TLDR: On September 19th, Satoshi's Angels held the inaugural livestream for the Big Boys, Big Blocks investment series on Bihu. First special guests; Marc de Mesel and Peter Ng were eager to share their stories about Bitcoin Cash and their investment philosophy with the Chinese community. The livestream gathered more than 7’000 live viewers and gathered more than 19’000 in the following 3 days. Please enjoy the full recap of their valuable discussion.
Cindy Wang: Hello Marc, welcome to the stream, please introduce yourself.
Marc de Mesel: Hello, I am happy to talk to you from Kenya. I have been an investor since 1999, started investing during the dot.com bubble at the age of 18 and lost all my savings because I bought at the top, which you should never do. I learned it the hard way. Then I inherited some money from grandpa, but the bank was doing such a poor job investing his money, and I decided to learn how to invest, because otherwise there would be no money left. I started reading books about investing around 2005. After some years it started going well and I quit my job to go all in investing. When I invested in Bitcoin when it was about $10 in 2012, and other coins in 2013-2014, like NXT, Peercoin, Ethereum and I made a lot of mistakes too. Many people were hostile about alt coins but I thought competition is a good thing and that is why I invested in other coins also early on. Bitcoin has the network effects, once you’re the biggest one, it’s hard to compete with you, the more people use it, the more valuable a coin becomes but Bitcoin had the monopoly and started being lazy.
Cindy: Why do you support BCH? You just mentioned that Bitcoin would win because of it’s network effect
Marc: Network effect isn’t holy, you can still lose market leadership if you make big mistakes, even if you have the network effect to your advantage. You need to offer an attractive service to people, and continue to do so. When BTC decided, or the lead developers decided not to scale BTC onchain, I knew the transactions fees would become expensive. In early 2017 I decided to sell all my BTC for other coins, that was a good move. Bitcoin Cash split off from Bitcoin Core in the middle of 2017, and that’s when I invested again in Bitcoin, in Bitcoin Cash. It was 300$ in 2017 when it split, since then I’ve been promoting and investing more and more into it over the years.
Cindy: So is BCH today undervalued or overvalued?
Marc: I make videos, and I would say that today all cryptocurrencies are fairly valued today, not overvalued or undervalued. Within that segment, certain coins are overvalued and others are undervalued. For example, when I invested in BCH, in the middle of 2017, it was 300$ and Bitcoin Core was valued 3000$ and today BTC is 4 times higher, around 12000$ and BCH is around 350$, so it’s now lower than 3 years ago. BTC went up and BCH went down and lost around 20%. But in the meantime, the fundamentals have worsened for Bitcoin Core, transactions fees have gone up a lot. So today it’s a lot less attractive to use, whereas Bitcoin Cash remains cheap to use. Basically, Bitcoin Core has continued to be managed poorly, and Bitcoin Cash is managed well, it’s not an easy part, however Bitcoin Cash is undervalued compared to Bitcoin Core, and is a better investment. Although it’s a hard time to hold Bitcoin Cash, people have losses, it’s been painful and people wished they didn’t invest in Bitcoin Cash. It’s also therefore a good time to invest in it. When the price is down, the climate is depressed but that also where there’s opportunity. When the price is going up and everyone is happy that’s not a good time to invest in it. It’s the other way around.
Cindy: Thank you Marc, so therefore it’s a good time to invest in BCH as everyone is depressed about the price...
Peter Ng: Because BCH is fundamentally better than other coins. I started investing in Bitcoin in 2012, and switched to BCH in 2017 after the fork. I think developers have a limited room in the BTC ecosystem. If you look at the fundamentals of BCH, you’ll realize that BCH is definitely undervalued. BCH is decentralized compared with other coins. Over the years, nobody stood up and said he could represent BCH. Unlike Ethereum, Vitalik decides the direction of development. I think BCH is fundamentally stabler than BTC.
Cindy: I always feel there is some kinda controversy among BCHers that they wish to keep BCH decentralized, but meanwhile they eager for KOLs/whales like Jihan Wu to voice for the coin. How do you look at such controversy?
Peter: I don't think it's a contradiction. BCH is fundamentally better, which will be realized by investors sooner or later. The only risk is that BCH and BTC have the same mining algorithm. Price will affect hashrate, and hashrate will affect the anti-attack ability of BCH.
