Self introduction Yuzo KanoHi, my name is Yuzo Kano, CEO of bitFlyer, and actually and I am the chairman of JBA, which is the Japan Authority of Digital Assets. I am trying advocate virtual currencies in Japan, and trying to provide the service for exchange, market makers, and nowadays we’re focusing on providing blockchain technology. Roger Ver I’m Roger Ver. I am the first person to start investing in bitcoin start-ups, and I am currently running bitcoin.com. Thank you very much. To start off the questions: where do you see the Bitcoin ecosystem one year from now? KanoI think it [will be] growing globally. User migration is growing slowly, but definitely more people will accept bitcoin, and will try to start [using it] as a payment method. In Japan, the virtual currency law will pass hopefully in a month; then, people [will] recognize that virtual currency is not bad, and hopefully people think it’s useful. RogerAs we’re talking today, in April of 2016, Bitcoin is going through some growing pains, and lots of people are debating what the right way for bitcoin to scale is. But that's the direct result of so many people around the world who started using the bitcoin now that this is an issue. If nobody was using bitcoin, it wouldn’t be an issue. That's real world evidence that bitcoin is becoming incredibly popular all over the world – and more and more people, and more and more businesses are forming around this ecosystem. It's really exciting to see that happen. All of us have known each other for a couple of years, and if we think back to the state of the ecosystem a few years ago compared to today, it’s not even close. There’s just so much more stuff that's happened in that time. How about Japan specifically? You did mention the virtual currency law; is there anything specific to Japan that you think will happen in next year or so? KanoI think [the virtual currency law] will drive global motivation to make certain laws and rules. There’s actually some discussion about if JBA should contribute to other authorities globally because we are kind of a role model – we’ve been talking with government agencies and try to help setting up the law. So, maybe actually it’s better to have the same law globally, and have the same KYC/AML process. RogerYuzo is definitely the expert on Japan. As far as globally, I’m excited about bitcoin because it puts everybody on the globe, on the same financial payment system, using the same currency; and just like the internet brought us all together communication wise, Bitcoin can bring us all together economically; which is a really exciting thing. Great. I guess as everyone gets more involved in bitcoin industry and world, everyone may be are aware of the upcoming block halving, which is 85 days from now. Do you see the block halving having any effect on price or the industry itself? KanoTheoretically it shouldn’t impact market price, because it’s already been taken into account, but people are expecting the price will actually hike up a bit because it happened last time. There is a risk that some miners will drop off because of less revenue versus the electricity cost. That may actually fluctuate the market; but my opinion here is that people are expecting a rally around that time. I suspect [the same]. RogerI’m always expecting a rally around for the Bitcoin because it’s just such an incredibly useful tool for people all over the world to use for their payments. People outside of Japan can use Bitcoin at every single Starbucks to save a 25% discount, and there’s a couple hundred million of Starbucks customers around the world… all of them should be using Bitcoin. There’s the same thing with purse.io. You can get a substantial discount on everything from Amazon by using Bitcoin. Once people hear about these things and realize it, they are going to want to use Bitcoin in their day to day lives, so I’m always expecting a rally. But, around the time of the reward halving, I think there’s an extra strong reason to suspect a rally because the inflation rate is goanna drop by half over night, literally. How do you think Bitcoin will fare in the future with the scalability problem, that's been in the news a lot lately. How do you feel about scalability problem, what kind of hurdles do you think there are, and what can be done about it? RogerThe fact we are having scalability issues or scalability arguments or scalability heated discussions online: that's the strongest sign for Bitcoin yet. Because so many people are using Bitcoin, this is becoming an issue; if nobody is using it, it wouldn’t have been an issue and it wasn’t an issue for the last seven years of Bitcoin’s existence. It just became an issue recently because so many people are using it. So, yes, it is a problem, but it's the exact right type of problem we want to have – it’s that so many people are using Bitcoin. KanoIt’s kind of difficult to say which is better. I understand that’s a Core and Classic problem. Both sides actually have their opinion, and both look good and bad. As a user, obviously