Disclaimer: Opinions expressed in this article do not constitute investment advice from Bitcoin Reserve.
You live in Puerto Rico. What made you move? How is the business environment there?
I had been living a pretty ordinary life in San Diego sharing a small house with a friend. Back then, in 2012, 2013, most of my time was spent at home doing contract software development for a local precious metals company or tinkering in our garage on the original Genesis1 machine. I was pretty comfortable, dating my high school sweetheart, playing Diablo, and evangelizing Bitcoin to whomever would lend a 22 year old their ear. While the gold and silver markets had gone parabolic in 2011, my contract did not survive the crash and prolonged bear market that followed.
I started focusing more on getting the ATM in the garage to work. I made some progress, but, while things were moving forward with the business, the stress of needing to make something happen exacted its toll on my relationship and eventually we went our separate ways. I finally had some customers, which gave me the confidence to get out of the small town where I grew up and make a move to Austin, TX. I knew the business environment there was very friendly and it had a reputation for being a little eccentric. It was a great time, I met some very dear friends.
Just days after unpacking the ragtag collection of boxes in my apartment, I stumbled upon an article online talking about the situation in Puerto Rico, how they had been living under the weight of a severe economic contraction, and how they never really recovered from the crisis. They were experiencing a flight of human and financial capital, and the government was experimenting with novel approaches to jump start the economy and bring new opportunities to the island. Part of that approach was to offer financial incentives for individuals and businesses to relocate, contingent on them investing in the island and creating jobs. I loved Austin, but I also knew that I was in yet another American city, once again comfortable. And isn’t it a shame that 10 years of public school Spanish language education had all but circled down the drain? I decided to apply, and shortly thereafter I was riding a 1-way ticket to San Juan.
Operating a business in Puerto Rico is more complex than what one would expect coming from the domestic USA, but it’s doable, and it’s deeply rewarding. I’ve been really impressed with the professionalism and technical acumen of my associates here. Puerto Rico is home to some incredible STEM-oriented public universities which produce high calibre graduates. The quality of the Genesis software is in no small part due to the technical talent I’ve recruited on the island.
Has bitcoin been gaining traction in Puerto Rico? If so, what are primary use-cases?
There is a small and growing scene of enthusiasts but outside of a few meetups and local businesses it’s been pretty quiet. I was encouraged recently though when my company went to a job fair at the public university and we were approached by many young people interested in Bitcoin and wanting to get involved. After Hurricane Maria my company partnered with local organizations to distribute and install water filters across the island. Many of the students working on the water filter project reached out to me to learn more about the industry and possible opportunities. The interest is definitely there but it still feels early.
How has the COVID-19 situation affected personal and business life in Puerto Rico?
In Puerto Rico the government took a very proactive approach and issued a full lockdown on March 14th. Everyone has been mostly holed up inside for the last 6 weeks. Some associates have fallen ill — luckily not from the virus — but needless to say the environment has been trying to work in. The pace has slowed down. We continue to push commits and iterate every day. The island is slated to “re-open” on May 3rd and I’m hopeful there is some resolution because our work is our passion, and there is a tendency for things to turn lackluster when every day is the same. Overall though myself and the team are just extremely grateful to have the ability to continue to work. I’ve been more concerned about the broader situation on the island and was elated to know Brock Pierce, his wife, and some other local Bitcoiners had put together a foundation to help keep Puerto Rico fed during these trying times, so I’ve been contributing to that.
Genesis Coin is one of the first bitcoin ATM hardware and software providers in the world. How did you come up with the idea?
I was developing software for a local precious metals company at the time, and everyone ragged on me whenever I brought up the idea of Bitcoin. The usual tripe of "it’s not backed by anything," "it’s a ploy by the government," "it will be hacked." I knew about it in 2011 but only after the metals markets imploded and my consulting income with it, did I decide to actually buy some and experience it for myself. That’s when I realized I was supposed to either wire money to Japan, go use the red phone at CVS or find someone locally. How was it this hard? I ended up opening LocalBitcoins. Back then I think it was just people listing phone numbers, kind of like Craigslist. I think there were 4 or 5 phones listed. I called all of them, they were all Google Voice numbers except one. Before I knew it, I was driving to Ramona, California to an address that turned out to be a quaint house in the California countryside. There, I met Todd Bethell, the only human to answer my plea to bestow upon me a few satoshi so I could see what this Bitcorn thing was all about. Todd was a gregarious fellow who had been running a professional printing business and just happened to fall in love with Bitcoin early on. I was really interested in the technology and we chatted for hours. When he learned I was a software developer, his eyes lit up, and he pulled me into his garage. There sat the fossilizing cobweb-draped remains of a long-shuttered project: the world’s first Bitcoin ATM. Or BitBill dispenser. Or something. I don’t know exactly what the plan was with that machine but it did look gorgeous, embossed with a large dust-covered backlit topper scintillating with a perfectly printed gloss gold Bitcoin logo. Todd told me that he bought the kiosk off the shelf and enlisted Eric Lombrozo to help him write the software. They had gone their separate ways and Todd inquired as to whether I would like to buy the machine. I didn’t know anything about kiosks and I respectfully declined but, being a bit of a domain name hoarder asked whether he would be interested in selling me BitcoinATM.com. He was. I could have the domain name! But I had to take the kiosk with me. And that’s how I ended up with the world’s first BitcoinATM fossilizing, dust-covered, and cobweb-ridden in my parent’s garage.
