We spoke with Dave Hodgson, Director and Co-founder of NEM Ventures about a wide array of subjects, including: mainstream crypto adoption, recent key partnerships (including its latest addition: Cyclebit), and more.
1. NEM Ventures’ Partnership Investment with Cyclebit
“The partnership is an investment in Cyclebit, although the exact terms remain undisclosed until Cyclebit are ready to do so…They are already part of our ecosystem and committed to supporting our Catapult blockchain product when it launches in 2020… [additionally] the team has gained significant traction to-date, with over 200K Point of Sale (PoS) terminals deployed.”Dave Hodgson, Director and Co-founder (NEM Ventures)
Cyclebit offers products and services to B2C and B2B clients; such as retailers, and other forms of merchant / service provider.
On its official website, Cyclebit is self-described as a ‘privacy-focused platform, and is accompanied by the tagline: ‘Sell and accept cryptocurrency anywhere. In-store, online, on-the-go’.
Its homepage features an impressive handful of strategic partners also, including: Mastercard, Android Pay, Samsung Pay, and Apple Pay. Additionally, Cyclebit supports a selection of different cryptocurrencies including: BTC and ETH.
“Cyclebit bridges various elements of the payment infrastructure, including in-person, online and cross-border payments.
They allow vendors to use the same infrastructure to accept fiat and crypto seamlessly, altogether making crypto more accessible to the masses. As well, they have two councils in Canada already accepting Municipal Tax payments in crypto via their partnership with CoinBerry.”Dave Hodgson, Director and Co-founder (NEM Ventures)
The vision of Cyclebit, as published online, is to integrate cryptocurrency-supporting, blockchain based infrastructure at the point-of-sale (POS) – for customer to merchant, fiat to crypto, vice versa, and everything in-between can be facilitated.
As a result the company seeks to drive mainstream adoption of cryptocurrency with both businesses and their clientele. Furthermore, the Cyclebit team claims five years of experience, as well as the following achievements:
- 1 million – Number of transactions processed, per month, within the platform:
- $1 billion – Annual Turnover (from card payments processed by ‘ibox’)
- 200k – No. of networked retail POS Terminals with integrated Cyclebit Technology:
According to Dave Hodgeson, the Cyclebit partnership fits in well with the overall vision of NEM also, being
“well aligned with our ethos. NEM is interested in having enterprises and projects of all sizes building on our protocol and an element of those projects’ success is dependent on their ability to leverage 21st century payment infrastructures to create solutions, without disadvantaging or deterring customers.
Additionally, by allowing our native tokens to be used physically or online, it provides opportunities for XEM to be more widely utilised on a global scale.
Cyclebit is one of those infrastructure components that is necessary for crypto to cross over into mainstream usage.”Dave Hodgson, Director and Co-founder (NEM Ventures)
Cyclebit isn’t the only project to use NEM Catapult technology in some capacity to have received attention and funding from NEM Ventures, with IoDLT being an example.
An article from CryptoNinjas informs us that IoDLT has the capability to run an NEM Catapult node or even an “entire private chain” and that the “solution will enable any business to utilize NEM Catapult’s features. This includes decentralized swaps between businesses, on-chain account systems, two-factor authentication, user data management, and secure business logic modeling”.
Hodgson also highlights a personal list of “exciting projects” which NEM Ventures invested in over the course of 2019,
“Including Vimba, Mobi, Ample, IoDLT and of course CycleBit. We plan to continue growing our portfolio and investing in other projects that are aligned with our vision of furthering the NEM ecosystem.
We have a particular interest in companies that are working to implement environmentally conscious products, as climate change is something that the entire NEM Ventures team is passionate about. Be sure to follow us on Twitter and LinkedIn to stay up-to-date on any upcoming news.”Dave Hodgson, Director and Co-founder (NEM Ventures)
2. Growing a Catapult on a Chain
The official press release claims that the strategic partnership investment “strategic partnership investment will further support the growth of NEM’s Catapult technology leading up to its launch in early 2020”.
“The upcoming Catapult launch will undoubtedly make waves in the industry, and we are excited to be partnering with NEM Ventures at this monumental time.
