Coin News

Bitcoin has always been seen as the king of the world of cryptocurrency due to its network effects and first-mover advantage, but ShapeShift CEO Erik Voorhees thinks bitcoin could be replaced as the top dog if a scaling resolution is not found this summer. Voorhees shared this point of view on the most recent episode of Epicenter with co-hosts Brian Fabian Crain and Sébastien Couture.

The debate over scaling Bitcoin has been the main topic of conversation in the ecosystem for the past two years, but it appears that the network will get the long-awaited Segregated Witness (SegWit) upgrade by August 1st.

During his appearance on Epicenter, Voorhees discussed his support for the SegWit2x proposal, his impression that many Bitcoin users aren’t paying attention to the scaling debate and whether Bitcoin needs an improved system of governance.

Is SegWit2x Bitcoin’s Short-Term Scaling Solution?

SegWit2x, which is supported by a large number of Bitcoin companies and miners, is a proposal for adding SegWit and a hard-forking increase to the block size limit to Bitcoin. Voorhees described himself as a “big proponent” of the proposal during his appearance on Epicenter, saying that it’s the “only viable, actual option to moving Bitcoin forward.”

“I want SegWit on Bitcoin as soon as possible,” said Voorhees. “I also want a hard fork to a larger base block size as soon as possible, and SegWit2x hopefully will make those things happen.”

Voorhees said that he is also bullish on the possible success of SegWit2x due to the declared support of the proposal from over 80 percent of the network hashrate.

According to Voorhees, the activation of SegWit2x will move Bitcoin out of a “trough of misery” that he believes the digital cash system has been in for the past two years, though he also believes the deployment of these changes has the potential to cause some volatility in the near term.

“This stagnation has been really horrible for Bitcoin,” said Voorhees.

In Voorhees’s view, the activation of SegWit2x on the Bitcoin network will lead to a rally in the bitcoin price that “will be unlike anything that people have ever seen before.” He also believes the activation of the scaling proposal will allow everyone in the ecosystem to refocus on building on top of Bitcoin rather than debating over the base protocol.

At one point during his Epicenter interview, Voorhees admitted that he almost doesn’t care which scaling proposal is activated on the network.

“I just want something to happen,” said Voorhees. “If this summer fails to find some kind of resolution to this debate, then I’m pretty bearish on bitcoin, and I think it’ll probably be replaced.”

Bitcoin’s Userbase is Much Larger Than /r/Bitcoin

Voorhees also discussed the Bitcoin community as a whole during his appearance on Epicenter, and he noted that Bitcoin’s userbase is much larger than some may realize.

“The community is so much larger than Reddit, and people that live on Reddit don’t realize this,” said Voorhees.

While the /r/Bitcoin subreddit is still a main hub of the community, Voorhees pointed out that both Blockchain and Coinbase have 10 million users each. By comparison, /r/Bitcoin has roughly 250,000 subscribers.

Voorhees then told a story of going to a recent Bitcoin meetup in Berlin, Germany, where Blockchain CEO Peter Smith asked the audience how many of them had heard of the SegWit2x proposal. According to Voorhees, about 5 percent of the crowd raised their hands.

Does Bitcoin Need a Better System of Governance?

Voorhees’s story about the Berlin meetup eventually turned into a broader conversation of how changes should be made to the Bitcoin protocol. Crain pointed out that some of the newer altcoins coming onto the market, such as Tezos, are heavily focused on the issue of network governance.

“It’s a slippery slope,” said Voorhees. “When you start having structured governance, you start moving toward an organization that can be compromised. As difficult as Bitcoin has been in making progress on this one debate, it also is showing immense resilience to change, which is good and bad — it depends what the issue at hand is. You have to be careful if you want something like a blockchain project to turn into a more traditional-looking organization with a hierarchical structure and certain people who make key decisions. That’s not necessarily the best way that a blockchain should exist.”

Voorhees then admitted that he does not know the best governance model for a blockchain, but he thinks it’s great that there is so much experimentation taking place in this area right now.