According to Coinatmradar.com, your bitcoin kiosks are the most widespread in the world. What was the major factor in Genesis Coin's success?
Originally my plan was not to actually build a business, but instead hold onto the domain name as an investment. However, after playing with Bitcoin for a few weeks I was curious enough to call up the manufacturer of the kiosk that Todd had given me. In fact, I called all of the manufacturers. “Can I buy 1 unit of your flagship ATM to develop a Bitcoin app on, and can you send me the SDK? The responses varied from “No way” to “Sure, for a hundred grand.” I had about $5,000 to my name. Bitcoin had a reputation and no one wanted to touch it. No one, that is, except an incredible manufacturer out of South Korea. They were innovators in what was at the time, a pretty inert industry. They were a relative newcomer to the space, and since 2006 had quickly developed a reputation for quality and reliability. They had demonstrated a willingness to build custom platforms for their customers, and were quickly capturing market share. They took a chance on me, they had the foresight to see that it could be a real opportunity when almost no one else did. I sold my Ninja 250 and my surfboard and emptied my bank account, my entire net worth chicken-scratched onto a wrinkled check and dropped nonchalantly into a blue USPS mail drop. A few weeks later a freight truck arrived with everything I needed to occupy myself for the next 7 years. Their willingness to take a bet on me provided a bedrock for me to focus on the software. I never worried about the hardware platform because they had built and shipped over a hundred thousand units all over the world before we got started. I was literally — and to no credit of my own — standing on the shoulders of giants. This is a common theme, and extends to my teammates. I’ve been very lucky with them, across the board. With the hardware taken care of I became laser-focused on getting the software to work. I listened to the operators. I pushed a lot of code. I let the customers guide the design decisions and roadmap. I stayed up til 3am building features, tiptoeing into the garage to test them so as not to wake my roommate. I honored their willingness to take a chance on me with persistent hard work. I was fanatical about making things happen. For me it was never about building kiosks. It was about being part of something bigger, the opportunity to play even a small role in what could pave the way for a more equitable future.
There has been a lot of fraud involving bitcoin kiosks over the years, tax agency and employment scams being the most prominent. While you only provide hardware and software to operators, have you assisted them in managing this issue in any capacity?
The software includes a very unique set of features aimed exclusively at stopping fraud dead in its tracks. These features were developed in conjunction with our customers, based on their direct experience dealing with these awful situations. They have provided invaluable feedback and we’ve transformed their knowledge into a suite of tools dedicated towards keeping people safe and secure when transacting at these kiosks.
What is the future of the bitcoin kiosk industry? Are banks with their vast networks of ATMs potential competitors? What about over-the-counter handheld terminals?
The future is bright. Most of the legacy hardware is not well-positioned to process fiat to Bitcoin transactions. Marrying the old world with the new is a nuanced affair, whose finality is perfectly serviced by a Bitcoin ATM. I believe these kiosks will remain a mainstay for onboarding new users and servicing existing users for many years to come.
Do you think bitcoin needs mass adoption, or can it remain a niche currency and still be considered a success?
It’s been 11 years now, Bitcoin has never wavered from its promise of being a permission-less network. Not many promises made in that era have been kept. There will only ever be 21 million coins. In the court of intellectual honesty, Bitcoin has won many times over. Against all odds, it’s a smashing success.
Where are the biggest business opportunities in the industry?
I believe we are on the cusp of seeing some really cool apps built on Lightning and Liquid. I’m really excited to see what kinds of things will come of them. There is really a sense of excitement in the air again, something that I haven’t felt in a long time.
Any advice to someone who wants to start a bitcoin business?
Force yourself to be multi-disciplinary. Bitcoin is in many ways a renaissance technology, sitting at the intersection of seemingly boundless different verticals and bodies of thought. It’s got something for everyone. Identify your weaknesses and know when to delegate. Try to get a little better every day. And most importantly, never ever give up.