bigger block sizes helps for faster transactions, but this obviously damages the miners’ fee. So it’s not just one side – not just looking at one side of like users or miners – but you have to come up with something that’s good for everybody. RogerMy understating is pretty much all the miners want bigger blocks as well, and they’ve all signed on saying they support 8 megabyte blocks for long time now, and they’ve been putting that in each block they released – there’s a little memo there. The only issue is that they want current Bitcoin Core team to write the code for the bigger blocks. The current Bitcoin Core team, for whatever the reason, doesn't want to write that code, so there’s lots of interesting politics at work there. As far as the adoption of Bitcoin as a mainstream payment option is concerned, what kind of hurdles do you think, apart from scalability, there are – such as as regulatory hurdles, or just opinions about Bitcoin? What kind of things can we do to help to improve the image, and what can we do to make Bitcoin more mainstream as a payment option in Japan? KanoIn Japan, it’s quite tough because we have Suica and other useful payment methods. It’s always a question of why Bitcoin is better than Suica? And it’s quite difficult to answer that. But one question is: the merchants actually pay a lot of fees for Suica, so [fees with] Bitcoin are much much less. RogerCan you make it at some point so that we can charge our Suica cards with Bitcoin? Because, I think people would love that. I don’t know if that's possible, but I know myself and my circle friends would love to be able to do that. KanoIf you actually limit that to like NFCs, including FeliCa, it could be possible. RogerI think that would maybe be something to consider working on because if you can do that, then instantly bitcoin is plugged into every single merchant that accepts Suica. I think it’s really really convenient for Bitcoin users. Maybe not for the merchants if there’s going to be some additional fee there but wow, Bitcoin, it would basically be able to be used ubiquitously if you can have your Suica card charged with Bitcoin. That's a from-a-user request to a Bitcoin exchange here in Japan. I’d love that and my friends would love that. KanoI agree with that. We should work on it. Roger I heard, not that you should necessary follow Mark Karpeles’s model or business plan but, I heard that he was looking into that and working on that at one point in the past, so I do think it’s good idea. That’s kind of more about person face-to-face payments. What do you think can be done to maybe improve the adoption for bitcoin for e-commerce? Is there any barrier there that needs to be looked at? KanoIt’s a chicken and egg problem here; if a big e-commerce site actually wants to use bitcoin, they require more [bitcoin users]. But, people don’t use bitcoin just because there are no e-commerce sites, so that's the current problem. RogerThere’s definitely the chicken or egg problem. And then, the other problem is that people aren’t even aware of the chicken or egg in regards to bitcoin. The average person on the street, unfortunately in Japan, probably still thinks bitcoin went bankrupt with Mt. Gox. They’re confusing Bitcoin and Mt. Gox as being the same entities, whereas and all of us this room realize Mt. Gox was just one specific company that was using Bitcoin and there’s probably tens of thousands of other companies around the world that are using Bitcoin that are all still doing just fine. So there’s still real educational issue that we have to address there and hopefully this video will help. What do you think about altcoins? What do you think is their direction for the next few years, and is there anything at all that kind of catches your interest at the moment? KanoEthereum is very popular in Japan. We will actually release an Ethereum exchange soon. But as for other altcoins, it will take some time. I still believe that Bitcoin is the king of the virtual currency, although it has a little bit of problem. I see a lot of better coins technically, but people use bitcoin because that's the first one. So Bitcoin is the number one, maybe Ethereum… if user needs to trade other altcoins, maybe we can implement it. RogerBitcoin is the “king of cryptocurrency,” as Yuzo said, and today that's true. But at one point, MySpace was the king of social media network, so it’s not always going to be true. The Bitcoin developers need to make sure that Bitcoin continues to lead the pack as far as usefulness, reliability, in technology, and that sort of thing. If something comes along that’s even better, then I guess that’s a good thing for world because all of us will get to use that new and better thing. But, it’ll be a little bit sad for those of us who have been holding Bitcoin. Is there any particular altcoin that you’ve been looking at lately? Or is it not really in your interest? RogerI think Bitcoin’s biggest weakness is the level. Like it’d be nice if bitcoin had a lot more privacy built into core protocol. So