Watch the whole episode here:

Bitcoin has always been seen as the king of the world of cryptocurrency due to its network effects and first-mover advantage, but ShapeShift CEO Erik Voorhees thinks bitcoin could be replaced as the top dog if a scaling resolution is not found this summer. Voorhees shared this point of view on the most recent episode of Epicenter with co-hosts Brian Fabian Crain and Sébastien Couture.

The debate over scaling Bitcoin has been the main topic of conversation in the ecosystem for the past two years, but it appears that the network will get the long-awaited Segregated Witness (SegWit) upgrade by August 1st.

During his appearance on Epicenter, Voorhees discussed his support for the SegWit2x proposal, his impression that many Bitcoin users aren’t paying attention to the scaling debate and whether Bitcoin needs an improved system of governance.

Is SegWit2x Bitcoin’s Short-Term Scaling Solution?

SegWit2x, which is supported by a large number of Bitcoin companies and miners, is a proposal for adding SegWit and a hard-forking increase to the block size limit to Bitcoin. Voorhees described himself as a “big proponent” of the proposal during his appearance on Epicenter, saying that it’s the “only viable, actual option to moving Bitcoin forward.”

“I want SegWit on Bitcoin as soon as possible,” said Voorhees. “I also want a hard fork to a larger base block size as soon as possible, and SegWit2x hopefully will make those things happen.”

Voorhees said that he is also bullish on the possible success of SegWit2x due to the declared support of the proposal from over 80 percent of the network hashrate.

According to Voorhees, the activation of SegWit2x will move Bitcoin out of a “trough of misery” that he believes the digital cash system has been in for the past two years, though he also believes the deployment of these changes has the potential to cause some volatility in the near term.

“This stagnation has been really horrible for Bitcoin,” said Voorhees.

In Voorhees’s view, the activation of SegWit2x on the Bitcoin network will lead to a rally in the bitcoin price that “will be unlike anything that people have ever seen before.” He also believes the activation of the scaling proposal will allow everyone in the ecosystem to refocus on building on top of Bitcoin rather than debating over the base protocol.

At one point during his Epicenter interview, Voorhees admitted that he almost doesn’t care which scaling proposal is activated on the network.

“I just want something to happen,” said Voorhees. “If this summer fails to find some kind of resolution to this debate, then I’m pretty bearish on bitcoin, and I think it’ll probably be replaced.”

Bitcoin’s Userbase is Much Larger Than /r/Bitcoin

Voorhees also discussed the Bitcoin community as a whole during his appearance on Epicenter, and he noted that Bitcoin’s userbase is much larger than some may realize.

“The community is so much larger than Reddit, and people that live on Reddit don’t realize this,” said Voorhees.

While the /r/Bitcoin subreddit is still a main hub of the community, Voorhees pointed out that both Blockchain and Coinbase have 10 million users each. By comparison, /r/Bitcoin has roughly 250,000 subscribers.

Voorhees then told a story of going to a recent Bitcoin meetup in Berlin, Germany, where Blockchain CEO Peter Smith asked the audience how many of them had heard of the SegWit2x proposal. According to Voorhees, about 5 percent of the crowd raised their hands.

Does Bitcoin Need a Better System of Governance?

Voorhees’s story about the Berlin meetup eventually turned into a broader conversation of how changes should be made to the Bitcoin protocol. Crain pointed out that some of the newer altcoins coming onto the market, such as Tezos, are heavily focused on the issue of network governance.

“It’s a slippery slope,” said Voorhees. “When you start having structured governance, you start moving toward an organization that can be compromised. As difficult as Bitcoin has been in making progress on this one debate, it also is showing immense resilience to change, which is good and bad — it depends what the issue at hand is. You have to be careful if you want something like a blockchain project to turn into a more traditional-looking organization with a hierarchical structure and certain people who make key decisions. That’s not necessarily the best way that a blockchain should exist.”

Voorhees then admitted that he does not know the best governance model for a blockchain, but he thinks it’s great that there is so much experimentation taking place in this area right now.

