I want to have your perspective on what the proper or legitimate incentive mechanism would be for a founder, someone who wants to create a protocol and hire developers. He wants to open-source it as well. Is first mover's advantage enough?

[AUDIENCE] Hi, Andreas. I want to have your [perspective] on what the proper or legitimate... incentive mechanism would be for a founder, someone who wants to create a protocol and hire developers. He wants to open-source it [as well]. Is first mover's advantage enough? [ANDREAS] First-mover advantage is often a zero-sum concept, because it becomes about being last-mover. That is the ultimate goal. You move first to cover enough territory, capture enough land, to become last-mover. Here's the thing: it is very difficult to figure out how to create value in this ecosystem. I think the most important resource is people's time and attention. If you are a company building something for people, and you want them to pay you for this thing so that... you gain something back and make some money [to enable you] to continue building, you should deliver value to those people that is respectful of their time and attention. We don't have enough customer service or tech support. We don't have enough services for users. I [delivered] a talk about four years ago [regarding] the design of a Bitcoin ATM. When you go to a Bitcoin ATM, the first thing on the screen is the exchange rate. If you already know what a Bitcoin ATM is, you will [probably] already know the exchange rate. If you have arrived there because you wanted [to use it], that is not useful information as the first thing you see. For everybody who didn't know what a Bitcoin ATM is, that is worse than useless information. It is actually confusing and alienating. My idea, for how I would design an ATM, which would be installed in bodegas in Brooklyn, would be a machine with bright colors like a piñata. It doesn't say "Bitcoin" anywhere and plays non-stop educational videos, preferably with cartoon animals... that can be understood and watched by all the kids who go into the bodega. It has one big red button on the front that says, "Enviar dinero a México." [Laughter] That is it, "send money to Mexico." I am sure I didn't pronounce that correctly. "Send money to Mexico." Boom. Why? With the audience you have, that is an application they need today. They would actually use this. As soon as you press that button, it doesn't give you an application screen. It gives you a person who speaks your language, tells you how to install a wallet and how Maria... in Guadalajara could convert that [cryptocurrency] back into pesos. That is the kind of work we should be doing in this industry, and that can be rewarding. You can earn money if you deliver value. The problem is, when you think the value you will deliver is some future appreciation on an investment. The only person you can deliver that value to is an investor. They would rather buy the shitcoin.

In your view, what are the biggest obstacles that Bitcoin has as a technical protocol?

[AUDIENCE] Hi Andreas, thank you for being here. In your view, what are the biggest obstacles that Bitcoin has as a technical protocol? For example, the size of the blockchain and scalability, full nodes versus SPV [wallet] usage. [ANDREAS] As a technical system? [AUDIENCE] As a social experiment. [ANDREAS] I think most of the biggest problems in both Bitcoin and cryptocurrencies in general... The problems that exist in the protocol layer express themselves as problems at the user interface level. The user interface layer is the wallets, all of the interfaces you run in your browsers. If you [following along with] the technical developments happening in the protocol layer, such as SegWit (implemented a year and a half ago), BIP-39 mnemonic phrases, or timelocks, you don't see those [features] in many wallets. BIP-39 mnemonic seeds took three years to be implemented broadly [in wallets]. There is a big gap between what is available to builders and what they use to build, right? Think of it in terms of building materials. I can give you new materials like steel and glass, but the architects and the builders don't know how to use those things yet, so they don't actually adapt. That gap is the biggest problem right now. One of the challenges in our space is finding ways to make it profitable to build user interfaces. Not too many companies have figured out how to do that yet. It is a very big challenge. Most of us are accustomed to [using] free wallets. I don't think free wallets are a good idea. I would rather have good wallets, even if they cost a bit of money to use. Or at least some of the features will cost a bit of money to use. Then I will know that developer [can] be around in a year to implement the next round of features, to fix a bug, or something like that. I currently have sixteen different crypto wallets installed on my phone right now. These are just the latest sixteen. Behind them is a graveyard of fifty [other] crypto wallets that I have... used and abandoned... though it is not that I abandoned them, they abandoned me. They did not keep up with developments. That gap is the biggest problem we have. There are a lot of great capabilities in the protocol today, but you [may not even] know abou them yet, because they are not in usable wallets.

You have spoken about the waves of adoption, the sparks that sometimes happen. You can categorize the first group as the cypherpunks, crypto-anarchists, and libertarians. Then the Austrian money people and the techies. What do you think the next wave will be?

[AUDIENCE] Hi Andreas. You have spoken about the waves of adoption, the sparks that sometimes happen. You can categorize the first [group] as the cypherpunks, crypto-anarchists, and libertarians. Then the Austrian money people and the techies. What do you think the next wave will be? My mother still asks me why this has value, and I can't give her a good-enough answer. We have a long way [to go]. I am speaking in an equation-al way, because it would be better to... have a clear message, if we know what kind of person will adopt this technology next. [ANDREAS] You can't predict that. The technology itself is changing all the time. Which technology? People will adopt parts of this technology for different use cases, at different times, in different countries. They will have different needs and you can't predict that. As an obvious example, what does the average upper- middle class American know about life in Caracas? Nothing. When they say, "I will create a mobile app to empower Venezuelans," the correct [response to that] is, "Fuck off." [Laughter] They will use what they want to use, if they want to use it at all. If they find something valuable, great! Build for what you know. Focus on the people that you understand. That applies to everything in life. whether you are writing a mobile app, or a book, or a poem, or drawing a picture. Speak from the heart about what you care about. Which categories are you in? Speak to your people. As new people come into the space, bringing their own perspective and needs, if we welcome them, they can go out and help their friends who have the same needs. I watched this happen with software developers in India who I paid with [bitcoin], as a bonus. They would figure out that they could actually make money, instead of losing their money with PayPal. Then they would start telling their friends, and ask me to tell their friends how to get a wallet. This is not something that I am doing deliberately, like evangelism. The trick is to find useful applications. Go talk to people you have never talked to before. Ask them about how their life works. For example, the next time you are in a taxi, ask the driver, "Hey, where are you from? Do you visit your family often? How do you send them money?" Maybe you will learn something about how they use whatever they currently have. I think the next [adoption] wave will still be [composed of] very technical [people]. We have a long way to go until we see critical mainstream applications. But in some places, maybe for obscure reasons, there will be a tremendous amount of need. People will adopt whatever they can, right away. It might not be what you think it will be. You might be surprised and suddenly see a million people trying to escape Erdoğan's dictatorship... in Turkey by buying [a shitcoin] and transmitting it across borders. [Laughter] If that is all they have, and that is where their knowledge came from, good for them. Welcome. Don't try to predict how this will [be adopted]. Let's keep the element of surprise. [Laughter]