Funny, isn’t it, how little you hear about Bitcoin these days? That’s probably because an awful lot of punters came horribly unstuck and are still nursing their wounds, praying the price will recover from this ‘crypto winter’. Round about last Christmas it was trading at $20,000; now it’s closer to $7,100 — which is quite a chunk to have lost if you bought at its peak, convinced by pundits such as software billionaire John McAfee that it would fly to the moon and beyond if only you kept your nerve and refused to sell.
Perhaps it will still fly to the moon. McAfee has promised that if one Bitcoin (BTC) isn’t worth $1million by 2020 he will eat his dick on TV. But perhaps machismo like that is part of the problem. Maybe if we’d ignored all the bullish, testosterone-fuelled lads and listened instead to the more naturally cautious crypto females, then some of us — me included — might have dodged the bullet.
Jess Houlgrave, Eleesa Dadiani, JoJo Hubbard and Helen Disney all work in the male-dominated world of blockchain, which is the technology behind most crypto-currencies, including Bitcoin. But none of them talks about the crypto world with quite the salivating bloodlust I’ve heard men do. For them it’s not a thrilling life or death game, or a get-rich-quick scheme, or a chance to exploit gullible fools. Rather, it’s simply a valuable new technology with all manner of promising applications that are going to make a huge difference to business, to the way the state operates and to our daily lives.
Put that way, it does sound rather dull. But then, perhaps the crypto gold rush was never quite as exciting as it was cracked up to be. Helen Disney, for example, once worked for a company that paid its staff in Bitcoin; had she held on to them she would now be a millionaire several times over. Unfortunately, this was her income so she had to use those precious BTCs to pay her bills; she couldn’t afford to hold on to them speculatively.
Jess Houlgrave, too, got in relatively early, thanks to a software engineer friend from Oxford who was into it, when the price was around $200. But even then she felt she was ‘late to the party’. So when her Bitcoin rose she sold for a modest profit, not imagining it would soar to 100 times her initial purchase price.
As Eleesa Dadiani, 30, the most experienced crypto trader, says: ‘I’ve never come across anyone who was sleeping rough on the streets who is now a millionaire because of crypto.’ First, she notes, people tend to sell their crypto when they think it has peaked — which can be a long way short of where the crypto actually peaks. Second, most crypto millionaires and billionaires already had the money in the first place. ‘Wealth does tend to start with wealth,’ she says.
And she should know. Dadiani now makes her living dealing mainly with the super-rich, partly as an intermediary enabling them to exchange cryptocurrencies for luxury objects. She claims, for example, to have sold a fleet of Formula 1 cars to a Chinese buyer for £4 million in Bitcoin. But it’s hard to verify because she’s protective of client privacy and quite cagey about how her trade works. She stresses, though, that if HMRC were to go through her accounts they would find nothing amiss.
Dadiani is similarly mysterious about her background, which is aristocratic Georgian through her paternal grandmother. She refuses to be drawn on whether or not her father would count as an oligarch, but insists she made her own money.
‘I lived in Oldham, for heaven’s sake!’ she says, as evidence of her early struggle. It was there, aged 17, that she decided to set herself up as a dance teacher. Not just any dance, but belly dancing, which she learned from watching videos. Was she any good? ‘I pretended really well.’ On a good night, she would fill the hall she hired with 70 trainee belly dancers, paying £8 each for the class.
‘Unschooled, with no degree, I’ve always been on the prowl, on the lookout for new opportunities,’ says Dadiani. Hence her early adoption of Bitcoin, as well as more obscure cryptos like Dogecoin (‘People thought it was a big old laugh. Everyone called it “shitcoin”. But it captured the imagination and did well’), which she sold at a tidy profit. Now she has branched out into the art market, where she is working on an ambitious scheme to build the world’s largest tokenised art fund using blockchain technology (more on that later).
Dadiani’s first experimental foray into this field — she has a gift for publicity stunts — was when her Dadiani Syndicate (in partnership with Maecenas, a fine-art digital investment platform) enabled 100 investors to buy a part share of Andy Warhol’s ‘14 Small Electric Chairs’. It paid £1.3 million in a mix of cryptocurrency and fiat money (pounds, dollars, etc) for a 31.5 per cent share in the artwork whose reserve price is £4.2 million.
But that was just a test run. In the future, Dadiani hopes, fine art will become as easily tradeable a commodity as stocks and shares. Instead of buying the artwork outright (expensive, relatively illiquid and vulnerable to theft or damage), you’ll be able to trade asset-backed tokens (just as if you had shares in a fund) representing shares in a diversified portfolio of fine art.
To understand how the technology behind this works, let’s go to Helen Disney, 45, because that’s her job: the company she founded, Unblocked Events, organises conferences and events explaining to businesses how blockchain can work for them.
‘You could call blockchain a “trust machine”,’ Helen says. ‘It enables people a long distance away to do business with one another, confident that they can trust the other party.’ Blockchain is an open, distributed ledger that can record transactions in a verifiable and permanent way. The reason it is so trustworthy is that no one person has control over it. It provides an audit trail of transactions from past to present (the purchase and sale, say, of Bitcoins or fractions of a Bitcoin), similar to looking at your online bank account details. Anyone can read it, but no one can tamper with it. It has a public key, the equivalent of a bank’s sort code, something to which everyone has access. And a private key, the equivalent of your PIN, which protects your personal information.
