As part of the Digital Currency Council’s Continuing Education partnership with Inside Bitcoins, the DCC’s Director of Curriculum Dan McArdle, had the opportunity to interview the thought leaders that will be speaking at the Inside Bitcoins Conference in New York City on April 27-29, 2015. Today, we share an interview with Justin Newton, CEO and CTO of Netki.
Dan: Can you tell us a little about how and why you became involved in Bitcoin and digital currencies?
Justin: I had a mentor in the early 90’s who showed me the transformational potential of the Internet, in terms of democratizing information and using the power of open communications to combat tyranny. I realized this was a technology that would literally change the world for the better, so I left Northwestern, where I had been studying physics, and began working full-time on the Internet. After twenty years in that space, I found that much of “changing the world” had been accomplished, and focus had shifted to building big companies, and I felt I needed a change of scenery. I began to explore different ways that I could help solve pressing global issues with technology, so when another entrepreneur took me to my first bitcoin conference, it felt like I had found my first love again. Many people talk about how bitcoin resembles the early Internet: I can tell you from first-hand experience, the resemblance is huge, both viscerally and practically. For me, bitcoin, like the Internet, is a transformational technology that is fundamentally empowering of individuals over institutions, and ultimately provides the most value to those who have the least. Additionally, it has the power to transform aging business models and create entirely new ones.
That said, we are currently in the “squeaky modems” and “busy signals” phase of early bitcoin adoption. In this phase, it is important to develop great reasons for people to use digital currency, as well as reduce the reasons why they would not use it. We at Netki are focused on trying to reduce barriers to mass-market adoption at a platform level across the industry, rather than with a point solution.
Dan: From what I understand, Netki uses the Namecoin blockchain to map easy-to-remember names to Bitcoin addresses. Is that correct? Will I finally be able to tell someone my Bitcoin payment details verbally?
Justin: Yes, you will be able to share your payment details verbally. One of my Wallet Names points to my Holy Transaction wallet, “holyt.justinwnewton.bit” and it contains addresses for bitcoin, as well as several other coin types, all of them easily shared with a single Wallet Name.
Our solution uses Secure DNS (DNSSEC) in addition to the Namecoin blockchain. This combination, which is both decentralized and distributed, provides users with control and ownership of the blockchain, and maintains their privacy by keeping name to address mapping off of a public ledger. With a Wallet Name, your information is only available to those you share it with.
Also, because we are built around the DNS system, we allow our partner companies to auto-register Wallet Names under their own name space, without making their users go through any extra steps in the onboarding process. We truly have a zero click setup for users through our partners. An example of this is ChangeTip, who is registering all of their users under their “.Tip.Me” domain through Netki. So, for example, to send me a tip from your HolyTransaction wallet, you will be able to simply type “justinwnewton.tip.me” in the send field. I can also easily fund my own ChangeTip account the same way. In addition to the extra privacy our system provides, this feature of our architecture allows a variety of benefits to both our partners and their customers.
For our partners, making the names an automatic feature of their service streamlines the process for all of their users who can now use a simple Wallet Name instead of a complicated wallet address. Knowing they have consistent use of the product lets them build it into support documentation, UI, etc. Also, by registering users under their own namespace, their company name is constantly in front of other users of the bitcoin ecosystem. This is how services like Yahoo! and Hotmail grew their userbase in the early days.
Another feature that we offer our partners is that our program is the fastest and easiest way to connect between their services. As an example, if a user wants to fund their Purse.io account using cash, they will be able to easily do so via BitQuick. Instead of finding, cutting and pasting their wallet address to send to, they simply remember their Purse.io username and can send to “Andrew.Purse.io.”
For users, they have the choice of using the fully integrated, automatically configured name they get from a partner, such as “Dan.HolyTransaction.com,” or registering their own vanity name through us, or on their own like, DanMcArdle.bit for a small fee. By using the name given to them by a partner company, users can immediately start using their Wallet Name and sharing it with their friends. They don’t even need to know their wallet address in order to make this work, the partner automatically configures it all for them. This is a total game changer in terms of the ease of use of bitcoin.
If an individual wants to register a vanity name, in order to have more flexibility and control over its use, he or she can register one through us for as low as $1.95/yr. In addition, we have published the format that we are using, and folks can register and host this completely on their own. We want to ensure that users have the freedom to choose their own level of engagement, ranging from “ease of use” to “I want to do this all myself,” and in doing so, make sure that the service appeals to everyone.
Dan: Are there other products or services on Netki’s roadmap that you can tell us a little more about?
