South African Bitcoin startup and Blockchain consulting firm, Bankymoon was recently propelled to rockstar status when it was announced to have been selected by the SARB (South African Reserve Bank) as a test subject for the drafting of local cryptocurrencyy regulations. Founded in 2014, Bankymoon is responsible for such innovations as Bitcoin power vending machines, and the Centbee bitcoin wallet which promises to bring the power of decentralised money to the masses.
After weeks of postponements, due to incongruent schedules, we finally got to do a Q&A session with Bankymoon’s head honcho (Read CEO), Lorien Gamaroff and casually chatted about himself, Bitcoin and a decentralised future:
(BitcoinHub): Who is Lorien Gamaroff? Where are you from? What did you do before 2014 when you started Bankymoon?
(Lorien Gamaroff): I’ve got a long history in software engineering. I’ve been building tech for the financial services, energy and advertising industries for about 20 years, and prior to founding Bankymoon 3 years ago, I was working in energy, developing smart-grid tools, analytics solutions, vending systems and meeting systems. At that stage I had been interested in Bitcoin for a few years – since about 2011 – and I thought to myself “Now is a good time to create a Bitcoin/Blockchain company and in late 2014 I created Bankymoon.
(BH): Awesome! Well, you’ve already partially answered my next question, which is: What inspired the move into Blockchain and Bankymoon, to begin with?
(LG): Well, you see, at that stage the conversation had become about Blockchain and not so much about Bitcoin anymore, also I was trying to find solutions for people to buy prepaid electricity and I thought Bitcoin would be the perfect solution for the African market. Most of the population pay for electricity with cash so I thought being able to use Bitcoin would be perfect. I started fiddling around with the idea of a Bitcoin powered, prepaid electricity vending system, but the company I was working at weren’t interested in it, they thought Bitcoin was pointless. That’s when I decided to start a company so I could explore all that, but I soon after, found myself distracted by a whole host of other things.
(BH): Was that the Smart Meter project you announced in 2015?
(LG): Exactly, I started out building Bitcoin prepaid electricity vending machines, but decided that I wouldn’t commercialise that and I’d focus on the crowd funding platform where foreign donors could donate electricity to African schools. That’s an ongoing project, but I decided not to pursue the electricity vending machines side of the business as the market isn’t quite ready yet. There’s a lot to be done before we can start focusing on that [electricity vending machines]. Right now the focus is on how to get people to buy and spend Bitcoin easily.
(BH): That’s where the Centbee wallet comes in right?
(LG): Ja, Centbee is a company where we only do Bitcoin related stuff. We have Bitcoin vouchers that people can buy over the counter like iTunes gift card vouchers. You can go to Checkers, or Shoprite or CNA and buy a Bitcoin voucher with cash. We also have a mobile wallet, which allows you to scan the voucher into the wallet, and through the wallet you can send funds directly to Mobile Money South Africa (Like M-Pesa) and also make purchases at local retailers. We’ve got a SnapScan like, product which allows you to scan the store’s bitcoin address and pay with Bitcoin.
(BH): That’s really innovative stuff!
(LG): Ja, it’s really cool. It’s gonna change things a lot, and make Bitcoin a lot more accessible.
(BH): So, which Blochain platforms do you build your solutions on?
(LG): Well, I’m only interested in Bitcoin, I’ve since become interested in Bitcoin Cash. I think Bitcoin is the only one worth focusing on at the moment. Maybe later on, we can expand and add extra currencies but I’m only interested in Bitcoin at the moment.
(BH): Awesome, so tell me about the consulting side of Bankymoon’s business, which organisations have sought your services, and what innovative projects have come out as a result?
(LG): Just about every major financial institution in the country, including the South African Reserve Bank, and a host of others. Insurance companies, tech companies, basically anybody who wants to understand Bitcoin and Blockchain. As for innovative projects, it’s still in the RnD phase, there isn’t any real business case for Blockchain yet. A lot of it is just exploration and doing a lot of research, and building up T’s & C’s. Blockchain is real interesting but the thing that can change the world and works is Bitcoin, so I’m not as interested in Blockchain platforms as I am in crypocurrency, because that works, where as everything else may or may not work.
(BH): Fair enough, so Bankymoon is currently at the forefront of cryptocurrency regulation development in South Africa, through collaboration with the SARB, how did that come about?
