Blockchain.info CEO: We Pay Employees in Bitcoin. And Someday You Might, Too.
Join us in a city near you at Entrepreneur’s Accelerate Your Business event series kicking off Feb 23. View cities and dates »
Editor's Note: In this series, we take you inside the mind of Nicolas Cary, CEO of the popular Bitcoin wallet service Blockchain.info, for his expert insights on the latest Bitcoin news and trends.
Nicolas Cary is convinced Bitcoin is as monumental a game changer as the Internet itself.
He believes in it so much that he’s perfectly fine with getting paid 100 percent in the world’s first digital cash by his employer, Blockchain.info, the popular Bitcoin wallet and block explorer he leads as CEO (and chief bacon officer).
Actually, everyone at the York, England-based startup gets paid in Bitcoin only. The company doesn’t even have a single traditional bank account.
Nic, as most people know and call him, is a fast-talking, upbeat Bitcoin die-hard. The avid runner and fly fisherman travels the world pretty much constantly, preaching the benefits of what he seriously sees as the “future of money.”
In the past six months alone, Nic has talked up Bitcoin in some 40 countries throughout Asia, Europe, North Africa and South America. Last April, the Denver, Colo., native returned stateside to keynote at MediaBistro’s Inside Bitcoins conference in New York City.
Earlier this month he crowed on Twitter that Blockchain.info was on the brink of sailing past the 1.6 million user mark, which it promptly did. Not too shabby for a small Bitcoin business born in 2011, back when the cybercurrency peaked at a skimpy $32. Today, at 3:46 p.m. E.T., a single Bitcoin was worth 20 times that, hovering near $640.
We spoke to Nic about Bitcoin’s recent ups and downs and why he believes the controversial currency will inevitably impact you, me and everyone else in the world.
The following includes portions of our interview, edited for clarity and brevity.
Entrepreneur: On May 27, the price of Bitcoin shot above $590, up 64 percent from April 10, when it sank to $360. Why such swings?
Cary: Right out of the gate this year, in early January and February, you had a pretty strong negative news cycle. There were a bunch of stories that came out week over week that probably put some downward pressure onto the price of Bitcoin.
First of all, you had a lot of curiosity around what’s going on with Mt. Gox, which was one of the earlier exchanges, even though they weren’t playing a pivotal role in the Bitcoin economy, really, in comparison to larger exchanges since taking its lead. Mt. Gox was a name that a lot of people recognized and any time there is a booming industry where people drive themselves and others off the road, it certainly makes for a good story.
Another big story was the removal of Blockchain.info’s app from iTunes store. It was the last wallet service that Apple had decided to ban. Also, the Silk Road 2 got hacked. Transaction malleability was impacting some of the services in the Bitcoin economy.
You also had tax season and a lot of people had gains in Bitcoin last year because the price went up by several orders of magnitude, so people who had to pay and deal with their taxes were most likely selling a good deal of Bitcoin off before April 15, just to cover their gains.
So you had a negative news cycle combined with tax season, which I think created a good deal of pressure on the market to cause the price to go down, all on top of some unusual uncertainty in China with regards to how Bitcoin would be treated there. You set that landscape up and you can expect that the price would’ve probably been a little bit depressed.
In the background, though, there’s an unbelievable amount of investment happening into Bitcoin. Even though all of those things were going on in the first quarter of this year, more venture capital has moved into Bitcoin in the first couple months of this year than in all of last year combined.
Then you have big [venture capital] raises in the industry contributing to the increase [in the price of Bitcoin]. Circle [a Boston-based Bitcoin banking platform] raised a lot more money. BitPay raised $30 million dollars, out of a potential $150 million dollar valuation for that team, and there’s a lot of capital that’s coming off the sidelines moving into digital currency and Bitcoin-related projects.
Another contributing factor in the value increase right now is that Bitcoin is gaining more and more legitimacy. Not only has Overstock started to accept Bitcoin, but Richard Branson has blessed it. You can now travel to space on Bitcoin.
Related: 3 Big Misconceptions About Bitcoin
Going into summer now, I think that the transaction velocity is increasing, so people are spending more and more of their bitcoins and that’s because it’s a more frictionless payment system and it’s saving people money. As more people learn about Bitcoin, it’s inevitable that the price will continue to grow and rise.
There’s a ton of opportunity and I think that’s starting to be realized. People who have spent their careers in other industries -- whether it be insurance or software or gaming or finance or remittances or non-profits -- there’s something for everyone in Bitcoin. And, as more and more human capital matches the financial capital that’s coming into the space, it’s going to accelerate. So, yeah, I expect the price to continue to go up to match the optimism and the real potential for the whole industry.
Entrepreneur: Do you think we’re headed for another Bitcoin bubble?
Cary: I’m very bullish on Bitcoin. My company is a 100 percent Bitcoin-based business. We don’t even have a corporate bank account. All of our employees are paid in Bitcoin and we do everything we can to maintain a Bitcoin economy.
From my perspective, the venture capital scene in the U.S. is just starting to rev up and that’s because they’re so much stake when you’re talking about the disruption that Bitcoin represents. It’s a digital property rights system and the first experiment with that is with currency.
But there are a lot of other things that can happen, too. With programmable money you can do some really amazing things, like binding contracts that automatically execute if certain conditions aren’t met. People are starting to devote a lot of R&D [research and design] into these ideas. It’s really inspiring what is effectively the most important expression of human potential in finance of the last 50 years.
I think there’s going to be a lot more money that moves into Bitcoin. The first couple of months this year are going to be a drop in the bucket in comparison to what’s coming down the pipeline.
Without sounding too ridiculous I do believe that in some ways digital currency is going to make the first dot-com bubble look actually like a blip because you’re talking about the future of finance. It’s an industry that hasn’t really adapted to digitization and there’s so much that can be improved and so much at stake.
While I’m not too worried about revolutionizing the shopping experience in North America, it can really change an awful lot around the world. There are 2.5 billion people on Earth that have no access to financial services whatsoever. If you can put a bank inside of a smartphone for them, that they have custody of, then you allow them to enter the marketplace anywhere in the world and instantly exchange value with anyone else, and that’s never existed in the history of time before.