Those are the only basics. As Jess Houlgrave says, this stuff is ‘super-interesting’ if you have her kind of brain (she read economics and management at Oxford) but essentially it’s just a means to an end. ‘When I order a pizza, all I’m thinking about is whether the pizza tastes nice, not about the TCP/IP protocols which made the cab journey and the Deliveroo order possible.’
Houlgrave, who is 29, got interested in blockchain while working in private equity but her first love was fine art, so she has combined her two enthusiasms by co-founding the Codex Protocol. This aims to be the world’s biggest decentralised registry of high-value unique assets: classic cars, fine wines and, initially, fine art.
‘Provenance is one of the biggest value drivers in fine art,’ she says. ‘Where it came from. Which institutions have sold it before. The same artwork is worth a lot more if it has come from Sotheby’s rather than Bob’s Auction House.’ This isn’t so much about snobbery as about authentication and security. ‘Does the seller have good title? Is it authentic? Did it have the correct export licence when it left Italy in 1947?’
What Codex will do is simply make this process easier. Each artwork will become part of a blockchain database enabling buyers to trace their origins reliably, while owners will be able to preserve their anonymity. It won’t be able to tell you whether or not a Van Gogh is a fake, but it will give you as much information as is available to help you make up your mind. Houlgrave concedes, though, that it will work most effectively for contemporary art. When, say, Damien Hirst or Jeff Koons create a new piece, they’ll be to sell it with a token creating its blockchain identity which can then be passed on from seller to seller, validating its authenticity.
‘It’s very helpful for creators,’ says Houlgrave. ‘There’s a well known jewellery designer whose work is always being faked. She’s very interested in working with us because this is the perfect way to put a stop to it.’ Similar rules apply to vintage wine, a market in which fakery is rife, especially now Chinese buyers have inflated the price for high-end vintages.
But blockchain isn’t just for the fun things in life. It’s also for boring but useful applications like the one being explored by 30-year-old JoJo Hubbard. I was hugely impressed by Hubbard — ‘VERY fluent’ I jotted down in my notes. She’s charismatic, knows her product inside out, and whatever she’d try to sell me I’d buy in a flash. I must confess, though, to finding it hard to get too excited about what her company actually does.
That’s probably because Electron, which she co-founded after leaving McKinsey, is more B2B than consumer. It uses blockchain to log and verify energy trading in a market which has become incredibly complicated, thanks to renewables targets, government-mandated subsidies and a plethora of different energy providers, from huge gas-fired or nuclear power stations to wind turbines and tiny solar installations on people’s roofs. But the outrageous cost of energy is hardly Hubbard’s’s fault. I admire the businesslike way she remains unflustered as I deliver my mini-rant on the subject.
Hubbard is simply doing what all successful new businesses do: spotting a gap in the market and delivering value to consumers. Because what Electron’s blockchain technology will do is enable grid operators to keep better tabs on the various resources they maintain — different types of power providers, from wind farms to gas-fired turbines, each with their own complicated pricing structure — so they can get the best-value energy at any one time. The bottom line for electricity users is that their bills will be lower, it will be easier to switch your energy provider and billing mistakes will be less likely.
‘My favourite Twitter quote from during the crypto boom was “Come on, girls! Buy Bitcoin! Don’t let the men get rich again”,’ Hubbard tells me. ‘But I was never interested in the gambling men side of blockchain. I’m much more interested in new narratives — finding better ways of doing things and making them stick.’
I got even more interested in Hubbard when I discovered she and I had studied English under the same tutor, Peter Conrad, at Oxford. I couldn’t decide whether to admire the way an arts graduate has transitioned so expertly into a tech venture, or be hugely depressed that someone who spent years studying The Faerie Queene has become so fluent in business speak.
‘I had this idea I wanted to be a novelist,’ she says. ‘So I went to live in Moscow for a year because that’s what novelists do. One night I got into conversation with a furniture maker who told me how it expensive it was to get rid of woodchips. A few days later I was reading about biomass subsidies in the UK, where people were being paid for their woodchips to use as fuel. That’s the connection with my English literature degree — I’m interested in people’s lives and their motivations; taking entangled concepts and finding a narrative that makes sense.’
What drew these women to blockchain? Houlgrave, I think, speaks for them all when she says it’s ‘because it’s an industry based on merit. It’s very diverse, very varied politically and geographically — so no one cares whether you’re male or female, it’s about how good you are.’
Possibly, if I’d picked four men to talk to about the ‘crypto space’ (as Houlgrave calls it) I might have got more McAfee-style willy-waving and drama and tales of derring do. But I suspect that these four women are closer to the mark in what they say about the industry.
As Helen Disney tells me, the blockchain revolution isn’t going suddenly to free us from the shackles of big government or turn us into crypto-millionaires. What it will do is ‘create a lot of new business models which will make data management more efficient’ and subtly improve our lives. When you go to an NHS hospital, say, you won’t have to keep filling out forms, over and over again, as you’re passed from specialist to specialist: all your information will be on one data-secure card. That same card might enable the NHS to run a payment mechanism (too complicated to organise under the current system) whereby you can top up with the extra needed to get private care. And to be sure it’s you, not someone else, the relevant authorities would only be able to access the information by scanning your iris.
Not quite Brave New World then. But still a big improvement on the one we’ve got