Dan: Can you tell us a little about how and why you got involved in Bitcoin?
Marshall: I had a number of different friends whisper to me in 2010 about this new currency they’ve been buying that was going up in price. That’s the first I heard of it, and I started to keep tabs after it showed staying power. I got involved in Bitcoin after reading the whitepaper, and seeing how much traction it had maintained over time, developing a loyal following. I knew it was too mature to be a fad. The technology looked more and more promising as well.
Dan: How is Coinsetter’s technology different than that of other exchanges? What sets you apart?
Marshall: Our team comes from a Wall St. and financial background. I’ve personally built exchanges for a major bank. What separates us is that we have the know-how and have put together an exchange that is built according to the standards and norms that professionals expect. That means low-latency, high performance, high uptime/reliability, a robust FIX API. So far, none of our competitors has been able to deliver a low-latency service with a solid FIX API. They’re not even close. We are currently at or better than 10millis, which still isn’t comparable to Equities or Forex, but is orders of magnitude better than anyone else in the Bitcoin exchange space.
Dan: How is Coinsetter navigating the regulatory environment? Having, I’m sure, put much thought into the NYDFS BitLicense, how would you like to see other states approach similar regulation?
Marshall: There’s so much to cover on regulatory. We started Coinsetter with the explicit intention to be regulator friendly, bank friendly and Wall St. friendly. That’s our personality. We’ve been working with NYDFS and other regulators, as well as a couple banks. We’re actually licensed/approved to operate in several states as of now, with more coming, and we’re about to announce domestic banking approval.
I’m a bit dismayed that so many states and other countries are awaiting the NYDFS license. I’m also disappointed that a ‘grace period’ hasn’t been established. I think a mutual process of engagement and learning, under a temporary ‘grace period’ would be most beneficial for everyone, as there are a lot of nuances and complexities to be discovered. Also, you can’t treat all Bitcoin businesses the same, and that’s where we’re most concerned. You either risk stifling competition or creating an unworkable framework for a specific type of business. As all this had dragged on, Coinbase has had a virtual monopoly on Bitcoin in the US because of their cozy relationship with SVB. Is that good for anyone?
Dan: Inside Bitcoins has brought together many of the best minds in the industry. What do you hope to learn, discuss, or accomplish at Inside Bitcoins New York this year?
Marshall: I’m looking forward to speaking on a panel about Bitcoin exchanges, and how they can ensure security and reliability, by operating with very high standards. I’m also looking forward to presenting a talk about the future of Bitcoin, and its impact across several industries, both in and outside finance. Bitcoin’s technology has some fantastic opportunities.
Dan: As digital currency technology evolves, what are you looking forward to seeing develop in the next 1-3 years? And what’s your long-term (5-10yr) outlook?
Marshall: We want to build consumer adoption but that will take time. Things are moving much more slowly because of banking and regulatory limbo. 5-10 years is a good time frame for seeing mass consumer adoption and consumer applications. 1-3 years is most likely going to see a lot of experimentation, ‘plumbing’ (the use of Bitcoin technology behind the scene), and merchant adoption. I think we’ll see consumer adoption in Argentina or Greece or other financially corrupt/incompetent countries in the next 1-3 years, before mass US adoption. I’m very optimistic on micro-payments as well. I think its time has come thanks to Bitcoin.
Dan: What do you see as the greatest challenge for the industry as a whole?
Marshall: Regulation is the biggest problem right now. That needs to get cleared up before things can really move forward. Other countries are also waiting on what the US and NY does next. That’s the only obstacle, and its temporary.
Dan: What’s your best advice for growing the ecosystem? How can we educate more people as to the benefits of digital currency and achieve greater adoption?
Marshall: The best way to learn is by first-hand experience. Buy some bitcoin, help setup a wallet for a friend, and then send some to them. Ask a merchant if they’ll accept bitcoin. Create an account with Coinsetter and start buying and trading bitcoin! ChangeTip is probably the best and easiest product I know to send bitcoin to people and get them interested, and they don’t even need to have a wallet setup initially. I love ChangeTip and micro-payments.
Dan: Thanks very much for your thoughts, Marshall.