Podcast
Topics Covered
- What exactly is Bitcoin?
- Why is it important to be informed about Bitcoin?
- The problems Bitcoin solves in Switzerland and abroad
- Bitcoin’s popularity in Switzerland
- How to buy Bitcoin in Switzerland
- Is now a good time to buy Bitcoin?
Disclaimer: This podcast does not constitute investment advice, nor is it a substitute for personalised guidance. We strongly recommend seeking professional assistance for specific inquiries or concerns regarding financial matters related to living in Switzerland. The responsibility for any actions taken based on the information in this podcast lies solely with the listener.
Who We're Speaking With
Yves Bennaïm has been studying Bitcoin for the last 12 years and teaching about Bitcoin and the Bitcoin blockchain for the last 6 years. He teaches all kinds of people, from university students to bankers, journalists, lawyers and even companies. He also contributes a column to Bilan magazine and from time to time, he writes for other publications.
About the Episode
Around 11% of people living in Switzerland already have some exposure to cryptocurrencies. Yves mentions several ways to buy Bitcoin in Switzerland:
- Through a bank or broker: You can gain exposure through large institutions like Swissquote or PostFinance. However, this doesn’t allow you to access your Bitcoin directly
- Through an online service: You buy through platforms like Pocket Bitcoin or Relai, but they don’t hold Bitcoin for you. You have your own wallet
- Direct currency exchange: You can buy Bitcoin directly from another person
- By earning Bitcoin: If you sell a product or service, you can ask your customers to pay you in Bitcoin instead of Swiss francs
Resources
Study about Swiss residents holding crypto
Crypto investing with PostFinance
Bitcoin investing with Swissquote
The Internet of Money by Andreas M. Antonopoulos
Next steps
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Transcript
Kathrin: Hello everybody and welcome to another episode of Living in Switzerland. The series is brought to you by Rigby. We are a staffing and project services company based in Zurich. If you or anyone you know of is looking for a new role in Switzerland, or if you're looking to hire, let us know. We'd be happy to help.
The best way to do that is by going to rigby.ch/apply and filling out the form. Then, if we have anything that might be of interest, we'll gladly let you know.
Today, we are joined by Yves Bennaïm. Yves has been studying Bitcoin for the last 12 years and teaching about Bitcoin and the Bitcoin blockchain for the last six years.
He teaches all kinds of people, from university students to bankers, journalists, lawyers, and even companies. He also contributes a column to Bilan magazine, and from time to time he writes for other publications. Yves, welcome to the show.
Yves: Thank you very much. Thank you for having me.
Kathrin: So, can you tell us a little bit about where you're from, and where do you live in Switzerland?
Yves: So originally I'm from Geneva, and I moved east gradually until recently we established in Schwyz. So I am Swiss, I'm originally Swiss, but because I'm a French speaker and now I'm in Swiss German territory, I feel a little bit like an expat, which is refreshing and exciting at the same time.
But yes, I, moved to central Switzerland with my wife. Because it's a fantastic area.
Kathrin: Okay. And how are you coping with Swiss German?
Yves: I haven't started coping with it yet. I.. so that's the thing. In the French part, nobody speaks German, but in the German part, a lot of people speak French and/or English.
And people are also more welcoming. So, if I speak like three words of German and I, I'm really clumsy. They are understanding and they're very welcoming. So, it's nice.
Kathrin: That's true. Yes.
Yves: But I need to take lessons and, like I was listening to your podcast in, like in general and yeah, that's where it starts.
You need to take lessons, at least a little bit of German, but if you can have like, Swiss German, it's even better because then you can really have conversations with people.
Kathrin: Yeah, especially I think understanding Swiss German. You don't necessarily need to speak it. You can speak to people in high German, but they want to reply ideally in Swiss German, because it's more comfortable for a lot of people, right?
Yves: Exactly.
Kathrin: Okay, so what's your background or what, where is your experience?
Yves: So my background originally is a bachelor's in modern Asian studies. So, I studied Chinese and Japanese cultures. Which was completely useless because I didn't have any work with it, but very quickly, it was the time when the web was starting to become... like the late nineties, it was becoming very exciting to learn about it.
So, I jumped into it. And I worked on websites and web marketing, online promotions, all that kind of thing. Like my career was that, and until eventually I discovered Bitcoin... and this is why I'm telling you about this because when I discovered Bitcoin, it was like the missing piece... puzzle piece.
It was like, you could share information both ways, you could exchange all kinds of things online, but the payments, the money wasn't there. And that was the point of friction.
So, this is the moment when suddenly everything started to make sense. You could have micropayment, you could have international communication, and it could become like work-related or it could become commerce-related.
You didn't have to have... everything was dematerialised when money had to go through banking system and credit card system and everything. So, this is when I started becoming very excited about Bitcoin.
Kathrin: Okay.
Yves: And then of course, like, the more it goes and the more I'm falling into the rabbit hole, and the more interesting it is for me. So, the more interested I am to share that with other people.
Kathrin: And then you started pivoting towards mainly working in Bitcoin.
