Fri Dec 11, 2015 11:19 pm

Hi Dan, thanks for the constant industry views and commentary on twitter, etc. As an inspiring investor to the ecosystem I've love to know what you think about the following.



1. What do you think the biggest hurdle is for the bitcoin to explode as a currency or protocol? I believe it is regulatory but I wonder if the technology will make those regulations obsolete or just force change of any poor regulation. Unless there is a hole in the protocol that can't be changed, how can bitcoin be stopped as a superior form of money?



2. For a speculator what do you suggest about making investments in this space and how to diversify (example for my speculating portfolio I am 80% in the currently 20% in startups across different sectors). I have the private keys spread across different locations, etc. Is there any next move you would make once having a good start of investments? Maybe the question is better asked - for Pantera, is there a finish line for amount of funds invested where you just sit back and wait or is committing as much as you possible can the move and risk over commitment?



3. If bitcoin takes off, how violently is this going to happen and what does that look like? If we are going to 10k-100k a coin in 5-10 years, how does that happen in such a short time? Will there be $1,000 drops because of media hype like we have on a smaller stage now, mass panic? What might that look like?



4. What is the biggest development in the space that even the bitcoin community might not be noticing right now?



Thanks for your time, keep up the great work.

What do you think the biggest hurdle is for the bitcoin to explode as a currency or protocol? I believe it is regulatory but I wonder if the technology will make those regulations obsolete or just force change of any poor regulation. Unless there is a hole in the protocol that can't be changed, how can bitcoin be stopped as a superior form of money?The formula for Bitcoin becoming ubiquitous is simple. Find the greatest pain points, build the apps, acquire users (which shouldn’t be hard if the pain points are intense enough). But this doesn’t mean things will be easy. If the technology (protocol) explodes, necessarily the currency does too, and vice versa.The biggest hurdle right now? Developer interest (i.e., app building) is healthy – part of our work it to help make sure of that. There’s always room for growth, but as more VC dollars come in and price increases, more devs will find the space attractive enough to ditch their jobs for new frontiers. Regulation is decent, but as long as it’s not suffocating, we’re OK. The pain points are there and new pain points are found at a reasonable rate. Some projects address weak pain points or are simply some service “but with bitcoins!”, but this is to be expected in any gold rush.Acquiring users could do some work – work which we’ve been seeing done the past year in terms of the ecosystem’s branding. “Blockchains, not bitcoins”, as dreadful as it was to hear, was a step in the right direction, but Bitcoin and the Blockchain need to be less focus/more backend. Nobody cares what they’re using if it works and they aren’t exposed to risk. You can see this with Align Commerce and Abra, which let service delivery do the talking instead of the old norm of trying to bank on controversial but trendy buzzwords. The cost-benefit of mentioning Bitcoin or the Blockchain in marketing is quite poor relative to not mentioning them at all.I'm not entirely sure how jet engines work, but I know it's faster than walking to New York. Same with bitcoin. Every consumer doesn't need to know all the exquisite details of how bitcoin works. They just want to MoIP money around for free.As a distributed technology, taken to its extreme, shutting down Bitcoin is about as feasible as shutting down the Internet. Very unlikely to happen. Still, efforts to comply with regulation are paramount. The value of permissionless innovation can be stifled by poorly formed regulation, but it’d be more greatly stifled by antagonized governments. There are countries like the U.K. that are turning out to be some of the best supporters of the technology. Smart policy makers recognize the competitive edge being supportive of Bitcoin entails. From the government-sponsored conferences I’ve attended and the regulators/policy makers I know, this is the case. Dissenting policy makers will need to eventually follow suit to avoid being left behind in the world arena.Pushback from incumbent service providers is a potential hurdle. It’s unclear at this stage how much of this our ecosystem will face, but it seems we’re close to the level of adoption where we’d see the brunt of it or at least enough to anticipate the degree of it in the future. Lobbying and lawsuits are some examples of pushback where startups may be disadvantaged. We’re seeing some of this with BitPesa and Safaricom. Luckily, most incumbents recognize the genie is out of the bottle and have instead opted to support some variation of “blockchain, not bitcoins”.2. For a speculator what do you suggest about making investments in this space and how to diversify (example for my speculating portfolio I am 80% in the currently 20% in startups across different sectors). I have the private keys spread across different locations, etc. Is there any next move you would make once having a good start of investments? Maybe the question is better asked - for Pantera, is there a finish line for amount of funds invested where you just sit back and wait or is committing as much as you possible can the move and risk over commitment?Will answer in a sec.3. If bitcoin takes off, how violently is this going to happen and what does that look like? If we are going to 10k-100k a coin in 5-10 years, how does that happen in such a short time? Will there be $1,000 drops because of media hype like we have on a smaller stage now, mass panic? What might that look like?Bitcoin is taking off. Startup exits are obvious indicators of success, but with things like bitcoin market movements and arbitrary qualitative indicators of success, the proof is in the pudding. Looking into the pudding now, Bitcoin is taking off relative to pretty much any time before the beginning of this year. The degree to which we’re taking off? We’ll need to check back in a year and evaluate in order to know.10k-100k a coin in 5-10 years? Since supply is fixed, there will need to be WhatsApp levels of adoption. This is not to say most of the adoption will be directly consumer based. Instead, consumers will have adopted apps that have adopted Bitcoin.At that point, Bitcoin would be so ingrained in everyday commerce, it’s hard to imagine what news could come out that would disrupt it all. Until that point, there may be more hype-fueled run-ups tantamount to December 2013. At that point bitcoin price was up 93x on a year before. Bitcoin was better at the end of 2013, but it was 93 TIMES better.In this future, Bitcoin will have become nothing special; there is no hype, we’d take it for granted. A funny thing to think about despite how hyped we all are today. We take the internet for granted today. We don’t really care about any news about the Internet, aside from something that debilitates it severely. Price would cling to this “boringness” necessarily, as the tech and currency are inextricable.4. What is the biggest development in the space that even the bitcoin community might not be noticing right now?Answer in a sec.Thanks, I'll be back with the remainder of your questions in an hour.Dan