Elliptic’s James Smith says luck was on his side when he decided to venture into the business of Bitcoin. “I generally don’t try to predict my future too far out and I’m not really risk averse, so when [my co-founders and I] saw what looked like it was going to be a big opportunity, we wanted to be a part of it.”
If you’ve read the news at all in the past year, you’ll have heard of Bitcoin, a digital payment system that operates on peer-to-peer open-source software. It allows for direct transactions without the use of an intermediary. The advent of Bitcoin has led some to make claims as extreme as calling the death of paper currency, and major players are lauding it as the future of payment networks.
Naturally, many people are trying to get in early on this new asset. Smith describes it as being comparable to internet in the nineties. “It’s the time to build infrastructure in Bitcoin because it’s such an early time in its development. There are a lot of things out there that are either in a very raw form or just haven’t been built yet, and we’re one of the companies trying to put that basic infrastructure in place.
Smith’s company, Elliptic, stores Bitcoins for companies and firms, including investment funds and trading houses. Most of the companies using Elliptic’s services are speculating on the price of Bitcoin, expecting it to appreciate in value. Elliptic provides a way of storing Bitcoins that’s compliant with regulation and insured against loss. “We take care of what can be quite a technical thing, and if you’re putting a lot of value into Bitcoins, you don’t want to store it in a way that’s susceptible to theft or loss.” He parallels Elliptic’s services to the work of the traditional custodians of finance.
Smith says that although he had never envisioned himself as an entrepreneur before this venture, his work at Elliptic combines his experience in finance and his academic background in computer science. He studied computer science at Cambridge and received his Ph.D. in computer science from Oxford. After his studies, he tried his hand at options trading, working at various firms in London.
While working in finance, the idea for Elliptic emerged. But James Smith and his co-founders spent a few months developing the concept before jumping into the business. This, Smith says, was a mistake. “If you’re confident in your idea, you’ve got to go for it and not worry about the things you don’t know, because you’ll have to learn them as you go. The best thing to do is to get out there and start talking to people. You only really learn by talking to people.”