable for running an exchange. And it’s being run by people who don’t really have experience building and operating scalable systems”. New, more professional and well-funded companies like Coinbase and Circle will take over the space, making it ready for primetime.

In the Bitcoin Foundation people like Charlie and Mark need to be replaced by more experienced professionals. If that won’t happen I think the Bitcoin Foundation may not survive itself, which may be a serious but not life-threatening problem for Bitcoin.

I believe in the Bitcoin and the Bitcoin protocol and I’m sure they will survive this transformation and come out of this a lot stronger.  I will hold on to my Bitcoins and may even buy a few more at today’s low prices. Never a boring day in Bitcoin land!

Weekend in Whistler

Whistler valley

Whistler Village, taken from Blackcomb Mountain

This weekend is a holiday weekend in British Columbia (Family Day weekend), and we decided to spend it in Whistler. It’s only a 75 minute drive from our house to Whistler when I follow the speed limit (or less than an hour if I hit the gas a bit more), but I find it just too far to drive up and down to go skiing. So we normally ski on Cypress Mountain in West Vancouver, which is just 20 minutes away and where we have a season ski pass. But although I like Cypress a lot, it is relatively small compared to Whistler (Cypress has 53 ski runs, Whistler over 200) and I also like to stay overnight in a ski resort instead of going home after skiing.

Reading at night in our hotel room (Hilton Whistler)

We rented a suite at the Hilton in Whistler, which was a good choice. The location of the Hilton is great, in the middle of the village at the end of the ski slopes and next to the main ski lifts. The room itself was quite good (generally I’m not a big fan of Hilton Hotels in North America), with an open fireplace (with wood, not gas) in the living room and even a steam bath in one of the bathrooms. The views from the balconies were nice, but it was too cold to sit outside and enjoy it. We had a great experience and I would not hesitate to stay at this hotel again in the future.

Peak 2 Peak (Whistler to Blackcomb)

Peak 2 Peak express

As a ski area Whistler is excellent, there are a lot of runs and they are very well maintained, especially compared to the ski resorts in Europe. You can ski at the lower level on runs through the forest, or you can go up to the top where it’s alpine wonderland with fantastic views. Whistler combines 2 ski areas, that of Whistler and that of Blackcomb Mountain. They are connected by the Peak 2 Peak, a 4 km gondola ride between the 2 mountains (with over distance 3 km between 2 towers, which we were told was a world record). Despite the unusually warm and dry winter this year all runs were open and the snow quality was pretty good.

Skiing into Whistler village with Scott

Scott skiing down into Whistler Village

Scott has been taking ski lessons for a couple of weeks already (once a week for 2 hours per time) and I decided to go skiing with him. That worked out quite well, kids learn to ski so quickly. He has no fear whatsoever and just goes straight down slopes without worrying about dangers or about whether he will be able to stop. I tried to teach him to make curves, but he likes speed so much that he did not really listen. He did not fall once during the 2 days, but of course he was exhausted at the end of both days. I look forward to a lot more skiing with him in the future!

Relaxing in the pool with the kids at -11 Celsius

Next to skiing we had a very relaxed time. I took the kids swimming in the open air pool at the Hilton, which was quite an experience because it was -11 Celsius outside. Whistler has some high end restaurants with top chefs and excellent wine lists, so we checked out some of those. And Grace went shopping with her sister (who was visiting us), which is also something that you can do well in Whistler. There are also a lot of art galleries, with some of the same painters that we came across in galleries on Maui during our trip a couple of months ago.

Skiing with Scott in Whistler

Because the Sochi Olympics started this weekend there was a real Olympic atmosphere in Whistler (exactly 4 years ago the Olympics were held in Vancouver and Whistler), and so we watched quite a lot of sports as well. I normally hardly ever watch TV (I find it a waste of time), but I enjoyed watching the opening ceremony and some of the skating and snowboarding events. The kids also liked it and preferred it over their usual kids series on Netflix.