Yves: Yeah, so there was one day when the price was going up very quickly in 2017, and of course, when price goes up, more people are interested than when price goes down, and all the people that I had been discussing with for many years very enthusiastically, and they were not so enthusiastic. And then suddenly the price was going, times two, times five, times 10. Suddenly they all came back to me, and they said, can you teach me? Can you tell me everything that you were telling me before?
And that's the moment when I realised also, like people that I didn't know were approaching me, especially media people who had no understanding, banking people who had no understanding, compliance people in banks who suddenly had to answer things, but they didn't even understand the question.
And so that's the moment when I thought, okay, maybe I need to do that a little bit more seriously because it's not a hobby anymore. It becomes like, an area of expertise that, first it's interesting for me because it's new, and it's a new frontier, but also I felt if I wasn't helping, people would make mistakes and it would make everything go slower. Because when you make a mistake and you burn yourself, potentially you don't want to hear about it for the next 10 years or 20 years. And I saw that with the web. Yeah. Because there was the dotcom bubble crash in 1999, 2000, where people panicked so much that they didn't want to do any involvement, any investment, anything to do with the web.
And I thought that's, that would be a shame. Because there will be some places where things will be moving smooth and fast. And, potentially in a place like Switzerland, suddenly, because people are very cautious it would become, I don't know, like everybody, everything would become late. And I didn't want to have that. I thought it's better to take the time to be very vocal and very frontal so that I can explain to people and demystify everything so that they also understand there are some bad points. Like, I'm not saying it solves everything. But it's like the internet, like there is good things with the internet, there is bad things with the internet. But if you think the internet is just for criminals and you block everything, and then your company or your country just refuses to have email and refuses to have hosting providers, then suddenly the U.S. become the leader, Europe become second, and you're like, left last behind.
Kathrin: Left behind. Yeah, exactly.
Let's take a step back. And just for people who may not yet be very familiar with it, what exactly is Bitcoin and how does it work?
Yves: So, the way to describe Bitcoin fast and simply is to say it's a peer to peer (so person to person without intermediary) electronic cash system.
Kathrin: Okay.
Yves: This is a very oversimplified way to describe it, but the idea is, if you are making a payment from one person to another person and you are using cash, you don't need a bank account. You don't need a credit card. You don't need anyone. If I give you a five-franc coin, because I don't know, I'm buying something from you, we don't need to involve anybody else.
The problem with electronics is that, as we know, we can multiply electronic files infinitely at zero cost. So for example, if I have a digital photo from in my phone and I send you that digital photo in a message, I still have the original one. So now we have two photos. And you send it to somebody else. I don't even know. But because I told you, please don't share it, and you share it. So suddenly there are three photos. I don't even know that there is a third one. And for all I told you that I destroyed mine, the original one, but I didn't destroy it. So it's a mess.
So if you want to do that with money, it doesn't work because if I send you five francs and I keep the first five francs, suddenly there is 10 francs in circulation. And your five francs, are they the real ones or is it just a copy of mine? So this is why when you start having money that is used electronically, you need to have an intermediary.
You can't do it with cash, like with cash.
So usually I would send you electronic money through, let's say my bank, or Twint, or a credit card. I would send something electronic. You would receive something electronic, which is 90 percent of the money in circulation today in Switzerland. But what we actually do technically is that I'm telling the intermediary, please remove mine and credit it to the recipient, to you. Which is really good, and it works. And every day you use Twint, you use your debit card, you use your bank account, it works. The problem is that you rely now on an intermediary that may or may not tell you what is good or what is not good with your payment.
So for example, let's say... So of course, in Switzerland, we are very lucky that everything works very well. But let's say you are in a country where the government is not super nice with you and they're saying you need a certain credit score in order to buy this or that, or you need to be a good citizen in order to spend this or that, or maybe they have specific laws for a carbon footprint. And so suddenly you want to go and buy some fuel for your car and the bank says, sorry, or the credit card, or just the system says, sorry you used all your carbon credit for this month. So you are in a system that is not cash anymore because it's not from one individual to another individual.
It's from an individual through a banking or through a service system and that service system through the other, to the other individual.
Kathrin: So there could be like issues if, for example, if a government isn't acting legally or something?
Yves: So that's the thing, if you have a governance... Okay, so first, what is illegal in Switzerland might not be illegal in other countries. So, this is a problem.
Another problem is sometimes it's not illegal, but it's immoral. Sometimes, for example you would be in some place where, I don't know, women's rights are not super respected, and you want to buy a birth control product, and they would say, sorry, but you're not married.
So, you cannot do that. So there is all this. Then there is a question of privacy in general. Because every transaction that you make and you're using a debit card or a credit card, it means that there is an American company somewhere, which is Visa or MasterCard, who knows exactly what you're spending your money with.
They know where you are, they know how much you're spending, they know your patterns. And of course, after that, they will sell this information to Facebook. And you will be getting targeted advertisements, for example.
Kathrin: Of course. Yeah. And you might not want that. You might not want your privacy impacted like that.
Yves: Exactly. Because you have no secrets, but it's still your private life. You don't want that everybody everywhere in the world knows about it.
