When it comes to my stance on Bitcoin I’m unequivocally long.

This aside, what never fails to amaze me is the level of scepticism that remains about whether or not Bitcoin will actually ‘work’ and go mainstream.

In Michael Manns 2004 version of ‘Miami Vice’ there is a scene where Jamie Foxx says to Colin Farrell… “there is undercover, and there is ‘which way is up’” to which Farrell replies, ‘you think I’m in so deep i forgot?’ this crystallises my personal tet a tet in that Bitcoin is still in early days, and in a current market sentiment that is comprised of a lot of ‘for’ arguments and a lot of ‘against’ arguments. Sometimes i need to step back and double check that i still know which way is ‘up’ because perhaps I’m ‘too committed’ or in ‘too deep’ and a lot of those ‘against’ arguments come in the form of the silent disapproval from the Banking system which due to a lifetime of ‘social programming’ makes us instantly ask the internal question, if the banks don’t believe it in it should we? My answer to that is absolutely we can.

Well ‘why’ should we is the question that im sure is on your lips; the answer goes like this…..

As i continue down this path into the forest that is creating what i would initially like to dub ‘South East Asia’s first multi-currency Bitcoin Wallet + Exchange’ http://Cryptosigma.com i arrive at a point in that journey where i must talk to banks and tell them ‘hey I’m setting up this Bitcoin wallet and online exchange where people can buy and sell Digital Currency such as Bitcoin in an online exchange for local currencies such as Singapore Dollar, Thai Baht, Hong Kong Dollar etc, the company is set up and now i need a bank account to process customer deposits and withdrawals’. Sadly, the only thing the banks compliance department hears in that conversation is $£*&^!@£$%^@!%^&* BITCOIN@£%^&*!@£%*’. What i find incredibly funny having witnessed it first hand is the Banks capacity to make their own rules and move the goalposts as they’re doing it based on an utter lack of understanding, a hideous example of double standards served on a bed of fear and the unknown. My advise is… don’t be scared of the unknown, its the only environment where you will find genuine change. The things we already ‘know’ cannot catalyse change.

I recently approached one of Singapore and the Worlds leading Banks a) Who I’ve been banking corporately with for 7 years and have a very good track record dealing with mobile payment solutions globally and b) this bank already have a client running a bitcoin exchange ‘Itbit.com’ which happens at present to be Singapores largest and most well funded Bitcoin Exchange platform. Obviously they weren’t aware of this and after sending my formal request to the ‘compliance and account set up department’ they came back and told me ‘sorry we don’t deal with anything bitcoin related’. To which i of course replied, well you do because you’re processing customer deposits and withdrawals for Singapores largest bitcoin exchange ‘itbit’com’…. ‘hmmmmm’ said my account manager, let me speak to compliance and get back to you. How i would have loved to be a fly on the wall during that conversation. It probably went something like this.

My Account Manager – ‘Hey compliance department, we have this long standing corporate client on the phone who wants to set up a Bitcoin business and wants to open an account with us to facilitate customer deposits and withdrawals.’

Compliance – ‘tell him we don’t deal with bitcoin’

My Account Manager ‘ I did actually but he told me we already have a client on the books called ’itbit.com’

Compliance – ‘Oh yeah we do, hmmm… just tell him policy has changed’

My Account Manager – ‘ok, thanks’

And sure enough thats what they did, and it blew me away:

That leads me to the next point…… ‘Explaining Bitcoin to a bank’ is like trying to explain ‘Amazon.com’ to ‘Barnes and Noble’, or Napster / iTunes to ‘Tower Records or HMV.’

They don’t get it, and they certainly don’t feel fondly about digital currency due to the fact that in their eyes with dilating dollar sign pupils Bitcoin has the power to curb their money making monopoly; but what about embracing an advance in technology to make things better for the consumer technically and financially…nope, they don’t care. Your role as a consumer is to produce benefit for the corporation; not the other way round, this is how they see things, and its very unfortunate. The problem with their deep desire to maintain their money making monopoly is that they choose this in favour of something much more brilliant, social change. With Social change arrives the possibility of re-structuring and breathing life back into old worn out systems that actual would involve passing benefit on to the consumer as opposed to what normally happens which is instead of innovating the banking fee’s, loans and fixed deposit products are constantly restructured over and over again to add profit to the banks bottom line because the bankers bonus’ are linked to that very thing; meaning the consumer is constantly at a disadvantage and we remain innovation-less. The only truly innovative thing the banks have achieved in the last 20 years that provides real consumer benefit is the ATM (and arguably online banking). As i mentioned in my previous blog post…in a world where you can have a video call in real time, see that person, hear that person in real time with no delays how is it possible that it still takes 3-5 working days to send someone money. The answer quite simply is that its impossible because of ‘the Banks Bottom line’ that inconvenient 3-5 days your banking institution tells you that it takes to send your bank transfer is on top of the 3-8% they will charge you to send that money in the first place with the final slap in the face being the miserable 1.99% annual interest they are prepared to offer you on your savings which they market to the world on TV and billboards as if it is the deal of the century. Its not fair and the playing field is not level.

From historic case scenarios such as The record industry trying to fight earlier disruptive technology such as peer2peer file sharing (torrents) you would think that the congolomerates would have learnt to embrace it, because things like this are like water running in a stream, you can put your hand in the water and it simply picks a new path around your hand. You can put a mound of earth in the stream and the water will wash it away, you can dig up more earth and completely block the flow of water only to come back a day later to find that the water has found a new route around the little earth dam you built. Technology like Bitcoin, and the internet are like flowing water, they have the power to disrupt global markets and processes we have had in place for decades or even centuries such as the postal system. This kind of disruptive tech comes along once every few decades so surely its time to embrace technological advancement. I sincerely hope the banks realise this, perhaps there is a glimmer of hope in that recently the Bank of England has weighed in on the Bitcoin debate expressing their interest to embrace, understand and utilise Bitcoin to re-invigorate the Fin-tech and banking industry rather than fight it in some vain attempt to temporarilyprotect their profit monopoly.

This leads me to my final ‘rant’ 🙂 we live in a society which has been led to believe that large organisations and ‘governments’ are to be completely trusted even though time and time again they have proved to us that they absolutely can’t be trusted. From quantitive easing, to the sub-prime loan crisis to Cyprus taking up to half the money from peoples bank accounts without their permission in order to bail the country out of economic collapse. Many people who I converse with about Bitcoin ask me ‘yeah but what is bitcoin backed by?’, to which i reply ‘well what is money backed by?’, those who didn’t get the memo that the gold standard officially ended in 1979 often reply ‘its backed by gold’ and this still shocks me. The remainder reply that ‘its backed by the government’ yet nobody ever told me ‘well its pretty much backed by thin air and isn’t worth the paper its printed on’ which would perhaps be the most accurate answer.

Although dealing with Banks at present is a very strange experience when one mentions Bitcoin I have no doubt that Bitcoin will be the most important thing to happen to global finance in a long long time…. and eventually either through their own choice or forced by the good old adage ‘adapt or die’ the Banks will eventually come around to the idea…… and one thing is for sure…..I’m banking on it.

http://www.cryptosigma.com – Be your own bank, control your own money.