Top of Whistler Mountain

It’s great to have a resort like Whistler so close to our home. It’s almost too close to stay overnight, but it’s a different experience when you stay in the village instead of taking a car back, so I am glad we turned the ski trip into a mini-break. I’ll probably be back once or twice this season for skiing, and also in summer I plan to spend more time in Whistler’s mountains (trail running & mountain biking).

 

Happy Year of The Horse

XPCP_HappyChineseNewYear

Happy New Year from all of us at CrossPacific Capital (XPCP).

This is the Chinese New Year card that we sent to many of our business relations and portfolio companies today, with the theme “Old Money, New Money”. Long live Bitcoin!

Vancouver sunset

Running around the Stanley Park seawall at sunset (Jan. 20, 2014)

Yesterday after work I did a 14 km run before driving home, among others along the seawall around Stanley Park. The sun set while I was running and because I had my iPhone with me during my run (as usual) I took some pictures. Vancouver is such a beautiful city!

Running around the Stanley Park seawall at sunset (Jan. 20, 2014)

View to West Vancouver from Stanley Park

Running around the Stanley Park seawall at sunset (Jan. 20, 2014)

View to downtown Vancouver (Coal Harbour)

Running around the Stanley Park seawall at sunset (Jan. 20, 2014)

North side of Stanley Park

New York Times: Why Bitcoin Matters

Bitcoin Wallpaper (2560x1600)

Today the New York Times had a very good article by Marc Andreessen (a former very well-known Internet entrepreneur and now well-respected VC) about why Bitcoin is so important and how it will change the world.

You can read it for yourself here: http://dealbook.nytimes.com/2014/01/21/why-bitcoin-matters/. But if you don’t want to read the long article I will summarize the main points in this post. They are a good reference when I talk to people about why I believe so much in Bitcoin and why I think 2014 will be the Year of the Bitcoin. Of course I will also add a few personal comments.

Similarities to growth of PC and Internet
Marc starts his article with a couple of paragraphs in which he compares the rise of Bitcoin with the start of the personal computer in the 1970s and the start of the Internet in the early 1990s. At first people didn’t understand it, then they start to embrace it and don’t understand why they did not see the powerful promise earlier. Exactly the same as what’s happening with Bitcoin now!

Trust
Bitcoin is a breakthrough in computer science in that it can create trust between untrusted parties over an untrusted network (the Internet). This means that any digital property can be transfered securely, including digital money.

Easy of use
Bitcoin is not easy to use, right now you still need quite some knowledge in order to set up an account to buy Bitcoin or a wallet. But the ease of use is rapidly increasing with new tools and apps. I think that before the end of 2014 most people can set up a wallet on their phone without help of others (incl. putting money on it!).

Volatility
Volatility is often mentioned as a problem for merchants, but it’s not really an issue. Reality is that merchants can accept Bitcoin without actually holding it, but the press does not understand that (yet).

Why would merchants use it?
Why would merchants use it? Simple, if the margin on electronics is about 5% and you pay 2-2.5% in fees to the credit card company, you can double your profit by using Bitcoin. You can also easily accept international payments (for example from customers without a credit card) and there are no chargebacks possible, which eleminates credit card fraud. Apparently 5-10% of all transactions are not accepted because of credit card risk, with Bitcoin you could accept these people as customers.

Anonymous or not?
Bitcoin is pseudonymous not anonymous. It’s a hype that Bitcoin is being used a lot for drugs and weapons because nobody can find out who is buying something or what you are buying. Law enforcement can much more easily trace bitocin than cash or gold.

Classic network effect
Bitcoins is a great example of a classic network effect: the more people use it, the more valuable it is for everyone who uses it (just like a telephone for example). Therefore it will be hard for another crypto currency to replace Bitcoin: this currency would need to have sizable improvements and it needs to happen quickly.

Here I disagree with Marc Andreessen, because I believe a lot of currencies will eventually exist next to each other. It’s not “either/or” but “and/and”. My expectation is that we will eventually have thousands of currencies that can all be exchanged easily into Bitcoin or into other virtual currencies. I’ll probably do a blog post on this as well, it’s something that will change the Bitcoin landscape.