Kathrin: What about... All these banks and all these institutions are also expensive, right? So especially if you have international transactions or even in your own country, surely you pay more because there's this whole institution and these intermediaries.
Yves: Exactly. So, for example, we see with Twint, it's very interesting because they're not struggling, but they have to deal with that because they're saying when it's one person to another person, it's free. Yeah, but how do we know that the recipient is a person and not a person actually doing as a merchant, a professional activity. Or they're telling you, okay, you can receive up to a certain amount, because normal people would not receive more than, I think it's 1,500 francs, but if you receive more than 1,500 francs in a month, they start saying maybe you're doing like business.
Kathrin: Oh.
Yves: And then they will start charging you percentage commission.
Kathrin: Yeah.
Yves: So this is why when sometimes you're going to, I don't know, a yoga class or someone on the market who is like, doing like, Twint, but as a business, but they don't want to pay these fees, they tell you, please use my phone number direct. But then they reach that level where it triggers the maximum amount, and then they will tell you, okay, now you can use my QR codes because, I reached my limit for the month.
Of course, when you're paying with your credit card you're thinking now, like people who are listening to us now, they're thinking, yeah, but when I'm using my credit card, I don't pay extra fees, but in reality you do because the merchant is paying those fees.
And the merchant doesn't want to give you a present by paying fees on your behalf. So, what they're going to do is they're just going to raise the prices. So the merchant has to pay the fees for every transaction. Plus, they're paying also the fees, like monthly fees that the service provider, the company who provides them with the machine that you use your card with, they will charge them a monthly contract.
And this of course will be projected on the prices of the items that you buy. So at the end of the day, every time you use an intermediary, it needs to be worthwhile for them to be the intermediary, otherwise they wouldn't do it. And this is when you are local, but if you are doing it internationally, maybe you're sending money out of the Eurozone, for example, you have family in South America or something, your transfer will become extremely expensive.
Kathrin: That's right. Yeah.
Yves: And you will have to go through more than one intermediary. So every intermediary will be like your bank, their bank, the Swift system in the middle, blah, blah, blah. Everybody will take their cut and worst to worst, eventually you're sending money to your family because you're an expat from someplace, let's say again, South America, and you want to send some of your money every month to support your family, but your family might not have a bank account, so if you want to send cash, the fees will be even more enormous because the service will be even more complicated.
Kathrin: Yes.
Yves: And that means you will send a lot of money all at once because the more you send, the lower the percentage fees will be, but then it becomes really inconvenient for everybody.
So, the whole system is, we see that with the internet, everything is becoming faster and simpler and more direct. Now we're, we're recording this using a free platform online. I could be at the top of Machu Picchu and we could still have this interview, and we can see each other and it's fantastic. And the internet solves so many things around the world, but money, we're still using the old system that costs so much, and that is so inconvenient. And for a lot of people, it's just not affordable. Because it's just too difficult and too complicated.
So of course, from Swiss person to Swiss person in everyday life, Bitcoin is not that useful or important, but for, let's say the majority of the world. And keep in mind that billions of people worldwide cannot have a bank account. You just cannot. So, this whole internet is making it that everybody in emerging countries all over the world, like in the deepest of the forest of whatever country in Southeast Asia to South America to Africa, everybody has a smartphone today. It's just incredible. Like you have homeless people in the streets here, they don't have enough to feed themselves or to have a house, but they have a smartphone.
Kathrin: Absolutely.
Yves: And everywhere in the world, smartphones are cheap and affordable because also they're subsidised by Facebook and whatever, so that people can have data. People in Africa are using phones to pay each other. They're sending each other minutes. Like, communication minutes.
Kathrin: Oh, I see.
Yves: So, you charge somebody else's phone as a means of payment. This is happening in many countries. It started in Kenya, I think, if I remember correctly.
So everything is moving like this. But then at the end, you can't even have a cash transaction using electronically. So, this is where Bitcoin become useful on a global level. And of course, in Switzerland, we see it because it's interesting. But we have to think about the rest of the planet as well.
Kathrin: Absolutely. So if I understand correctly, the main advantages are that there is no intermediary, so you don't need the bank in the middle. So you have more control over your money and then also fewer fees.
Yves: And no censorship. In one way you have more freedom, but also you don't have to ask for intermediary, but also no intermediary can come between you and the recipient.
Kathrin: Okay. True. And then I suppose a lot of people, especially in wealthier countries like Switzerland are very interested in saving and investing. So obviously you can also use Bitcoin as a means to store your money, right?
Yves: So that's the thing. It's like when you're talking about the internet is not just Facebook or just email, it's whatever you want to do with it.
So it's a network, but then it becomes also a tool. And the same goes with Bitcoin. Bitcoin is a network of payments, but it's also the currency itself. It's the currency or the monetary system itself. So the way Bitcoin works as opposed to the currencies that we have, Swiss franc, Euro, Dollar, is that because there is no central bank, in order to have the system work, it needs to be a software that is very rigid, that is very trustworthy in itself, because you cannot have a human coming and saying, Oh, this doesn't work. We'll switch it a little bit like this, or we'll tweak it a little bit like that. So the system with Bitcoin that is not exactly unique, but it's unique for a modern money is that the supply is limited. So, it becomes more like gold.
