- The government needs to lower taxes and reduce subsidies to the tech sector, if it really wants the sector to develop.
- Instead of boycotting bitcoin, Canada’s banks should be working with bitcoin companies to develop and apply innovations to their services.
- Canada has the opportunity to become a world leader in recycling energy waste by using surplus energy for bitcoin mining.
To the government and the regulatory authorities, I would say “stay out of our way”. Innovation happens on its own and when the government thinks about supporting a sector, it should prioritize the removal of obstacles over the creation of new programs. To the banks I would point out that right now there might be some consensus amongst them to not touch bitcoin. But one day, one of the banks will move away from the consensus and embrace bitcoin. That bank is going to become a market leader. So to the CEOs of Canada’s banks I would say “do you want to be the first one to implement bitcoin or the last one?”
What do you think Canada must do to position itself as a world leader in tech, and particularly in bitcoin and blockchain?
In general, the most effective step the government can take to help tech development is to stop subsidizing the industry so much. I think there is enough government financing and intervention in tech right now. The government should support by lowering taxes. Canada has a good regulatory environment, a highly skilled population and well-reputed academia. The country has everything it needs to succeed in tech, but a lot of tech businesses are being held back by high taxes. Few companies want to come to Canada because of our high corporate taxes and, similarly, nobody wants to live in Canada due to our high income tax.
While Canada is generally known for its stability as a jurisdiction, it is quite the opposite when it comes to bitcoin mining. For example, the Quebec government was openly calling for miners to move there. As a result, miners struck a lot of large deals and investments in Quebec. But, the Quebec government suddenly changed its position and instilled a moratorium on bitcoin mining. I would urge the Canadian government at all levels to remove the moratorium and obstacles for miners if they want to accelerate tech development in the country. Miners do not just come here, mine and leave with the money; they also reinvest in local enterprises.
“Canada has a good regulatory environment, a highly skilled population and well-reputed academia. The country has everything it needs to succeed in tech, but a lot of tech businesses are being held back by high taxes.”
Moreover, there is a lot of confusion around the classification and taxation of bitcoin. For example, the Minister of Finance and the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) classify bitcoin as a currency whereas the Canada Revenue Agency (CRA) classifies it as a commodity. That is creating anxiety in the ecosystem, so clarity on taxes would definitely help position Canada. Other than these three challenges, Canada has all the attributes needed to be a world leader in the bitcoin and blockchain space. So, to the government and the regulatory authorities, I would say “stay out of our way”. Innovation happens on its own and when the government thinks about supporting a sector, it should prioritize the removal of obstacles over the creation of new programs.
How can we regulate cryptocurrencies without stifling innovation in the sector?
Cryptocurrencies are quite diverse, so a blanket regulatory framework will not work. I consider bitcoin to be money, so it should be regulated as money. On the other hand, according to my interpretation of Canadian Securities Association and provincial regulator guidance, the other cryptocurrencies will almost all be recognized as securities, creating a classification issue with FINTRAC, which regulates them as virtual currencies. In terms of regulation, FINTRAC treated bitcoin like a currency and used currency regulatory apparatus such as laws that cover payment processing, currency exchanging and cheque cashing for bitcoin as well. Right now, the government is just drafting specific changes to the regulation.
“I do not think we need new laws, we just need to apply our current ones to cryptocurrencies.”
The government needs to enforce its regulations and crack down on scams and Ponzi schemes, which I think most alt-coins are. I do not think we need new laws, we just need to apply our current ones to cryptocurrencies. For example, Initial Coin Offerings (ICO) can be regulated the same way as Initial Public Offerings (IPO).
How would you describe the relationship between the incumbent financial system and cryptocurrency companies, and how do you see it evolving?
Bitcoin is money and a bank’s mandate is to work with money on behalf of its clients; regardless of the money’s form. So, banks should be offering financial services like custody, storage, loans, transfers, and others regardless of the type of currency one owns. However, banks are truly hostile to bitcoin companies and they are preventing them from having access to basic financial services. For example, I had all my personal bank accounts shut down because I was using and trading on bitcoin exchanges. Similarly, it has been exhausting to build banking relationships for my company. Instead of boycotting bitcoin, banks should be working closely with bitcoin companies because they are the most innovative in the financial sector. Banking in Canada resembles a cartel; there are only 21 chartered banks, so it is not an open marketplace. Moreover, the bureaucratic nature of financial institutions stifles most incentives to innovate. For example, none of the banks have two-step authentication on their bank accounts. I don’t see how banks that are not even providing basic security for users’ bank accounts could be innovating with AI and blockchain technology. It seems like banks are just competing for market share through their branding. I do not see any real innovation, probably because the market is too regulated.
“Instead of boycotting bitcoin, banks should be working closely with bitcoin companies because they are the most innovative in the financial sector.”
I do not see any future uses of blockchain tech by banks at all. There could be some extremely niche use cases of blockchain such as in notarization, audit and certification. But, I do not see much scope in the enterprise blockchain space for revolutionizing banking. Blockchain tech is just repackaging existing financial backends and adding some cryptographic signatures to them. So, the banks should focus on bitcoin and work with bitcoin companies instead of ostracizing them.
“The biggest application of bitcoin is in payments processing and banking services.”
