I am Wences Casares, co-founder & CEO of Xapo, Ask Me Anything

[wences]

Are you personally still buying bitcoin?

What do you think about all the blockchain hype with companies using distributive ledgers but not bitcoin?

I am one of the most biased pro-Bitcoin people you can find so I am always buying. But I strongly recommend that people do not buy an amount they cannot afford to loose; Bitcoin is risky, could still fail and be worth zero.

I think "blockchain" is a politically correct word for mid-level executives at financial institutions to be able to look into Bitcoin without getting killed by compliance, legal and/or upper management.

People saying "I am interested in Blockchain but not Bitcoin" are like people saying "I really like the browser but not the Internet". Well, the browser would not work without the internet and the Blockchain would not work if the miners where not being paid with bitcoins. But a lot of people miss that.

The innovations that Bitcoin brought is that it is trustless and permissionless. Some of these people who are "fascinated" with Blockchain go on to work on "private blockchains" which require that you trust that blockchain operator or operators and that you ask for their permission to participate. So, a "private blockchain" is not trustless and it is not permissionless, it is just a database, nothing you could not do with Oracle a few decades ago. You do not need a blockchain for that.

But if all this focus on Blockchain helps get more people exposed to Bitcoin and, eventually, learn about it, the so be it.

[BTC1075]

Hi Wences,

What is your view on the major financial institutions teaming up with R3 to create their own blockchain solution for the industry? Do you think the banks will be open to both bitcoin and blockchain or do everything in their power maintain control of the financial system?

[BitcoinXio]

Hi Wences, thanks for doing this AMA. I'm a big fan of Xapo, so welcome!

Can you please tell us how the user adoption in Argentina is coming along, and how the overall climate is there (in terms of regulation, politics, users, merchant adoption, and so on)?

Thanks!

[wences]

What's next from Xapo?

Will the debit card ever be available to US customers?

Unfortunately we do not have a date for the debit card to be available to US customers.

[wences]

Hi Wences,

What is your view on the major financial institutions teaming up with R3 to create their own blockchain solution for the industry? Do you think the banks will be open to both bitcoin and blockchain or do everything in their power maintain control of the financial system?

I will copy/paste what I said in another similar question above:


I think "blockchain" is a politically correct word for mid-level executives at financial institutions to be able to look into Bitcoin without getting killed by compliance, legal and/or upper management.

People saying "I am interested in Blockchain but not Bitcoin" are like people saying "I really like the browser but not the Internet". Well, the browser would not work without the internet and the Blockchain would not work if the miners where not being paid with bitcoins. But a lot of people miss that.

The innovations that Bitcoin brought is that it is trustless and permissionless. Some of these people who are "fascinated" with Blockchain go on to work on "private blockchains" which require that you trust that blockchain operator or operators and that you ask for their permission to participate. So, a "private blockchain" is not trustless and it is not permissionless, it is just a database, nothing you could not do with Oracle a few decades ago. You do not need a blockchain for that.

But if all this focus on Blockchain helps get more people exposed to Bitcoin and, eventually, learn about it, the so be it.

[LiteCoinGuy]

Hi Wences,

1) Do you plan to use the Blockchain for other things than "just" bitcoin?

2) Did you meet Bill Gates in the last 12 moths and talked with him about Bitcoin again ?

3) Are you storing your own Bitcoin at Xapo (i guess you are ) ?



LCG

[wences]

Hi Wences, thanks for doing this AMA. I'm a big fan of Xapo, so welcome!

Can you please tell us how the user adoption in Argentina is coming along, and how the overall climate is there (in terms of regulation, politics, users, merchant adoption, and so on)?

Thanks!

Bitcoin is a lot more important for Argentina than Argentina is for Bitcoin. What I mean by that is that Bitcoin adoption in Argentina is higher than in other countries but, because Argentina is a relatively small economy, not enough to move the needle for Bitcoin as a whole.

At Xapo we see a lot more activity in Argentina that we would have expected, but even then it is not make it to being one of our top 10 markets.

Argentina has had so many problems with its currency (hyperinflation, devaluations, etc), with its banking system (accounts being frozen or confiscated en masse, etc) and with the payments system (currency controls, difficulty to send money in or out, difficulty to buy dollars, etc), that most Argentines understand the appeal of Bitcoin immediately and use it to protect themselves from those issues.