Kathrin: Okay.
Yves: There is a certain amount of money. There is a certain amount of Bitcoin. And then there will be never any more that will be created. So this is where it starts having value because people are saying, I want a piece of it.
So, you have to think of it like gold or real estate. So the idea, of course, is that if you are buying a piece of land next to a lake, in Lake Léman or Lake Zurich, you will have a beautiful view. It will be very nice and you will never have a neighbour in front of you blocking the view.
Kathrin: Because it's a lake.
Yves: Because there is a lake. So this has more value than a place that is in the middle of, I don't know, some place in the middle of the city where you have a lot of houses and you have zero view. The thing is, that value is very subjective. It's the value that other people would want to pay to have that piece of land.
And Bitcoin is the same. It's a supply and demand thing. There is a certain amount, and people are interested to participate in that network because they think that they want to have a piece of it. And the fact that more people want to have a piece of it than there is available, supply demands, the price goes up. But then some people, they are thinking in Swiss francs because that's what they use every day, and they see the price going up and they're saying now I have a lot of money because I don't know, I invested very early, so I can sell my Bitcoin and I will buy a house with it.
So they sell. And of course, when they sell, there is more supply compared to earlier, so the price will go down a little bit. And the supply and the demand goes back and forth like this, because when the price goes down, there is somebody who thought it was too expensive.
Now they see the price is going down because this person wants to buy a house and they want to buy Swiss franc with their Bitcoin. So, the price goes down, they're saying, Oh, great. Now it's a good opportunity to buy a Bitcoin. And it goes back and forth like this.
Kathrin: But because it's limited at some point, the idea is that the price does have value and will keep going up.
Yves: So, you said... it's very interesting. You said the price has value. The price is the price, and the value is the value. And that's the thing. You can have something that is very valuable, but it has sentimental value and there is no price. And you can have something that has a very high price, I don't know, like a little doodle that Picasso made.
But it's really ugly, but it has the Picasso signature. So it's not like a famous painting. It's a nothing, but for a collector who wants to have an original Picasso signature with a little doodle, it has a certain price. It has a certain value.
Kathrin: Yes. But it's subjective.
Yves: It's very subjective.
Kathrin: If you saw it and you didn't know about Picasso, you'd think it isn't valuable at all.
Yves: Yeah, you would say it's a piece of garbage. So, it depends. And of course, today, Picasso is very recognised, but there are some artists who are recognised today that were not when they were alive, like Van Gogh, for example. So at the time, he was making his drawing just to have some food, and today they're in museums.
Kathrin: But the fact is, I suppose, that in the last ten or so years people who held Bitcoin have done really well with it compared to their original currency, right? For example, on your blog, I think you once wrote that if somebody saved $250 per month, four years ago, they would have spent $12,250. But the current value of their bitcoins would be over 47,000. So, they would have done very well compared to dollars, for example.
Yves: Exactly. So now we're entering a very interesting territory. The fact that the dollar, the euro, the Swiss franc are being devalued. So we all know that there is inflation and that when it's too much inflation, it's not good because all the prices are too expensive and we can't afford anything. But 2 percent inflation, central banks are telling us is the perfect level of inflation. We should have 2 percent inflation. So without going into the whole concept of why they're saying 2 percent inflation is good, which is arbitrary, but let's say it has some kind of sense because it's good for the economy because people can borrow and then create companies, which will create value.
You have to think that if you have a hundred francs in a bank account and there is 2 percent inflation, the next year at the same date, you will still have 100 francs, but the purchasing power will be 98 francs.
Kathrin: That's right.
Yves: This is what inflation is. It's not the price is going up. It's everything is stable. The price of the apple is stable technically, but your money has less purchasing power.
So in a place like Switzerland, we're very comfortable, but in a lot of places, and we saw with after COVID in Europe and in the U.S. for example, inflation was too high, and people were suffering from it.
So now, how do you beat inflation? Cause that inflation every year, it's like you have a, you have a bucket, you put your water in it. And you keep it for later for, your children and your retirement and everything. But there is a hole at the end of the bucket. It's a small hole, but every year there's a little bit that escapes you. That's your purchasing power. So, what did people, like our parents, grandparents, bankers, television, what did they teach us?
They said, you have to put your money in something that will work for it, for you. And that will compensate with inflation. So they're telling you, you have to put in life insurance, you have to put in stocks, and your grandparents told you, you have to buy gold.
Kathrin: That's right. Yes.
Yves: Because the idea is you want to have something that will not lose the value as fast as your money, your cash, is losing value. So, one other thing that your grandparents told you is, buy a house. And this is why earlier I was saying you buy a piece of land or a little house next to the lake. Your point is that you're going to be using it, you're going to live in it. But also, the value will go up gradually and today you buy it for, I don't know, a million, but in twenty years, it will be worth 10 million.
Kathrin: That's right. And especially because we still have population growth, so it becomes more rare like, housing becomes more in demand.
Yves: Exactly. You have population growth, but you don't have land growth.
