Thank you. My name is Jan Vornberger and I will
briefly say a few things about Bridgewalker.
It’s an idea, that I’m working on, where
I try to combine traditional currencies
– in this case the Euro – with Bitcoin.
That means I work on a mobile payment app,
which maintains a Euro balance
for the user and allows him to make
Bitcoin payments with it.
A few words about my motivation – why I
work on this. I am interested in the
whole area of “mobile payments”. Mobile
payment systems in general.
According to Gartner this is a growth market.
Growth rates of 42 % per year.
But so far it has not really taken
off in Germany.
Maybe we Germans are especially sceptical
in this regard. We like our EC cards.
Credit cards are also not that widespread
in Germany.
But regardless, there are many contenders,
who try to do something in this space.
I have listed a few here: mpass for example,
by O2, Vodafone and T-Mobile.
They want to get people to pay with
their cellphones. Edeka and Netto have apps.
girogo. PayPal has a number of projects.
VISA also has different NFC projects, where
they try to pay contactless and various
local startups, that also do things in
this space. All of this has in common,
that these are all walled gardens.
Closed systems, which only work, if
one provider delivers the whole solution.
So if mpass provides the app and also
the shop system and anything else needed
so that is all works together. And it
is of course difficult to reach
widespread use with such closed systems.
Therefore I think that Bitcoin
can play an important role here – independent
of other possible uses cases for it.
That in the mobile payment space, Bitcoin
could maybe play the role of a
shared, neutral protocol. A kind of
lowest common denominator. An interface,
that different participants can agree on.
This plays into the idea of “money over IP”,
which is often mentioned as well.
So Bitcoin would be used for this communication.
Why is Bitcoin a good choice for that?
Many reasons have already been pointed out,
that I do not have to repeat here,
but of course the fact, that it is an
open and neutral protocol. That there is
no central point of control. So in this
sense no one has a “home-field advantage”.
If two people agree on, let’s say, connect
their finance IT systems via Bitcoin, then
no one has a home-field advantage, but they
rather meet on neutral ground, so to speak.
And of course the advantage of no counterparty
risk. That it is possible to
connect via Bitcoin with people, that one
does not necessarily have to trust.
Since in this respect it acts as a kind of
digital gold. It is the actual asset,
wherease – for example – if some Euro IT
systems are connected to each other,
then they can only exchange digital IOUs,
where I necessarily have to trust the
other participant. Bitcoin has a very
interesting property in this way
which makes it much easier to communicate
with other people that speak Bitcoin,
because I do not necessarily have to
trust them. I can just
look at the actual Bitcoin, whether
or not it is real.
Ok, but there is also a “but” – at least
in my opinion. I see the biggest difficulty
in… aw, sorry, back to this graphic for
a second. So if you imagine that you
have some money here, in an account, or
in cash and then want to transfer this
to an app in some way and then later
use in the shop to buy a cup of coffee,
then we can just put Bitcoin in between
here everywhere – and presto!
All these different things can now be
provided by different people. The app
can be done by someone else, then who is
doing the shop system. Everything plays
together – plug and play – as long
as everyone is using Bitcoin. The problem
I see with it, is the often mentioned
exchange rate volatility. Bitcoin will be
very volatile for the foreseeable future.
That makes it difficult to use for this,
as it cannot be used as a stable reference.
A much bigger problem in my opinion is the
fact, that for the user, Bitcoin is a foreign
currency, which he is not familiar with.
He is more familiar with the local currency –
for example the Euro.
He has an idea of prices – how much
certain things cost in respect to others.
And of course his local currency appears
very stable to him, because everything
around him is priced in this currency.
So if we take the Euro as an example,
here in Germany, then the Euro also
fluctuates against other currencies
on the world market. But milk still
costs the same the next morning.
On most days at least. Therefore the user
experiences the currency as very stable
and is familiar with it. For these
reasons I am interested in combining
these two things. To use Bitcoin only
as a payment mechanism,
as this interface, but exchange from
and to local currencies before and after
the Bitcoin interface. So if we look
at this graphic again,
then you still have the Bitcoin interfaces,
but you exchange into local currencies
before and after that. At first glance
this sounds like a ridiculous amount
of exchanging back and forth. But still,
if the currency exchange can be relatively
cheap, then the whole process might still be
cheaper than credit cards.
And yet one maintains the advantage of
the local currency. So for example on the
phone the user now sees a Euro balance.
And in addition, the plug and play functionality
is maintained. So the provider of the app,
does not have to be the same person doing
the shop system or the person offering
top-up services for the app balance.
I work on putting this idea into practice
with Bridgewalker. More precisely the
the middle part of that graphic, the app.
So I am prototyping how
that could look like. An app, that maintains
a Euro balance for the user.
One can see here, that the user has twenty
Euros on his phone.
To top that up, he has to send bitcoins to
the app. How he gets them is a task for
someone else. And then conversely
he can pay anyone who accepts bitcoins.
So for example a shop that integrates with Bitpay,
either online or in person.
At the moment this is in a prototype stage.
I am experimenting with the concept;
figuring out how this could look from
a user’s perspective.
The next steps for me would then be to
see, whether I want to turn this into
an actual product. In this case I would
probably need strategic partners,
especially to get the legal side of things
properly set up.
That’s it from me. Thanks!