This investment makes it possible to continue scaling our PoS terminals globally, and we can’t wait to continue diversifying our user base with a major industry player by our side.”via Press Release: Sameer Pirani, CEO (Cyclebit)
The release informs / reminds readers that NEM (XEM) has been available as a payment option at Cyclebit since 2018, showing that the relationship between the two companies truly is strategic and not simply nominal.
In trend of this seemingly positive business relationship, Catapult tokens will also be soon added as a payment method on the Cyclebit platform (in supporting countries), once they become available. But what is Catapult?
Dave Hodgeson describes Catapult as
“A new technology, created from the learnings of the NEM version 1 (XEM) which has been up 100% of the time since 2015. All holders of XEM have the right to participate in Catapult as holders on a 1:1 basis”Dave Hodgson, Director and Co-founder (NEM Ventures)
And that one reason they selected Cyclebit in this circumstance relates to the following
“In order to set up the new chain for success, it is helpful to have certain infrastructure components in place.
One of these components is an established payment infrastructure, which CycleBit already provides in most of NEM’s larger demographic regions.
Additionally, both NEM and CycleBit’s relationships with key exchange partners globally open up opportunities for both parties respectively. “Dave Hodgson, Director and Co-founder (NEM Ventures)
The website copy describes NEM Catapult as a “full-featured” blockchain engine which is “optimised for business data”, and can act as a foundational infrastructure for “both private and public networks with its unique smart contract plugins”
Use cases listed on the page are diverse and abundant, and include: “Currencies, Exchanges, Securities Trading, IOT Micropayments, ICOs and Utility Tokens, Inspection Records, Copyright Management, Trading Cards, Social Media, Logistics Tracking, Medical Records, User Identity Verification, Scientific Data Records, Customer Relationship Management “.
Beyond it’s four layered architecture (technical, under-the-hood information), Catapult’s website highlights a unique list of key features. Including:
i. Aggregated Transactions
- NEM advertises that, with Catapult, ‘decentralized swaps are here’ before reeling off a list of relevant terminology: “Trustless swaps, automatic cross-chain transactions, and other advanced logic.
- These ‘aggregated transactions are achieved by merging “multiple transactions into one,” a process which is accomplished through the generation of what are described as “one-time disposable smart contract(s)”.
ii. Decentralized Swaps
- According to its website, “Catapult executes all these transfers simultaneously as one transaction. This built-in escrow means all the transfers succeed together or they all fail together. Note that while transactions may be facilitated by exchanges, they never hold your keys, so the funds can’t be seized or interrupted.”
iii. Automatic Transaction Fee Payment
iv. Multi-Asset Escrowed Transactions
On a completely different subject: Hodgson also emphasised security features on the Catapult platform, especially in the light of the infamous hack of early 2018 in which $530 million worth of XEM was stolen from accounts on Japanese cryptocurrency exchange Coincheck.
“One easy way for exchanges to increase security is to utilise the On-Chain Multi Signature account capability that NEM has had out of the box since 2015, and to my knowledge it is the first chain to do so.
Catapult brings with it the ability to set up multi-level, multi-signature, and all exchanges are advised of these recommendations when listing XEM and Catapult’s new token. Beyond that, security is dependent upon standard custodial operational security processes – good governance, audits, appropriate key management and not storing all the tokens in a hot wallet.
Decentralised/P2P exchanges are once again growing in popularity which make it harder, but not impossible, for the exchange to be hacked and lose tokens.
As part of the Catapult launch, the NEM Foundation is proactively speaking to many exchanges about how best to support, secure and integrate the new technology and naturally this is a key area of discussion in that process.”Dave Hodgson, Director and Co-founder (NEM Ventures)
3. The Mainstream Adoption of Cryptocurrency
It became evident during our conversation that Hodgeson believes we are currently in the initial stages of “mainstream adoption of cryptocurrency”.
He referred directly to BTC Futures markets, the inclusion of token-based indices being reported by mainstream financial sources such as Nasdaq and Bloomberg, and specifically name-checked “Brave New Coin. Hodgeson also referenced services which allow clients to “collateralise finance via crypto assets”.
