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Monday, December 5, 2016

Learn about Bitcoin and Blockchain; Executive Director of the Bitcoin and Blockchain Alliance of Canada Discusses Current Status and its Disruptive Future

Learn about Bitcoin and Blockchain; Executive Director of the Bitcoin and Blockchain Alliance of Canada Discusses Current Status and its Disruptive Future


Point Roberts, WA, Delta BC, December 5, 2016 – Investorideas.com, a global news source and investor resource releases an exclusive interview discussing bitcoin and blockchain with Kyle Kemper, Executive Director of the Bitcoin and Blockchain Alliance of Canada.


Q: Investorideas.com
Kyle, for background can you tell us how long the Alliance has been in existence and what its mission is?

A: Kyle Kemper of the Bitcoin and Blockchain Alliance of Canada
The Bitcoin & Blockchain Alliance of Canada was started in late 2013. The mission of the organization has been to promote education, adoption and awareness of bitcoin and the underlying Blockchain technology, amongst consumers, merchants and policy-makers.


Q: Investorideas.com
Where do you see Canada’s position in terms of the global industry and where are we headed?

A: Kyle Kemper of the Bitcoin and Blockchain Alliance of Canada
I would consider Canada a leading country in terms of Bitcoin and Blockchain adoption and innovation. Canada has traditionally been a leader in payment technology and I think this is the case with Bitcoin as well. In my experience, Canadian entrepreneurs are seeing a great opportunity to create valuable new products and services that leverage Bitcoin and Blockchain. The innovative offerings that are being developed in Canada are, for the most part, for the global markets.

If we look at how the community has been self-organizing for the past couple years, it’s truly amazing. Last month in Toronto, there was a meetup that attracted over 500 people and the organizers have been doing these month over month seeing great growth. We are seeing universities holding seminars and workshops. Powerful Canadian and global think-tanks are dedicating resources specifically to understanding and forecasting the impact of this technology.


Q: Investorideas.com
For our readers that are new to bitcoin and blockchain can you explain the difference between bitcoin as a currency and blockchain as the technology behind it? Also, the role that I find fascinating is that of the miners - can you explain bitcoin mining and how it works?

A: Kyle Kemper of the Bitcoin and Blockchain Alliance of Canada
I consider Bitcoin to be three things. It is a currency, a transaction network, and a general ledger.

From a currency perspective Bitcoin is digital gold. It is important to understand that Bitcoin is its own currency altogether. You’re probably familiar with the US Dollar (USD), the Euro (EUR), the Canadian Dollar (CAD), and others, well now you can add Bitcoin (BTC) to that list. The difference between Bitcoin and central-bank issued currencies is that Bitcoin has a fixed monetary policy. Central Banks can print money at will which results in the currency having an infinite supply. With Bitcoin, the supply is limited to 21,000,000 bitcoin. Currently, there are 16 million bitcoins on the market. These 16 million bitcoins have been “mined”.

So just what is bitcoin mining? The network is designed so that every 10 minutes, new bitcoins are awarded to ‘miners’ as compensation for running the network. Mining involves dedicating computing power to solving a complex cryptographic problem. The miner, or group of miners, that figures out the solution receives a reward in the form of newly minted bitcoin. In the beginning it was 50 BTC every 10 minutes, then it reduced to 25 BTC, and it is currently at 12.5 BTC. In about 3 ½ years from now it will reduce to 6.25. It could be said that the inflation rate has a half life of 4 years. To better understand the supply of bitcoin see this chart.


https://ip.bitcointalk.org/?u=http%3A%2F%2Fwww.mattwhitlock.com%2FBitcoin%2520Inflation%2520logarithmic.png&t=571&c=zvIkS01-wDn_QQ

To conclude the Bitcoin as a currency point, let’s understand how the price is set. The price is set by the market. There is no one single bitcoin price. On different exchanges it trades at different prices. There is a global network of traders which take advantage of arbitrage opportunities to bring equilibrium to the global markets. Here is a snapshot of the Bitcoin markets.  Ultimately, the price is determined by supply and demand. As demand increases so should the price so long as the supply cannot change. Demand is driven by utility. Utility is the benefits and reasons to use something. I have just outlined the currency component and how bitcoin is more like a digital gold than a digital dollar. Now let’s look at how bitcoin is a payment network.


To start, let’s think about cash and how it works. If I give you a $100 bill there is no one I can call to reverse that transaction. I also don’t need to know who you are, I can simply see you and give you the bill. Cash works in the physical environment but it does not work in the digital realm. With bitcoin, we have a digital form of cash. In order to send bitcoin to someone you need to enter their “public address”. A public address is like an email address but for money, when someone has yours they can send you money. In order to send bitcoin you need a private key which is like your email password. In order to do this sending and receiving both parties need digital wallets. There are many different types of wallets but all of them interact with the network in the same function. The following is an illustration of a wallet app.