I think this New York Times article describes it well: http://www.nytimes.com/2015/05/03/magaz ... onomy.html

[wences]

Hi Wences,

1) Do you plan to use the Blockchain for other things than "just" bitcoin?

2) Did you meet Bill Gates in the last 12 moths and talked with him about Bitcoin again ?

3) Are you storing your own Bitcoin at Xapo (i guess you are ) ?



LCG

1) Xapo is a Bitcoin company, not a Blockchain company As Blockstream and others enable sidechains and other technologies to use the Blockchain to store and move other assets we may implement some of those technologies in the back-end to provide products and services to our customers, but Xapo will always be a Bitcoin company that uses other companies Blockchain products, we are not a Blockchain company.

2) After that conversation he put me in touch with the people at his foundation who are responsible for financial inclusion, they had a negative view on Bitcoin but were very open minded and have changed their view. They have come up with these great guidelines for financial inclusion: https://leveloneproject.org/

3) Of course! Cannot think of a safer place to keep them.

[bitc0in]

Of all the ways in which Bitcoin could fail the one that worries me most, because I think it has the highest probability of all the bad things that could happen, is a price panic that drives the price to zero, or $15, from which it may be very hard for Bitcoin to recover the public's trust.

Right now most of the money that is invested in Bitcoin is money people can afford to loose and that makes it safe money. So when Bitcoin goes from $1,200 to $200 there is not a vicious cycle of people who need to sell, because they cannot afford to loose more money, that drives the price to zero.

It is hard to estimate how many people on bitcoins, but it may be somewhere between 13 and 15 million people right now. If Bitcoin is successful we will see hundreds of millions of people own Bitcoin and, eventually, billions. The only way we can get to billions of people owning Bitcoin is by the price going up by several orders of magnitude, let's say $ 1 million (but this is highly speculative and risky). So, if I am right, and Bitcoin has to go from $390 to $1,000,000 the best way for it to get there without crashing irreversibly is with as much volatility as possible. If bitcoin went up a couple percentage points every week and everybody began to think about it as a "sure" thing, investing money that was destined to pay for kids colleges or for retirement, that is a disaster waiting to happen price wise. Because when Bitcoin corrects those people have to sell because they cannot take more losses, potentially creating a vicious circle which is hard to reverse.

Ironically, we have to thank Bitcoin's volatility for people not investing money they cannot afford to loose. As long as the Bitcoin price remains highly volatile and perceived as risky, we are OK. Begin to worry when it is perceived as a sure thing that everybody should own a lot of.

Hi Wences,

Very interesting analysis. Thank you for sharing.
About the $ 1 million you mention, I was wondering how do you come up with this number?

[edugarbizu]

Where there any bitcoin specific objectives to move Xapo to Swiss instead of other (European) counties?

We were looking for the safest jurisdiction from where to serve all our customers except US customers which, for regulatory reasons, need to be served from the US. So we have a US subsidiary to serve US customers and a Swiss subsidiary to serve all non-us customers.

By safest we mean where our customers information can be best protected and we found the Swiss privacy laws to be the most robust in the world (beyond banking, just about how your personal information is treated). It is also important to be able to trust the rule of law, property rights, etc.

We also looked at other countries but ended up settling in Switzlerland, mostly for these reasons: https://xapo.com/resources/switzerland/

Do you think that Crypto Valley in Zug (Switzerland) can compete with Silicon Valley?
What is Xapo doing to help growing the swiss bitcoin ecosystem?
Are you planning to join http://en.dfca.ch and http://bitcoinassociation.ch ?

[nandubatchu]

How do we change the 2Factor Authentication details for Xapo wallets in the case of terminated/change of mobile number (old)

[wences]

How do we change the 2Factor Authentication details for Xapo wallets in the case of terminated/change of mobile number (old)

please contact support@xapo.com

We have to be very careful about how we do that because we have to make sure it is not someone trying to steal your account.

[Ishotas]

Hi Wences,

Thanks for doing this AMA.

1- We currently see different governments taking very different approaches to bitcoin. What is your prediction regarding the regulatory trends for bitcoin in the following years?

2- Will Xapo Vault remain free-of-charge for non-institutional users despite costs related with infrastructure, insurance, etc?

3- What other (bitcoin) financial services does Xapo plan to offer in the near future?

[helloworld]

When will xapo release a bitcoin debit card which is not a rip off?

