He was one of the founders of Clarín Digital (Website of the main local newspaper), Patagon.com (financial institution sold to Banco Santander for 750MM), Internet Argentina (first ISP to provide ADSL), Edunexo (provider of the SaaS platform to manage public and private academic institutions in Latin America and Spain).
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Today he is a partner at Xinergia, a renowned web development company and chairs the Bitcoin Argentina Foundation (in training) fully dedicated to the development and promotion of the bitcoin, cryptocurrency or digital currency ecosystem.
Diego GZ is in a bar in Palermo, sitting at a table for two, he leaves his computer, shares a coffee and talks with ADUANA NEWS about Bitcoin, a virtual payment system of interest to e-commerce.
How was Bitcoin born and why did it emerge?
Bitcoin technology was put into operation in 2009, but the concepts that underpin it date back to the late XNUMXs. The Bitcoin process took several years to build the intellectual foundation that would allow it to function.
Bitcoin was born in 2008 when a pseudonymous person, Satoshi Nakamoto, published a document on the cryptography list where he described the Bitcoin protocol. Cryptography is the use of mathematical techniques that are used to provide security to communications, information and the entities that communicate. Its importance lies in the fact that it is an integral part of the management of information via the Internet and in this line, Bitcoin guarantees the protection of people's data.
Bitcoin was born at a very difficult time in human history due to the financial collapse caused by mortgages in the United States, which put trust in the traditional financial system in jeopardy. Bitcoin thus emerged as a consequence of the evolution of technology and the new concept of building a decentralized financial system, without a central entity to regulate it.
What is Bitcoin, this new paradigm that could change the world's financial system?
Bitcoin is a digital means of exchange that has many applications, such as being a virtual currency. It also allows the transfer of values such as property titles, company shares, and could create a global financial transfer system that does not depend on a central regulatory body. Bitcoin technology could create a universal voting system in the style of direct democracy. Ultimately, if we think about it, pyramidal structures where we delegate power to another were a necessity for humanity, where communications at that time made it necessary to build that delegation of power. But today, technology allows us to work among peers and build the concept of the ancient polis of Athens on a scale of millions of people. This concept is what is revolutionary about Bitcoin as a technology and goes beyond its use as a digital currency because Bitcoin is like the Internet, its potential exceeds email.
At our Bitcoin Argentina Foundation (in formation) the objective is to promote the study and development of technological, economic, legal and social solutions applicable to the use of decentralized digital economies and their corresponding ones. We believe it is important that Argentina is not left out of the process but can take advantage of it in the best way. Educating on how Bitcoin works has to do with ensuring that everyone can take advantage of this technological advance.
Our country is characterized by being a pioneer in the use of technology. We were the first to use cable, internet, cell phones, and we have a large share in the use of social networks. There is a macroeconomic awareness given by the crises that helps us to know how to coexist and build this system from the social base. Unlike the United States, where the community is being built from a technological base. In addition, in Argentina, the interest in innovation and entrepreneurial spirit are motivating factors for forming a community of Bitcoin entrepreneurs, finding ourselves among the five largest in the world along with the United States, Canada, Israel, and England. Countries that have a very strong innovative tendency.
To learn about this technological trend, how does Bitcoin work?
The Bitcoin network works based on servers that are distributed throughout the planet. These servers are called "Miners."
One of the geniuses of Bitcoin is that it has found a way for miners around the world to almost instantly agree on who will have the right to alternately write a new page in the Bitcoin universal ledger. This ledger records all of the transactions in the history of Bitcoin.
To reach an agreement, the "miners" explore a virtual mathematical space where they eventually find a Bitcoin vein. When they find it, they notify the network and earn the right to write the next page of the ledger. Each page fulfills two essential functions: the first is to give birth to 25 new Bitcoins that are assigned to the miner as a reward for his efforts, and the second is to record all the transactions that have not yet been recorded.
This way, only transactions that have been recorded in the accounting book are considered valid, and unscrupulous users are prevented from trying to pay twice with the same digital currency.
What is the difference between Bitcoin and traditional currency?
Bitcoin is technology and as such, it can be used as a currency and as a payment system.
As a currency, Bitcoin has peculiarities that make it unique. Namely, it is a scarce currency (the algorithm establishes that there will be a limit of 21 million Bitcoins); it is durable (being digital it does not wear out), widely used, portable (it can be carried on any device), its emission rate is predetermined and decreasing, that is, today 25 Bitcoins are given as a prize, but every four years it will be reduced by half. The emission of Bitcoins will slow down until it reaches a point where no more currency will be issued and it is also easy to store.
As a payment system, Bitcoin is universal (borderless), transactions are reported instantly and permanently recorded in the ledger in just eight minutes, the transaction cost is voluntary (currently less than one peso to transfer any amount of Bitcoins), transactions are irreversible and people's privacy is protected unlike credit cards where one always risks identity theft.
Bitcoin as a digital currency would seem not to exist, it is not tangible, is that so?
