As part of the Digital Currency Council’s Continuing Education partnership with Inside Bitcoins, the DCC’s Director of Curriculum, Dan McArdle, has had the opportunity to interview the thought leaders that spoke at Inside Bitcoins Berlin on March 5-6. Today, we share insights from Flavien Charlon. Flavien is the founder of Pixode, producer of Predictious, the Bitcoin derivatives and prediction market, and Coinprism, the first colored coins web wallet.
Dan: Tell us a little about your background in Bitcoin and Digital Currencies, and how and why you got involved?
Flavien: Like most people, when I heard of Bitcoin for the first time, I dismissed it. I looked into it in more details end of 2012, when I was considering the idea of building a prediction market similar to InTrade. The more I read about it, the more fascinated I became. I built the prediction market, Predictious, and launched it in July 2013.
Dan: Why is Predictious specifically a Bitcoin-only predictions market? What advantage does Bitcoin offer?
Flavien: There are a lot of complications with accepting fiat currencies, in particular dealing with the banks. For instance, fees are quite high. Bitcoin is an open platform which is not controlled by any particular entity, and fees are practically non-existent. These are very compelling reasons to build a service like Predictious on Bitcoin.
Dan: What did you speak about at Inside Bitcoins?
Flavien: In Berlin, I gave a talk about colored coins. I founded Coinprism, which is the first web-based wallet for colored coins. Colored coins let people create their own custom assets, and use the Blockchain as a ledger for it. It is probably the simplest “Bitcoin 2.0” protocol, yet it is very powerful. The design goal is to keep it simple: do one thing, but do it well. There are some very interesting use cases around colored coins, like crowd funding, loyalty points and gold backed crypto-currencies.
Dan: What excites you the most about the long-term prospects for Bitcoin and decentralizing technologies in general?
Flavien: I think the end game is commoditized financial infrastructure. Today’s financial systems are proprietary system stacked on top of more proprietary systems. Whenever you want to accept a payment, you have to pay two or three intermediaries, which often are in a near-monopoly situation. Bitcoin can help change that by providing interoperability for consumers, merchants and financial institutions. Of course, technology is one side of the problem, but the other side is the regulations, and will probably be much harder to solve.
Dan: What worries you the most about getting there? What is the biggest challenge to success?
Flavien: On the technical side, there are a number of challenges to overcome to ensure Bitcoin stays relevant in the long run. The scalability and the transaction fees are two related problems. We want to ensure the transaction throughput of Bitcoin can scale by two or even three orders of magnitude, without causing fees to skyrocket. Also, we don’t want to increase centralization of mining in the process. I am cautiously optimistic about those issues as payment channels and lightning networks could be the solution to those problems, however, it will take at least two years before we start seeing those implemented.
Dan: How do you see the so-called “Bitcoin 2.0” space evolving? There’s been a lot of experimentation, both with bitcoin-layered approaches, as well as new blockchains. Do you see the “2.0” space developing more towards layers on top of Bitcoin, or completely new chains?
Flavien: I personally don’t believe in the long term viability of alt-coins. Liquidity attracts liquidity. That’s why I think in the future, we’ll see more and more innovation being built directly on top of Bitcoin. And sidechains are a great way to have both the Bitcoin currency and alt-coin type features. Also, I believe we’ll sooner or later observe a peak in the “Crypto 2.0” hype. We’re seeing a lot of interesting innovations, but we’re also seeing a number of applications that don’t make a lot of sense.
Dan: How can we in the Digital Currency profession help Bitcoin adoption in general? How do we educate the public and communicate the benefits to potential new users?
Flavien: Education is useful right now, but in the longer term, we want Bitcoin to be at a point where people just get it. I remember my first PC running Windows 95: it came with a 400 pages manual. On the other hand I also remember when Apple released the iPod, which didn’t have any manual at all. This was because the user experience was so simple it just didn’t need a manual. The crypto industry needs to make an effort around user experience, and the day people can start using Bitcoin without having to understand any of it is the day Bitcoin will have won.
Dan: Flavien, thank you very much for your time, insight and support of the Digital Currency Council.