Learn about Bitcoin and Blockchain; Executive
Director of the Bitcoin and Blockchain Alliance of Canada Discusses Current
Status and its Disruptive Future
Point Roberts, WA, Delta BC, December 5, 2016 –
Investorideas.com, a global news source and investor resource releases an
exclusive interview discussing bitcoin and blockchain with Kyle Kemper,
Executive Director of the Bitcoin and Blockchain Alliance of Canada.
Read the full interview at http://www.investorideas.com/news/2016/bitcoin/12051ExecutiveDirector.asp
Q:
Investorideas.com
Kyle, for background can you tell us how long
the Alliance has been in existence and what its mission is?
A: Kyle
Kemper of the Bitcoin and Blockchain Alliance of Canada
The Bitcoin & Blockchain Alliance of Canada
was started in late 2013. The mission of the organization has been to promote
education, adoption and awareness of bitcoin and the underlying Blockchain
technology, amongst consumers, merchants and policy-makers.
Q:
Investorideas.com
Where do you see Canada’s position in terms of
the global industry and where are we headed?
A: Kyle
Kemper of the Bitcoin and Blockchain Alliance of Canada
I would consider Canada a leading country in
terms of Bitcoin and Blockchain adoption and innovation. Canada has
traditionally been a leader in payment technology and I think this is the case
with Bitcoin as well. In my experience, Canadian entrepreneurs are seeing a
great opportunity to create valuable new products and services that leverage
Bitcoin and Blockchain. The innovative offerings that are being developed in
Canada are, for the most part, for the global markets.
If we look at how the community has been
self-organizing for the past couple years, it’s truly amazing. Last month in
Toronto, there was a meetup that attracted over 500 people and the organizers
have been doing these month over month seeing great growth. We are seeing
universities holding seminars and workshops. Powerful Canadian and global
think-tanks are dedicating resources specifically to understanding and
forecasting the impact of this technology.
Q:
Investorideas.com
For our readers that are new to bitcoin and
blockchain can you explain the difference between bitcoin as a currency and
blockchain as the technology behind it? Also, the role that I find fascinating
is that of the miners - can you explain bitcoin mining and how it works?
A: Kyle
Kemper of the Bitcoin and Blockchain Alliance of Canada
I consider Bitcoin to be three things. It is a
currency, a transaction network, and a general ledger.
From a currency perspective Bitcoin is digital
gold. It is important to understand that Bitcoin is its own currency
altogether. You’re probably familiar with the US Dollar (USD), the Euro (EUR),
the Canadian Dollar (CAD), and others, well now you can add Bitcoin (BTC) to
that list. The difference between Bitcoin and central-bank issued currencies is
that Bitcoin has a fixed monetary policy. Central Banks can print money at will
which results in the currency having an infinite supply. With Bitcoin, the supply
is limited to 21,000,000 bitcoin. Currently, there are 16 million bitcoins on
the market. These 16 million bitcoins have been “mined”.
So just what is bitcoin mining? The network is
designed so that every 10 minutes, new bitcoins are awarded to ‘miners’ as
compensation for running the network. Mining involves dedicating computing
power to solving a complex cryptographic problem. The miner, or group of
miners, that figures out the solution receives a reward in the form of newly
minted bitcoin. In the beginning it was 50 BTC every 10 minutes, then it
reduced to 25 BTC, and it is currently at 12.5 BTC. In about 3 ½ years from now
it will reduce to 6.25. It could be said that the inflation rate has a half
life of 4 years. To better understand the supply of bitcoin see this chart.
https://ip.bitcointalk.org/?u=http%3A%2F%2Fwww.mattwhitlock.com%2FBitcoin%2520Inflation%2520logarithmic.png&t=571&c=zvIkS01-wDn_QQ
To conclude the Bitcoin as a currency point,
let’s understand how the price is set. The price is set by the market. There is
no one single bitcoin price. On different exchanges it trades at different
prices. There is a global network of traders which take advantage of arbitrage
opportunities to bring equilibrium to the global markets. Here is a snapshot of
the Bitcoin markets. Ultimately, the
price is determined by supply and demand. As demand increases so should the
price so long as the supply cannot change. Demand is driven by utility. Utility
is the benefits and reasons to use something. I have just outlined the currency
component and how bitcoin is more like a digital gold than a digital dollar.
Now let’s look at how bitcoin is a payment network.
To start, let’s think about cash and how it
works. If I give you a $100 bill there is no one I can call to reverse that
transaction. I also don’t need to know who you are, I can simply see you and
give you the bill. Cash works in the physical environment but it does not work
in the digital realm. With bitcoin, we have a digital form of cash. In order to
send bitcoin to someone you need to enter their “public address”. A public
address is like an email address but for money, when someone has yours they can
send you money. In order to send bitcoin you need a private key which is like
your email password. In order to do this sending and receiving both parties
need digital wallets. There are many different types of wallets but all of them
interact with the network in the same function. The following is an illustration
of a wallet app.
