Rare News Desk
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Kurt Wallace: This is Kurt Wallace and our guest today is Pete Rizzo East Coast editor for Coindesk.com the online news source for digital currency and Pete thanks for being with us today on Rare.
Pete Rizzo: Kurt, glad to be here
Kurt Wallace: Please give us an overview of Coindesk.com.
Pete Rizzo: Thanks for having me Kurt. I’ll just start off by saying Coindesk we’re and internationally focused digital currency news source we primarily cover anything and everything related to Bitcoin and other digital currencies. We’re primarily based in the UK but we have outlets now accross the world and we’re working on expanding that as the ecosystem conintues to grow and more people like yourself become more interested in what’s going on.
Kurt Wallace: What are there some of the more common interestes that people have in Bitcoin, basic questions, things that you find that your news site comes accross with the general public?
Pete Rizzo: Sure, I’d say the ecosystem is very much in the introductory stages of introducing the topic to people. I think there’s a we see a big gap between, we cater to people who are very much enthusiast, people who follow the news daily who are on Reddit all the time gathering this news. But when we talk to general consumers they’re still asking questions like how do I buy Bitcoin? Is it legal? How do I sell Bitoin? Why would I use it? Things like that, it’s definitely interesting from a publication standpoint. We have people that are really enthusiastic about what they consider to be something that has potential to be the next internet or the next big technological breakthrough and then people who may be unfamiliar with it or coming to it from expectations that they’ve heard through the mainstream media.
Kurt Wallace: You just released an annual report on Bitcoin a great benefit for those involved and interested in getting involved with bitcoin. What are some of the more important details of this report for those interested in entering the bitcoin marketplace?
Pete Rizzo: According to the really broad overview. How the media is covering Bitcoin. Who the players are in that system is a really good chart. The current major players in the ecosystem showcases their investments, I think that’s one of the stories that has’nt really been told yet. Bitcoin’s on a course right now, double the total investment from 2013. It’s been on the backs of some large fundraising rounds like Zappa they’re a digital wallet company and Circle which does similar things but with some different services as well. There’s a really handy chart there that goes through all these investments by country. The US still dominating the market, silcon valley still taking the lead on this as well, shows you who the major stakeholders are who the processors of the paymets are, who’s putting out wallets. And the larger players doing more than one thing. The main take aways for people that are enthusiasts are gonna be that general investment is on the rise. There’s approximately 50,000 merchants right now accepting Bitcoin. But there are some negatives in our report as well, the price is down currently I think 30% from where it was at peak last year when a lot of people came in and were interested. There’s a healthy debate going on about what the expectations are going to be for the price of as an asset going forward. I think the report does a great job of showcasing both sides of the coin there.
Kurt Wallace: The perception is that bitcoin is taking a beating but according to your report 2013 had the largest increase in bitcoin history an increase of 56 times.
Pete Rizzo: I think what the industry is putting forward right now is that there was sort of a peak of expectations in November, December of last year. People got really enthusiastic and really excited. A lot of people invested really heavily, really quickly. I think what your are seeing right now is a natural reaction where really that enthusiasm outpaced general knowledge. You know you saw people buy in pretty heavily without understanding some of the basic components of the system. How do you buy? How do you sell? How do you store it? How do you keep your digital assets safe? Even with technology that’s available. I think that there’s a lot of things going on at that time. There’s the Senate hearings where they were instrumental in boosting the price there just on the fact that Bitcoin wasn’t banned. There’s the China ban. So there’s a lot of misinformation and good information at that time and really created a peak of activity and interest. I think it drew a lot of people to it. Now you’re seeing a plateu. I think people are settling in with the ecosystem a bit and with that becoming more maybe more reasonable expectations. At the beginning of January I think a majority of our readers thought that by the end of this year Bitcoin would be over $10,000 a Bitcoin. I think that’s a really good survey of how enthusiastic people were at the time. Coming down from that peak can be seen that it isn’t doing that well but campaired to a year ago it was $10 – $13 a Bitcoin maybe even less. Now it’s over $400, it’s definiately how you look at the situation, eye of the beholder on that one.
Kurt Wallace: Let’s discuss Mt. Gox, a Bitcoin exchange that closed down, many traders lost there investments and marketplace confidence took a hit just when Bitcoin was starting to go mainstream in the situation you were discussing with all the excitement. What are some take aways from this unfortunate event with Mt. Gox?
Pete Rizzo: I think that’s very much still a conversation that the industry is having. You know Mt. Gox seems to be in all indications a very special case. I think what people really should remember is that in the same way that consumers and the media and the general public was sort of swept up into the ferver around Bitcoin at the end of last year, so were a lot respects the businesses as well. Mt. Gox a little known fact is it stand for a magical gathering online exchange. It was a trading card company a few years ago and it switch to becoming a Bitcoin company. You know it really never developed that infustructure that a global financial provider would need to have. I think specific case you had a company that really just couldn’t keep up with the demand and really didn’t invest perhaps as much as it should. There are still ongoing legal aspects to that case and I think will shed some more light on perhaps what went on. I think from an industry perspective you’re noticing that a lot of people are using that case as this is what we can do going forward, this is what we can learn from something like this, we need to be more transparent. Your seeing a lot of exchanges and places where you can buy and sell Bitcoin coming out and doing audits. This is how much Bitcoin we have and this is why we’re sovent as a company and you’re starting to see that the ecosystem is starting to take itself more seriously in terms of how to treat it’s comsumers. I think having something like that is very unfortanate a lot of consumers were hurt by that. At least it seems that the industry as we see it is taking the right lessons from that.
Kurt Wallace: So, the freemarket’s kind of flushing out some positive aspects of this is what you’re seeing?
Pete Rizzo: Yeah, it hink that when you have anything like this of course it’s unfortunate. To see a major company like that go under and it certainly effected a lot of people and the overall market as well. And I think what you can get from that is you can take the positives and use it as a learning experience. I think what we see is that a lot fo the comapnies are, a lot of the people we talk to would be really quick to say this was an isolated case and from what we’re seeing now there really hasn’t been a lot of other problems with major services and they may not get as much publicity. I think that the catch 22 now is that a lot of people who are really putting in good work and being kind to their customers and giving that positive experience maybe just don’t get the same coverage that a sensational story Like MtGox was getting. But I think it will come out in time and people will start seeing that there are reputable players in here. People with institutional experience who are going to get a lot of financing and actually start to put some good products into the market and I think people will eventually see that.
Kurt Wallace: There’s an impressive part of your report. Some significant investors and VC firms have poored money into bitcoin companies according to your report $98 million to date, this has characteristics of the dot com boom of the late 90s?
Pete Rizzo: I think it’s a popular comaprison. A lot of people would come out there and say that Bitcoin is the next iternet or the next web. There’s a lot of which type of class of the internet Bitcoin is most similar to but there’s a general that we’re at the beginning of something that is going to have that long term effect. It’s hard to really predict where the industry is going to go. I think in the early 90’s it would have been really hard to forsee something like a blog or a service like Twitter having the impact that they did saying Twitter is 140 characters and was able to have a really large impact. I think applying that to the financial system is going to be equally as interesting. We don’t know how we’re going to come out of this what things we’re going to get and I think there’s a lot of debate there and I think intellectual capital and investment capital come together and I think a lot of people will start to experiment and sort of explore a new idea in the same way they do with the internet. I think that’s the best way to bring that compairison together.