If land was expanding infinitely the same way the population was, then of course it would make no sense, but in a place like Switzerland where we have a certain amount of land, you know that your piece of land and your house will keep their value. But keeping their value means that their price will go up.
And this is what, and this is why people are going into Bitcoin. It's a high-reward but also high-risk investment, so it's if you're going to the stock market, or if you were going to invest in real estate, but you are buying agriculture lands and you think, one day people will be building a high rise on it, but today I buy it very cheap because it's agricultural or something like that, or you can't build on it. The thing with Bitcoin is, the people who invested a long time ago, they decided, I'm willing to take that risk that because it's very limited, I'm betting that people in the future will also want to have a piece of it.
So, one side note that is very important because a lot of people don't know, as I said, Bitcoin is limited, but it's very divisible. When we say there is 21 million Bitcoin, one Bitcoin can be divided into 100 million, what is called Satoshi.
So you have to think that there is 21 million of something that each of those million, of those 21 million, can be divided to 100 million.
Kathrin: Oh, I see. Okay.
Yves: So you can have when you're saving into Bitcoin, because you're saying, maybe I diversify, I have a little bit of gold, I have a little bit of stock, I put a little bit in life insurance, and I want to put 2 percent, or whatever, of my income or my savings into Bitcoin.
Then you're not buying one Bitcoin.
Kathrin: No, of course.
Yves: And if the price goes up and up, and then you're like, yeah, this is too expensive because now it's whatever 80, 000 Swiss francs, I'm not going to buy one.
Kathrin: No, of course.
Yves: But the same way I don't buy a cow. When I go to the supermarket, I have 20 francs. I go to the guy and I say, give me four, 20 francs worth of steak.
Kathrin: Yes. You don't have to buy the whole thing. It's the same as Bitcoin. Yeah.
Yves: Exactly. So you can use whatever your savings are to invest in whatever you want. And of course, there was a time when one Bitcoin was whatever, one franc or a hundred francs and people would buy one, but today people are still saving, the same 100 francs and they get whatever Bitcoin is on the other side.
Kathrin: Alright, we'll be back after a really short break.
(AD BREAK)
Kathrin: And now we're back.
Let's get practical about this. So, let's imagine that I've decided now, yeah, I think it's a good idea, I want to start investing in Bitcoin in Switzerland, maybe with a small monthly amount, maybe I want to just do a hundred or 200 francs a month. How do I start? What, where do I even go to buy some Bitcoin?
Yves: So, there are several options. One option is that you say, I don't trust myself. I don't understand anything yet. So I want to do it the most convenient and the most safe way, so that I protect myself from my own mistakes. And I don't, do something crazy. So for that, you can use a bank.
There are many banks who are offering Bitcoin services. The most famous one that everybody knows is PostFinance. Because PostFinance belongs to the government, and it's very safe, and it works perfectly. You have access to it very easily. A lot of people already have a PostFinance account.
So you go into your app, you activate the crypto, Bitcoin, whatever, option thing. They get a little fee from it because of course nothing is free, right? And you can set up your system.
Kathrin: Okay.
Yves: The problem with that is that what you will have is not Bitcoin. What you will have is a number that is displayed on your app that is supposed to represent the Bitcoin that you have, that you cannot have access to directly.
Kathrin: Okay. So it's an indirect way of buying Bitcoin.
Yves: So part of what we were saying earlier about the peer to peer, no intermediary, everything like that, you put it all in the trash. Now you have full intermediary, full, no privacy.
They know exactly what you're buying, where you're buying. And if they say, you don't, we don't want you to spend it or to send it to somebody else or whatever, they can. But if you're not interested in the whole privacy and sovereignty and international, you just want to have exposure to the price the same way you would be buying a share, that's super easy.
Kathrin: Okay.
Yves: There are other platforms who do that. There is Swissquote, which is one of the leaders or the leader in that type of thing. And of course, with Swissquote, you can buy shares, you can buy all kinds of things, you can buy different kinds of currencies.
And you can of course buy Bitcoin as well.
Kathrin: Okay. And also some cantonal banks offer it?
Yves: Yes. So some cantonal banks, Zug, Lucerne, I forgot. I think Zurich maybe. They have that in their system. So for example, in Geneva the Banque Cantonale de Genève doesn't, but because each of those cantonal banks are independent, they can do whatever they want. And some of them are, more, I don't know, more advanced or advanced thinking than others.
Kathrin: Okay.
Yves: If you have a bank account with UBS, for example, they don't offer it, but if you are a high-net-worth individual with UBS and you tell them, yes, we would like to, whatever, they have also their partners that will be doing it on your behalf.
Kathrin: Oh, I see.
Yves: So it depends also who you are. And of course, if you are like a normal nobody like you and I, and you just want to put a hundred bucks, UBS will tell you, sorry, we're not doing that. But PostFinance would say, no problem. You can open an account in five minutes.
So that's one aspect. The other way is that you are embracing the whole thing and you say, okay, now I want to learn and I want to understand and I want to do it for myself. And so what you're going to do is, you will have what is called a wallet, which is a piece of software that you have either on your computer or your phone, which will take care of all the technical stuff for you.
