Danny Scott co-founded CoinCorner in 2014 as a solution to the problem of being able to buy and sell Bitcoin easily in the UK. Today he’s a leading cryptocurrency figure on the Isle of Man. He believes in regulation, but in moderation. He and his firm are working on their piece of the puzzle educating people on Bitcoin and spreading the use of the cryptocurrency. Here, he taloks with Coin Rivet’s Olivier Acuna…
Coin Rivet: Tell us a little about yourself and how you got started with CoinCorner?
Danny Scott: I am one of the co-founders of the business. I have a tech background. I’ve been a software developer for the better part of the last 12 years. I’ve worked for a number of startups in the past and a couple of multinational companies, including Microsoft. During that time, the startups were my interest, particularly the techie aspect.
I initially got involved in Bitcoin back in 2012 and in 2013 other Coin Corner founders and I began to mine it. We worked from a garage and blew the electrical circuits a few times, so these were good times. We were working from the Isle of Man which is where I’m from and where electricity wasn’t so cheap, so we weren’t able to compete with the likes of China, United States and other jurisdictions that have much less expensive power, so we fell back to our roots and came up with CoinCorner.
At the time, in the UK, it was very difficult to buy Bitcoin, which is why we ended up mining them because buying them was a nightmare. There was a handful of places, but they weren’t easy, they weren’t great. So, we came back full circle and decided to stop mining and set up an exchange and make it easy for people here to buy Bitcoin.
CR: How do you take part in the crypto and blockchain revolution and how do plan to bring about change within this industry?
DS: From the actual crypto side of the industry, Bitcoin has always been our focus. To be able to buy and sell. And this is what we did with CoinCorner, making it easy for everyone to access this cryptocurrency. So, this is the financial root. The blockchain is the more technical side, and businesses are using it for many things. I keep up with everything related to this technology, but it is not currently our objective at CoinCorner. We’re aiming to offer more financial services through our exchange platform.
In November, we are coming out with our Visa Bitcoin debit card, which is something many of our customers have been asking for. Our last survey showed 90% of our customers said they wanted Bitcoin debit cards. We’re a self-funded company, we’ve never taken venture capital money or anything like that, and our goal is to move and grow with the industry and not try to force the matter.
This industry is different from all other sectors. In other industries, you’re potentially creating and driving one, and it’s your company driving the industry. With the Bitcoin and cryptocurrency space, it drives the businesses, and you cannot force where the Bitcoin technology is moving, you can’t force what blockchain concept is going to come out, and the technology around it is going to be developed. We grow with the industry, which many times is opposite to what many other companies do. We’ve been around for four years, we’re still going strong, and it has certainly played out well for us.
CR: What compelled you to be where you are today?
DS: I believe I’ve always been entrepreneurial and have worked with a few startups which gave me that techie side and entrepreneurial side, which is building and creating something that people use. I love creating something. It’s less about the financial gain; it’s more about creating something that makes you feel proud of what you’ve achieved. That has undoubtedly been the driving force behind me. I’d love to sit here and say we’re trying to end poverty, but again, it’s one step at a time. We’re doing our little piece of the puzzle by helping to increase the adoption of Bitcoin and blockchain as well, and, hopefully, on top of that, the poverty aspect will also crystallise.
CR: What benefits do new technologies bring to the world we live in today?
DS: My response may be a bit controversial. Laziness is what technology brings. I believe it’s always been our concept and our drive from the beginning, to make it as easy as possible to buy Bitcoin. People are traditionally lazy. And technology has helped increase the laziness, myself included. Can’t say much more than that. However, that will continue to move forward, I mean, technology making the daily things in life easier and more comfortable, such as self-driving cars. Blockchain technology has that potential to automate many processes.
CR: There’s significant hype around cryptocurrencies, but also a lot of debate and concern over its volatility and the fact they have no real asset backing. How would you put people’s minds at ease regarding these issues?
