In a world obsessed with the value of Bitcoin, it is easy to overlook the听true potential of听迟丑别听肠谤测辫迟辞肠耻谤谤别苍肠y revolution.听
The poster child of crypto, which recently rose to a record valuation听before falling back somewhat, regularly grabs the headlines as investors听speculate on听the possibility of听huge returns.听
In its wake听follow a multitude of digital currencies created with use-cases in mind 鈥� or, in the case of Dogecoin, as a joke听鈥�听each听with their own army of听supporters. These advocates for crypto are people, just like you and me, who believe in a financial听future听built upon听virtual coins 鈥� and听hope听to make听a听fortune听out of it.听
鈥淭he news media cycle focuses too much just on the price movement. I don’t think enough is being talked about in terms of the technology,鈥澨�Ivan Soto-Wright, co-founder and CEO of听MoonPay, tells听老九品茶Cloud.听
鈥淎s we move forward, people will begin to understand the inefficiencies with the existing legacy system [of fiat currency]: it can take days and there’s听a really expensive听reconciliation听process听on both sides,听whereas with the blockchain, you have this intermediate layer which is a source of听truth听and听everyone can see.鈥�听
Monetary systems
As World War II听came to a close, the听Bretton Woods system of monetary management, which effectively tied the value of national currencies to gold,听established the rules for worldwide commercial and financial relations.听听
In 1971, the听present system of free-floating currencies听鈥� in other words,听not backed by a commodity听鈥� effectively听replaced听this when听the Nixon administration听terminated convertibility of the US dollar to gold.听
鈥淲e’re in an unprecedented environment today: we’ve never seen so much monetary stimulus from governments around the world in the wake of COVID-19. There’s a crazy stat in the United States: around 20% of United States dollars have been printed in the last year,鈥澨�says Soto-Wright.听
鈥淚t is a relatively new phenomenon where governments have been taking this monetary stimulus action to print more of their currency.鈥�听
Inflation protection
The US Fed鈥檚 decision to introduce unlimited quantitative easing听saw听$3 trillion听pumped听into the economy, which will ultimately devalue the money already in circulation. In contrast,听the total number of Bitcoins which will eventually be created will be limited to 21 million, protecting their value.听听
鈥淨uantitative easing [policies] can lead to cases of hyperinflation, as we鈥檝e seen in Argentina and Venezuela.听On a macro level, people are looking for some sort of inflation protection, which is what’s driving institutional investors to look at Bitcoin more seriously as part of their overall portfolio,鈥�听he adds.听
鈥淭here is an argument around Bitcoin trying to be this new kind of global reserve currency standard. But I think we’re far away from that… It’s still听really early听days.听听
鈥淚f you zoom out, from a macro perspective, Bitcoin today is about $1 trillion in market cap. But if you put that into context, another alternative asset class, gold, is closer to $10tn.鈥�听
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MoonPay听is a new payments infrastructure provider that powers some of the world鈥檚 biggest crypto companies, including Bitcoin.com.听
The start-up, which has gone from a standing start in 2019 to become one of the biggest players in the space, is focused on democratising cryptocurrency.听It enables more than 250 partners听across 170 countries听to integrate cryptocurrency into their payment solution 鈥� providing a simple entry point into the crypto market and supporting over 30 fiat currencies and听20 virtual currencies.听
鈥淲e鈥檝e serviced around two听million end–users.听We want to bring cryptocurrencies to a billion people by 2030,鈥� says Soto-Wright (above).听鈥淲e want to cover every single payment method across every single geography to make it very easy to access cryptocurrency from any part of the world.”