Right now, there might be some consensus amongst banks to not touch bitcoin. But one day, one of the banks will move away from the consensus and embrace bitcoin. That bank is going to become a market leader. So to the CEOs of Canada’s banks I would say “do you want to be the first one to implement bitcoin or the last one?”
Why are you convinced of bitcoin’s long-term value for Canadian society and our future economy, and how does Bull Bitcoin’s mission tie into those beliefs?
I work in bitcoin because I see it as an inevitable addition to our future economy. It is almost like space travel; we all know we are going to colonize Mars someday. I am strongly convinced that we are heading towards a major economic collapse. We want to make sure that the people have an alternative to adopt once the currency bubble bursts. Government currencies are Ponzi schemes whereby we devalue the currency for future users. The government never pays back, inflation never stops and we just keep printing more and more money. These currencies have become so easy to inflate and create that they are just being used as government tools to create free money to finance programs. The banks do not care about systematic economic collapse; they only care about quarterly bonuses. Politicians are focused on a four-year time span and they care about being re-elected. But, Bitcoiners tend to be very long-term thinkers and planners, which is a result of having money that does not devalue over time.
“I see [bitcoin] as an inevitable addition to our future economy.”
It is very difficult for people to get into bitcoin by themselves, so Bull Bitcoin’s role is not to necessarily convince people to engage with bitcoin, but to create an access ramp for them to transition towards it. The goal of Bull Bitcoin is to create a bitcoin standard and create the infrastructure for it. Bull Bitcoin is different from a lot of other bitcoin companies because it is very mission-oriented and has strong core values. The objective of Bull Bitcoin is to grab market share in order to shape the industry in a positive way. We cannot engineer the evolution of society, but we can set a standard and infuse it into society through various applications.
We are bitcoin-only and are actively promoting the idea that companies should be bitcoin-only. We work a lot on open source software developments and try to make our entire backend open source, so that other companies can build on top of it. We have a mentality that the market is huge and we are not necessarily competing with other bitcoin companies. We are competing with the Fiat standard and with bitcoin companies that we believe have bad ethics.
What disruptive opportunities does bitcoin present for Canadian industries, and our current and future economy?
The biggest applications of bitcoin are in payments processing and banking services. The other significant one would be energy. Bitcoin is not going to disrupt the energy market – it is going to unleash the energy market.
First of all, the mining and creation of bitcoin is directly tied to the consumption of energy. And, Canada has a lot of energy surplus because energy is not liquid or easily transportable. On the other hand, bitcoin is extremely liquid. Through bitcoin, we have the chance to become a world leader in recycling energy waste by-products like methane, natural gas and other fossil fuels that are by-products of oil and gas production. So instead of flaring methane and natural gas in the atmosphere and burning them because transport is too expensive, we could move the bitcoin miners to the surplus energy. So, I can see bitcoin mining operations becoming mobile and servicing the oil and gas sector to offload their surplus. Similarly, when it rains, hydro dams just open their floodgates and let the water run without a turbine. That creates a competitive disadvantage for hydro compared to a lot of coal plants. So, bitcoin mining can make hydro more profitable by using its surplus energy as well. This is also very interesting for self-sustaining and peer-to-peer electric grids. In the future, people will produce electricity at home and will sell it to their neighbours who might need it, which will require a liquid market. So, people could exchange energy into bitcoin in real time; bitcoin can be used as a settling currency for energy transfers. Also, peer-to-peer grids might also have energy surpluses, which could be offloaded into a smart grid that could be connected to a miner. Instead of having to sell the electricity to a foreign government at market prices, we could just sell it to the bitcoin miners. Bitcoin is the most competitive business on Earth, which incentivizes miners to make their energy consumption as efficient as possible. I see bitcoin being one of the main drivers of renewable energy and energy efficiency technology in the future.
“Through bitcoin, we have the chance to become a world leader in recycling energy waste by-products like methane, natural gas and other fossil fuels that are by-products of oil and gas production.”
If Canada becomes a cryptocurrency leader from a regulatory standpoint, particularly with regards to ICOs, we might be a refuge for international cryptocurrency companies fleeing unclear laws. I am not saying we should be a haven for illegal scams. Rather, if we have very clear rules, we will attract people that are fleeing unclear regulations in other jurisdictions. Secondly, Canada can become the dominant player in the bitcoin mining space, which has geopolitical implications. Bitcoin could be the new oil, so Canada has to decide whether it wants to import or export it. I think we should be net exporters of bitcoin since we do not want to have trade deficits with China, Brazil, Russia and the United States.
“I see bitcoin being one of the main drivers of renewable energy and energy efficiency technology in the future.”
Finally, I believe that there will come a moment when the value of Fiat currencies will begin to rapidly disintegrate as the bubble pops. We will see a mass migration to bitcoin. In my opinion, the idea of bitcoin is to buy it cheap now because I will want them in to future to use as a medium of exchange, a store of value, and a unit of account as a currency, and I can get more today than in future for the same amount of Canadian or US dollars. If we make it extremely easy to buy bitcoin in Canada, we will attract a large number of bitcoin holders. Any country with a lot of bitcoiners will inevitably be wealthy in terms of GDP and purchasing power if my expectations of bitcoin adoption materialize.