DS: This is one of those questions that are very difficult to answer. I personally can’t put people’s minds at ease. I don’t have facts that would do that; however, I recommend all those interested in Bitcoin to do their research. We would never give investment advice. I can say, though, that when people say the dollar is backed by assets, by gold, and the fact nowadays is that it isn’t the case anymore. You can see currencies backed by governments are fairing so well. Venezuela’s bolivar is not doing so great these days; I’m sure everybody knows. Bitcoin is backed by the technology and the Proof of Work (PoW) protocol. It’s backed by people! And, I agree that it’s a strange concept and for people to move away from fiat, but to me, it’s a natural progression. As an analogy, before you use to go to Blockbuster to rent a movie and now you go online to Netflix. This is a natural progression brought on by technology. So, for now, it’s about people understanding and educating themselves on the technology and how many mining machines there are around the world securing and supporting the network and that part will hopefully start giving them confidence and help them understand why Bitcoin has the value it has.
CR: Some financial experts claim a few fiat currencies such as the dollar are not only not backed by any asset and, in fact, have a negative value because of the debt of the United States. Do you feel cryptocurrencies have more value than the dollar?
DS: Bitcoin doesn’t have a negative value. You cannot create fake Bitcoins. You can, however, print fake dollar bills. Also, there’s no debt attached to Bitcoin, for example. So, that for me, implies another natural progression towards cryptocurrency away from fiat currency such as the dollar, the Venezuelan bolivar and even the pound, at the minute, with the Brexit angle, has taken such a hit over the last couple of years. These things go to show that it doesn’t matter what government is backing a fiat currency and how it’s running it behind the scenes. Anything can happen to any currency. Bitcoin is affected in a different way, but it’s never going to be a debt currency and will never have the debt that governments inflict on their countries’ currencies.
CR: Will cryptocurrencies become mainstream and how soon do you believe that will happen?
DS: They’re already making their way into society; however, the crypto revolution is not going to happen overnight as I’ve said before. It will take time. Cryptocurrencies, though, are already out there and embedded in everyday life. Sure, not as common or mainstream as we may want or we may see over the coming years. I don’t believe Bitcoin will become the one and only cryptocurrency around the world, that just not going to be the reality in my vision, but I do think it will become a significant part of currencies around the globe similarly to what the dollar is today. Hopefully, Bitcoin will become a second currency for many parts of the world.
CR: Will cryptocurrencies substitute fiat or coexist?
DS: I think they will coexist at least within our lifetime. Further, in the future, it’s anybody’s guess. It’s my opinion that it will take five to 10 years before Bitcoin becomes more mainstream. Everything takes time, the Internet has taken 30 years to become what it is today, being in our everyday lives and I believe Bitcoin will eventually get there. It’s not going to happen in one or two years; it’ll take much longer than that.
CR: How do you feel about regulation?
DS: CoinCorner has always been very compliant since the very first day of operations. We’ve always adhered to the anti-money laundering and anti-terrorism financing side. From the beginning, we’ve collected all the KYC (Know Your Customer) documents that are required. We never feel under legislation at the time of the launch, but we knew we would, at some point whether it be one year or five years down the line. So, we decided not to go back retrospectively KYC customers. With that in mind, we have worked closely with the Isle of Man government. We helped create the guidance notes around the cryptocurrency industry and the Bitcoin side. For us, that was an excellent learning experience in regards to the way they needed legislation to be drafted in connection with the way we needed it to be to allow for growth of companies such as ours as well as all those that were relocating to the Isle of Man at the time. So yes, CoinCorner and I are all for regulation with moderation, of course. I’m sure banks will tell you as well as other financial institutions and gaming companies around the world that they are overregulated at the minute. I’m hoping we don’t get to that point.
CR: Your stance on centralisation versus decentralisation?