(LG): You know, with Centbee allowing people to use Bitcoin as a currency, that has an impact on what regulators can allow. There’s a lot of fear that there could be huge amounts of money moving out of the country, or maybe funding terrorism, or money laundering or things like that.
Since Centbee operates in fintech, we became familar with the guys at the Reserve Bank, we’ve done several workshops there before on Blockchain. They new about Centbee so we’ve just been talking to them being very transparent and have shared our plan, and business model and explained how it all works, just so they can be in the loop. They don’t want to make any official statement about regulations or policies or sandboxes just yet because they first have to understand it themselves.
It’s a sort of informal relationship, but we are being looked at as a case study so instead of just theorising about these things [crypocurrencies] they can see it in action. Which will help guide policy development, down the line. They’re very optimistic, they’re actually very cool guys, you’d be surprised.
(BH): Awesome, so how long will the project be running for, and do you think at some point we’ll have a Crypto Rand?
(LG): (Laughs) No, I don’t think so. There are a lot of complications around that and the technologies that exist today can do it better, So I don’t think so. Even our own governer says it’s too risky and too weird, So I doubt there’ll ever be Crypto Rand.
Of course there’s a huge drive around the world to get people to stop using cash, that way banks can’t charge high fees and can’t control or manipulate money, So central banks around the world desperately want people to stop using cash. We saw it in india with a lot of guys demonetising stuff. It’s a real scary thing [cash], it’s scary in terms of our liberty and our freedom.
The great thing about Bitcoin is that it’s this liberating thing, where you can now transact and have money without having to be under the thumb of a central power which throughout history, has been pretty much the cause of all the troubles we’ve ever had. Especially with regards to printing money and hyper inflating currencies, not just in Zim, but we’ve seen it with Venezuela as well.
Virtually all currencies are hyper inflating so it’s a kind of way to free money. Free it in terms of allowing people to earn money without fear that it’ll be devalued.
The cost of remittances in Africa are also rather high, the highest in the world, here we have a technology where they can send money cheaper and easier without having to have a bank account, it’s really gonna be incredible, I’m very excited.
(BH): You’re optimistic about the future of cryptocurrencies even though prices have dipped right now
(LG): Oh that? I Can tell you, I’ve seen ups and downs for years I mean that’s just how Cryptocurrency works. Until there’s clarity on regulations there’s always gonna be these speculators who freak out at the first sign of bad news, like the news out of China or the JP Morgan guy, that’s just how it is. I can tell, man, since 2010 it’s been a roller coaster, so this one’s nothing, I barely noticed this type of dip. (Laughs)
(BH): You think it’s worth ignoring? I mean China is a big Bitcoin market, I think they run about two-thirds of global Bitcoin trade.
(LG): Well if you look at Bictoin volume on exchanges, it’s not that high. It used to be that high because those exchanges had no-fee trading and obviously volumes were huge, but now Some other countries have higher volumes of trade, I mean South Africa has got some of the highest volumes in the world so it’s not really true that China has all the crypto. It’s true, they have over a Billion people there 1% of the population there is not the same as 1% of the population over here so we may see massive amounts of crypto flow over to China in coming years, due to sheer population size as more people take to cryptocurrencies.
They [China] also have lower labour costs and more affordable tech so it’s easier to mine [crypocurrencies], it’s definitely a hub for mining but I don’t see it as a problem. As long as it remains a free market, there’ll be specialisation like, Silicon Valley with tech and Asia with manufacturing, where certain coins are more popular in certain regions, but that’s how it is, it’s not really a problem to me.
(BH): Awesome! We’ve kind of veered off track a bit, so my next question is, do you think South Africa will view cryptocurrencies as legal tender or securities?
(LG): It’s not really certain, we don’t know what’s gonna happen yet, but as far as I’m concerned crypocurrency is money. Neither security, nor traditional legal tender. We’ve seen Japan recently declare Bitcoin as sort of legal tender, and if it’s legal tender it means you pay taxes on it. The day you can pay your taxes on it then I’ll say it’s officially legal tender. They’ve just said companies can now accept it as payment.
I think crypocurrency taxation is a long way away. I think the financial system would have to crumble and fall away before governments declare something like bitcoin as legal tender. It’s probably not that far off. I think the financial system is very fragile. Since 2008 none of those problems have been solved and it’s only gotten worse today. In thw next coming months and years we’re gonna see massive problems in the financial system and people are gonna have no choicw but to adopt bitcoin, kinda like in Zimbabwe when they had to start using thw dollar and the rand. There’d have to be a catastrophe before government willingly hands over contol of the money because without control of money, they have no real power.
