• Slide 0

1. Introduction to Bitcoin
2. Problem
3. Solution, and Product Strategy

Part 1: Introduction to Bitcoin

(jeopardy answer)

• Slide 1: Computer algorithm that makes it possible for a sender of information to prove with mathematical certainty that the information reached its recipient.

• Slide 2: What is bitcoin?

Bitcoin is actually the solution a long-standing problem in computer science that was suspected by many in the academy to be unsolvable.

Here's what happened in the world before bitcoin: Alice might claim that she sent a payment to Bob, but she has no way to prove it. Bob could have deleted the record of the payment, or altered it; maybe there was a network failure in the middle and it didn't reach him, or maybe Alice really didn't send it. The only way to prove to the rest of the world that the transaciton really happened is to send money through a trusted intermediary, and use that intermediary as a source of trust for answering this question.

• Slide 3: (Background is Unicorns). I know what you're thinking right now. This is a bunch of abstract nonsense, hipster magic, etc. So let's talk about the real world. Let's talk about how this computer algorithm affects you.

Part 2: The Problem

• Slide 4: Fractions of a penny Visa, Mastercard: ~2% Amex: ~3.5% PayPal: 2.9% + $0.30

This is a hidden costs that we all pay on everything we buy. It's already there.

So relying on trusted 3rd parties to facilitate and verify our transactions, while generally ok and useful throughout history, is expensive. And until recently, there's been no other option.

• Slide 6: New Power

Bitcoin gives all of us a brand new power to verify a transaction with undeniable certainty and without the need for anyone to observe the transaction when it occurs. Every transaction that ever occurs, once verified by the network using this new algorithm, becomes indisputably enshrined in the foreverness of the internet. This is a totally new capability that we have not had before now, and the transformation effected by this power is just getting underway.

• Slide 7: Absurdly Brief VC Market Overview Internet VC
• 1995: $250m

Bitcoin VC

• 2012: $36m
• 2013: $88m
• 2014: $284m (run-rate)

https://pbs.twimg.com/media/BtvpK4rCAAMHeV5.jpg:large

Part 3: Solution

"In principle, any of the functionality or services related to payment and transfer offered in the existing financial system should be, and likely will be, a candidate for reform if such reform can result in greater efficiency by using technology developed in the open-source distributed network framework that is at the foundation of bitcoin." -- Boston Federal Reserve

• Slide 7 https://bitcoinwisdom.com/assets/difficulty/bitcoin-hash_rate-all.png?1411250692

Like anything, it needs infrastructure. You may have heard about bitcoin "mining" or "hashing", for example. Hashing is actually the process of transaction verification; because computation is the raw material for bitcoin, you see a lot of investment in bitcoin "hashing" in order to build up the ecosystem.

• Slide 8: hashpanel Hashpanel is the first of many software services I intend to build and deliver. Hashpanel will offer a web management interface to manage the daily operations of small to medium-sized mining operation. The current market need for tools like hashpanel is similar to the need for shovels in the midst of a gold rush.

Development has already begun; I've hired another developer already to increase the pace of development, and I plan to release the first version within 60 days, and iterate from there. I'm confident that this is a great first step to take; as the owner of a bitcoin mining operation, I will be my first customer.

• Slide 9: Future Products

  • escrow service
  • market making
  • non-financial transactions
    • contract witness

• Slide 10: Adoption Thesis It has the unique opportunity to become invisible and essential, much like cryptography itself already stealthily underlies everything we can do on the internet. While disruptive, it will serve as a facilitator rather than a displacer. It is irrelevant whether the average person starts carrying bitcoin in their wallet, since the adoption of Bitcoin, I argue, will be driven by payments industry veterans who leverage it as a cost-savings mechanism.

There are tons of products that the market could support, but I intend to focus on products and services that support this path of adoption, since this is the path that my research indicates that current and projected market conditions support.