recently I invested in altcoin called Zcash (the website is z.cash); and basically you have a blockchain with that, but instead the blockchain being viewable to everybody, the entire thing is encrypted. You can only see your own stuff, but the network itself is able to verify that people aren’t double spending coins, and that new coins that aren’t just coming into existence. At the protocol level, it’s a 100% mathematically anonymous cryptocurrency, which is a better form of money than Bitcoin to be honest if it works in this scale. There’s been a little bit of blockchain boom in the banking industry – lots of banks participating, R3, and other financial institutions are seemingly taking an interest into blockchain technology. What do you think about that? And do you think blockchain technology really has a viable chance at changing the way the financial institutions operate? RogerThere’s two questions there I think. The last was “do blockchains have an opportunity to change the way the banks and financial institution operate?” Absolutely, it’s going to change the all of them do their business, and they realize it, that's why they all scrambling to try and figure out how to implement this into their business. But I think it’s important for them and everybody else to keep it in mind that by far, several orders of magnitude, the safest the most secure and most reliable blockchain is the Bitcoin blockchain. That's why so many these other businesses are getting excited about the blockchain technology are using the Bitcoin blockchain technology to build that technology upon. KanoYeah I agree with that. Blockchain technology will change the finance world, for sure. It’s very innovative in that you can reduce the cost of maintenance and the development, and SLA 100%, and is a system never actually goes down… RogerThat alone is amazing! KanoYeah, that’s amazing. RogerEven if it’s only that, it’s still revolutionary and changes the whole system. KanoWhat’s good on a blockchain is more like transactional business. So, it fits the financial industry, including insurance and maybe real estate, and some other government operations. What it’s not good for is, let’s say, controlling airplanes. Blockchain is not supposed to be used for that because it’s slow, and it’s not transactional. So anything that's transactional [could] be replaced with blockchain possibly. It’s not just limited to finance: maybe social networks, or a traffic jam recorder, or something like highway fee system… those can actually be replaced easily. RogerAnything for which data integrity is important, and keeping track that the copy you have is the real and original copy. Like court records, or absolutely anything which you want to prove that ‘this one’ this is one is real one. Somebody online said at some point that the start of the Bitcoin blockchain is the true beginning of recorded history. And I think there’s a lot of truth to that because, before that, we had the printing press and people would write books, but books got lost or people could be changed or new revision came out … whereas once something is written into blockchain, it’s going to be there until probably the end of internet, which I don’t see coming into any time soon. So, I thought that was interesting way of looking at it: that beginning of blockchain was the “true beginning of recorded history”. Are there any specific blockchain-related projects that have caught your interests lately? KanoR3Cev sounds like it’s politically successful, but maybe the Linux Foundation, W3C is actually looking into [blockchain technology,] Ripple, Swift... everything is very interesting but I recognize that these are still under survey, so we believe that there might be better blockchain innovation happening in the near future. RogerI’m really excited about the bitcoinhivemind.com, which is building a prediction market, where you can harness the wisdom of crowds and people can place real money on the line to what they think what actions today are going to lead to what future results; and that becomes a really, really, useful tool for all human kind. It’s almost like a time machine window where you can see into the future and see and what’s going to happen. And not only can it be a window into the future, but it can also be used as a tool to control the future or modify the outcome of the future events. What an incredibly exciting powerful and interesting tool. So, bitcoinhivemind.com is one that has my attention. Roger, I’d like ask you, with all of your past experiences in Bitcoin space and with your insight to the future of how Bitcoin might turn out, do you have any advice for bitFlyer? RogerAdvice for bitFlyer? Japanese market’s a very different market than other markets around the world, so to be honest I don’t think I have that much great advice for you other than listen to what the customers want, and provide the services your customers want, and one that they want pay for. I think that's good advice for any business, not just bitFlyer. Figure out what your