Watch the whole episode here:

It’s getting easier all the time to be paid in cryptocurrency. As of Monday, July 3, Bitwage, the Bitcoin payroll and international wage payment service, announced that it is launching services in the U.K. While there might be irony given that earlier this year Bitwage also announced it would offer European Union (EU) IBAN numbers to workers anywhere in the world receiving wages from EU companies, the latest news suggests that the United Kingdom is ready for cryptocurrency. But Bitwage has been saying that for two years.

“For domestic workers, we are providing the easiest way for users to obtain digital currencies,” Jonathan Chester, founder and president of Bitwage, told Bitcoin Magazine in a recent interview. “It is just ‘set it and forget it,’ as your savings of bitcoin, ether or litecoin increase over time. This is great timing to allow all the new U.K. users that have come into the ecosystem due to the recent price rise.”

The Brexit Impact

“For international workers, this comes at a good time during the uncertainty of Brexit,” said Chester. “Once the U.K. leaves the EU, it will be much harder to receive payments from U.K. companies throughout Europe. Our solution will help reduce the cost and delays for workers receiving wages from the U.K., despite the impending consequences of the U.K. leaving the EU.”

If Brexit leads to a significant change in the exchange rate, businesses will need to account for the most efficient payment process possible to reduce the likelihood of errors, delays or any other costs within their control.

Adoption in the Workplace

While entire companies can easily switch their entire workforce payroll onto Bitwage, this scenario is not entirely necessary. Individual employees can create accounts for themselves. “If someone is interested in getting their wages or a portion [of them] in cryptocurrency, all they have to do is sign up to Bitwage and provide the bank account provided to their employer,” explained Chester. “[Employers] don’t even need to know the difference.”

However, a great way to spread cryptocurrency adoption in the workplace would be to discuss the advantages of Bitcoin with fellow employees and management. As Chester put it, “Bitcoin is a much better store of value than gold [because it’s] easier to use and store, and it’s much more scarce. For employees, taking a portion of wages in cryptocurrency would be an investment.” Because users have the option of allocating the portion of their wages that are paid out in crypto versus fiat, it is an easy way to automatically start holding small amounts of cryptocurrencies.

1.  Cryptocurrency Lowers International Payment Costs

“If you are paying a lot of workers, it is about saving money on wire fees and not being limited on the amount you can send,” said Chester. “Systems that save you money on wire fees, but do not leverage blockchain [technology], have to use a method called ‘float.’ This essentially means they are holding money in the other country to pay out when they receive the funds and then send a bulk wire to replenish the accounts in the payout country later. These systems have to limit the amount you can send so that they do not run out of funds to pay out. This is not the case with blockchain [technology].”

Chester said that, before announcing its U.K. launch, several U.K. companies had approached Bitwage, hoping to use their service to pay workers in the Philippines. They wanted a way to save money on wire fees, save their workers money on exchange rates and remove limits on the amount of money that can be sent.

2. Optionality Is a Powerful Marketing and Recruiting Tool

For many people, particularly millennials, having options can be a legitimate benefit. Offering employees more options for how they want their wages paid out is empowering. Furthermore, it signifies trust between employee and employer.

Bitwage can also receive and pay out in a wide range of other currencies such as gold, silver, USD, Euros, GBP, BRL, PHP, INR, MXN, ARS, VND, NGN and UAH. Choice of currency could be a formidable recruiting tool to attract a much wider pool of talent. For instance, international employees, the unbanked, gold bugs, silverites and of course the crypto community might appreciate the option of getting paid in the currency of their choice.

Chester pointed out that once more than 50 percent of employees at a business are getting paid in cryptocurrency, an employer might even decide to provide an incentive package “like a bitcoin 401k.”  

It is important to note, however, that once businesses receive bitcoins from a Bitcoin transaction, it becomes that entity’s responsibility to report capital gains. If a business receives all of their transactions in another designated currency, no additional reporting is required. Before making these choices on the type of payment, payment processor and preferred currency for Bitcoin transactions, and before making any changes to their settlement, it’s a good idea for business owners to discuss their intentions and their options with their accountants.

Furthermore, employees should pay careful attention the Bitwage’s fee structures, since there are some costs associated with the service.

