Looking Back to Predict the Future
Here at firstminute, we believe that digital assets are the future of currency and payments. Although hard to fathom today, if you look at the History of Money, it is a perfectly logical and natural evolution. Over thousands of years, we have moved from Bartering to Bills of Exchange to the Gold Standard, and finally to Electronic Money. These shifts were determined by changing technology and human behaviour. Digital assets are the next phase — a form of currency that can be programmed and transferred peer-to-peer.
Digital Assets & The Future
We think there are three paths for digital assets:
- Security Tokens (tokenization of equity, debt and physical assets)
- Utility Tokens (tokens used to access products and services)
- Exchange Tokens (peer to peer payments)
The Blocker Today
One thing preventing this future is that it remains incredibly difficult to move between fiat (aka traditional currency) and digital assets. We will not be able to embrace the power of this new technology unless this is seamless.
Today, shifting between fiat and digital assets means opening up an account with a centralised exchange (e.g. Coinbase), providing proof of identity (e.g. Passport), completing a background check (e.g. PEP and Sanction Lists) and connecting your bank account to deposit funds.
Once you’re in (by this point this has taken at least a day) you can only buy assets the exchange has decided to list. Oh and by the way, you are at risk of hacking as they are notoriously bad at preventing attacks. Last thing — every time you trade you’re paying nice commissions to the exchange!
Luckily, Ramp is solving this problem by building an on-ramp fiat to digital asset protocol that is entirely decentralised.
In layman’s terms this means a portal or bridge that allows you to exchange traditional currency (e.g. GBP/EUR) to digital assets(e.g. Ethereum) without ever having to deposit your traditional currency or crypto with a centralised third party.
Their technology uses Open Banking APIs mandated by the EU’s Payment Services Directive 2 (PSD2) — a new legislation that forces banks to allow third party companies to access customer bank account details with user consent.
Ramp in Action
Let’s take an example of two consumers making a transaction. Brent Hoberman (Our General Partner who co-founded lastminute.com) wants to buy £10 of Ethereum. Ashton Kutcher (he loves crypto) just happens to want to sell £10 of Ethereum.
Brent consents to Ramp connecting to his bank account (via the Open API) and provides his crypto wallet address. Ashton also consents to Ramp connecting to his bank account and provides his crypto wallet address. Brent then sends £10 from his HSBC account to Ashton’s Barclays account. Ashton’s crypto is then placed into a smart contract. Once Ramp verifies the money has been received by Ashton, the crypto is released from the smart contract and sent to Brent’s crypto wallet.
At no point did Ramp ever custody your fiat or your crypto so you were never exposed to a hack! Fewer intermediaries means fewer fees and access to any asset you want! And finally — no identity check because you’ve already been verified via your bank!
There are so many retail and institutional use-cases here but what really excited us about Ramp was its founders. Szymon and Przemek are long-time advocates of libertarian ideas and even co-founded the Libertarian Party of Poland — pretty amazing since they’re only 24! When they say they want to build a decentralised future, it’s not just talk. Szymon is a lawyer by background whilst Przemek is a theoretical physicist. They’ve hired the best technical and product talent in Warsaw and if you spend a day at their office, you walk out inspired.
Reach out if you’d like to hear more!