Cindy: Next question if for you Marc, you’ve donated more than 800 BCH to multiple Flipstarter campaigns, proving that voluntary donations work in the community. But only a couple of whales donate, so I’m wondering for simple investors, why should they donate, if they’re not making any money in Bitcoin Cash?
Marc: You don’t have to donate to these Flipstarters campaigns, if you just invest in BCH you already add value by saving BCH and you’re giving it value by holding it, you don’t have any moral obligation to do more than that. You’re already doing something very useful, and if you save more BCH you might want to influence the project more and then you might want to invest more in BCH and at that stage, you can decide to support different projects built on top of BCH, even get equity in return but don’t worry about donating, that’s the beauty about the voluntary business model that BCH has, you’re free to give but if you don’t want to give it’s fine, if you don’t want support IFP projects, if you don’t believe in them, you’re free to not support them.
Cindy:A lot of applications are built on BCH over the past three years, but most failed. Peter, what do you think are good projects?
Peter：Blockchain applications are not mature yet. It will take several years to improve our life with them. Crypto currency is more about gamble these days. DeFi and Dex has become a buzzword like ICO did in 2017. In 2017, many people lost money in participating ICOs. But it attracted newcomers into the space. DeFi and Dex are the same. It will bring new developers and improve some things for the industry. I have some friends working on blockchain applications. And it's inevitable that some applications would fail. At present, a project can mainly attract users with a high price. It takes more time for applications to make a difference.
Cindy: Have you seen any good applications in the BCH community?
Peter: There are many similarities between BCH and Ethereum. Ethereum succeeds because of the bottlenecks of Bitcoin. Developers found several projects could not be achieved on Bitcoin. And thus Vitalik chose to build his own chain. So BCH started the same way as Ethereum. It's just that the route may be more about token than cloud computing. In terms of application, BCH is years behind Ethereum. but I think it can catch up.
Cindy: By how?
Peter：By decentralization and the ability to build. Ethereum attracted great developers in 2017, which helped make it succeed. I think we should pay more attention to hot technologies in the industry. DeFi and Dex are like ICO 2.0. New projects like SUSHI and UNI are still similar to ICO, and they will also face regulatory issues soon. If the bull market comes, the altcoins will pump insanely. We need to attract developers to build on BCH.
Cindy: Back to you Marc, you’ve donated quite a few to users on the read.cash platform, what’s the potential of read.cash? Is it a good application?
Marc: First, let me say it’s an honor to speak to the Chinese community, thank you so much for the platform. BCH is a great investment, cheap today, just buy it and keep it and you’ll do very well over the next 2-3 years, it could go up to 10000$ for a coin, but indeed it’s difficult to buy now because the price has done poorly, and it’s hard because you have to hold when the price drops! Hold for the next 3 years, wait for the bubble to form. Once your family and friends want to buy BCH that’s when you sell! Not before. You create value by buying and holding and also when you convince someone else to buy some, you create a lot of value. Many people need good investments, it’s not easy to find good investment.
Read.cash is a new platform, the founder has done an amazing job where people can earn BCH by writing articles and commenting. He’s able to reach the poorest regions of the world, people that don’t have much money are happy to make a little by writing articles and in return they receive BCH, creating a lot of value. Read.cash is succeeding in growing rapidly, the statistics on the website are impressive, many new users are joining the platform. Adoption is key. BCH needs more of it, it’s difficult for people to adopt, start using it, but read.cash is succeeding at it, that’s why I invested a lot in it.
Cindy: There are BCH-based projects in third-world countries like eatBCH, BCHouse Venezuela. Do you think they can have a network effect?
Peter: I haven't learned much about these two projects. But three years ago, I created a Venezuelan telegram group to learn about their local life. I found people there loved BCH because the transaction fee of BTC was too expensive. A few cents may not mean much to you, but they could support themselves for several days with that. Me and my friends would pay one or two dollars to let them work for BCH, like making a video. These few dollars are very important to them. Never underestimate the importance of transaction fees. High transaction fees may make some applications impossible. I was very impressed with what happened in Venezuela. We need to wait and see what these projects will evolve into.
