In an interview with CoinJournal, Jon Downing of Visa Europe Collab and Edan Yago of Epiphyte said that while they are interested in other systems, Bitcoin will likely play a role in the future and other blockchains have to be considered “at this point vapourware.” Seemingly a departure from the tone of other institutions that preferred to hype their own blockchain technologies over Bitcoin itself.

Visa and Blockchain stories are nothing new, the payment network has made comment on the technology dozens of times over the past year and whereas the frequency of headlines about bitcoin & financial institutions has reached a boiling point, something we may not have expected 12 months ago, the latest news from Visa Europe Collab is more interesting having announced a proof of concept through their collaboration with Epiphyte Limited.

About Visa Europe Collab

Visa Europe Collab was set up at the beginning of 2015, essentially serving as the innovation hub of Visa Europe. The company is exploring five key areas/questions: How to add value in the smart cities space, how friction can be removed from the consumer retail environment through new innovations, how identity and authentication can be simplified without compromising our own personal security and blockchain technology, specifically at how the technology and cryptocurrencies can provide long-term value for Visa Europe and how they can enable existing services to be delivered in innovative ways.

One specific area of activity has been reviewing how the use of cryptocurrency as a means of payment which lead the company to collaborate with Epiphyte, a company they became aware of at this year’s digital catapult event, identifying the use case for remittances and seeing potential in using the technology to send payments at a lower cost and in a less complex way. This is something that embodies the mission statement of the project according to Jon Downing, Innovation Partner of Emerging payments at Visa Europe Collab

OUR MISSION AND PASSION IS TO IDENTIFY SOME OF THE NEW PAYMENT OPPORTUNITIES WHICH CAN MAKE EVERYBODY’S LIVES EASIER IN THE FUTURE, WHETHER THAT’S CONSUMERS, MERCHANTS, BANKS, OR OTHER KEY PARTIES IN THE PAYMENTS ECO SYSTEM.

Though the company is kept separate from Visa HQ, with offices in the London district Shoreditch, they report directly into the chief executive’s office, showing that this is much more than a skunkworks project, and something that Visa Europe are taking seriously. The company is comprised of 20 members of experienced staff, all of which have experience in the payments industry. They are aiming to find new payment opportunities. That goal is something that Epiphyte co-founder, Edan Yago identifies as being something that could aid those who need it most

EVERYONE WHO IS PART OF EPIPHYTE IS PART OF THE COMPANY BECAUSE WANT TO BRING THE ADVANTAGES OF BITCOIN AND THE BLOCKCHAIN AND THE RELATED TECHNOLOGIES TO THE PEOPLE WHO NEED IT MOST AND THE PEOPLE WHO NEED IT MOST ARE A BROAD AUDIENCE OF THE UNDERSERVED AROUND THE WORLD, BUT THIS CAN BE ANYONE FROM A GRANDMOTHER IN KENYA WHO NEEDS FUNDS, OR FINANCIAL INSTITUTIONS WHO DON’T HAVE GOOD TOOLS FOR SETTLEMENT. OUR SENSE IS THAT BITCOIN AND THE BLOCKCHAIN IS THE MOST IMPORTANT INNOVATION SINCE THE INTERNET ITSELF.

At the risk of repeating myself, it’s often a surprise that large financial institutions are working with Bitcoin/ Blockchain companies, especially considering the political and disruptive nature of the technology, something that was touched upon by Vinay Gupta during the Ethereum adoption panel at Devcon1. However, listening to two people from completely different backgrounds really brings home the sense that old and new can play nicely together, ultimately delivering superior payment systems and aiding those most in need. A sentiment echoed by Yago as he explained how the 2 companies could compliment each other in the long term

There is a real challenge to provide people with the advantages of the technology, and the only way we are going to see mainstream adoption is if the key financial institutions of the world are able to utilise the technology and provide it to their customers. For this to work, we need to be able to make this work for their business model and enhance their business capabilities and for their customers, this needs to be friction free, invisible and as simple, or simpler than what they are using today and in the currencies they are familiar with. Our goal is to integrate with these financial institutions and make Bitcoin disappear into the background where it should be as it’s a technology. Our work with Visa is an excellent example of that. The pilot consists of 2 things: We aren’t doing anything theoretical on what blockchains could be, rather what the blockchain is, transferring real value today and utilising the existing networks. Secondly, we are utilising parts of the existing eco system and services that have already integrated with Bitcoin. We are using Bitcoin as an open standards, open network that will be the glue between different propriety financial networks of which the biggest in the world is the Visa payment network.

We were fortunate enough to speak with Jon Downing of Visa Europe Collab and Edan Yago of Epiphyte in more detail about the project.

Oliver Carding:  Are you only experimenting with the Bitcoin blockchain, or are there other platforms and chains you are working with?

Jon Downing: At this point in time, this is our principal proof of concept that we are ready to show to the wider community. However, we are conducting internal tests to review the power and potential of private blockchains, multi chains and others.