[americanpegasus]

Hey,

It's americanpegasus, I created an account here just now specifically to thank you for that incredible and famous video of yours (new gold standard). You were one of my original Bitcoin heroes, and have really helped me articulate *why* bitcoin and cryptocurrency is important, both to myself and others.

I've extended some of the concepts you presented to the Cryptonote standard as well in my own works. My personal belief is that civilization needs a public ledger and a private ledger, with optional mechanisms to obscure or reveal those two respectively. Do you believe that the original bitcoin blockchain is the only one we will ever need (like the internet), or are competing blockchains an inevitability (like language)?

My best wishes to Xapo and your future endeavors.

[omarabid]

Hi,

1. If you have a vault service, does that mean that the funds at my wallet are insecure? If the security level is the same, why not just have delayed withdrawals for large amounts?

2. Is there something in Xapo like Coinbase "multisig" wallet?

3. Will you freeze my funds if the gov. ask you to?

[OWMC]

Hello Wences!

I don't have a question. I just want to say I really, really enjoyed your interview with Reason (https://www.youtube.com/watch?v=tY1N26TZFAI). I can completely understand your passion. My family went bankrupt from the Savings and Loans crisis when I was younger (funnily at the time we lived near a village called Casares in Spain, have you heard of it?). I really admire what you are doing with Xapo, and I must say, you really nailed the design. The graphics are awesome.

All power to you my friend!

[wences]

Hi Wences,

Thanks for doing this AMA.

1- We currently see different governments taking very different approaches to bitcoin. What is your prediction regarding the regulatory trends for bitcoin in the following years?

2- Will Xapo Vault remain free-of-charge for non-institutional users despite costs related with infrastructure, insurance, etc?

3- What other (bitcoin) financial services does Xapo plan to offer in the near future?

1- I think it will take a decade or two to get to "cruising altitude" in Bitcoin's regulatory front and, in that path, we are going to see governments take two steps forward and one backwards many times, like we have already seen. I takes a while for regulators to realize that Bitcoin is a thing, like gravity, and you have to deal with it like it or not, like gravity, but you cannot make it disappear like you cannot make gravity disappear.

2- Yes, the Xapo Vault will remain free for all users.

3- We are working on products and services to make it easier for people to buy bitcoins and for people to spend those bitcoins.

[wences]

When will xapo release a bitcoin debit card which is not a rip off?

I understand your frustration. I am a Bitcoin user and Xapo has a debit card because I want to use that product. The fees we charge are the fees that we are being charged, we do not make any money on those fees and the only way we would have to eliminate them would be to loose money on it which we cannot do. It is the cost we pay of interfacing with the old world financial system and its addiction to fees.

We keep working to improve the debit card experience but the Xapo debit card is the best debit card in the market. It is a true debit card, ie. you do not need to "load" it like a pre-paid card because it automatically debits your Xapo Wallet in real time and it beats or matches the fees and prices of all the other debit cards out there (which work more like pre-paid cards, you have to fund, etc.)

[OgNasty]

Thank you for doing this AMA Wences. I've enjoyed reading your thoughts about Bitcoin and your view of Xapo.

What do you find entertaining about Bitcoin?

[chriswilmer]

Hi Wences,

Thanks for doing this AMA!

It seems to me that a lot of the venture capital dollars are being invested prematurely... I think that money would have been better spent just buying bitcoins, and then once the price is $10,000 (ish), a lot more money is then needed to try and keep it somewhat stable... and THEN money should go into creating consumer products. Those are *my* thoughts... what do you feel is the right sequence of investments for Bitcoin to succeed? (imagine you could mind control all of the VCs and institutional investors out there...)

[wences]

Hi,

1. If you have a vault service, does that mean that the funds at my wallet are insecure? If the security level is the same, why not just have delayed withdrawals for large amounts?

2. Is there something in Xapo like Coinbase "multisig" wallet?

3. Will you freeze my funds if the gov. ask you to?

1. Xapo keeps 97% of all our customers funds in our own vault, so the funds in your wallet have the same level of security of its private keys as the vault does. One of the main features of the Xapo Wallet is that your balance is private (no one can figure out your balance by looking at the blockchain) and your transactions are private (no one can figure out what payments you have made or received by looking at the blockchain). We offer the vault as a separate product for people and institutions who want or need to see the balance of that account in the blockchain. They loose the privacy of balance and transactions but they get the security of being able to self audit their balance. Your Xapo Vault balance and transactions are visible in the blockchain, which is why we recommend your vault address to yourself and why the vault can only transact against your wallet, to keep all those transactions private and secure).

