Blog article
See all stories »

Learning the hard way: Blockchain.info

In my brief meeting with Blockchain.info’s Nic Cary I get the impression that he is a careful man. 

As co-founder of one of the world’s most popular bitcoin wallet providers, recently involved in a high-profile security issue, he has reason to be careful, I imagine. 

Just after midnight on December 8, Blockchain.info’s development team made a mistake with a software update. The result? A few hundred users had their bitcoins stolen. 

“We weren’t externally breached. It was a flawed deployment and that was a learning opportunity for us. We’ve never had a security incident like this before,” says Nic.

“We take security very seriously and are making improvements to our deployment process,” he adds.

The funds, as it happens, were swept away by a white-hat "good" hacker who returned the bitcoins to their rightful owners.

Nic emphasises how the open-source nature of Blockchain.info adds transparency to the business. 

“We are different to most bitcoin companies that build a black box around the way they operate. Being open source provides a huge amount of consumer protection, we have a commitment to open source software and it’s a philosophical tenet of our business.”

Despite the issues that have beset Blockchain.info, Nic maintains a positive outlook on the future of the company and bitcoin.

“We’re recruiting for a serious amount of growth - establishing offices in London and New York - we recently secured the biggest single funding round for a bitcoin company, $30.5 million dollars.”

It was just a few years ago that Blockchain.info was nothing more than a bootstrapped company arriving in London with little funding and big dreams. 

I asked Nic what it means to be a leader in the bitcoin wallet market. Inevitably, comparisons to PayPal were made. 

“We don’t want to be seen as the ‘PayPal of bitcoin’ because PayPal is a closed system. It’s walled off and not open-source.”

I can’t help but think of anecdotal reports of charities and small businesses which have had their PayPal accounts frozen with little communication or warning. A balancing act between consumer security and freedom which a payments facilitator must manage. 

“When you have freedom over your own money - you choose how to spend it. Two and a half billion people have no access to financial services - a Blockchain wallet takes 15 seconds to download, provides instant access to your funds. This is a more efficient system than what the world has now”

Bitcoin undoubtedly has a strenuous relationship with financial institutions. Some see it as a threat - others dismiss it as a fad. Whatever you want to label it - it’s a frightening contrast to the transaction networks the world runs on currently. 

“The protocol allows settlement at zero cost - that’s billions of pounds worth of financial infrastructure that can be replaced by bitcoin technology - I’m excited about the block chain - bankers should see it as an opportunity - not a threat - they can bring digital efficiencies - provide new services and go to market in new places.”

It was a very relevant time to meet with Nic as just hours before our meeting bitcoin’s value slumped again to $220. A stark contrast to the $1000 peak it hit in 2013.

“Of course I pay attention to the price of bitcoin - I earn my income in bitcoins - but nobody has a crystal ball on it. The better measure of utility is whether people are transacting with it - not the price.”

It is perhaps too easy, too damning to suppose the nail on bitcoin’s coffin will come from a security breach or two - it is those firms, and those people like Nic, who remain optimistic for the future of bitcoin and digital currency that will emerge victorious. 

3844

Comments: (0)

Blog group founder

Retired Member

Member since

19 Mar 2009

Location

Blog posts

5,372

Comments

5,784

More from Retired

This post is from a series of posts in the group:

Fintech innovation and startups

Disruption, destruction, harmony and creation; Fintech’s new frontier – a place to discuss the cutting edge of innovation.


See all