Remittance fees
Every year workers send US$ 400 billion in remittances to family in their home countries, out of which companies like Western Union take 10% or more in transaction fees. Bitcoin will reduce these fees to virtually zero, meaning Bitcoin will raise the quality of life for these families.

Bypass banking system
Bitcoin is a powerful catalyst to bring large numbers of people around the world into the modern economic system. Many countries don’t have well-functioning banking systems yet or people don’t have bank accounts at all (even in the US!). Bitcoin can help people to bypass the banking system and do transactions without the need for a trusted central party like a bank or credit card company.

Micropayments
Micropayments are so far not very cost effective, but Bitcoin allows you to pay fractions of pennies. This could change the way content will be delivered: you don’t need a subscription to a site but can pay a very small amount to read an article on it. This means ads will be less important, or you can decide to pay for an ad free site. For example, I don’t mind paying YouTube a small amount per video if I don’t need to click away their ads. Also spam may disappear if sending an email would cost a fraction of a penny. I believe micropayments will disrupt the Internet in ways that we can’t foresee yet.

For me this article was another sign that Bitcoin is here to stay and that it is slowly becoming more mainstream. I am happy that the emphasis is going away from the price of Bitcoin to what you can do with the platform and the currency.

China is still buying all the Bitcoins

China is still buying all the Bitcoins

Yesterday I looked at Fiatleak.com to see where most Bitcoin activity was happening in the world, and to my surprise most coins were flowing to Chinese exchanges. I thought that could not be right, because Chinese financial institutions and 3rd party payment providers are not allowed to facilitate Bitcoin transactions anymore, so it’s much harder to buy Bitcoins if you are in China.

I assumed it would be a temporary thing and that if I would let fiatleak run longer the percentages would change. But that did not happen, over the past 36 hours 85% of all Bitcoins worldwide were traded in China! The percentage only takes the major exchanges into account, so private trades may make the figure look a bit different, but there is no denying that China is still the biggest source of Bitcoin liquidity.

Interesting is that traditional media do not seem to notice this yet. The recent increase in the Bitcoin price was attributed to Zynga (the game company will start some tests for Bitcoin payments) and Overstock, but I don’t believe that most Chinese users are aware of this.

I can’t explain what’s happening in China, however. I know that over the past weeks most Chinese exchanges found ways to work around the ban. Some, like OKCoin and Huobi, use direct deposits into their corporate bank account as a way to circumvent the existing regulations. Others, like leading exchange BTC China, use a voucher system where users with cash in their account can sell that cash through a voucher to new users that want to buy Bitcoins.

But it’s hard to believe that despite these hurdles to buy Bitcoin, Chinese are still buying the majority of all Bitcoins. What is happening here? Who is buying? I don’t understand it.

New CrossPacific Capital office in downtown Vancouver

View from our new office in Vancouver - still a bit foggy in downtown Vancouver

CrossPacific Capital (XPCP) moved to a bigger office last week. Because I was still on holiday today is my first time in our new office. The place looks great and the views are amazing – when it’s not foggy like earlier this morning when I arrived.

View from our new office in Vancouver - it's foggy early in the morning

It was a bit foggy when I arrived in the office

My office has big windows to the West (overlooking downtown Vancouver & Canada Place) and the North (Vancouver harbour & the mountains on the North Shore), which will make working a lot harder if the weather is nice.

View from our new office in Vancouver

The fog disappeared within 15 minutes

Next to the many freight trains that don’t seem to be moving at all, I can see the big ocean ships passing by, helicopters landing on the HeliJet airport and seaplanes landing & taking off. To top it off there is a view of all 3 Vancouver ski resorts: Mount Seymour, Grouse Mountain and Cypress Mountain’s slopes can all be seen in the distance.

View from our new office in Vancouver - still a bit foggy

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