Making Dumb Money Smart | Following the Rocket | Using Tech That Makes Sense

24.03.20 09:17 AM By Dan

Jack Nikogosian enjoyed his first brush with fame in 2015 when he survived for an entire month paying for everything using only Bitcoin. During this period, which would even see the award-winning Danish blockchain expert pay 0.04 BTC for a car ride to work,  the media popularised the epithet “Bitcoin Jack” - a name which has stuck with him to this day.

The experiment turned out to be a successful marketing stunt for Coinify, in the days long before crypto debit cards and instant swapping tools gathered great attention. He recollects how it was a challenge to convince merchants to accept Bitcoin back then, but that even today further progress still needs to be made. He explains:

“I got to work on many, many cool projects: from location-based payments to micropayments for online media to IoT devices paying to each other… but the challenge remains that we need some kind of smart money. Back then, we only had Bitcoin and then came Ethereum, and then so on, so we have different cryptocurrencies that we could use.”

In trying to make sense of why smart digital money like cryptocurrencies were needed over analogue fiat, Jack came upon the idea of “making dumb money smart”. Today, as CEO and co-founder of Copenhagen-based fintech Aryze, he works on the concept of digitizing the money people were already using.

“Why can’t we make something as agile as cryptocurrency, as ETH or BTC, like true programmable money, but as secure as government money - as secure as cash money?”

Pointedly, it was the price volatility of crypto that made it almost impossible to be used in the same manner as traditional fiat.

“Until a lot of people use Bitcoin, or any cryptocurrency, you can’t really create an ecosystem, right? If we had a magic wand and we could make everybody on Earth use Bitcoin or Ethereum overnight, then maybe we could see crypto or Bitcoin as a digital future cryptocurrency. But the fact is, the real world out there operates using money and traditional financial tools.”

For Jack, choosing Aryze as a financial institution that was regulated and audited was the only way to bridge the gap between traditional and modern money systems, but with the advantage of a full-reserve banking system in blockchain.

When asked, Jack acknowledged the vast and complex challenges of the current fractional reserve system of banking, conceding that they are a big part of why the concept of decentralized cryptocurrency is so attractive. He added however, that the problem with smart money is that it isn’t regulated and it isn’t tied into the things that most people are already buying. He professes a love for the ideals of crypto but has an insistence on practical money solutions.

“I do have a passion for that agenda as well. But I think we’re not talking about different things. We’re talking about the same thing. We are creating digital versions of cash so that it can link to all these other kinds of smart money. Or else the rocket is just flying and we’re not following!”

From cool ideas to and the truth of financial exclusion, it’s been called our most interesting episode yet… Jack Nikogosian is our guest on Episode 14 of the Talkonomics Podcast!

“You need a bank to want you as a customer… if you don’t have a lot of money to give... you cost them too much! Banking the unbanked is not just a technological issue. It is a social issue, it is an understanding and a cultural issue… it is so much more than creating a coin.” -- Jack Nikogosian, CEO Aryze