Cindy: Marc what do you think of BCH-based projects in third-world countries like eatBCH, BCHouse Venezuela. Do you think they can have a network effect?
Marc: I believe that it’s important to help people, I also do it in my personal life also, for certain people I donate Bitcoin Cash, but it all depends on the recipient, if they sell it all and go on with their lives, you don’t add much value to BCH because they don’t become actual users. If they sell a piece, and keep some exposure to BCH, you gain a new user, it’s the same with eatBCH. I believe it’s mainly cashed out to buy food and help the poor, this has limited value in adoption because the poor don’t get in contact directly with BCH. In any case, when I give money to people, in the past I used to give out EUR/USD but now I do it with BCH instead of fiat, that’s a chance for BCH to gain new users, increasing my investment as well, since the more users we gain the higher the value of BCH might become.
Cindy: Let’s talk some trending discussions. The community worries that BCH will fork in November as we are not unanimous about IFP. Roger Ver is against it. What’s your attitude to it?
Peter: There is definitely such a risk. It doesn’t take much to fork a coin. The key is how determined the person is and the price of the forked coin.
Cindy: Will the potential fork lead to pump or dump?
Peter: Historically, we’d better sell before the fork, and then buy back when we are optimistic about the market. You need to value the possibility of the fork and see if you need to sell first.
Cindy: So you are not 100% sure there will be a fork?
Peter: It depends on the price of the forked coin. If it's only worth several dollars, then the fork is meaningless.
Cindy: Haipo said he would fork BCH? What’s your attitude to that?
Peter: His behavior is different. He might want to change the algorithm.
Cindy: Marc what do you think, will BCH fork again in November? Give us some investment suggestions.
Marc: Yes, it seems like we will have a fork, led by Amaury Séchet and Bitcoin ABC, they want to basically implement the IFP, which means that 8% of the block reward, the inflation wouldn’t go to the miners but to them. Most of the community doesn’t want that, it seems like they’re determined to fork off. That means that you’ll have 2 coins, it’s not 100% sure who will inherit the Bitcoin Cash name, it seems that the overwhelming support is not to have this “dev tax” as the opposition calls it.
Most people don’t want it. The majority of miners seem to also reject the tax, so the name and ticker Bitcoin Cash, BCH should be kept as we know it today. There will be a new coin, forking off, with the dev tax. You’ll have both, like with BSV you ended up having BCH and BSV, and you can choose yourself what to do, sell it or keep the new coin, that’s everyone’s decision to make. My recommendation actually depends on the price. I sold my BSV at the time, for a cheaper price than it is today, I didn’t expect it to hold it’s value so well. I got 30-40% more BCH for selling my BSV at the time, I’m still happy with that trade. Even though today, I might get 80% more BCH since BSV held in value so well. Not sure about this new coin, I’ve been wrong in the past, you can not invest in everything, you have to make choices, and for me personally I’ll likely sell it. However, if I get only 5% more BCH, I’ll keep it until it pumps and sell it later, it all depends on the price.
Cindy: How much do you know about BCHN? Are they purposely slander Bitcoin ABC? Do you think BCH will fall into a “political game” like BTC in the end?
Peter: BCH forked BTC because developers are acting like dictators. It's like miners can only use specific brand mining rig without any choices, which is unhealthy for the whole industry. Therefore, BCH should be divided into two layers, one is about node, and the other is about application. It’s natural that BCHN has conflict with ABC. There are developers that left ABC and joined BCHN. They think that ABC is not well managed. Again, just like mining. How can two miner manufacturers get along friendly? The industry is still too young, and we have few developers. It's about personal conflicts and fork is not the only way to settle conflicts. But the downside of soft forks is that we can’t make big decisions. And soft forks increase the pressure on the bottom layer as we can only add rules instead of reducing rules.
Cindy: Debating reflects the vitality of the community. But it’s diverting as coding is developers’ main job.
Peter: BCH developers should be divided into node developers and application developers. The bottom layer should be changed according to the needs of application developers. If they need this feature then underlying should upgrade accordingly. It wastes time if it’s the other way around. We need feedback from the market.
Cindy: Marc what do you know about Bitcoin Cash Node, BCHN?