The last important characteristic to understand
about Bitcoin is the Blockchain. This is the global decentralized
general-ledger of all transactions that take place on the network. What is so
significant about this technology is that all information recorded in the
blockchain can never be altered or deleted. The information is time-stamped and
all transactions can be queried at will.
With regards to financial transactions, when you
send someone bitcoin, a transaction takes place on the blockchain. Think of it
like a receipt. Your wallet records the transaction ID so that you can always
reference it.
There is a lot of excitement around Blockchain
because when you have a decentralized database in which records cannot be
deleted or altered, light bulbs start going off in innovators heads. Things
like identity, asset ownership, stocks, medical records, access keys, digital
rights, resource management, and contracts will be able to leverage blockchains
to remove centralized agents of trusts and replace them with a trustless
network. Where Bitcoin fits in is that because Bitcoin is the largest and most
valuable cryptocurrency, it is the most secure blockchain. Innovators are
building solutions to leverage the Bitcoin Blockchain to extend the benefits of
Blockchain to other industries.
Q:
Investorideas.com
How can Canadian investors and online vendors
participate to buy, sell and accept bitcoin and other cryptocurrencies? Can you
give examples of sites that they use?
A: Kyle
Kemper of the Bitcoin and Blockchain Alliance of Canada
Any individual can buy & bitcoin on their
own accord. Sites like Quickbit.com and QuadrigaCX.com allow Canadians to buy
and sell bitcoin. Additionally, there are local vendors/brokers who can be
found through sites like localbitcoins.com. For larger investors, there are
international exchanges like Kraken.com and Bitstamp.net as well as OTC dealers
who can assist with acquiring large sums of bitcoin. For brokers and investors
looking to speculate without actually taking delivery of bitcoin there are
Forex sites (like etoro and simplefx) and there are some private ETFs. As the
industry matures and returns continue to be yielded the number of options
available to investors is sure to increase as well.
For businesses looking to accept Bitcoin this is
quite simple. All one needs to accept Bitcoin is a wallet. For more advanced
payment processing and to see the bitcoin converted back to local currency,
merchants can use services like Coinpayments.com and Bitpay.com.
Q:
Investorideas.com
What regulation is in place for the industry in
Canada now and where do you see that headed?
A: Kyle
Kemper of the Bitcoin and Blockchain Alliance of Canada
I feel that I need to make it clear that I am
not a lawyer and there are more knowledgeable people than I to speak on the
topic of regulations but having worked in the space for years I will say the
following: Bitcoin is difficult for the regulators. To some eyes it’s currency,
to others it is a commodity. Depending on how it is being used by the
participants the applicable regulations may change. Anti-money laundering and
anti-terrorism laws are applicable and it has been the exchanges who have been
most affected by those regulations. Exchanges act as custodians for client
funds and thus are required to perform know your customer (KYC) and collect
client information in the same way a traditional institution would. If an
exchange is processing large transactions they are required to fill out and
submit suspicious transaction reports.
The senate of Canada did an in-depth study into
Bitcoin and recommended that a “light-touch” approach be used by regulators as
there were many outstanding questions and uncertainties around how the future
will unfold. The senate certainly saw and understood the incredible potential
of digital currencies and cautioned that extraneous regulations would drive
innovation to other jurisdictions.
As far as where I see it headed, I think that
this is an area that the BAC can be helpful and influential. The industry needs
to be at the table when speaking with the policy-makers and regulators.
Research needs to be commissioned and research needs to be conducted. Bitcoin
and Blockchain is here to stay and we should see more developments and
clarifications on the regulatory front as adoption increases and time passes.
Q:
Investorideas.com
For newbies to bitcoin how can they take
advantage of the Alliance and what do you offer in terms of education and
resources? And for now membership is free -
do you see that changing?
A: Kyle
Kemper of the Bitcoin and Blockchain Alliance of Canada
The BAC is in a period of transition. We are
currently holding board elections and following the election we will be
defining our mandate moving forward. Membership in the organization is
currently free for individuals but this may change under the new board. We have
been and continue to be a resource to individuals and businesses who have
questions. We have an email and phone number listed on the website and we have
helped a great many Canadians gain a better understanding of Bitcoin. If you
are interested in helping the BAC or just want to stay in the loop then I
highly recommend that you join the organization. If you are interested in being
a director of the Bitcoin alliance please visit our website and fill out the
nomination form.
Thank you Dawn.
Kyle
Kemper of the Bitcoin and Blockchain Alliance of Canada
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