It will give you a complicated passphrase that you will have to back up somewhere. That you will do like, on a piece of paper, and some people who are very paranoid, they would engrave it in metal, for example, but you can have it on a piece of paper and keep it safe somewhere in your drawer.
Just in case you break your phone or someone steals your phone, you want to have a backup. And then you will go to a service online. There are multiple Swiss companies who are offering this service. One of them is called Pocket. One of them is called Relai. And what you will do is you will tell them, please buy the Bitcoin on my behalf. And when I send you Swiss francs, you send... or euros for the European customers... you send me the Bitcoin to that wallet that I have on my computer or my phone. So, you have an intermediary, but they are not holding it for you, they are not taking care of it for you, they are just selling it to you.
You don't grow your own apples but when you go to the supermarket and you buy apples, you leave, they are your apples.
Kathrin: Yes. You can take them home. You don't let the supermarket store them for you.
Yves: Exactly. So, this is a system where, usually they would take between one and one and a half percent commission. And the system, the way you set it up is that they give you an IBAN number and a code to identify yourself that you will put in the communication box. And every time you send money to them, they identify you with that code's identifier, and they would send to the address that you gave them, and then you will open your phone and you'll see that the number of Bitcoin that you have is higher than before. So this is the two convenient aspects.
Kathrin: Yes.
Yves: Now, there are two different ways that are very logical, but usually people don't talk about it. Let's say, me, and I have Bitcoin, and it's not illegal for me to give you up to a certain amount. Of course, if you come with a suitcase with 1 million, I’m legally not allowed to do that kind of transaction. But let's say I come back from a holiday somewhere.
I come back with dollars. And you're going to the U.S. next week and you say, hey do you still have dollars that you didn't spend when you were traveling? And I say, yeah. And you say, why would I go to the bank and the currency exchange booth at the airport? I'll just buy your dollars. And you give me Swiss francs. I'm happy because I don't need to have those dollars because I'm not traveling anymore, and you're happy because you have dollars.
This is also what works with Bitcoin. You can have it, you can have it like a person to person, because as we said, it's peer to peer. It's very easy.
Kathrin: Yes.
Yves: So this is very simple, but a lot of people don't think about it.
And the last thing is, let's say your company provides a service to people, and some of those people have Bitcoin.
Kathrin: Okay.
Yves: And today when you charge them, your bank takes a fee or maybe you're using credit cards and whatnot. So you're paying like whatever, 2%. So you're saying if you pay me in Bitcoin, I give you a discount of one and a half percent. And suddenly you start having Bitcoin coming in because you don't have to buy the Bitcoin. You can earn it.
Kathrin: Yeah.
Yves: The same way the question is, okay, I want to buy Swiss francs. What do I do? No, I want to have Swiss francs. What do I do?
Kathrin: You earn them.
Yves: You earn them. Yeah. That's what most people are doing. You don't go to the Swiss franc shop to buy them, right?
Kathrin: Yes. True.
Yves: So this is how it works for a lot of people who want to, let's say, I don't know, a software developer in Ukraine today. They know that their currency is unreliable today because of the current situation, or in Turkey or in Lebanon or wherever. They know that they don't want to start doing international businesses that they can do online providing little services to all kinds of people in the West. They don't want to be paid in dollars because it's inconvenient for them. They don't want to be paid in their local currency because they don't trust their local currency. Usually they would rather have something else. They don't necessarily want to pay a lot of money in fees for the international transfer.
So they're saying, you know what, pay me in Bitcoin because it's convenient for you, it's easy enough for you, and it's convenient for me as well. And then they don't buy the Bitcoin, they just earn it and they save it.
Kathrin: Yeah. And then over time, obviously they build up a store of more and more, unless they spend it and do the same then.
Yves: Exactly. And it's like money, you don't save it for the point of saving. You save it so that you can use it later.
Kathrin: Yes.
Yves: To go back to the example that you were saying about the example on my blog, I'm not saying you should never spend any money ever. What I'm saying is, we were taught to be thrifty and wise and to put some money aside in a piggy bank so that we can have money for later, for the rainy days and whatever. The problem is if you do that with your own currency, you're putting it in that bucket that has a hole at the bottom.
Kathrin: Yes.
Yves: So, you would want to have something that you can put aside in the piggy bank that doesn't lose value.
Kathrin: And then Bitcoin is an example of an option like gold, but a newer option.
Yves: Exactly.
Kathrin: Yeah.
So, what is the current state of Bitcoin in Switzerland? I know obviously it started out as something very niche that only a few people were interested in.
What's it like now? Is it quite popular in Switzerland or is it still quite niche?
Yves: Officially, 11 percent based on some study from I think it's Basel university. Officially, 11 percent of Swiss people have some exposure to Bitcoin and/or crypto, but usually there is always some Bitcoin in it.
Kathrin: Yes.
Yves: Even if people are a little bit more playful and they try to play the market a little bit like a casino, usually Bitcoin is still the queen of cryptocurrencies. So yeah, 11 percent is a fairly big number. If you're thinking that suddenly, 11 percent of your apartment or house is flooded or burned down, that's a problem, right?
