country growth hacking

I’ve been lucky to have had some great discussions around public sector possibilities with open data and open banking but a meetup with Malcolm Couch, the Chief Financial Officer of the Isle of Man Government (the name on our banknotes) and Mark Shuttleworth, Isle of Man resident and ubuntu founder, centred on internal disruption, crowdfunding, Mobile World Congress, cloud hosting, Africa and an open banking mobile app undoubtedly accelerated me on a path to some recent digital currency milestones.

By default governments retain ownership of employee IPR even though most national accounts do not include any employee IPR or goodwill from residents and expats — I had wondered if that would disrupt calculations such as GDP, not unlike the recently included drugs and prostitution numbers in the latest UK statistics.

I needed a different type of engagement to reflect intellectual property rights and digital assets accumulated to date with credit card funding and the opportunity cost of not switching to the private sector — something between an employee secondment, a sabbatical, a fellowship and a social enterprise non-executive directorship to fast forward the local ecosystem but with an IPR exemption — I’ve called the net result country growth hacking!

In January 2014, I started a 1 year specialist contract on open government and open banking with the Isle of Man Government and they were already an early adopter of the shift to tax transparency via USA FATCA and UK “FATCA” and committed to FoI/RTI legislation.

I was 1 of 12 from the IATI (International Aid Transparency Initiative) technical advisory group conference in Montreal at the World Bank supported Open Contracting Partnership fringe meetup next day on the draft procurement transparency standard, with open banking inspired input.  To some extent the open bank project API is a mainstream bank version of the bitcoin blockchain.

Isle of Man footprint

TGBEX launched physical bitcoins as a tangible option to collect an inevitable bit of history or to easily and safely invest in offline bitcoin.

QwikBit installed a bitcoin ATM in a very popular pub, the Thirsty Pigeon.

CoinCorner have a live exchange and recently launched a wallet and installed a payment tablet that connects to the existing POS at the Thirsty Pigeon.

GoCoin submitted an expression of interest to progress an Isle of Man Government inbound payment processing contract.  PayPal “Isle of Man” and XBTerminal are bid partners.

CoinKite POS is installed at the Java Express coffee shop.  John Middleton also hosts a bitcoin awareness night on Monday night.

A leading local hotel, the Claremont Hotel, is pending installation of inbound bitcoin systems.

CrypArt commissioned original artworks with QR coded bitcoin wallets as the centrepiece and they now have an option to include your existing keys.

A significant handful of other businesses are already exploring bitcoin transaction technology.

A trade association, the Manx Digital Currency Association, helps co-ordinate the industry such as collated responses to government policy, draft legislation and regulator consultations and to promote the jurisdiction as a responsible well regulated centre of excellence in digital currency.  The committee members are all active in the industry and indeed the secretary is former head of ebusiness at the Isle of Man Government.

bitcoin milestone: declaration of beneficial ownership of a bitcoin address on a public register

As I thought more about the regulatory context of bitcoin, centred on anonymous transactions and beneficial ownership, I decided on a “mystery shopper” strategy to flush out whether or not anyone could declare beneficial ownership of a bitcoin address at the Courts of Justice and then register the document as a deed on the public register at the General Registry.

On Monday 8th September the first draft was rejected by the Courts of Justice Commissioner for Oaths as it did not meet a prescribed format and I had to amend the draft document and try again.  On Wednesday 10th September I arrived at the Deeds Registry and, after some discussion at the public counter and 2 internal legal opinions — a typical deed has a grantor and a grantee and they were uncertain if the system would be able to register the deed — but 2 days later I received the deed certificate by post:

deed of beneficial ownership

I would definitely recommend some minor but legally significant amendments to the existing procedures, but the offline option demonstrated that a beneficial ownership public register could be delivered within weeks and with existing legislation, procedures and systems.

