Butter-bot: Bitcoin Will Take a Similar Role to Gold in Asia
Butter-bot is an automated Bitcoin/Litecoin trading bot that helps you to fully customize your bitcoin trade strategy as per your needs. What is Butter-bot exactly? Pablo Lema sheds some light on a limited Coin News Asia interview about Butter-bot.
Coin News Asia: Every Bitcoin enthusiast has gone through a journey– what led you to be interested in bitcoin and come to believe you will build your business in it?
Pablo Lema: I was an early believer and had been looking for an entry point since around 2011. I got my start trading Second Life Linden Dollars and other game currencies while still in college back in 2005, so the concept of “digital” money was something that appealed to me. I saw several incarnations of it, from SLL to E-Gold come and go, and I came to the same conclusion that Satoshi clearly came to, centralization was the single greatest point of failure in attempting to create e-money. Bitcoin clearly solved this problem, so to me it was not a question of whether it was worth my time, but rather of how I could maximize the return on my investment. It took me almost two years of participating in the community to find an entry point.
The main hurdles we have faced have been in raising capital. When we started back in late 2012, early 2013, where the Bitcoin investment market was just starting to go mainstream and investors still looked at it as a speculative investment. Some VCs I know personally specifically refused to invest because it was a Bitcoin oriented business, on fears the U.S. government would start cracking down on the currency. As the market developed, institutional investors began to warm to bitcoin, but the main investment market for raising capital is and was the USA; as a Panama company it was extremely difficult to get VCs on board.
CNA: What’s the main factor that’s preventing bitcoin from going mainstream?
PL: There are several barriers to entry for the non-technical user, among them key management, UI, and transaction speed. I read a great book recently called “The Book of Satoshi” which relays some of Satoshi’s early correspondence where he addresses some of these issues. I feel however that the Bitcoin Core team has made a deliberate decision to stop developing Bitcoin in a startup sense (experimenting, adding features, etc.) and instead are focusing on just maintaining the code, they expect people to just build their services on top. I think that was a bad call and that is another reason I like Dash so much; it is still experimental. The Bitcoin code, I believe, could be improved and features added to make things more user friendly and favorable to new ideas, but that is clearly not going to happen.
CNA: How do you think bitcoin will affect the Asian market in particular?
PL: That is an interesting question; I think Bitcoin, particularly in Asia, will take on a role similar to gold as a store of wealth for cultural and normative reasons. There is a debate going on whether bitcoin is a currency, akin to the US dollar, or a store of wealth, akin to gold; I believe that it can be either, according to the needs of its host community, so I believe it will function as a store of wealth in places that currently use the U.S. dollar or euro as a store of wealth, and as a currency elsewhere.
CNA: What can you say about online gambling laws and cryptocurrency legality?
PL: These are two different things. I’m a libertarian by heart so I feel that things should not be heavily regulated, but I like to think I know enough to say that bitcoin, or whatever its successor comes out to be, has to be regulated and accepted by governments to really take over the world. So I am in favor of Bitcoin regulation, but we have to be smart enough to shape what that regulation will look like.
About Bitcoin gambling, I really think that if odds are provably fair, people should be allowed to do what they want with their own money. A core issue to compliance is not that providers want to avoid paying taxes on things like gambling, but rather that the law is so damn complex when you are running a business that has clients from all over the world; you need lawyers, and lawyers are expensive. This is something that needs to be dealt with at a global level because it is stifling innovation.
CNA: Do you think it is hypocritical when Bitcoin supporters who are critical of banks are also critical of altcoins?
PL: I think that the mistake a lot of Bitcoin “true believers” make is thinking that bitcoin is the best a cryptocurrency can be. As discussed above, the Bitcoin core team has clearly made an executive decision on their role to not be innovators, but rather caretakers of the protocol. I feel like that leaves a lot of room to experiment and grow and that is something altcoins are doing now. It’s nothing anyone has to worry about, in the end, I am convinced, the best coin will survive, be it Bitcoin, or Dash or whatever. Or perhaps a handful will co-exist; the point is that altcoins that don’t make the cut won’t survive and those that have something to offer will stick around. I think it’s disingenuous to say that Altcoin development should stop, and that we should focus on bitcoin to the exception of all other things. Bitcoin is great, but I don’t think anyone can say it can’t be improved. You have to really be blind to what this movement means in real terms to say that.
CNA: Insightful. Let’s talk about Butter-bot now. Can you share some definite advantages of operating it?
PL: We were lucky with Butter-bot in the sense that we were first the first to do it professionally and had a great first mover advantage. I remember pitching the business, and VCs were always surprised we were not only profitable but very profitable for a business of our size and level of investment.
Bitcoin was so fresh back then, a lot of first movers came on the scene and garnered massive community support. Most of them are actually not around any more as more professional entrepreneurs have replaced the early adopters. Many of these “first mover” businesses imploded. Gox and Bitinstant are just two prominent examples of this. I think this is both a good thing and a bad thing as the barrier to entry is much higher now, but on the other hand, the services evolving around bitcoin are much more reliable.
I think the most fun we had was when we launched V3 and took something that was essentially a minor add-on monitor and gave it teeth. I recall getting something like 300-450 emails a day from enthusiastic users as well as a couple dozen posts on our main thread . After that a lot of people took our idea and improved upon it in ways that we had not foreseen. In the end, I feel best about this experience when I think that although we didn’t keep our post as top dog until the end, we did help shape and improve our particular market as regards automated trading for Bitcoin.
CNA: What can we expect from your venture in the near future?
PL: We are actually in the process of migrating our IP. I discovered Dash last year and will likely be developing a business centered on that currency in the near future. Like I said before, the Bitcoin VC market is now very competitive and funding is hard to get for non-US based businesses, so I think moving into something new like Dash is a good idea.
CNA: How about a price prediction?
PL: I think we have reached a price equilibrium for the next 6 months or so, and we will likely see the price increase afterwards. That’s just an opinion however; I do not consider myself a trader.
CNA: Finally, what can you suggest to the Bitcoin community?
PL: I have a suggestion for the community: let’s make bitcoin easier to understand. I agree with the analogy that bitcoin is like the early internet. Following that analogy, I believe we have unfortunately not invented a good internet explorer, when we do, I believe crypto will explode into the mainstream.
CNA: Thank you very much, Pablo.