Oliver Carding: We’ve seen more financial institutions become vocal about Bitcoin and cryptocurrencies recently. Do you think there has been a catalyst?

Jon Downing: My perspective is that it has been accumulative and more and more companies have been spending money, sponsoring projects and initiatives. In parallel, we have seen more conferences which have been raising awareness, bringing communities of people together. One example, though there are many others, is Consensus 2015 which had a community of financial institutions, government agencies and startups together in the same rooms, networking and talking about different ideas. The third factor is that the technology has been more talked about in mainstream, serious journals. We all saw the Economist article at the start of November, probably the most visible and prominent of its kind and a publication that we know is read by business and political leaders around the globe. So, it’s bringing the technology to the forefront showing that this is not just a backwater experiment, but something that should be thought about more deeply.

I think the power and momentum of these events, all happening at the same time has allowed for more conversations, more relationships being forged and more companies wanting to take this from a theoretical to test or proof of concept stage.

Edan Yago: I don’t think it’s surprising. Ourselves and other companies have been talking to financial institutions since early 2013 at least. I think it is due to the pace in which large institutions decide that they are going to make investments or strategic moves into a new space and so, given the conversations began in 2013, it makes sense that over the course of 2015 we would begin to hear more about this.

Oliver Carding: The Visa Network can handle a huge amount of transactions a second, how does this impact your Blockchain platform?

Jon Downing: Visa Europe can process 1500 transactions a second, we clearly recognise that this is a very established, long built network which we are very proud of. We recognise that the Bitcoin blockchain network has no current mechanism to deliver services of that scale, but in reality, nor does it need to at this moment. We are not looking to replace the already established, reliable and integrated payment network that we have today anytime soon, more what are doing in the Bitcoin and Blockchain domain is to explore and look at something where we can potentially spin up or test new services and new proof of concepts quickly to learn about the opportunities as well as the constraints which would have to be overcome for any future scaling.

We are watchful and mindful, but not worried at this moment in time. Within this 100 day proof of concept we’ve gone from an idea to a working prototype and the front end of the payment has been built and constructed in our sandbox test environment, in practice this means we have a number of test accounts, test banks and currencies which can then launch a payment from a test utility, as soon as that transaction is converted into Bitcoin this is being recorded on the Blockchain, but received, at least for the purpose of this test as an M-Pesa credit on a Sim Card. Next week we will be showcasing this at Unbound Digital 2015 where we will be running a knowledge share session with Epiphyte.

Oliver Carding: Going back to the Bitcoin blockchain and scaling. Going forward, do you think there’s potential in the original blockchain, or do you think it will be replaced by something else, say, Ethereum or private blockchains?

Edan Yago: The major innovation is a consensus mechanism allowing for immutable shared transactions, while in theory there are a number of ways to do scalable consensus, in practice there’s only one which has been proven, all of the others are at this point vapourware. From this perspective, we don’t know if anything will replace or supersede bitcoin in that way yet, but even if we do see the emergence of other systems, I think it’s highly likely that we will continue to see Bitcoin play a role. When you connect to the internet, the vast majority of the world still use phone lines, so we don’t see older versions of technology disappear, rather they become base layers in an ever more complex and growing infrastructure of digital tools that we have available to us. These binary outcomes tend to exist more in fiction than reality.

Jon Downing: From my perspective, I can certainly echo a lot of what Edan said. Over the last 5 years, we have seen that as different problems have needed to be solved, the community of core developers have come together and looked to solve them. They’ve challenged each other, had different opinions at times but also as those real elements need to be resolved for the growth, or survival they’ve proven that they have a desire for this to continue. Also, we know for a fact that the Bitcoin market capitalisation is in excess of ten times the nearest, biggest cryptocurrency and I feel that will continue to hold weight and interest for people. If that dynamic changes over time, we will see new sets of characteristics and a new set of events happening.

Oliver Carding: Edan, what has been the biggest hindrance of developing with the Bitcoin blockchain?

Edan Yago: The biggest issue we encounter is there is still a lack of standards and tools that allow different services that aren’t utilising any blockchain to talk and interface with each other in a seamless way. If you think about the way that you perform transactions today, they are still often performed with non-human readable addresses that only contain information about the destination address, they contain no information about the value being sent, or who the beneficiary or senders are. What Bitcoin does, it does very well, but there are no mature standards for Meta Data which is a crucial part of payments and so part of our challenge is building out the tools to allow that to happen. We are working with others in the community so that eventually these will become available to others in the eco-system.

Thank you Jon & Edan for speaking to us. As mentioned within the interview, Visa Europe Collab & Epiphyte will be showcasing their proof of concept at Unbound Digital 2015.

This interview has been edited for brevity and clarity.

  • Thomistic Cajetan

    Excellent interview :D, good questions, and good responses. The person giving answers also did not portray just being a pawn, but giving a good educated opinion on the technology.