When he tries to explain the concept behind his latest venture, George Parthimos uses the Gold Rush metaphor: “People are going to look for gold,” he says. “What we do is build the tools, the shovels and picks for them.”
In this analogy, ‘gold’ is cryptocurrencies, that is forms of digital or electronic money sent peer-to-peer using blockchain technology. As for the ‘tool’ in question it consists of a card, the shape of a credit card, featuring a microchip and a numeric dial pad. It’s black, sleek and sports an image of an ancient warrior helmet. This is Spartacard.
“Spartacard is a product that we’ve been working on and designing for the last six months,” says Parthimos, the CEO of Melbourne-based Spartacard, starting with a brief history of cryptocurrency.
“In order to understand cryptocurrency and why it started, you need to go back to the global financial crisis in 2009, where banks and institutions which were the middlemen basically went and squandered customers’ money.
There was a dissatisfaction of having to deal with third parties who mistreated their customers and their money, so effectively the whole blockchain was developed to eliminate the need to deal with a third party. That’s the strength of blockchain and cryptocurrency and that’s why it’s becoming more and more popular,” he says. “Everyone has heard of bitcoins.”
It does not take an expert on cryptography and blockchain to understand that cryptocurrencies are not like normal money, which is stored at banks. “Cryptocurrencies are stored and held by the people,” Parthimos stresses; “there’s no intermediary, no-one sits in the middle, [because] this creates a risk; a lot of the people who invest in this currency have to protect the actual currency itself personally, and there have been a lot of hacks online recently in which currency is stolen and people can’t recover it.”
This is the first need that Spartacard addressed. Up until now, cryptocurrencies were stored in computers, mobile phone, USB sticks, or the cloud. “All these are prone to hacking,” Parthimos says. “We have designed a product that can store currency, and it can never be hacked. It’s got encryption and the card itself has a secure element; the chip in the card cannot be compromised. If someone takes your card and breaks it open, they cannot read what’s on the chip. We call it banking grade security.”
As important as security is to the cryptocurrency investor, this is only one part of its potential appeal.
“The next challenge for us was to allow for people to use the currency,” says Parthimos. “At the moment, bitcoin is accepted in over 1,000 merchants worldwide and that number is growing every week. More and more merchants are accepting bitcoin payments. Spartacard allows you to walk into a retail shop that supports crypto purchases and buy products, goods and services.”
What is even more interesting, is that the card also allows merchants to receive payment in their local currency, through a currency exchange patform. “You can be a plumber, an electrician, you can be any form of business, you can request to be paid in Australian dollars and the person with the Spartacard can pay you using their cryptocurrency, which we convert to a local currency globally, and the merchant would have the money in their account, depending where they’re located, within three days. We provide a facility for the customers to tap just like a normal credit card, and in the background it will be done through foreign exchange and through cryptocurrency exchangers.”
It’s easy to see why Parthimos is excited about the product. This is a device that might prove to be groundbreaking, in terms of bringing cryptocurrency to the mainstream. “We’ve actually filed a global patent application to protect the technology that we built,” he says. But the true indicator of his belief in this product is the fact that he resigned from his previous venture, Smart Car software developer Connexion Media a year ago, right after it became an ASX-listed company, to focus on this project alongside his partner chief technology officer Nick Daskalou, who built the technology.
Is it because both are Greek Australian, that they chose to name the product ‘Spartacard’?
“My parents come from Sparti,” says the CEO, “and the reason we chose the name is that the Spartan name and logo implies strength and security That matched the branding where we wanted to position the product. Sparta as a global brand does represent a lot of values that we want to demonstrate in the product. We wanted to say that it is safe and secure and tamperproof.”
Spartacard was officially launched this week, with an online campaign, via indiegogo, to allow for people to preorder it. Shipment of the actual products is expected to start in November.
By that time, the company will be looking at an investment round. “We didn’t have the need to go to investors so far, although we’ve had a lot of people who want to invest,” Parthimos says. This shouldn’t come as a surprise, given the global aspirations of this venture. “Our target audience are Russians and Americans and Asians,” he says, pointing to markets as South Korea and Japan and the US, where most cryptocurrency investors come from. This is expanding. “There are at least 17 countries today, including Venezuela, Russia, Sweden, Switzerland and Singapore, that are exploring releasing their own, government backed cryptocurrency assets,” he explains. “You’re looking at countries looking to implement their own type of cryptocurrency.”
If he sounds like a champion of this system, it doesn’t mean that he does not know about the drawbacks and critique that comes with cryptocurrencies.
“The biggest issue is around regulation,” he says. “Because cryptocurrency by its definition is private, so governments and regulatory bodies do not know how much currency you have, where you made your money and how you spend your money. Therefore it has implications right across our banking system; how do you collect taxes, or how do you know whether there is fraud or money laundering involved? All these are big concerns that the sector faces. Regulation will definitely happen and it’s needed; but blockchain is absolutely here to stay.”
For more information and preorders, go to spartacard.com.