customers want, find out the way to give it to them, and charge them for it at the same time. KanoSo that’s NFC for now? RogerI think everybody in Japan that's already Bitcoin user [would use bitFlyer] if they can log into bitFlyer account, and put in their Suica pin code, and charge the Suica card from your account. I personally don't have a bitFlyer account, because I don’t really covert bitcoins to other forms of money. But, if you could offer that service on your website – boom! I’d have an account, and all my friends would have an account on bitFlyer specifically so that we can charge our Suica cards. Maybe that’s my advice – if that's possible to be done in Japan, where we can charge our Suica cards with Bitcoin, every single existing Bitcoin user in Japan would have account in bitFlyer to do that. They’d be telling all their friends, “hey, let me pay you in Bitcoin” and like “where can I spend Bitcoin”, well log into bitFlyer, and you can charge your Suica account with it, and then you can spend Bitcoin anywhere Suica is accepted. If that's possible to be done, I think that's should be a pretty high priority on bitFlyer’s account, and we would gladly pay a fee to be able to do that. KanoOkay. Thanks for the advice. RogerThank you [moderator], actually! All right, just to wrap it up, if you could just talk about anything you are working on at the moment. Roger you’re very busy, I’m just curious what you’re doing. RogerI’m spending most of my time focusing on bitcoin.com now, trying to make it the world’s best English language portal for people that are new to bitcoin, because most of the people that actually go to website currently are the people brand new to Bitcoin, and they heard about it in media, and we all know in this room that there’s no official website for Bitcoin, no official Bitcoin company, but most of the people will show up there they assume that bitcoin.com must be the official website, for the official Bitcoin company, and all sort of stuff. We are trying to make a really easy place for them to get started, and if they come from Japanese IP address, one of the first place to see buy Bitcoin is bitFlyer. KanoAt bitFlyer, we are actually trying to provide more altcoins. That's probably the first request by users, and maybe more payment methods. We actually just released convenience store payments and a 24 hour net-banking payments, so we should acquire more varieties of [payment] methods. RogerThis is where you can fund bitFlyer account with convenience store deposit? KanoYes. As JBA, I must actually work on consumption tax, which is the biggest problem in Japan. That is, we need to actually pay 8% tax when you buy Bitcoin. This is ridiculous. So that's actually our first target, and then we need solve some other issues – legal issues – and we need to work on the some of the details for new virtual currencies law. [Those are] the issues we have. Any other comments before we close things up? RogerIf you are watching this video, you are already fan of Bitcoin and interested in bitcoin. But maybe your brother isn’t. Maybe your sister isn’t. And, your friend in your school isn’t. So tell your co-workers at work, tell your family, tell everybody what you know about Bitcoin, and explain to them why is useful, explain to them why it’s good for the world and get them involved in Bitcoin too because there’s no official Bitcoin company. It’s just up to all of us to spread the world and tell people about how amazing and wonderful this technology is for everyone in the world. So tell your friends and tell your family about Bitcoin. KanoA lot of actually Japanese people think Bitcoin is kind of evil maybe, and has strong bad image because of the Mt. Gox issue, but we would like to emphasize that Mt. Gox issue is not Bitcoin. It’s separate. The security of Bitcoin is still safe. Start using Bitcoin a little bit, so you can actually use it outside of japan, you can buy electronics, and maybe drink coffee, or whatever. Let’s actually start using Bitcoin because it’s convenient. You can’t use Suica outside of Japan. RogerBitcoin works worldwide. KanoYeah Great. Thank you very much for your time. Kano＆RogerThank you. Profile Roger Ver Roger Ver, also known as "Bitcoin Jesus" is a well-known Bitcoin evangelist. He is an investor in several Bitcoin startups, including Bitcoin.com, Blockchain.info and BitPay. Though he is a internationally renowned Bitcoin "top player", Ver lives in Tokyo and has helped to spread Bitcoin domestically, and also helped organize events for Japan's largest Bitcoin Meetup in Tokyo. Twitter: @rogerkver Yuzo Kano Co-Founder and CEO of bitFlyer, Inc. Yuzo graduated from The University of Tokyo in 2001 with a Master of Engineering. Prior to bitFlyer, Yuzo worked as an Equities Derivatives and Convertible Bonds Trader at Goldman Sachs, focusing on market making for institutional investors as well as principal trading, and financing for corporations. Yuzo co-founded bitFlyer in January 2014 and also serves as the head of Japan Blockchain Association (JBA).