Marc: It’s a great development. Amaury with Bitcoin ABC, declared they wanted to implement the IFP, wanted a piece of the block reward and the inflation. This was concerning for the community. Crypto is about sound money. Bitcoin was invented in 2008, there was a big financial crisis. When Satoshi Nakamoto launched the Bitcoin whitepaper, entitled “Bitcoin: A Peer-to-Peer Electronic Cash System” and in the coinbase added “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks” it was a protest against the government printing a lot of money for themselves and their friends. As a consequence, the value of money goes down, all over the world, governments print money and that’s why you can always buy less and less with your currency. It’s not smart to save your money, things get more expensive over time, you lose money if you save it.
That’s why Bitcoin was invented, to have sound money again. When Amaury came up with this proposal, to pay himself via the inflation, that was a bad idea, that’s what governments do, they print money and pay themselves. The problem is that it’s so easy and they don’t really create value. If they printed double the amount of money, and have 10 more users after that, that would be a good deal. However, that’s not what the government does, they print but don’t create more users of the currency. It’s the same with Amaury Séchet, paying himself with the inflation. It’s not likely he’ll bring more users. Satoshi Nakamoto created Bitcoin, you have inflation to pay for security and the miners, but every year this goes down, after a while, there’s little inflation. That’s a very good concept. With little inflation, the more users you have, the higher the value, it’s a great design and we shouldn’t change that. BCHN was created as a group of talented developers that wanted to offer an alternative to the Bitcoin ABC client, for those that don’t support the IFP. They’ve done a great job. Bitcoin ABC lacked transparency as well and BCHN is doing very well, describing what they are building, asking for voluntary donations, they are not threatening to pay themselves by printing more BCH. They understand that BCH needs to remain sound money.
Cindy: DeFi is prevailing these days! Followed chainlink, BNB also surpassed BCH in terms of market cap. Do you think BCH can still remain a top 10 coin?
Peter: It depends on how long the DeFi bubble lasts. If it remains so for another three months, BCH may be dethroned from top 10. DeFi tokens are incredibly crazy, and many tokens have not been mined yet. But I think DeFi will soon encounter similar problems with ICO. And regulation will step in.
Cindy: So Marc, DeFi is prevailing these days! LINK, BNB have surpassed BCH in terms of market cap. Do you think BCH can still remain a top 10 coin?
Marc: I certainly hope so! You have to beware of trends and hype, decentralized finance is important but a lot of these DeFi projects are Ponzis. They lock their ETH, and then they borrow against Ethereum, and invest in more Ethereum. That’s just investing with margins, there’s nothing special. DeFi has a great future, but we certainly need to see more useful applications that people value, and are in the long term sustainable. It’s very important when you invest to stick to the basics, when you invest in cryptocurrencies, be careful. You can lose your money very easily, investing in the hype, is a great way to lose your money.
Stick to the fundamentals, first and foremost, cryptocurrency needs to be a currency that you can use, cheap to transact, easy to transact. For example, Ethereum doesn’t offer that, download an ETH wallet and send it to your friend, it’s not that easy compared to the Bitcoin.com wallet, easy to use and to send BCH to your friends. The same goes for Bitcoin Core, you have good wallets but it’s expensive, 1$ for a transaction!. This is not talked about a lot in the space, but that’s the challenge of investing. Which companies, currencies are doing a great job and which ones are overhyped, undervalued or overvalued. So I think Bitcoin Cash is also busy with building DeFi projects like AnyHedge but indeed it’s not hyped right now, we have a good chance to see valuable services built on top of Bitcoin Cash in the future, yes.
I would like to add that Bitcoin Cash has a chance to become the biggest coin, the top 1 coin in 5 to 10 years, just like in the dot-com bubble the biggest companies at the time, were America Online, Yahoo when I was investing in 1999, but 5, 10 years later they lost their position to Google and Amazon that were small players in 1999. No one thought they would win, but they ended up winning the market. This can also happen in crypto, with Bitcoin Core, people might realise that these high transactions are not ok, developers went to build Ethereum and Bitcoin Cash because it’s Bitcoin has a chance to become the biggest in the crypto market, it will take time, but there’s potential. It’s crazy to say right now, but I believe it’s important to realise.