Or if you lose 11 percent of your salary, that's going to be a problem. On the other hand, if you think that 9 persons out of 10 are not convinced because they don't care. It's still not mainstream.
Kathrin: Yes.
Yves: What is mainstream is that we are talking about it, you and I. And it's in the news every day, and politicians are talking about it worldwide.
Central bankers are talking about it worldwide. So it is established as something that is here to stay now.
Kathrin: Yes.
Yves: And even if 99. 9999 percent of cryptocurrencies are literally garbage and/or pure scam, it doesn't mean that the whole thing, the whole concept of Bitcoin and cryptocurrencies is scam.
So, I'm saying 99. 9999. It's not an exaggeration. It's real. It's really, most of it is. They're just garbage. Because it's software. So it's so easy to create and it's so easy to market. And we saw recently with Trump doing his own meme coin just before he was taking office.
And it went up very quickly. It went down very quickly.
Kathrin: Yeah.
Yves: It was not officially a pump and dump. It was not officially a big scam. And the guy is the president of the U.S. so officially you would think that he knows better than just going to prison, but it's too easy. Like, everybody can make anything and market it.
Kathrin: And that goes back to what you said at the beginning about people potentially getting burned. And it's important to have that education, because otherwise, they could then get put off quite easily if you get burned by something like that, and you lose a lot of money, then you're like, Oh, I don't want to try that again... that was dangerous.
Yves: Exactly. Even if you don't lose your own money, but you heard of someone.
Kathrin: You can hear about it too, yeah.
Yves: So I would say that maybe 10 percent of Swiss people are convinced, and I would say that the 90 percent left is not 100 percent of those 90 percent who are against it. It's just that a lot of people still don't understand.
Kathrin: Yes, I think so.
Yves: They're confused because it's a confusing topic.
Kathrin: It is.
Yves: Someone was saying Bitcoin is everything you don't understand about computers combined with everything you don't understand about money.
Kathrin: That's a very good way of putting it.
Yves: And it's exactly that. Nobody understands money. Nobody understands computers. And if you do, you're a geek. So people don't trust you because you're saying, yeah, you're a weirdo.
Kathrin: Put it all together. And it's very confusing. Yes.
So let's come to that very common, a little bit silly question, but we have to talk about it.
Yves: Of course.
Kathrin: Is now a good time to buy Bitcoin?
Yves: Nobody knows. Nobody knows. That's the problem. What I would say is this, as we talked earlier. Five years ago, you and I didn't have this conversation. 10 years ago, you didn't even know about it, or I'm not, I don't know about you.
Kathrin: Yeah! But people generally.
Yves: And five years ago, I was talking to some journalists who had some very... not ignorant, but very naive questions because they had no idea and they didn't have the hindsight of stepping back and looking at the big picture and understanding what was happening.
So, things are moving. Until I think it was January 2024, there was no ETF in the U.S. So an ETF is basically an asset manager who would buy something, let's say gold or stocks or whatever. And then they itemise it in mini stocks that people can buy.
So the Bitcoin ETF in the U.S. is some big companies, they are buying Bitcoin. Then they take the value of all that Bitcoin, they make it into a very easy-to-understand and to trade a little share. And you get a piece of their overall, holding with a share that you can buy and sell and you know, you get exposure.
Which by the way is another way for Swiss people, if they want to have exposure and they don't really care about having the Bitcoin, they can buy an ETF. The problem is it's gonna be denominated in US dollars.
Kathrin: Right, so there's a bit of currency risk there as well.
Yves: Yeah. But in general it's a good exposure and BlackRock is the hugest company in the world. It's enormous. They're not gonna go bankrupt. They're not gonna leave with all their money and leave you stranded.
Kathrin: So it's a reasonably convenient way.
Yves: It's not risk free because you have the risk of Bitcoin and you have the risk of the U.S. dollar, but in general, you don't have the risk of someone scamming you.
So until January, there was no Bitcoin ETF in the U.S. Today, the Bitcoin ETF is the best performing and the fastest growing and the highest yielding and everything of all the ETFs that exist in the whole world of ETFs. And you have ETFs for everything, for gold and for S&P 500 and whatever.
The Bitcoin one is huge. Why? Because you have all those institutions like insurance companies, banks, who don't want to do what I was telling you earlier about backing up your seed word and, putting it in a drawer and everything. And they don't care about the sovereignty and they don't care about sending money back home to Venezuela. They don't care about all this.
Kathrin: Yes. They just want the investment or the exposure to it.
Yves: Exactly. And all these people, they are buying the ETF in the U.S. in dollar from highly regulated, highly trustworthy companies like BlackRock. So, all this to say, these people are not going away. So if you are Mr. Whatever in Switzerland, Mr. Nobody, and you're saying, I want to save a little bit in Bitcoin. Is it a good time or is it a bad time? The thing is you have to think that in the whole global ecosystem of Bitcoin, you have people who are investing millions and billions. And in a way it doesn't mean anything, but it still should give you some kind of a hint that you are a very small fish, and those people are protecting your investment.
