Why Bitcoin Cash Will Win the World: 3 Key Takeaways from nChain Visiting the University of Exeter
Chief Scientist Dr Craig S Wright and CEO Jimmy Nguyen from the leading blockchain research and development company nChain shared their vision on where blockchain is headed in the future by exploring the most powerful use cases with students and 2 favourite professors, John Maloney and Gihan Marasingha from the Economics and Maths Departments. The Future of Bitcoin (Cash) was a first of its kind, creating the bridge between leading academia, students, but also the general public; the event was and, in a sense, still is open to anyone who is curious, and can be viewed in full on YouTube here.
It was a win in many ways: it put the University of Exeter on the map for what will be a leading blockchain university (with its new cryptocurrency module coming later this year), attendees got to gain insights from the 2 experts in the field, and—not the least of all wins—it opened the door for mainstream acceptance and adoption of Bitcoin Cash in a world where anyone can transact with anyone else around the planet, a world that leads to the wealth of nations as we have never experienced it before.
Here are 3 takeaways and reasons why I think it was such an outstanding experience to be a part of:
#1 Africa Matters, World Trade Matters
In America and Europe we may speculate with coins, but in many parts of Africa and Asia people use them; they have no other choice, because banks in rural Western Kenya, for example, cannot provide bank accounts for people who own less than USD200. But even in Japan, Craig Wright argued, the interest rate that banks pay is less (because it’s negative) than it is for storing money under a mattress. It exposes them to theft and the tendency to spend it on non-durable goods such as alcohol. Craig Wright makes the case for underdeveloped countries:
Freedom comes from controlling our own destiny. People don’t like everyone to control their own destiny because they don’t get to compete as well. […] We have a system that can open up and allow us to have all those utopian dreams, because we can open up and ensure everyone actually gets a chance to play. […] Right now, people don’t even get a chance to play and compete. Most of the world are poor, not because of exploitation. Africa is not poor because it’s exploited. There are more monetary transactions coming out of Tasmania, a little tiny […] state at the bottom of Australia […], than Africa. And Africa is massive, it has over a billion people; Tasmania is small, it has around a million people. The truth of the matter is: if we want a free world, we need to have open transactions and we need to have free money.
The difference between the West and underdeveloped countries is found in the need for cryptocurrencies. It is why nChain is focussing on such relevant regions, and why Craig Wright believes the use of Bitcoin Cash will take off there:
We see a bigger market in certain places like Africa, and certain parts of Asia and South Amercia. […] There isn’t really all that sound of money in many of these places right now. There are some solutions, but they are expensive—there isn’t a way of saving money easily. […] The future, and why we are going to places like Rwanda […], is anyone. […] If we allow anyone in society to transact globally, it changes the way we live. […] We allow people to choose what they sell and what they give away, and once you start allowing all the internet connections to earn money, to sell, to be, to open up the world, we start a different world.
Ultimately, innovation comes with necessity. And the necessity for modern cash in underdeveloped countries is far greater than in developed countries. If a cryptocurrency cannot provide the basic functionality of cash with low fees, and instant and reliable transactions, it automatically excludes most of the world’s population. On the contrary, a cryptocurrency that can provide all the benefits of cheap and reliable cash is likely to succeed, because the use of it is driven by underdeveloped countries. People there are not going to wait on different solutions, they take the best solution that is available now; Bitcoin Cash is, and it is functioning as it was always intended to be—as peer-to-peer electronic cash.
#2 Why We Will End with one Blockchain
During the panel discussion, the question arose: how many of the existing coins were likely to survive? And the answer was simple: one. It is the most efficient and easiest of outcomes, Craig Wright explained: “If you go to Zimbabwe right now, the government gave up on money. So people use USD, GBP, EUR, anything they can find right now. […] It’s much easier, if everyone uses the same.” The question is, do other currencies serve a purpose that one cannot fulfil? If anything, the opposite is the case—Jimmy Nguyen:
Now that [opcodes] are restored, you have to ask yourself: how much do you need Ethereum anymore? […] If we demonstrate all these capabilities on Bitcoin Cash, and it can also operate as a payment currency, we believe it’s gonna end up with one coin. […] The utility of other coins is going to be revealed as almost non-existent.
It is a win for consumers and merchants to use one. Instead of going to a shop or even another country with several coins in our pockets, we avoid the hassle of exchanging them, we save transaction and frictional costs, but we also, ultimately, get rid of volatility: if the world uses one currency, there is no single economy the value could depend on, nor would there be another currency it could be depreciating against.
But it is also the most efficient outcome for miners. If we all end up transacting on the most useful chain, leading to billions of transactions a day that pay tiny transaction fees, who wouldn’t want to get a piece of that? And as more miners secure the network in a competitive system, it will become near to impossible to manipulate the system. Craig Wright summarised it this way:
Scale is easy. The cost per transaction goes down as we scale. […] At scale, each block will probably earn […] 50 to 100 million dollars. […] A single ASIC device that can’t easily be compromised by a virus […] destroys all the criminal activity that was starting to take over machines to mine in a single stroke.
#3 Why Bitcoin Cash and not any other?
First of all, Bitcoin Cash traces back to the original Genesis Block, which makes it easy for businesses that have previously accepted Bitcoin to now accept Bitcoin Cash (as has been happening with BitPay, Newegg, Microsoft, and many more). But it is the fundamental nature of Bitcoin Cash which will make it the most usable blockchain: big blocks. nChain estimated that 1 TB blocks would fit 4 billion transactions, that is 7 million txns/second. This amount would open up the blockchain to all sorts of use cases:
We want money growing, we want it bigger, we want transaction [fees] less. And the simplicity of all this is it works because we can trust more, if more people compete. More competition allows us to do more revenue streams—not just ‘Bitcoin is money’; merchant solutions, smart contracts, escrows, tokens, merchant to merchant propagation, banks, finance, the world, says Craig Wright.
Jimmy Nguyen in his presentation adds:
The original Satoshi Nakamoto white paper describes Bitcoin as ‘peer-to-peer electronic cash’. There are several important elements to that: first, […] it needs to be used easily on a daily basis as cash. […] It also needs to be peer-to-peer meaning that I need to be able to send it easily anywhere in the world to anyone of you. […] I should be able to do it instantly, quickly, and it should not cost a lot of money to do so. It becomes the coin and the blockchain that can do what other coins claim to do, but all-in-one.
This belief, and to spark acceleration of good innovation, has led nChain to provide free usage of their patents on the Bitcoin Cash network. It has also led nChain to invest in businesses that make Bitcoin Cash more user-friendly, as this will be the key to gain mass adoption which will make it even more usable. Jimmy Nguyen talks about a future where one phone touches the other for a simple transaction via NFC (with an app called HandCash), and an app that will make monetary transactions as easy as sending a WhatsApp message so even your grandmother (or loved one) can use it:
Centbee is one of those apps […] where they treat it much more like a social media platform. You download the app, it automatically asks you for permission to access your contacts on your phone, it […] will allow you to connect to them as contacts on the app. […] Using that you’ll be able to send people money through the Centbee wallet.
Unlimited block sizes, applications that make the use of Bitcoin Cash seamless, and an uncountable amount of use cases, the most basic of which will be driven in underdeveloped countries; if we connect all the major dots, it becomes clear that Bitcoin Cash is in for the win that takes it all.
You don’t believe me? Convince yourself by viewing the full event on YouTube here, and watch Craig Wright and Jimmy Nguyen tackle questions from both a cryptographic and an economic standpoint.
Sebastian Ploetzeneder, May 8th, 2018
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