As part of the Digital Currency Council’s Continuing Education partnership with Virtual Currency Today, the DCC’s Vice President, Sarah Martin, had the opportunity to interview the thought leaders that will be speaking at the Virtual Currency Today Summit on April 29, 2015. Today, we share insights from interviews Clay Nelson, Director of Business Development at Bitpay.
Sarah: Tell me about how and why you got involved in Bitcoin and digital currencies.
Clay: When my close friend and long time colleague Andy Phillipson left IBM in the fall of 2013, I dug into bitcoin to give him some advice on joining a startup. It was really the first time I had looked at Bitcoin for more than a moment. As he and I continued to talk over the course of 2013 and 2014, I began to see the business models that Bitcoin could enable. When the right opportunity opened up to join Andy at BitPay, I sought the advice of a couple of my mentors and decided this was something I had to be involved with.
Sarah: Bitcoin is steadily gaining traction with merchants; but few mainstream customers are using bitcoins yet for regular purchases. What do you plan to discuss during your panel?
Clay: Bitcoin advocates envision a world where we natively use bitcoin for purchases. However, the reality right now is that outside of an online commerce context, making a purchase with bitcoin is not as easy as with other methods. We have a multidimensional issue that we need to acknowledge.
On the merchant side: We have a legacy install base of POS systems, employee training, competing priorities—primarily EMV—that makes accepting bitcoin in brick and mortar context a challenge at scale.
On the consumer side: We have price volatility, first generation wallet technology, entrenched behavior with card loyalty, access to credit, and a belief that customers aren’t responsible for fraud. In other words, the consumer doesn’t feel they have a problem to solve.
All of that sounds like I am pessimistic on bitcoin, and I definitely am not. Mobile offers a long range opportunity to shift consumer expectations. What we believe is we have to identify and amplify the qualities of bitcoin that are unique across the value chain.
Micropayments, branded currency, cross trading partner loyalty- there are a number of elements that can be productized that can enable the merchant benefits of bitcoin without a massive campaign to educate and persuade the general public to adopt bitcoin.
Sarah: Virtual Currency Today has brought together many of the best minds in the industry. What do you hope to hear from others at the conference?
Clay: I am still a bit of a newcomer to the space, so I enjoy listening to how others who are new to digital currencies consume and act on what they learn at conferences like this. What are the impediments they expect to confront them as they listen to the “seasoned” veterans of this space. Some of the most interesting things I have encountered have been from people who are approaching bitcoin with perspectives outside of the dogma.
Sarah: As Bitcoin and digital currencies evolve, what are you looking forward to seeing develop this year, or in the next 5-10 years?
Clay: I think these long range prognostications are really a bit silly, but in the near term, I look forward to seeing digital currency applied to online content purchasing- music, articles, etc. I’m certain we will see some implementations of smart contracts and registries. There are many great ideas that I want to see validated with real world usage.
Sarah: What do you see as the greatest immediate challenge facing the industry right now?
Clay: The first thing that popped in my head when I read this question was the movie City Slickers. As Billy Crystal’s character searches for meaning, Curly, played by the intimidating Jack Palance, holds up a single finger—“One”. Our biggest challenge is finding that ONE killer app that will help Bitcoin break out of the fringe movement narrative. Yes overly restrictive regulation is also a concern, but that won’t matter if we aren’t able to get consumers en masse.
Sarah: What’s your best advice for growing the industry? How do we engage more people in Bitcoin and digital currencies?
Clay: Find innovative ways to weave bitcoin into the current infrastructure of payments. I spent 14 years working in software development at IBM. Ever since the 1990’s people have been working to “replace the mainframe.” IBM continues to sell more mainframes each year than the year before. Why? Because “rip and replace” strategies are difficult to justify and execute. Even if you believe bitcoin will ultimately replace fiat currency and systems, believing and wishing for that eventuality isn’t enough.
Sarah: Thanks very much for your thoughts, Clay. Looking forward to a great conference.