Kathrin: Yeah. So, it's unlikely that it will just disappear, and all your money will disappear and all that.
Yves: Exactly. And also, it's unlikely. So, of course, it will go up and down. And that will not go away because Bitcoin is still a small ecosystem. There is not a lot of money in it.
So of course, the volatility goes up and down. And you have volatility in gold. You have volatility in the stock market. Volatility itself is not a bad thing, but you have to think that it will go up and down.
Kathrin: So you have to be prepared and not maybe panic if it goes down or if the price changes.
So I suppose the easiest way for someone with a regular income or something is just to buy a little bit each month.
Yves: Exactly.
Kathrin: Then if the price goes down, you're still buying a bit, you're getting that lower price again and...
Yves: Exactly. When it goes down, you're happy because you put the same amount of money every month, but now you're having more for that money. And when it goes up, you're happy because your whole investment is going up.
Kathrin: And then you have more money overall. Yeah. Or more in your currency, for example, Swiss francs. Yeah.
Yves: But you will never have the best price. That, people have to forget about it, because if you want the best price, you buy it when it was zero.
Kathrin: Of course. You have to go back in time.
Yves: Exactly. It will never be the best price. Is it the best price today compared to the next five years? It's difficult to say, but if you're thinking about your retirement and your future, and you're thinking about keeping it for a long time and you're not putting all your savings all at once but as we said, you put a little percentage of your income on a monthly basis or on a weekly basis, then eventually you will make that volatility more smooth.
Kathrin: Yes, exactly.
Yves: It will be flattened.
Kathrin: It will smooth out instead of just putting a big chunk at some point where maybe the next day it goes down.
Yves: Exactly.
Kathrin: That makes sense.
All right, we have to start slowly wrapping up, but it would be really interesting to hear just maybe one or two resources. So, if someone is listening to this and they think, Oh yeah, actually this is a very interesting topic, but I don't just want to start straight away. I want to learn a little bit more. Is there one or two resources for people to learn more about Bitcoin or Bitcoin in Switzerland?
Yves: So that's a good question. There is a very interesting book in English. It's written by Lyn Alden. It's called 'Broken Money'. It's a very interesting book because it's not a book about Bitcoin. It's a book about money.
So it gives you a nice background of monetary literacy. And then it shows you all the problems so that when she starts addressing Bitcoin, you can understand what Bitcoin actually brings in order to try to solve all these problems. So, it's not super technical. There is a little bit of technical, but you can skip it. You don't have to understand a hundred percent of the technicalities. But the storytelling is really good. It's very good for like, normal people.
And like, everybody who I suggested that book, they all told me it's incredible because, I live in the world, but I don't understand. I don't know anything.
Kathrin: Of course. Okay.
Yves: So this is really nice. Apart from that, there are of course podcasts and websites and everything. I think the easier thing to do is that we will add them as notes.
Kathrin: Yes, of course. We'll add all the links and all the things in the show notes as well. I think this episode might have quite long show notes, which is fine.
Yves: Because I think it's also good to have some resources. You click, you go and you find. If we are talking about them now and people are driving or working or whatever, they might not write down and they will come back to the show notes anyway.
Kathrin: Then of course they can get in touch with you or look at your resources. So, how can people find you and/or contact you if they maybe want to just read some more on your blog or if they have a follow-up question.
Yves: So, I'm very active on Twitter, because that's where I communicate the most and of course, people can approach me, tag me, link to me or send me a DM. I'm also on LinkedIn because I also understand that some people are not on Twitter of course, and in general I have a website which is my name. So it's https://yves.bennaim.com/ where people can also get in contact. In general, I think my name is unusual enough that if you look for me, you can find me. But yes, also I wrote a few things like we said on Bilan and on my personal page and also in other publications.
So, for example, I addressed what we didn't talk about. And a lot of people are talking about, is the energy consumption of Bitcoin.
Kathrin: Okay interesting, yes.
Yves: And the fact that energy consumption doesn't mean pollution or carbon footprint. And there is too much electricity today. There are lots of misconceptions that people say, "Yeah but Bitcoin is bad because..." and I also try to address that because in writing it's better.
Kathrin: Yes it's easier, you can go back and yeah. Excellent.
Yeah, so obviously we'll add all of that in the show notes then people can click through from our website or wherever that is. Yes. Excellent.
Yves: Perfect.
Kathrin: All right. That's it for today. So, thanks once again to our guest Yves for joining us.
Yves: Thank you for giving me the opportunity to talk to your audience. I'm very happy about sharing as much as I can.
Kathrin: And thanks to you for listening. We'll include links in the show notes to our guest and to further materials about some of the topics that we've spoken about today. If you enjoyed the episode, please leave a review on your favourite podcast platform.
Yves: And subscribe!
Kathrin: Absolutely. You have to subscribe.
Yves: You have to say it.
Kathrin: Once again, this podcast was brought to you by Rigby. We're a staffing and project services company here in Zurich. If you would like our help either to hire or to be hired, let us know. Best way to do that is by going to rigby.ch/apply and filling out the form.
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So, thanks, and until the next time.