2. Xapo only uses muti-sig technology. When you are using our wallet or our vault you are using multiple signatures that are kept in different locations, etc. If you want to spread the risk in multiple people you can add users to your wallet or vault with different permissions for each, but the private keys are never at risk and are never exposed to a customer's device.

3. If you are a US customer and the US government or a US judge issues a valid order to freeze an account we would have to obey it. If you are a non-US customer we can only freeze your account if a Swiss judge issues a firm order to do so.

[ucontroltv]

Hello Wences,

Love everything you have done and are doing for bitcoin community. This question has been asked in the past but I wanted to get your current thoughts:

Which country in the world do you think would be the first to adopt bitcoin as a national currency (would it be Argentina)?
And do you have any suggestions on how to best convince a government to adopt bitcoin as a national currency? Have you tried with Argentina?

Usually in times of extreme turmoil people are willing to try almost anything.... I personally think that is what will happen when a country becomes desperate enough due to the failures of their own currency to adopt bitcoin.

Thanks for your thoughts on this subject.

Sincerely,

Dale Malone.

[wences]

Thank you for doing this AMA Wences. I've enjoyed reading your thoughts about Bitcoin and your view of Xapo.

What do you find entertaining about Bitcoin?

That it feels more like a crusade than an economic phenomenon

[bitvote]

I'm starting to plan a halving party - where people around the world get together to celebrate the halving event. Some people in Golden Gate Park in San Francisco, some in Central Park in NYC, some in London, etc...

It'd be a bit like the World Cup or Olympics - a way for bitcoiners to get together every ~4yrs to celebrate bitcoin.

Would you be interested in coming to the party?

[wences]

Hello Wences,

Love everything you have done and are doing for bitcoin community. This question has been asked in the past but I wanted to get your current thoughts:

Which country in the world do you think would be the first to adopt bitcoin as a national currency (would it be Argentina)?
And do you have any suggestions on how to best convince a government to adopt bitcoin as a national currency? Have you tried with Argentina?

Usually in times of extreme turmoil people are willing to try almost anything.... I personally think that is what will happen when a country becomes desperate enough due to the failures of their own currency to adopt bitcoin.

Thanks for your thoughts on this subject.

Sincerely,

Dale Malone.

I have suffered governments being irresponsible with their currency more than most people, but even then I think it would be a bad idea for a country to adopt Bitcoin as its only currency. It would make sense for a country to allow Bitcoin as a parallel currency to their own, though.

Imagine that Argentina adopted Bitcoin when it was at USD 10, and that your salary was then set at 100 bitcoins a month or USD 1,000. Your salary today would be USD 40,000 a month: how can an economy operate like that? And, if you say: "OK, let's pay in bitcoins but determine the salary in USD your currency is USD, not bitcoin".

I explained it here: https://blog.xapo.com/why-greece-should ... o-bitcoin/

I think Bitcoin is a private currency and it will become the native digital global currency of the Internet, by the people and for the people, not governments,

[karibou]

hello and thanks for doing an AMA

Why did you chose the name xapo? what does it mean?

What country sees the most trafic on your site?

Do you have any future plan we aren't aware of?


Thank u

[LiteCoinGuy]

Did you recommend bitcoin to your family members too ?

How did they react the first time you explained it to them?

[wences]

hello and thanks for doing an AMA

Why did you chose the name xapo? what does it mean?

It was just a four letter .com domain that I was able to buy for $6,500

What country sees the most trafic on your site?

It changes every week. It is often India, China, Russia, Indonesia, Philippines, Turkey, Brazil & Thailand.

Do you have any future plan we aren't aware of?

I hope so!


Thank u

[wences]

Did you recommend bitcoin to your family members too ?

Yes, absolutely! I always tell them that the second most stupid thing they could do right now is to own an amount of bitcoins they cannot afford to loose and the most stupid thing they could do would be to not own any.

How did they react the first time you explained it to them?

Not very well. I find that bitcoin is like a pregnancy: it does not matter how powerful and/or rich you are it takes 9 months to have a baby. Similarly, it does not matter how intelligent you are, how much you know about technology or finance, it takes about 6 months to fully understand and embrace Bitcoin.