Questions from the audience:
Peter: Beware of DeFi it’s a lot like gambling right now. As for BCH we haven’t had a bull run yet. I concur with Marc, BCH has the potential to become the number 1 coin in the future. I don’t think this prediction is ridiculous. I have a similar background to Marc, we both invest in stocks, futures. The value of stocks is determined by the health of the company. Currently investors are looking for insider news, which is good for short term investment, but from my perspective the best is to look at the long term, you need to know whether the investment is worth the money to invest, while not relying on what others have to say.
Questions from the audience: Marc, you mentioned that BTC might be similar to Yahoo during the dot-com bubble but how can you be sure that BCH will be the top coin and not another alt coin?
Marc: I’m not sure, I believe it has a good chance. Nothing is sure in the investment world. Bitcoin Cash is Bitcoin. It has proven to be successful in the past, like in the early day, unlimited transactions at a cheap price. If you want to build something on BTC or ETH today, you know you’re going to have to deal with high transaction fees. BTC and ETH are popular to build on today, but when there’s high transaction fees that’s very difficult to build something popular. I think that people just don’t realise today that Bitcoin Cash functions as Bitcoin in the early days, and it is the true Bitcoin and that’s very valuable. Many people in the world don't know Ethereum, they don’t know Cardano, they know Bitcoin, it’s an important brand name. Also here in Africa, they know Bitcoin, not Ethereum. Cryptocurrencies, like the internet, will be big in 10 years, people will have some cryptocurrencies, the question is which one? They will want Bitcoin, that’s what they know. The question is then which Bitcoin, today it’s Bitcoin Core, but the transaction fees keep going up, we’re over 1$ and in the future 5$ or 10$ per transaction. In the future, you’ll see more applications built on Bitcoin Cash, people will flip to Bitcoin Cash. In the beginning, it’s slow, and then you reach a tilting point and it goes very fast. We’re in the slow phase, another few slow years, but a tilting point will come. This will all change if Bitcoin Core manages to scale on-chain with cheap transaction fees… but as long as they stay on this path it’s unlikely to happen. There are many other coins, it’s hard to pick the winners and I could certainly be wrong.
Cindy: One last question for you and it’s from the audience. Do you personally participate in DeFi projects?
Marc: Not yet. I invest in BCH and Ethereum. I have invested in some smaller coins 3 years ago but they only consist of less than 1% of my portfolio. I do have 35% BCH and 10-15% ETH in my portfolio. I also invested in AnyHedge and read.cash but these small investments and my big investment is just holding BCH. But I will invest in some DeFi projects built on Ethereum after some correction. Crypto will still grow slowly over the year, still see some corrections and there are still chances to invest. I still need to do some more studying. But it is super important not to lose your eye from the target. You can basically buy Bitcoin at $250 in 2020, and that’s a crazy price and you should certainly not pass on the opportunity.
Questions from the audience: What are the DApps in BCH?
Peter: Each coin has its own limitations. Apparently DeFi is not for all, as the transaction fees are too high. You need to use a coin and then figure out its use case. BCH solves what BTC can not solve. BCH now doesn’t have the smart contract feature of Ethereum, but BCH can already achieve part of Ethereum’s functionality and can even do a better job.
Questions from the audience: How long do you think the bull market can last?
Marc: I think the bull market will peak out at the end of 2023, and by the end of 2021 it will reach the all-time high with BTC $20k and many other coins will pump. ETH, BCH, and many others will pump independently of each other. ETH is pumping quite well right now and some other new coins, but I think over the next year BCH will pump on its own also, and see much higher valuations. Still be a slow market, but once it breaches ATH, it will go very fast, so I expect that to happen around the end of 2021 and in 2022 we will see a big bubble where we go from 300 billion market cap to 800 billion. In one year we will break 2-3 trillion by the end of 2022. Valuations will be 20 times higher than today, I believe there is lots of money to be made in the next 2 years in crypto.
Cindy: Thank you and good-bye Marc! Best wishes to you and your family. You have very cute children!
Marc: Thank you Cindy and Peter for introducing me and giving me a chance to talk to the Chinese community!
Thank you for your attention, we hope you enjoyed the first episode of the "Big Boys, Big Blocks" investment series. We invite you to also watch the full livestream here (don't forget to turn on the English subtitles). Make sure to stay tuned for our next episode! 🐳
This prediction didn't age well ;-)