A Historical Perspective
When the Bank of England started in the 1690s they created, in its simplest terms, two parallel structures. First, they created what was effectively a crypto-currency: Bank of England pound notes backed by a reserve. Second, they created a business, which made money out of using the crypto-currency. Their business edge derived, in part, from their control of the crypto-cu
rrency as the operating company i.e. nobody else could issue Bank of England notes. The operating company made its money out of lending, using Bank of England notes and deposit accounts in the ledger of the Bank. In the 1690s and early 1700s the Bank of England was hugely profitable. The Nature of Money
Money has evolved at an accelerating rate over the past three hundred years, while retaining strong linkages with the past. Each stage of evolution has conferred qualities of “moneyness” on new instruments; and at each stage of evolution companies or banks have derived a new profitable business model from being at the cutting edge of that change – think Visa and MasterCard. Bitcoin, however, has signalled a new era. We believe that the nature of money is changing somewhat. Payment, the payment process and the security surrounding that transaction has always been at the heart of the concept of money, and as society evolves, technology can provide answers that keep pace with requirements and expectations. Improved communications and consumer needs always lead changes in money. Correspondence banking by the Medici branches in Florence and Bruges eliminated the need for mule trains of bullion to cross the Alps, in order to pay for Flemish cloth. The build-out of the Telegraph in the American West, and the payroll requirements of the railway companies, accelerated the concept of wiring money. Sub-Saharan African telcos have already begun to implement what is effectively social money, running on the rails of the telecom networks instead of the banking system – this represents a quantum leap comparable to the switch from canals to railroads. Mobile is the only universal form of communication and that in a nutshell is the opportunity. Initial Success of Crypto-Currencies
Running in parallel with developments at the African telcos, we have seen the initial success of crypto-currencies for internet-related transactions, culminating in more widespread acceptance of Bitcoin. Critics of Bitcoin have largely missed the point: prototype instruments have not needed to be perfect in order to acquire features of “moneyness” but they have required to have some critical aspects of “moneyness”, while both meeting and shaping market needs. The advent of Bitcoin has permanently changed the game and there is no going back. Our crypto-currency is modelled on Bitcoin, though only to a degree, because Bitcoin has channelled a permanent shift in consumer expectations – that crypto-currencies can be monetised. Growth of Cashless Transactions
The pervasiveness of mobile devices worldwide, the exponential growth of cashless transactions and the accompanying shift in consumer expectations, accelerated and accentuated by the internet and by a generation that has grown up with technology, creates the potential for the development of new financial ecosystems. One manifestation of this has been the specific market trend towards tokens and one-touch transactions (bank cards, public transportation systems etc.) and the integration and cross fertilisation of the various diverse and superficially unrelated token payment systems. The consumer is transparently moving in this direction and the market and the world’s banking systems need to follow. The key to acceptance is cost, security, ease of use and widespread adoption. Driving Adoption in an Ethical Manner
In Latin America and Africa mobile phone pe*******on is higher than bank account pe*******on. According to Wikipedia, only 24% of adults in Sub-Saharan Africa have bank accounts. In some cases people do not trust their own currencies and faith in their domestic monetary regimes is deteriorating. Inflation in Venezuela and Argentina is above 50% and accelerating. The currency in Zimbabwe has effectively ceased to exist: a product and an idea may only be attractive if it has nothing to do with the government in these countries. The cellular network provider could potentially become more important in developing world financial systems than a player like Citibank or HSBC. The cellular network providers have already woken up to the banking opportunities in the developing world. In these countries legacy currency and banking systems do not yet have a stranglehold on domestic business culture. Massive change and rapid growth are happening in real time. We are working on Fixing not only Crypto Currency but currency and it's control with a charitable twist.
