We’re still in the early days for blockchain technology but a handful of pioneers have realised that the sector needs entrepreneurs and engineers to get invested early. A small standout is the Isle of Man-based startup Credits which has found success marketing its blockchain-as-a-service system as a ready-made platform for organisations that want to test the technology without the complexity, time and risk of doing everything themselves.
Founded by American Nick Williamson in November 2014, the firm has recently tapped a seam of interested early adopters, including public sector provider Skyscape not to mention that it has the backing of the Isle of Man Government which is keen to legitimise the concept of distributed cryptocurrency ledgers.
The blockchain was probably over-hyped in 2015 but a year later and there seems to be a firmer foundation for the technology. Interest is up and banks, governments and technology firms now look like a viable customer base with applications across identity, government administration and specialised financial engineering.
The outlook is positive but it’s clear from meeting Credits’ CEO Williamson that there is still a lot of work to do: blockchain is still not familiar even within high tech let alone the financial sector that will probably be most of its market in the proof-of-company stage. If Williamson had started his firm in London it would be notable but to have set up in an office on the Isle of Man (population: 85,000) inevitably invites they obvious question: why here?
The answer turns out to have a lot to do with how blockchains might develop, the status of small jurisdictions and the Isle of Man itself.
“It seemed like a very sleepy little village and yet I ended up moving here a few months later,” Williamson admits. And yet “the Isle of Man Government has been very supportive of us from day one You’re not going to get that level of support from the UK Government. The UK Government has made lots of noise about supporting blockchain but it’s always in the abstract,” shots Williamson.
“When I started the company it was still unclear how regulation would be treating this [blockchains] but the Isle of Man Government had come out very strongly in supporting it,” he says.
“With the Isle of Man Government they still talk strongly about blockchain. They have the freedom to talk about how they like Credits. I don’t have to be worried that I’m going to have a knock on the door saying that ‘we don’t like what you are doing and you’re going to have to stop.”
There are good reasons why a blockchain startup might be on the island at this stage but the fact he is here at all turns out to be more serendipitous. Williamson arrived on the island in early 2011 when he was offered a job with what is still the island's biggest tech employer, e-gaming firm PokerStars. Still in his twenties, what got him that position was his two years working as a professional online poker player although, significantly, he was already by that point interested in the then barely-known Bitcoin cryptocurrency.
After four years at PokerStars he started to “get a little restless,” and Williamson started dabbling with what turned into Credits building on his Bitcoin interest. In the year and a half since he founded Credits, the company has grown into two employees on the island and five in London with a number of part-timers taking involvement up to 15 in total.
“I funded the company myself initially and then just threw myself into it. It was about learning the nuances of how cryptocurrency systems are built,” says Williamson of his early days.
Credits - blockchain Platform-as-a-Service
Describing the Credits platform takes some concentration because there isn’t much software infrastructure that resembles it yet. Williamson and his collaborators decided at a certain point that specific incarnations of blockchain technology – Bitcoins for example – were only one application of a wider concept that could be applied to numerous emerging trust scenarios. Today, most of these work inefficiently, requiring layers of security and authentication that blockchains can solve more easily, at least on paper.
Designed initially for 'Know Your Customer' (KYC) applications, Credits developed, pragmatically, into a cloud platform that took the donkey work out of hosting specific applications using blockchains. It’s a model that makes Credits an enabler that can work across and between applications, including those from large enterprises and smaller firms alike.
The point of blockchain technology on this scale is that is must dovetail with today’s incredibly complex infrastructure and services but also be flexible enough to build into new services that are only just being developed.
Having launched Credits as a beta earlier this year, the firm is in the process of expanding its ecosystem, a critical element of its future success. Without that it’s just a platform taking on much larger players such as IBM and a host of new companies in the same space. Williamson is reluctant to be drawn into naming these competitors, possibly because Credits might at some point work with some of them.
“A year ago we thought we were competing with blockchain startups who we now think we’re complimentary to,” he points out.
He believes that by the middle of 2017 there will be three to five established blockchain platforms. “We hope to be one of those three to five."
As for locating such a potentially disruptive business on an island in the Irish Sea: “It was more a bunch of serendipitous things that ended up creating the larger picture.
“Honestly if you sneeze the word blockchain right now you can probably get a meeting with anybody in the financial industry,” says Williamson, who steadfastly refuses to see the relative remoteness of his London customer base as an issue given the number of direct connections to London City Airport.
“The tax reason isn’t of itself enough reason to stay,” comments Williamson on the island’s famously low rates of personal and corporation tax. “But having built up my life here that isn’t an inconsequential reason.”
What the island gives both Williamson and Credits is more than lip service to a few Powerpoint slides. Again and again he mentions the way the island's Department of Economic Development has supported Credits, somewhere between rare and unimaginable in UK. It's as if the island sees itself as an incubator rather than a country.
But Williamson is not what you’d expect of the CEO of a blockhain startup. Far from selling the technology as the next great thing, he remains steadfastly realistic about what a platform provider in this space is biting off.
“There are enough people overselling blockchain so we try not to because it still is very unproven.”