Isle of Man Crypto Valley Summit

Max Keiser happened to mention his connection to Hollywood Stock Exchange so I knew bitcoin would prompt some serendipitous collisions.  I went to the UK Parliament weekend hackathon last November hosted by Rewired State to learn new skills, so I was totally stunned when our team of strangers went on to win with political crowdfunding platform Westminster Stock Exchange inspired by Hollywood Stock Exchange.  It highlighted an unexpected core issue with the parliament API and government.  MPs are accountable for government performance but government data is not widely available in geocoded datasets filtered by constituency.

At the end of day #1, Brock Pierce, serial investor in bitcoin companies and recently elected director of the Bitcoin Foundation, declared the Isle of Man the bitcoin capital  of the world.  He also wanted a photo of the deed and the declaration of beneficial ownership of a bitcoin address.

At the end of day #2, Chris Corlett, CEO, Department of Economic Development announced that the Isle of Man Government was the first national government to request expressions of interest in supplying digital currency payment processing.  The culmination of my recommendation a number of weeks earlier to Peter Greenhill, ebusiness director at the Department of Economic Development, a coffee with Owen Cutajar, a test transaction via Firmstep AchieveForms and a strategy meetup with the CFO and CTO.  Not easy, but easier in the Isle of Man.

Formal expression of interest:

https://www.gov.im/media/1345724/pin-notice-provision-of-pay-payment-merchant-services-closing-3-october-2014.pdf

Of course, a LinkedIn group Isle of Man Bitcoin Network popped up to maintain palpable momentum from the Summit now with 172 members.

bitcoin milestone: incorporation

On 22nd September, 4 co-founders (Graeme Jones, John Middleton, Adrian Forbes and Richard Owusu) incorporated Garigus Limited, the first corporate entity denominated in bitcoin in the Isle of Man and perhaps the world.  It is expected that the company will allow the group to progress ecosystem upgrades and other digital currency projects.   Of course, a public corporate bitcoin address could be considered equivalent to a crowdfunding platform!

welcome regulation and compliance

Most regulators are still in catch up mode with digital currency technology but the Gambling Supervision Commission, Financial Supervision Commission and the Office of Fair Trading are generally accepted to be ahead of equivalent regulators, although detailed documentation and consensus agreement on the regulatory framework, minimum standards and compliance requirements is not widely expected until 2015.

A regulator may need to consider that if a brand is already strong enough to reassure players, a licensed gambling operator could soft launch a temporary technology trial in an unregulated jurisdiction anyway just to quantify demand and any issues and then relocate to support faster innovation.  Should the Isle of Man be somewhere “where you can” map possibilities?

For example, BetVIP claims to be the first licensed gambling operator to only accept bitcoin, with the systems licensed in Curacao and the company based in Malta.

banking issue

Well, if regulators are struggling to keep up, so are the banks!

The Isle of Man has the same issue as other British jurisdictions — UK banks are reluctant to bank or simply reject a bitcoin company.  Of course, a lot of bitcoin startups are just using a personal bank account but even that option could be squeezed out with the first tax filing.

I recently progressed a new mortgage with a more reasonable Santander after both HSBC, my bank of 15 years and never a missed mortgage payment, and LLoyds Bank were very worried about 1 “high roller” £100 gambling transaction on a football match banker with a subsequent profitable cashout transaction but did not comment on a £40 bitcoin transaction, despite millions of customers gambling more every week in offline casinos with ATM cash withdrawals.  You have been warned, probably best to stop anything vaguely naughty now if you want to keep your bank account!

next steps

I have a pipeline of bitcoin milestones but bills to pay so I have a seed funding round in London on Wednesday and I have also invited offers on digital assets such as altETF.com, PlayAsYouGo.com (GoCoin igaming?), ChristianBanking.com and shairholder.com to accelerate ecosystem projects with unconditional self-funding.

In a week that ended with Yodlee listed on NASDAQ, a timely reminder that I really need to finalise the next micro funding round on banknotey.com, a unique payment process to instantly extend ebusiness to the unbanked, the underbanked and even the lazy banked, before my government contract ends on 31st December 2014!

Best regards,

Graeme Jones

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