He adds: 鈥淚 think that with Bitcoin there is good, general distribution. It’s decentralised and owned by many different people in different countries in the world. But听it听isn’t necessarily a very good payment method听today听because it’s more of a听鈥�store of value鈥�听迟丑别sis.鈥�听
Micro-transactions听
SoV听is a belief that听something has value and听is guaranteed听to听retain听this value听鈥� or increase it听鈥撎�well听into the听future. Many believers in BTC 鈥� at the time of writing worth around $53,500听鈥� expect it to ultimately rise to $1m.听
鈥淭his payments piece gets talked about a lot: being able to use Bitcoin at a Starbucks. It’s not very effective for small transactions because the network fees are quite expensive,鈥� he explains.听
鈥淲hat is practical is if I want to move a billion dollars in Bitcoin from one person to another: I can do that for under $100 in transaction fees and in hours, which is better than the existing financial system today.听There’s already advantages at the macro scale.听听
听鈥淭here are incredible engineers, talented people around the world, working on trying to scale blockchain and听bring transaction costs as close to zero as possible for micro-transactions.听
鈥淲e want to plug into many different types of blockchains 鈥� and really, our mission is about trying to see adoption around real use-cases beyond just speculating on Bitcoin as a future store of value.鈥�听
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Digital currencies will exist alongside their fiat counterparts, says听Soto-Wright,听drawing听a comparison with Voice over Internet Protocol听provider Skype.听
“VoIP听is听what we’re using right now to communicate on听Zoom.听Using the internet to make a call听brought costs down massively from the existing legacy system, which is using cell towers in different countries听to make expensive long-distance calls,鈥�听he says.听听
鈥�Skype was one of those very first businesses that leveraged VoIP to听bring down the barriers for anyone in the world to be able to communicate听seamlessly.听But it wasn’t like your phone number disappeared听or听your existing cell contracts disappeared.听It听has听taken time for people to opt in.听听听
鈥淭hat’s kind of the same way I see crypto: right now, the user experience isn’t fantastic, but I think it has an incredible promise over the long term.听It’s not听like听your credit card or bank account is going to disappear; but as people find utility and efficiency听within the crypto system, they will opt-in.听We’re looking at a听5-10–year horizon.鈥�听
A fairer system
The creation of a fairer financial ecosystem is the end-goal of听MoonPay,听which has听seen its听revenue stream听鈥撎�taken听from听transaction听fees听鈥撎�increase 3000% over the past 12 months.听听
鈥淭his is a landmark opportunity: there are billions of people around the world that are still unbanked. With this technology, as long as you have access to the internet,听in minutes听you can create a cryptocurrency wallet听which听can almost function as your bank account,鈥� he says.听听
鈥�That, to me, is incredibly liberating. In Kenya,听[mobile payments firm]听M-Pesa started with people trading mobile phone credits with one another;听eventually听it actually leapfrogged the existing legacy system and听became its de facto financial system.听听
鈥淎听lot of the companies that we’ve been working with recently are looking at cross–border remittances,听a听trillion–dollar industry听where听legacy financial institutions charge an arm and a leg听for you to听move money from one country to another.听听
鈥�Where we see it听going听is听this idea that I can move from my existing payment method into a cryptocurrency stable coin听鈥撎�a听virtual听currency that’s backed by a particular country’s currency听鈥撎�and听out again. For example,听I could听move听dollars听from my听US bank account听into crypto and on听to someone in the Philippines;听迟丑别y could receive that in seconds at almost no cost, if I’m using the correct blockchain;听they can then听cash out that dollar coin into Philippine pesos听鈥撎�or听spend it and cut out Visa and MasterCard.听
“Merchants are also getting essentially implicitly taxed every听time they receive a payment.鈥�听
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The transparency of blockchains is another powerful tool in the fight against financial crime.听
鈥�For charities and听non–profits, it’s really powerful to be able to track all of the donations that take place over the blockchain,鈥� says Soto-Wright.听鈥�We helped the Argentinian Red Cross accept听money听via听people鈥檚听existing payment method听and听see听it arrive in听肠谤测辫迟辞肠耻谤谤别苍肠y, tracked听in real–time.鈥�听
Bootstrapped and independent
The 31-year-old entrepreneur and co-founder听Victor Faramond,听惭辞辞苍笔补测鈥檚听CTO, have bootstrapped the business to date, which makes it听all the more听impressive that it has grown from five to more than 65 global employees in the last year.听
鈥淐ryptocurrency as a business can be a little bit tribal:听you have different exchanges competing with one another, you have different protocols,鈥� says Soto-Wright.听鈥淲e wanted to be听an听independent player judging the听merits of the technology.听
“A lot of entrepreneurs could be tempted to take that capital early. I’ve taken a contrarian view that there needs to be a very clear idea on how to leverage that growth capital to really accelerate the business.听
鈥淎t some point, we might consider taking on external funding听to听accelerate our roadmap. But听for听now听we feel听pretty comfortable听in听continuing to听reinvest our profits back into the business.鈥�听
Cryptocurrency