Luzius Meisser was our guest on the Relai Bitcoin Session today. He is a co-founder of the Bitcoin Association Switzerland and a member of the board at Bitcoin Suisse.
We sat down with Luzius to talk about the state of Bitcoin in Switzerland, among other topics.
You can view the podcast episode here.
Alternatively, you can tune in on AnchorFM here.
Luzius Meisser is a leading figure in Switzerland’s Bitcoin industry. As an economist, legal expert, and early Bitcoin adopter, he is one of the most experienced individuals in the country’s Bitcoin community.
Luzius explains that in Switzerland, Bitcoin is well-defined in terms of legal status, for example, in areas such as taxation. However, when it comes to new technologies, there are challenges.
For example, the Bitcoin Lightning Network poses challenges as it is unclear whether LN node operators quality as financial intermediaries or not. Luzius believes that Lightning node operators should not be classified as financial intermediaries.
Learning to Live with Uncertainty
When asked what can be done to take steps towards Bitcoin mass adoption from a legal point of view, Luzius responded:
“The most important thing [to help mass Bitcoin adoption] is for people to learn to live with uncertainty because uncertainties cannot be entirely eliminated.“
At the same time, Luzius believes that Bitcoin has already reached the masses. “Everyone knows it. Everyone has heard about it,” he explains. “There are simple apps like Relai that enable you to buy bitcoin.”
The Early Days of Bitcoin
Luzius first came across Bitcoin in 2011. He was working on creating an incentivized decentralized storage system that leverages unused hard drives, somewhat akin to Filecoin. At the time, however, they couldn’t find a solution on how to create such a system. When he read the Bitcoin whitepaper, he saw that someone came up with a viable solution for what he was working on, albeit in a slightly different context.
Around that time, he also bought his first bitcoin. Not as an investment, however, but just to play around with this new technology.
“Back then, no one knew what it was. Even just being able to Google the price was already difficult.”
The Bitcoin community was much smaller and much more idealistic. The first meet-up was a handful of people in a pub in Zurich organized by Mike Hearn.
“A few of the people present on that meeting went on to become influential individuals in the development of Bitcoin and its ecosystem.”
The Pioneer Phase is Over
We asked Luzius about where he sees the state of Bitcoin today and whether he thinks the common notion that “we are still early” still holds true for Bitcoin, given that it is already over twelve years old.
He explained that he thinks the pioneer phase is over. The interesting thing now will be to see in what direction Bitcoin evolves.
Bitcoin has moved away from being peer-to-peer digital cash and has turned into “digital gold.” While the Lightning Network may help it to become digital cash, it is not as easily accessible, pushing people to alternatives that are more accessible, he explains.
Regulations will also play a role in how Bitcoin develops, especially pan-regional regulations, such as Financial Action Task Force (FATF) “recommendations” that Switzerland is contractually obligated to adhere to.
Bitcoin as a Medium of Exchange
When asked about what other use cases (beyond digital gold) Luzius sees for Bitcoin in the near future, he explains that the payment system use case is the most likely.
“In the case of Bitcoin, I can see it being used as a payment method. The main challenge with that is that existing payment systems already work well.“
There is also a cultural issue. Most people want to use intermediaries that they can call up when a payment doesn’t go through as opposed to having complete control over their funds, he explains. User-friendliness and economic factors also play a role. The Swiss franc is stable, so there is no reason to use bitcoin instead of francs to make payments.
“You would probably have to start with niches, such as gambling and online poker, where bitcoin as a medium of exchange makes sense. Alternatively, using it in a country where you don’t trust the currency would also make sense.”
Luzius also points out younger generations could eventually reject sovereign currencies and decide that they want to transact in bitcoin.
They could decide to spend bitcoin, save in bitcoin, and pay and receive salaries in bitcoin, which would create a conflict with the fiat currency system. At this point, regulators and lawmakers would probably jump in to preserve the old system, banning the conversion from Swiss francs to bitcoin, for example. At that point, you would either see funds flowing back into the franc or more funds flowing in the bitcoin.
Bitcoin’s Future Price Development
In terms of the future development of Bitcoin’s price, Luzius suggests that people should not follow the herd. Instead, they should buy a small amount and then make a note in their calendar to purchase more on that specific date. That way, they don’t just follow to herd and get caught up in the hype.
He also recommends not to trade as most people lose money trading. Moreover, checking the bitcoin price every day is also no a good idea. Finally, he recommends that you shouldn’t be too greedy. He has price targets where he sells some of his cryptocurrency.
“If the price increases five-fold, you should probably think about selling some and taking a profit,” he concludes.