Sam: What inspired you to write Layered Money?
Nik: I felt that my background in US fixed-income markets gave me a unique perspective to be able to explain Bitcoin’s role in the future of money and how we might get there. There had been a lot of great books written on the technology, but my mission was to write a book about Bitcoin that brings people into this new arena.
Sam: Do you think money is well understood today, why or why not?
Nik: No, money isn’t well understood because of the simple fact that we operate in a credit money system. People usually don’t think of their checking account deposits as a liability of a bank, but every form of money today (except Bitcoin and gold) is the liability of a financial institution. Bitcoin is an equity-based money, not a form of credit money, and therefore has the potential to alter the way we understand money.
Sam: What trends do you think affect Bitcoin’s positioning as a global reserve currency?
Nik: Bitcoin is already a global reserve currency, simply because of how widely dispersed the ownership base is. People in practically every country own bitcoin as their reserve currency. While Bitcoin still has possibly decades to catch the network effects of the dollar as the primary world reserve currency, it will continue its march that is already well underway.
Sam: How do you see the Lightning Network affecting Bitcoin’s expansion of its monetary regime?
Nik: The Lightning Network brings unprecedented customizability and speed to the Bitcoin network. It can be thought of like a built-in PayPal/Venmo for Bitcoin and therefore materially expands its capabilities. It transitions Bitcoin from more of a pure commodity to a commodity with currency-like features. Lightning Network will also bring the idea of “streaming” money to Bitcoin, as we can now pay for things in the smallest amounts by the millisecond.
Sam: What role have institutions played in making Bitcoin more robust and entrenched in the existing financial world, and what can they do moving forward?
Nik: Institutions can commit to robust security processes in order to build trust in the custodianship of Bitcoin. This will bring access to Bitcoin to billions of people that don’t feel comfortable taking custody of digital money that requires some degree of technology expertise or awareness.
Sam: What do you think needs to happen in Bitcoin’s financial infrastructure (products / services) for it to become more relevant in people’s day to day lives?
Nik: Bitcoin’s price volatility scares away people, but companies in the financial infrastructure are already committing to the technology in order to bring a stamp of legitimacy to Bitcoin. Products are being developed that are already successful, it will simply take time, customer feedback, and iteration to improve our collective experience with Bitcoin. I believe we’re already on the correct path.