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Important Takeaways from Crypto Springs

October 1, 2019 3 min read

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Important Takeaways from Crypto Springs

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If you don’t like the heat, please stay far away from the Crypto Springs conference. But if you can tolerate a dry 107 degrees like a true Angeleno, Crypto Springs provides some of the highest quality Bitcoin conversation one can find. I was surrounded by genius Bitcoin diehards for three straight days, so I did my best to just sit back and listen. Here are some of my key takeaways from the conference.

Non-traditional businesses should be accepting bitcoin

CEOs of three businesses, MakeLoveNotPorn, Eaze, and Gab, appeared on a panel called Sex, Drugs, and Free Speech to kick off the conference. These three businesses operate outside of the traditional business spectrum when it comes to both culture and regulation. 

MakeLoveNotPorn’s CEO Cindy Gallop complained that despite not breaking any laws, her company has had nightmarish relationships with banks, payment processors, and critical business infrastructure providers.

 Eaze’s CEO Jim Patterson also acknowledged that banking relationships can be very difficult given the federal restrictions against cannabis.

While Andrew Torba’s Gab was able to build a BTCPay Server infrastructure to power bitcoin payments for his social media platform, most businesses don’t have the IT capacity to run dedicated hardware.

OpenNode is perfectly positioned to assist businesses like Eaze and MakeLoveNotPorn that are experiencing banking difficulties. If Bitcoin is meant to empower consumers and merchants to transact freely with each other, then Bitcoin should be used when traditional payment processors fail to service businesses. It’s time that companies recognize Bitcoin as a form of freedom of expression and allow customers to spend it with them.

Lightning Network nodes are trying to find reliable peers

Finding reliable peers in the Lightning Network is the main priority for businesses that operate a Lightning node. Bitcoin companies are experimenting with and implementing Lightning Network functionality, and they are forming a core of nodes with commited channel capacity and uptime. Websites like 1ml.com provide metrics such as capacity and channel count, but some large capacity nodes have poor response rates making these metrics less valuable. Companies are doing their own network probing by sending test transactions in order to find the fastest and most reliable payment routes around the network. 

I sensed a growing desire for better Lightning Network metrics, something we are researching at OpenNode. Before the industry can focus on routing economics and even overall growth of network size, successful payment routing remains the primary objective for major Lightning Network businesses. Successful routing needs reliable peers!

Bitcoin is a tool for empowerment

The more we sink into discussions about technical improvements and monetary economics, the easier it is to forget that Bitcoin is a revolutionary technology empowering peaceful human interaction. Nozomi Hayase did a brilliant job of evoking some of Nick Szabo’s most influential work on reciprocal altruism, or simply when people do favors for each other. Szabo cited reciprocal altruism as a foundational basis for money so that people wouldn’t have to rely exclusively on memory to account for all favors owed and deployed. Bitcoin was invented to be a new form of money, or according to Hayase, the new incarnation of an accounting mechanism for favors. No nuclear arsenal can undo SHA-256, giving Bitcoin its violence-resistant qualities. Her talk was inspirational because it reinforced the empowering nature of Bitcoin transactions. With many at the conference focused on business strategy, impending regulation, and protocol updates, Hayase brought a welcome message of human empowerment to remind us all why we Bitcoin.

Thank you to Beatrice Leung and Conner Fromknecht for their commentary on Lightning Network routing. Thank you to Cindy Gallop and Jim Patterson for their willingness to discuss operational struggles due to legacy payment processing and banking. And thank you to Nozomi Hayase for her inspirational talk on Bitcoin empowerment.

Nik Bhatia is a Research Strategist at OpenNode. In his past he traded US Treasuries and interest rate futures for Payden & Rygel, a Los Angeles based investment manager with over $100 billion assets under management. He received his Masters in Finance from IE University in Madrid, Spain in 2013, and received his Bachelors in Social Sciences (Economics) from University of Southern California in 2011. He is a CFA charterholder. His goal is to bring a capital market to Bitcoin in order for it to achieve status as a global reserve currency.