As part of the Digital Currency Council’s Continuing Education partnership with Inside Bitcoins, the DCC’s Director of Curriculum Dan McArdle, had the opportunity to interview the thought leaders that will be speaking at the Inside Bitcoins Conference in New York City on April 27-29, 2015. Today, we share an interview with Gil Luria of Wedbush Securities.
Dan: How did you first discover Bitcoin and what was your initial reaction to it?
Gil: My associate Aaron Turner came back from a payment conference (when we are not talking bitcoin our day job is covering payments companies such as Visa, MasterCard and PayPal) and insisted bitcoin was by far the most interesting development in payments. Around the same time I happened to sit in on a meeting with Brock Pierce. I entered the meeting completely skeptical and left realizing this is something I need to learn a lot more about.
Dan: Wedbush began covering Bitcoin fairly early. What in particular struck you that led to you seeing potential in Bitcoin that others missed at the time?
Gil: The light bulb over my head came on as soon as I read the Satoshi paper. It was such an elegant explanation of what was wrong with how payments work today and how to solve these problems that I knew there was something there. The more I talked to people in the bitcoin community the more I realized the negative media coverage had little to do with the essence of bitcoin and its potential.
Dan: Analysts often have difficulty defining and classifying bitcoin upon first glance. Having now given the topic more thought than most, what’s your current view on how to approach valuation of bitcoin as a financial asset?
Gil: Bitcoin is a financial instrument the likes of which we have never seen – that does make it more difficult to value it. Since it does not generate any cash flow, our approach has been to value it more like a commodity taking into account supply and demand factors. We also apply a probability weighting to account for the very broad potential set of outcomes.
Dan: Inside Bitcoins has brought together many of the best minds in the industry. What do you hope to learn, discuss, or accomplish at Inside Bitcoins New York this year?
Gil: I am hoping to see more entrepreneurs with more great ideas of how to leverage bitcoin and its underlying technology. More and more talented entrepreneurs are leaving their old jobs and trying to build in this ecosystem and I am excited to see what they are working on.
Dan: As Bitcoin and the broader digital currency ecosystem evolve, what are you looking forward to seeing develop in the next 1-3 years? And what’s your long-term (5-10yr+) outlook?
Gil: In the shorter term I want to see good early implementations of the bitcoin applications we are already familiar with – remittance, online payments and micro transactions. The traction from these applications should drive the new stage of growth which will introduce new applications based on the underlying technology, some of which we have yet to imagine. In that timeframe I am also hoping to see real implementations of real financial products in emerging markets gaining popularity.
Dan: What do you see as the greatest challenge for the industry as a whole?
Gil: The obvious obstacle is regulation and governments which is the topic most often discussed. The other big challenge from my point of view is the maturity of the technology. For financial institutions and payments companies to fully embrace the technology and deploy it broadly they have to feel it is stable, has a clear well understood path and reliable infrastructure.
Dan: What’s your best advice for supporting the growth of Bitcoin, both as a technology, and as an asset-class?
Gil: We all need a lot of patience. Rebuilding the way financial services are delivered on a global basis is a very ambitious goal and is going to take a lot of time and effort.
Dan: Thanks very much for your thoughts, Gil. Looking forward to a great conference.