David Hodgeson additionally ruminated on how
“In most people’s day to day lives, it doesn’t play much of a part yet, however there are some early signs of success. For example, in various national governments, regulators are now proactively engaging instead of assuming that the industry will die off.
In my view, part of the next wave of adoption will be to appeal to normal retail customers, and to offer solutions that are simple and user-friendly.”Dave Hodgson, Director and Co-founder (NEM Ventures)
Hodgeson emphasised the role of retail as a segue between the mass consumer market, and various sizes of partner enterprises; as he sees cryptocurrency as a means of unlocking greater free market opportunities for all parties.
“I see the retail space as an integral element in the overall progression of the industry.
Solutions that allow a cross-over between fiat and crypto, without requiring a merchant to align with one or the other, offer increased utility and fewer barriers to entry for people and companies that become exposed to crypto.
They can then, for example, use crypto to pay their taxes or send money to family in a quick, reliable and cost effective way.”Dave Hodgson, Director and Co-founder (NEM Ventures)
Afterwards we asked Hodgeson as to where he saw the future expansion of cryptocurrency integration and expansion to which he replied:
“The most immediate areas I see as beneficial for blockchain (as opposed to purely crypto) integration are any processes or protocols that rely on a high degree of trust in a competitive or untrusted environment.
This is likely to impact energy settlement, supply chain solutions and FinTech. The proliferation of IoT/AI/autonomous solutions fits very naturally within blockchain and crypto, and as these solutions expand, I also see blockchain growing with them in new and interesting ways”Dave Hodgson, Director and Co-founder (NEM Ventures)
Our final concern on the subject of cryptocurrency and the mainstream, is regarding the obstacles that companies and other innovators may face with regards to permeating the more mainstream financial space.
David Hodgson believes that the greatest “major setbacks preventing crypto from reaching mainstream at the moment, if any” are as follows,
“FUD (fear, uncertainty and doubt) from national governments and regulators has hindered mainstream adoption.
Thankfully this is now changing slowly, coupled with the crypto industry economic cycles making headlines. Fortunately, the industry is maturing rapidly and is already in a very different place from 2017/18, never mind the earlier boom cycles.
A lot of the projects and companies that are still standing are now nearing delivery of their initial vision, and I would expect to see several launching properly in 2020 after 2 years in build and market validation phases.
We are still in a nascent phase of the industry and as these projects start to deliver, reputation can shift from speculation to value delivery.”Dave Hodgson, Director and Co-founder (NEM Ventures)
4. Is XEM Dead? (Regarding Cointelegraph Article)
“The sentiments are incorrect and the projects XEM is listed alongside are significantly different to XEM itself.”Dave Hodgson, Director and Co-founder (NEM Ventures)
Back in July2019 , Cointelegraph published a piece titled ‘Top-5 famous crypto tokens that seem ’dead’: Analysis’ – and XEM was included on that list. We decided to ask David Hodgson straight-up what his response was to the sentiments expressed in this article.
He had a lot to say, and to anybody who claims that XEM is ‘dead’ Hodgeson presents the following list in retort:
“1. Check the recent commits on Github in relation to Catapult
2. Look at the amount of activity from the project entities that are mandated by the Community (NEM Ventures, NEM Foundation and NEM Studios)
3. Consider that NEM Ventures has made SIX VC investments this year in projects that actively build and expand the ecosystem – showing signs of growth for the future!Dave Hodgson, Director and Co-founder (NEM Ventures)
We began the interview by discussing NEM Ventures decision to invest in the privacy-focused, cryptocurrency-based B2B company Cyclebit, news it had originally announced last November via press release. In spite of this, Cyclebit is still the most recent known investment from NEM Ventures to date.
NEM Ventures is the VC arm of the NEM blockchain ecosystem. The division invests in what it considers “commercially viable companies’ which either build upon or otherwise enhance the ecosystem. NEM is a blockchain network which focuses towards becoming “the smart asset blockchain.
The official website proudly advertises that the VC is “now open for new investment proposals” – which can be submitted on the NEM Ventures homepage (Note that this website is somewhat flawed: with several dead links and an outdated copyright in the footer).