Belfast Telegraph

Bitcoin: Belfast firm Bitnet aims to coin it at digital money's forefront

By John Mulgrew

It's been heralded as digital gold and is predicted to change our shopping habits in the same way email revolutionised how we communicate. Now bitcoin is moving away from the dark depths of the web and into the mainstream.

It's a solely digital currency or 'internet money' which can be used to purchase a range of goods and services across the globe.

However, while still very much in its infancy here, a Northern Ireland-founded firm is at the forefront of bitcoin, after bagging one of the biggest international retail giants as its client.

And bitcoin has finally caught the eye of the Chancellor of the Exchequer George Osborne, who revealed plans in his Budget last week to begin regulating the currency.

Belfast-based Bitnet - formed in January last year by ex-Visa executives John McDonnell and Downpatrick man Stephen McNamara - has landed a deal with the fourth largest online retailer, Tokyo-based Rakuten.

The giant owns a number of international retailers including

"Bitcoin is digital cash and what Bitnet does is allow merchants to accept it as payment from its customers," said Bitnet co-founder Stephen McNamara.

"We take on the risk of volatility of price.

"We collect it for the consumer - they get to pay as normal but have the privacy and security."

Bitcoin is not held centrally, but controlled through a 'wallet' which is secured with a unique code.

Bitnet currently boasts a 30-strong team of top-end software talent at its Belfast base, and works much like any other financial intermediary, such as Visa or Paypal - providing a service for businesses to accept bitcoin as payment.

Despite being very much in its infancy in Northern Ireland, a few stores here have already taken to the so-called cryptocurrency.

Computer games and electronics store CEX - which operates three outlets in Northern Ireland including one in Belfast - now accepts bitcoin as payment, and also pays its customers in the currency when trading in games and gear.

And its gone so far as to offer a dedicated bitcoin 'cash point' for some if its customers in England.

Still a fledging concept - after coming in to existence in 2009 - it's also garnered the attention of some of the world's biggest business names, including Dell and Microsoft.

And in London, one law firm has become a bitcoin specialist - providing clients with advice on regulation and filing bitcoin financial statements to HMRC.

There remains some scepticism among businesses and governments towards the benefits of the currency, mostly because it's unregulated. The digital currency's value has sky-rocketed from just pence when it rumbled around in the darkness six years ago, to a peak of £750 for just one bitcoin in November 2013.

It's now worth around £175.

That meteoric rise meant one Norwegian man's £18 punt back in 2009 turned into a £600,000 windfall as bitcoin value soared.

And it's that stark fluctuation which prompts some distrust or concern over the currency. But Bitnet's Stephen McNamara believes there should be nothing to stop any business in Northern Ireland from getting on board.

"The future is already here, it's just not evenly distributed. Businesses could be using it at a point of sale today - they just need a reason to engage," he said.

"It could be a novelty for some - to be an early mover, but it can really help with cost.

"It's three to five times cheaper than a card payment. Why would a business not take a bitcoin payment?"

Meanwhile, just last month one man was jailed in the US for being the mastermind behind the online black market known as Silk Road.

The 'anonymous marketplace' was shut down in 2013 following raids by the FBI, who claimed it was dealing in illegal drugs, which were being sold using bitcoins. But it's those headlines which have detracted from the currency's increasingly mainstream credibility.

A handful of businesses here have tried using bitcoin, albeit with mixed success.

Warren Smyth, who owns Greenlawn Garden Services in Belfast, said he found "the interest wasn't quite there" after he began accepting bitcoin as a payment method.

"In the future it will be popular. For me, as a payment method, it was maybe more because there was a buzz and I was looking for more customers," he said.

But Bitnet co-founder Stephen McNamara said the entire market in Northern Ireland was set to change.

"The ecosystem is in its early days - it's in the beginning, and it's going to be enormous," he said. "The genie won't go back in the bottle, and there's an adoption curve - you can draw a parallel with the rise in social media."

Former market trader Niall Maye (37) set up Bitcoin Association Northern Ireland to help educate businesses and consumers about the technology.

And while Northern Ireland is still "way behind the UK and the Republic" he predicts bitcoin will be mainstream in little over a year.

"It's going to do to finance what email did for information - it has no physical presence, and removes the institutions, so people can be their own bank," he said.

"The first thing we are focusing on is getting a community, and there are supermarkets looking into it. Elsewhere in the UK, there are lots of places where it can be used - you can buy a pint, eat in a restaurant or buy a coffee."

Belfast Telegraph