DS: We’re a company that is centralised. However, they both can play the part. Decentralisation is great. Bitcoin is the whole point of the decentralised bit, and that’s part of what interested me in the start. We would like to see the decentralisation of companies like Facebook that hold your data. It’s a great vision and a great idealistic world to live in, and maybe in the future, it will happen. There’s a need for centralised companies such as ourselves at the moment, purely from the fiat to cryptocurrency on-boarding process. You can’t go and buy Bitcoin; it’s difficult and confusing. People, for example, want to buy Bitcoin with pounds, you can’t do that currently with decentralised exchanges because there are no fiat on-ramps at the moment. They need companies such as CoinCorner. Some people want decentralisation, but some centralisation is still required at the moment. Maybe that will change in the future. For the time being, it’s more secure for people to work with centralised platforms because they foot the bill if a hack occurs. With decentralised exchanges, this would not be the case.
DS: One thing I’ll always say about blockchain is that the buzz is great, I love the innovation side of it. People are becoming very excited about this technology. The way I see it, for now, is that there is no blockchain without Bitcoin. I recently wrote a piece trying to break down what Bitcoin is and to explain to people the blockchain buzzwords. Yes, it’s excellent, but Bitcoin is not blockchain. Within Bitcoin you’ve got the currency layer; you’ve got the nodes, which are the people running the software and passing the transactions around the network; you have the miners who are the Proof of Work aspect, and that’s the piece confirming the transaction and adding them to the blockchain. And, eventually, you come down to the blockchain, which is the part where it is being stored in a large decentralised database. Without these layers on top and I know people are moving away from the Proof of Work and Proof of Stake and things like that… when you lose the cryptocurrency piece and the Proof of Work bit, blockchain is only a spreadsheet ledger, and without the currency piece and all the other aspects on top of that, blockchain is almost useless. Many companies – and I’m not trying to knock any of them down – are creating centralised blockchain systems, and my argument has always been why not just build a database. So, for me, the decentralised blockchain is excellent, the centralised blockchain, not so great. I see it very similar to what happened years ago with companies wanting the intranet and no the Internet and years later they realised the intranet was not the solution.
CR: Do you then see blockchain as a tool against poverty, corruption and inequality?
DS: I, definitely, see room for blockchain in voting systems and fighting corruption. However, poverty is a tricky subject. I can see blockchain being a solution and we are doing our piece of the puzzle by spreading the knowledge and interest into Bitcoin, and that is helping other companies to develop blockchain towards those areas and, hopefully, help resolve some of these issues. However, I don’t think blockchain is the answer to solve everything.
CR: Do you believe governments and private institutions will fully adopt blockchain?
DS: We’re already seeing governments around the world dipping their toes in the technology. I believe a lot of them are trying to figure it out and understand it better because it’s still so new. They’re looking at it from the Bitcoin perspective but also from the technology itself. They’re researching and experimenting to see how blockchain fits as a piece of their puzzle and I believe that it will progress over time. I think blockchain in voting systems is the most obvious application right now. There’s no reason why voting cannot be done over blockchain and even Bitcoin’s blockchain in the near future.
CR: Danny, tell us what have been the highlights and significant challenges of your career in blockchain and cryptocurrency?
DS: My biggest challenge is keeping up to date with the technology and the movement. Running the business because we have to keep on top of not only the company itself but the industry as a whole, and because it’s moving so quickly and there’s so much noise around about all the different blockchains, the ICOs, cryptocurrencies, altcoins, it becomes very, very difficult to keep up with the space. My highlight is working with my team at CoinCorner.
CR: You’re future within the blockchain and cryptocurrency revolution?
DS: Again, CoinCorner’s future is not about being the company that solves all the problems affecting the world. We’re doing our share, and we hope the companies around us do their share as well. We’re here to help other companies and work together to drive the revolution. So, we’ll stick to our offering which is the buy and sell Bitcoin angle as well as expanding into more financial services and the debit card that we’ll be launching soon. We’re helping launch a concierge service, which is mainly focused on helping to drive the OTC (over the counter) side of things. We have a lot of institutional investors. We’re helping to onboard people into the crypto space. We are helping to educate and bring people into the industry. That’s our piece of the puzzle.