Nanopay specializes in reducing the cost and friction in cross-border and B2B payments. CEO Laurence Cooke talked with Block Tribune about the company and the state of cryptocurrency, cross-border payments, ICOs and fiat currency’s future.
BLOCK TRIBUNE: So I understand that you were at a recent Goldman-Sachs panel and had some interesting things to say about crypto ICOs and more.
LAURENCE COOKE: Sure. So you know, it was a panel that was led by Jim Schneider ,who’s in Goldman-Sachs Global Investment Research and focuses on this space, in particular cryptocurrencies and ICOs. There were two other people on the panel. One was Adam Ludwin and the other Sean Neville from Chain and Circle respectively.
BLOCK TRIBUNE: And what was the gist of what you said?
LAURENCE COOKE: The format was Jim asked us a couple of questions and then we responded. So, for example, the first thing that he asked us about was whether we thought that we were long or short bitcoin, in terms of bitcoin being a payment system. And so from a payment system perspective, both the others thought that it was interesting and had legs and I said that I was bearish. And the reason I was bearish was for a number of reasons. The first thing is that bitcoin and blockchain in general, have shown that its difficult to scale and when it comes to speed, you’ve obviously got a big issue, and if you look at the sort of throughput and the cost as well … so if you combine speed, which is, I think, on the near side 25 minutes, and on the long side more than an hour to do a transaction, and then you only have throughput of seven to, I dunno, depending on this is a later question, depending on other alternatives, maybe as much as 15 transactions per second. So, our transactions take one to three milliseconds and we can do 30 000 transactions per second, per AWS server.
So, if you compare 30 000 with seven, that’s obviously a much better economic and if you compare one to three milliseconds with 25 to 60 minutes, it’s obviously [inaudible 00:02:30] different. Then when it comes to the overall cost, I think, if you look at the cost of doing a transaction on bitcoin, it is extremely expensive and this is not looking at the amount that is charged. This is just looking at the amount of infrastructure that you need to actually deliver a bitcoin transaction. So if you just took the electricity alone and you ignored all of the rigs around the world, and you divided that by the actual costs of doing it, it becomes an extraordinary number and so it’s very, very expensive if there’s no margin.
On the other hand, the marginal cost of a transaction on our platform or other platforms is near zero. So, I would argue that bitcoin is actually poor for doing transactions. The last thing about the payment system is bitcoin is super, super clever technology and the whole blockchain idea is fabulous. It’s purpose built to allow to parties who do not trust each other to be able to transact, which is fantastic because you don’t have to know or trust each other. The only thing is, just about every payment, it is illegal to do a transaction where you don’t know and trust the other party. In fact, when you do most transactions you have to disclose all of the information of the other party to ensure that all of the transactions are legitimate from an AML and KYC perspective. And the only example where you do a transaction where you haven’t indicated your relationship with the other party, is when you do a retail cash transaction. And when you do a retail cash transaction, at least you are physically present and it’s really obvious what you’re buying.