It’s getting easier all the time to be paid in cryptocurrency. As of Monday, July 3, Bitwage, the Bitcoin payroll and international wage payment service, announced that it is launching services in the U.K. While there might be irony given that earlier this year Bitwage also announced it would offer European Union (EU) IBAN numbers to workers anywhere in the world receiving wages from EU companies, the latest news suggests that the United Kingdom is ready for cryptocurrency. But Bitwage has been saying that for two years.

“For domestic workers, we are providing the easiest way for users to obtain digital currencies,” Jonathan Chester, founder and president of Bitwage, told Bitcoin Magazine in a recent interview. “It is just ‘set it and forget it,’ as your savings of bitcoin, ether or litecoin increase over time. This is great timing to allow all the new U.K. users that have come into the ecosystem due to the recent price rise.”

The Brexit Impact

“For international workers, this comes at a good time during the uncertainty of Brexit,” said Chester. “Once the U.K. leaves the EU, it will be much harder to receive payments from U.K. companies throughout Europe. Our solution will help reduce the cost and delays for workers receiving wages from the U.K., despite the impending consequences of the U.K. leaving the EU.”

If Brexit leads to a significant change in the exchange rate, businesses will need to account for the most efficient payment process possible to reduce the likelihood of errors, delays or any other costs within their control.

Adoption in the Workplace

While entire companies can easily switch their entire workforce payroll onto Bitwage, this scenario is not entirely necessary. Individual employees can create accounts for themselves. “If someone is interested in getting their wages or a portion [of them] in cryptocurrency, all they have to do is sign up to Bitwage and provide the bank account provided to their employer,” explained Chester. “[Employers] don’t even need to know the difference.”

However, a great way to spread cryptocurrency adoption in the workplace would be to discuss the advantages of Bitcoin with fellow employees and management. As Chester put it, “Bitcoin is a much better store of value than gold [because it’s] easier to use and store, and it’s much more scarce. For employees, taking a portion of wages in cryptocurrency would be an investment.” Because users have the option of allocating the portion of their wages that are paid out in crypto versus fiat, it is an easy way to automatically start holding small amounts of cryptocurrencies.

1.  Cryptocurrency Lowers International Payment Costs

“If you are paying a lot of workers, it is about saving money on wire fees and not being limited on the amount you can send,” said Chester. “Systems that save you money on wire fees, but do not leverage blockchain [technology], have to use a method called ‘float.’ This essentially means they are holding money in the other country to pay out when they receive the funds and then send a bulk wire to replenish the accounts in the payout country later. These systems have to limit the amount you can send so that they do not run out of funds to pay out. This is not the case with blockchain [technology].”

Chester said that, before announcing its U.K. launch, several U.K. companies had approached Bitwage, hoping to use their service to pay workers in the Philippines. They wanted a way to save money on wire fees, save their workers money on exchange rates and remove limits on the amount of money that can be sent.

2. Optionality Is a Powerful Marketing and Recruiting Tool

For many people, particularly millennials, having options can be a legitimate benefit. Offering employees more options for how they want their wages paid out is empowering. Furthermore, it signifies trust between employee and employer.

Bitwage can also receive and pay out in a wide range of other currencies such as gold, silver, USD, Euros, GBP, BRL, PHP, INR, MXN, ARS, VND, NGN and UAH. Choice of currency could be a formidable recruiting tool to attract a much wider pool of talent. For instance, international employees, the unbanked, gold bugs, silverites and of course the crypto community might appreciate the option of getting paid in the currency of their choice.

Chester pointed out that once more than 50 percent of employees at a business are getting paid in cryptocurrency, an employer might even decide to provide an incentive package “like a bitcoin 401k.”  

It is important to note, however, that once businesses receive bitcoins from a Bitcoin transaction, it becomes that entity’s responsibility to report capital gains. If a business receives all of their transactions in another designated currency, no additional reporting is required. Before making these choices on the type of payment, payment processor and preferred currency for Bitcoin transactions, and before making any changes to their settlement, it’s a good idea for business owners to discuss their intentions and their options with their accountants.

Furthermore, employees should pay careful attention the Bitwage’s fee structures, since there are some costs associated with the service.