It's an interesting question. Bitcoin as a currency is not tangible. However, we can say that people with online banking are getting used to intangibility and this financial virtualization is also happening in currencies. Added to this is trust. Today no currency has physical backing. With the Bretton Woods Agreement, after the Second World War, a new international economic order was put in place to give stability to commercial transactions through a monetary system with an exchange rate based on the dominance of the dollar-gold.
In the late 1971s, countries began to suspect that the United States was issuing more dollars than its gold backing. Faced with this situation, President Nixon broke with the dollar-gold standard in XNUMX.
Since then, all currencies are no longer backed by gold and become debt instruments, awakening the financial bubbles of recent years and the lack of credibility in the classic financial system. For this reason, trust is transferred to a mathematical system of cryptocurrencies that cannot be manipulated.
This does not mean that the economic role of States will disappear or that Bitcoin will replace national currencies, but that Bitcoin is a reliable alternative that can coexist with these currencies.
He mentioned “trustworthy” – why trust Bitcoin if there are hackers?
There is a lot of speculation about the future of Bitcoin, given the technological development and some of the technical difficulties that it faces and that can hinder its massive use in retail chains. Today we manipulate Bitcoin, but security layers are being built such as wallets that are difficult to hack with passwords to enter and exit. There are investment funds that are being developed for the purposes of greater security. The cold vault is another example.
In order to inform people, why is it good to invest in Bitcoin?
Investing in Bitcoin is investing in technology. As a currency, Bitcoin is volatile. If you invest in it, you have to hoard it in the medium and long term and also be prepared to lose due to technical problems that may occur. However, if the promises are fulfilled, the investment will generate a great positive impact. Such is the case of a man who, being retired, invested in Bitcoin and the return was so high that he can now spend his last years more peacefully.
Regarding legislation, the Argentine Constitution in its article 19 states: "No inhabitant may be deprived of what the law does not prohibit." Under this framework, how does Bitcoin fit in?
Our Bitcoin Argentina Foundation has prepared a report on the legal and tax situation of Bitcoin based on this premise. The team's objective is to make all aspects of Bitcoin known to the community so that they can learn and make good decisions about it.
In our opinion, Bitcoin is a species and as such, it should be regulated by the National Securities Commission (CNV).
At the tax level, some activities should be taxed, such as mining and intermediary buying and selling.
E-commerce is a channel that is here to stay. It moved $116.700 billion without VAT in Argentina in 2012 according to CACE and the use of Bitcoin would seem ideal. Are there business experiences that use Bitcoin as a means of payment?
Using Bitcoin in e-commerce is one of the best advantages it offers, as it significantly lowers transaction costs, protects the privacy of buyers and prevents fraud in businesses.
In Argentina there are experiences of almost one hundred businesses and professionals that accept this form of payment. Among the pioneers in accepting Bitcoins are, in particular, hotels. This is due to the appearance on the market of Bitpayments.
Similarly, there is the experience in restaurants, which through the system of Restocoins can receive payments in Bitcoins.
Interesting cases occurred in the Labitconf (Latin American Bitcoin Conference), the first international meeting on Bitcoins organized by our Bitcoin Argentina Foundation, at the Melií£ hotel, in December 2013, was a meeting of explanatory talks on bitcoin in its various aspects and a space that allowed commercial interactions in the bitcoin ecosystem of Latin America. In addition, important investments were made, such as that of BitPay, the leading company in payment processing in the Bitcoin world, who later set up in Argentina.
We plan to repeat this experience in 2014 in Brazil, Mexico or Colombia.
Considering your high-impact ventures, is “entrepreneurship” like rediscovering gunpowder or is it applying existing ideas in the best way?
I believe that “entrepreneurship” is about helping people. Just as it happened with the Web revolution, there is currently the Bitcoin revolution. We are assisting the structures of the network to disintermediate powers and generate relationships based on values such as trust.
It would seem that you are moved more by emotion than by intuition. How do you define yourself?
Indeed. I am a technologist and a humanist. That is how I define myself.
Who has influenced you in your life to define yourself this way?
Undoubtedly, the greatest influence comes from my parents. Dad's open-mindedness gave me a taste for the mental. On my mother's side, my grandfather was a diplomat and a very accomplished person. I have also learned a lot from friends. Wences Casares is one of them, and I admire how he managed to maintain personal harmony despite the success he achieved.
In line with the above, a magical moment that marked you in your life?
Without a doubt, the birth of my children was a magical moment, it allowed me to connect with human nature. I also remember crossing the Atlantic Ocean on a sailboat, the immensity of the night and contact with the moon, the stars, the water, everything was magic. Likewise, it was the experience lived in the mountains for three days where I disconnected from civilization to find myself and everything. But I confess that I always find magic in family gatherings with uncles and cousins where sharing the table is an absolute pleasure. These are moments where the ordinary becomes extraordinary.
Something you would like to do
I would like to travel the world on a sailboat. with my family (great companion in my companies) to connect and integrate with other cultures and of course, ensure that my ventures have such a social impact that they benefit all of humanity.
Aduana News is the first Argentine customs newspaper to launch its digital version. With 20 years of experience, its publications and initiatives aim to provide the most relevant knowledge on customs issues in order to contribute to safe trade in the region.