The last important characteristic to understand about Bitcoin is the Blockchain. This is the global decentralized general-ledger of all transactions that take place on the network. What is so significant about this technology is that all information recorded in the blockchain can never be altered or deleted. The information is time-stamped and all transactions can be queried at will.

With regards to financial transactions, when you send someone bitcoin, a transaction takes place on the blockchain. Think of it like a receipt. Your wallet records the transaction ID so that you can always reference it.

There is a lot of excitement around Blockchain because when you have a decentralized database in which records cannot be deleted or altered, light bulbs start going off in innovators heads. Things like identity, asset ownership, stocks, medical records, access keys, digital rights, resource management, and contracts will be able to leverage blockchains to remove centralized agents of trusts and replace them with a trustless network. Where Bitcoin fits in is that because Bitcoin is the largest and most valuable cryptocurrency, it is the most secure blockchain. Innovators are building solutions to leverage the Bitcoin Blockchain to extend the benefits of Blockchain to other industries.


Q: Investorideas.com
How can Canadian investors and online vendors participate to buy, sell and accept bitcoin and other cryptocurrencies? Can you give examples of sites that they use? 


A: Kyle Kemper of the Bitcoin and Blockchain Alliance of Canada
Any individual can buy & bitcoin on their own accord. Sites like Quickbit.com and QuadrigaCX.com allow Canadians to buy and sell bitcoin. Additionally, there are local vendors/brokers who can be found through sites like localbitcoins.com. For larger investors, there are international exchanges like Kraken.com and Bitstamp.net as well as OTC dealers who can assist with acquiring large sums of bitcoin. For brokers and investors looking to speculate without actually taking delivery of bitcoin there are Forex sites (like etoro and simplefx) and there are some private ETFs. As the industry matures and returns continue to be yielded the number of options available to investors is sure to increase as well.

For businesses looking to accept Bitcoin this is quite simple. All one needs to accept Bitcoin is a wallet. For more advanced payment processing and to see the bitcoin converted back to local currency, merchants can use services like Coinpayments.com and Bitpay.com.


Q: Investorideas.com
What regulation is in place for the industry in Canada now and where do you see that headed?

A: Kyle Kemper of the Bitcoin and Blockchain Alliance of Canada
I feel that I need to make it clear that I am not a lawyer and there are more knowledgeable people than I to speak on the topic of regulations but having worked in the space for years I will say the following: Bitcoin is difficult for the regulators. To some eyes it’s currency, to others it is a commodity. Depending on how it is being used by the participants the applicable regulations may change. Anti-money laundering and anti-terrorism laws are applicable and it has been the exchanges who have been most affected by those regulations. Exchanges act as custodians for client funds and thus are required to perform know your customer (KYC) and collect client information in the same way a traditional institution would. If an exchange is processing large transactions they are required to fill out and submit suspicious transaction reports.

The senate of Canada did an in-depth study into Bitcoin and recommended that a “light-touch” approach be used by regulators as there were many outstanding questions and uncertainties around how the future will unfold. The senate certainly saw and understood the incredible potential of digital currencies and cautioned that extraneous regulations would drive innovation to other jurisdictions.

As far as where I see it headed, I think that this is an area that the BAC can be helpful and influential. The industry needs to be at the table when speaking with the policy-makers and regulators. Research needs to be commissioned and research needs to be conducted. Bitcoin and Blockchain is here to stay and we should see more developments and clarifications on the regulatory front as adoption increases and time passes.


Q: Investorideas.com
For newbies to bitcoin how can they take advantage of the Alliance and what do you offer in terms of education and resources? And for now membership is free -  do you see that changing?


A: Kyle Kemper of the Bitcoin and Blockchain Alliance of Canada
The BAC is in a period of transition. We are currently holding board elections and following the election we will be defining our mandate moving forward. Membership in the organization is currently free for individuals but this may change under the new board. We have been and continue to be a resource to individuals and businesses who have questions. We have an email and phone number listed on the website and we have helped a great many Canadians gain a better understanding of Bitcoin. If you are interested in helping the BAC or just want to stay in the loop then I highly recommend that you join the organization. If you are interested in being a director of the Bitcoin alliance please visit our website and fill out the nomination form.

Thank you Dawn.




Kyle Kemper of the Bitcoin and Blockchain Alliance of Canada

Learn More about the Bitcoin and Blockchain Alliance of Canada http://bitcoinalliance.ca/

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