Money makes the world go round and it’s good for a headline or two as well.
Bitcoin stands as testament to this, as its value soared to over $1000 per Bitcoin, so the mainstream media wanted to know more, publishing as many reports proclaiming it to be the next big thing as there were those deriding it as a flash-in-the pan.
This financially driven media attention has been interesting and has certainly served to increase Bitcoin’s profile. What it hasn’t done is tell the full story of the technology’s potential as a decentralised network with trust built into the system. Looking at it another way, it is a network that gets rid of trust by using algorithms to overcome that particular leap of faith – a ‘trustless’ network.
As a result, most people’s encounters with Bitcoin or any other cryptocurrency have been at the level of financial speculation, as risk-embracing investors have sought to cash in on an asset that many would have to admit, they don’t understand.
Adam Cleary is someone who sees both sides of the (Bit)coin. As the founder and director of Bullion Bitcoin, a London-based startup that offers a gold bullion and Bitcoin exchange service, he is keenly aware of the cryptocurrency’s investment potential. However, he also understands the enormous and virtually untapped potential that Bitcoin offers as a decentralised, self-regulating network with a huge range of possible applications.
“Bitcoin was originally conceived as a currency but the genius of it is much wider than that. There is an evolution of Bitcoin into new protocols led by the likes of Ethereum and Mastercoin, which enable the development of securities and smart contracts that are governed not by law but by algorithms. You can create your own decentralised autonomous organisation in the ether,” he says.
Putting it succinctly, Adam adds that “Ethereum is an amazing new idea.”
As a result, he has also helped to establish the UK Digital Currency Association with a view to promoting cryptocurrencies and their development, driven by the belief that they can improve society.
But back to the bullion.
Bullion Bitcoin “enables gold to be transmitted globally.” As a result, he sees the firm as “effectively remonetising gold,” and to some extent playing a role in the challenge that cryptocurrencies are taking to existing financial systems, particularly in the UK where Adam sees the banks as having effectively “closed ranks and said that they will never accept accounts with Bitcoin.”
This attitude from the existing financial sector has slowed the development of UK-based cryptocurrency exchanges, although, in true entrepreneurial spirit, there are firms working around the problem. Bullion Bitcoin is one of these, being an exchange that completely avoids fiat currency, instead enabling direct Bitcoin to gold exchange.
That does not mean however, that it does not want to see some form of regulation for Bitcoin. As a result, Bullion Bitcoin is voluntarily taking on as much regulation as it can.
“We try to comply with regulatory standards as much as possible. I’m trying to be a next generation Bitcoin organisation.”
To this end, Bullion Bitcoin is currently only available to sophisticated investors able to exchange a minimum of 10oz of gold bullion. It also requires new clients to go through due diligence and anti-money laundering processes and holds the bullion via a separate Guernsey-based firm, Bullion Rock, thus ensuring transparency of processes.
It is a sign of our times that innovative companies bringing game changing concepts to the marketplace are eager to be regulated or at least be seen to be self-regulated. No matter how much trust is built into the Bitcoin network, which regulates itself far more effectively than any third party organisation could, regulation is seen as key to acceptance by the wider financial community.
As such, regulation is an issue high on the agenda for the UKDCA, which can see moves towards cryptocurrency regulation happening in jurisdictions like the Isle of Man or further afield in Singapore. The idea that the much derided banking sector could be a reason for the UK being slow to encourage the nascent industry is one that certainly sticks on the throat of Bitcoin proponents like Adam Cleary.
The UKDCA is just getting off the ground. “We’ve established a founder membership and are trying to attract key people in the Bitcoin community.”
Once organised, the potential for growth in the UK is huge, despite the ire of established financial institutions. Adam explains that the UKDCA has around 40 members as it stands but the London Bitcoin meetup community counts 300 – 400 people with 200 regularly turning up to meets, proving that the expertise and enthusiasm is already there.
Bitcoin and cryptocurrencies are not going away, Adam Cleary is certain of that. We just need more people to wake up to the fact because, in his words, “the possibilities are as wide as you can imagine.”