(BH): Do you foresee a future where banks offer crypto-based services along with or will banks just die out?
(LG): Yeah, I do think banks are gonna die out, but they may continue to exist in some form. I don’t think they’ll exist in the way that they do now, but I suppose we’ll always need somebody to loan people money. I think they will definitely be using crypocurrencies in the future, but I’m not optimistic about the longevity of banks. Banks are definitely dinosaurs, and if they live on it’ll definitely be because they’ve bought up some fintech and put their logo on it.
(BH): So the game is changing?
(LG): The game is definitely changing.
(BH): Experts have predicted that the global banking industry could bleed as many as 6 million jobs in the next 10 years due to blockchain disruption. You think things could get shaken up to that extent?
(LG): Yes I do. Again, I think it’s more about the cryptocurrency and not the blockchain, I think we’ve been distracted by that word ‘Blockchain’. The real innovation here is Bitcoin and cryptocurrencies. I do there are benefits, especially from a deflationary currency perspective where a currency doesn’t devalue, I think that’s an important thing as a store of value, for people to protect their savings and for how people move money around the world. Traditional systems are very expensive and they take a lot of time. Also if you think about the businesses that exist today like uber and online marketplaces and so on, I think, once people are able to pay each other directly, then we won’t need these sorts of services. If you can pay your driver directly then what would you nee Uber for? Centralised Services like Uber, are glorified payment hubs, same with marketplaces like Ebay or Bid-or-Buy, people go on them list their product and the platform facilitates the payment, but if you can make a payment directly to your service provider or the person you’re buying from it makes you wonder what the point of these centralised services is. I believe there are going to be a lot of decentralised services in the world. Not just marketplaces, but if you think about Companies that offer online storage services like Google Drive or Dropbox, we have the ability nowadays to mesh all our unused hard drive capacity together and rent it out via micropayments through cryptocurrencies, so we’ll see services like that disappear, simply because people can pay each other directly, with crypto. A lot of business today is about facilitating payment, so there’s gonna be a huge amount of disruption just because people can pay each other directly.
Regarding blockchain itself, everybody’s saying blockchain is gonna change this and change that but I don’t see it. I see a lot of use cases but I don’t see any business cases yet, not to say that they won’t happen, but all the business cases that they’re trying to apply to business right now aren’t turning out to be worthwhile, you do everything that is being proposed on Blockchain much better with existing technology so the only thing I can see for sure, is cryptocurrency. With Blockchain, you never know, there could be some innovations that come out of it, but they’re not obvious.
(BH): Which leads us to my next question. Do you foresee any ICO activity in South Africa, with local companies launching ICO’s?
(LG): Ja, we’ve got 2 already. One is called ProsperiProp where you can buy tokens and have shares in a rental property. The other is called, Podium Sports which enables sports people to earn money instead of having to be milked by the system. Those are the two I know of personally.
(BH): Wow, we’re doing pretty good. Last question: Top 5 cryptocurrencies, you will still be around 10 years from now? (Curveball Question)
(LG): In a decade? That’s hard to say… I’ll say Bitcoin, and perhaps Ethereum. Honestly, they could all be around. Nothing is stopping them from all being around as long as people are assigning a value to them and putting them to use and trading them. Any currency can exist unless there’s a catastrophic failure or some governments clamp down on certain coins. I easily see, all the coins in existence today plus another ten thousand, all serving little niches.
(BH): Things could get confusing with that many cryptocurrencies around wouldn’t it?
(LG): I think what could happen, for example, is that instead of earning air miles from SAA you could earn or buy SAA coin or instead of eBucks there could be some kind of crypto equivalent. Many of them will probably be linked to loyalty programs and rewards, where there’ll be coins that come along and serves some specific niche. Like if you use a specific platform, you will earn a coin linked to that platform and can then trade it for goods and services offered by that company.
With the insights has on cryptocurrencies, it’s easy to tell why he’s such a sought after, thought leader on the subject, and speaking with him, it’s hard not to share his bullish sentiments about the future of Bitcoin. If you’re wondering what inspired him to name his company Bankymoon, here it is in his own words:”When I first heard the name Bankymoon I loved the sound of it. It fits perfectly for a bitcoin company. The ‘Bank’ is for fintech and the moon is [derived from] a bitcoin meme ie: If you are a believer and somebody asks where you think the price is going to go you say ‘the moon’.”