Justin: Yes, we at Netki are excited about the additional privacy and security that HD Wallets (BIP 0032) and Payment Requests (BIP 0070) provide to sending bitcoin. HD Wallets produce a unique wallet address for each transaction, which means that even if you share your wallet name with 100 people, each of them will receive a unique wallet address in response, further protecting the privacy of your bitcoin transactions. Payment requests are like SSL for bitcoin. They allow a wallet provider or payment processor such as Coin.co to sign a wallet address with an x.509 certificate, the same certificate used for SSL on websites. This shows that they are the owner of that address and can choose to supply additional information such as which end user they are accepting the bitcoin for. Without going into too much detail, our development team is currently hard at work on a new open source project that will help any company in the space easily embrace these important standards.
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?
Justin: Well, first, I can’t wait to hear from my other panelists on what is going on in the bitcoin startup ecosystem. While we talk to as many different people in the space as possible, this is a wide and diverse community, and I always love to learn more about what is going on. Also, there are a number of other great speakers and panelists that I want to hear who are too numerous to name. Most important to me, however, are the great people that you meet for hallway conversations. Finding the people that I should be working with but have not had the chance to meet, or learning about that new thing I didn’t know, are always the highlights of every conference.
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?
Justin: In the next 1-3 years we are going to see a lot of the promise being talked about today actually come to fruition. Things will get easier for users. Applications will become more mature, secure and intuitive. Ways to acquire and sell bitcoin will be built out that are appropriate to the local environment, whether that be online purchases or the guy at the convenience store who sells phone cards. Simple forms of micropayments will take hold, such as paying for content, tipping, and other use cases. The most exciting advancement that we will see, however, is the true beginning of bitcoin creating more financial inclusion for those who have been excluded from traditional financial institutions. With services like BitPesa, Satoshi Citadel in the Philippines, Moneero, and the many others that are focused on tackling this, I am confident that we will make mobile money a reality for people who are currently cut off from financial networks, and effectively lower transaction costs for the people who can afford them the least.
The longer term outlook is a lot more interesting because, frankly, that’s when the things that we can’t even imagine yet will start to be built. In the same way that in the early days of the Internet we would have never seen it leading to Lyft, the advancements that digital payments broadly – and micro transactions in the specific – will enable, are things that we simply cannot fathom at the moment. Some interesting things that I think we will see further out in the long term include machine to machine transactions, ground breaking overlap of digital currency and the ‘sharing economy,’ and a world where our digital agents will be making smart contracts on our behalf. The thing that I think will be most transformational in the longer term, however, is that people will basically forget what the world was like when distance and borders meant something with respect to financial transactions, in the way we have forgotten that they used to mean something to communication.
Dan: What do you see as the greatest challenge for the industry as a whole?
Justin: I think one of the greatest challenges that the industry faces right now is patience and synergy. As an industry, we are transforming something as broad as the rails of the financial system, and as much as we want to move quickly, we have to remember that this is going to take time and we shouldn’t expect to be “done” anytime soon. We need to focus our energy on how we are growing the ecosystem together and not on how to kneecap the company adjacent to us. Our fight isn’t with each other, our fight is to help bitcoin live up to its potential and we need to act like we are on the same team. Anytime you change the world there will be obstacles, but if we face them together we can overcome any of them.
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?
Justin: I don’t think that most entrepreneurs should be focused on necessarily “growing the ecosystem”. If you are starting a business or building a product, focus on creating something that solves a real problem and is more effective than how it’s currently done. There are a lot of opportunities to create great applications and experiences for people using bitcoin that can’t be done as well with the existing financial rails. Online tipping and micro-payments, remittance, other cross border payments and foreign exchange are all examples of where bitcoin just plain wins over their current system. Also, there are the billions of unbanked all over the world, including here in the US, who would benefit from being able to make mobile electronic payments. Find a way to serve them. Finally, there are industries in the US where the legacy financial system doesn’t include them, or only includes them if they are willing to pay very high tolls.
One emerging industry, the legal marijuana market here in the US, has a big problem where the entire supply chain is essentially banned from banks and has to deal in only cash. This is an industry that touches a large portion of the mass market, and has a need for a financial network and store of value that is censorship resistant. Maybe legal marijuana is the gateway drug…for bitcoin.
In summary, focus on finding where there is a pain point for people that the existing financial system doesn’t serve well, and fix it. It’s by creating things that solve people’s problems that we will create sustainable growth, and by embracing the goal of helping people, the ecosystem will grow and the mass market will come.
Dan: Thanks very much for your thoughts, Justin. Looking forward to a great conference.