What is Xapo doing?
Xapo was founded by serial entrepreneur Wences Casares in 2014 with the intention to safely store Bitcoins. Furthermore, Xapo offers the use of a debit card for an underlying Bitcoin account that can be used everywhere Visa is accepted.
Who is Félix Moreno?
Félix Moreno is the current CFO of Xapo. He previously worked in banking and consulting and is a well-know personality in the European Bitcoin scene.
What do you think is the future potential of
cryptocurrencies?
My idea is
that cryptocurrencies are going to change payments in the same way e-mail
changed communications. No less than that. That is because they are
permissionless, like e-mail, as the blockchain protocol can be used by anyone.
This for sure will take time. Tools have to be built to make it easy, to make
it so simple that in fact your granny can use it.
In times of increased insecurity in the
financial markets, why do you think anyone would use a payment network based on
a nonphysical and volatile currency?
In fact
most people already use nonphysical payment networks. 97% of the money that
goes through the European Union is digital. The average customer will not use Bitcoin
or any other cryptocurrency until they stop being volatile. The good thing
about Bitcoin though, is that you can easily use smart contracts to guarantee
the price and stop volatility. Some people are doing that already. The adoption
curve will surely go with the volatility. Volatility has already gone down
tremendously since the early days and it continues to go down at a steady rate.
At 10bn market capitalization it is a lot more stable than it was at 1bn. Furthermore,
volatility is a function of volume and stock. The bigger the stock, the more
stable something is. That is why the Euro or the Dollar are so stable compared
to currencies of smaller economic zones. These currencies are a big stock and
there is a relatively small volume exchanging between both. The same thing will
be happening with Bitcoin. Bitcoin has the possibility to reach a higher
stability in the future than any other currency, as it can be globally used and
is not bounded by frontiers.
How do these smart contracts, that you have
mentioned, work?
Basically
the Bitcoin code allows for certain operations, so called OpCodes. So far there
is only a short list of these possible operations, which allow you to set
certain conditions to payments. For example, the most useful one right now is
called MultiSig. This code allows you to make a payment if two or more people
sign. Which means that you can make payments conditional. It is programmable
money.
Do you believe that cryptocurrencies will be
able to fully replace fiat money?
I think
that cryptocurrencies will dominate the Internet before they dominate anything
else. But then, as the Internet is becoming a bigger part of our life, they
will have a large role to play. This will probably not happen over night and it
will need a long time for mass adoption, but exponential movements do happen
very slowly at first and very quickly thereafter. We have seen this with social
networks. Each doubling took an even shorter amount of time.
Do you think with the evolvement of
cryptocurrencies there will be increased intentions from nations to regulate
these?
One of the
reasons regulators are not doing anything about cryptocurrencies right now is
that there aren't yet many users; there is not such a large volume. For them
it's not worth it to devote time to that. As the user numbers keep growing,
there will surely be intentions to regulate cryptocurrencies. Nevertheless,
cryptocurrencies do not care that much about what regulations someone makes up.
Just the same as e-mail doesn't care very much. As long as regulators do not
regulate the physical aspect, meaning that they stop you from getting an Internet
connection, they won't be able to stop it. Additionally, cryptocurrencies can
be transferred over many more streams than just the Internet.
Is it complicated for retailers to implement
the Bitcoin payment system?
Not at all.
It all depends if you want to receive Bitcoins or if you want to receive your
local currency. If you want to receive your local currency you need a service
provider that will do that for you, such as BitPay. Otherwise it is very easy
and can be done through various programs, such as the app Blockchain.
What do you think will be the impact of
cryptocurrencies on peoples' everyday life?
Actually
there will be only little impact in Europe or the United States, as most people
are already familiar with transferring money digitally. Nevertheless, there
will be huge impacts in countries such as China, as it comes to regulation, and
in Africa, where payment systems are very split between different countries and
it's very hard to make international payments. We will see big impacts in
remittances; in fact there are several Bitcoin companies that are already
focussing on the remittance market. The only problem that remains is that you
still have to convert your local currency into Bitcoins, which is a bit
expensive right now in many places.
What do you see as the main challenges for a
company providing complimentary services for cryptocurrencies, such as Xapo?
A main
problem is regulation. We are a regulated company, which slows things down a
lot. For example, we have to proceed users' documents or block suspicious
accounts. Also regulations sometimes is unclear and it varies in different
places. This all costs time and money.
How does Xapo guarantee full security for the
Bitcoins stored at your servers?
We provide
a product called the Vault, where we safely store our clients' Bitcoins. A vast
majority of the Bitcoins are stored offline in cold-storage vaults all around
the world. That prevents them from being hacked.
