Bitcoin vs. Scotcoin – the Scottish cryptocurrency alternative
It’s becoming very hard to ignore cryptocurrencies. Whether you’re a cryptocoin enthusiast or a confirmed sceptic, it’s clear that they are here to stay. They might never replace traditional currencies but will have their part to play in the world of finance.
However, Caroline Wylie, at Scotcoin tells us that the rise in Bitcoin has had a profound effect on the very nature of Bitcoin. Increased transaction charges are pushing up the cost of working in cryptocurrencies – as she says: “Your cup of coffee at £3 looks rather different when it becomes £7 by the time you pay for it. Why would you pay such a high premium just to use Bitcoin as a currency? It makes smaller transactions completely uneconomic.”
Bitcoin Transaction charges
Why are the charges so high? It’s down to the success of Bitcoin. This has led to a steep increase in the number of transactions. The way Bitcoin verifies those transactions requires rewards for the miners who do the work – they get paid in Bitcoin, so the more transactions there are, the more miners are needed and transaction fees go up.
The standard charge for a transaction is 0.0005 BTC or 0.50 cents at $1,000 per BTC. This number can fluctuate depending on how fast you want the transaction to happen.
However, today, with Bitcoin over $11,000, even if the standard charge is around $3.50 it will require 99 blocks to process and confirm the transaction. 99 blocks is the equivalent of up to 17 hours. If you want the transaction to be faster you’re looking at:
0.0006 BTC or $4.20 for 15 blocks
0.0007 BTC or $4.90 for 2 to 5 blocks
The alternative – Scotcoin
Scotcoin intends to move from the Bitcoin blockchain to its own permissioned blockchain to remove the those high transaction charges and speed up how fast those transactions are confirmed. The new blockchain can deal with transactions in seconds with a cost that’s only a very small fraction of the charge one would pay with the Bitcoin blockchain. So not only is it cheaper, it’s faster making retail use of cryptocurrencies a reality.
Scotcoin has already done a small trial of using digital currencies to buy beer in the Arlington Bar in Glasgow. And initial tests on the new blockchain are producing exciting speeds. More updates soon.
About the author:
Scotcoin is a cryptocurrency established in 2014 by Derek Nisbet, a Scottish fintech entrepreneur. It currently operates on the Bitcoin blockchain using the Counterparty protocol and has a market value of $25 million USD placing it in the top 200 of global crypto currencies as measured by the USD value.
In 2016 all intellectual property associated with Scotcoin was acquired from Nisbet by Scottish fintech investors, David Low and Temple Melville.
The investors’ desire is for the Scottish Government to adopt Scotcoin as the country’s unofficial crypto currency. It is acknowledged that currency is not a devolved responsibility whilst Scotland remains part of the UK. Scotcoin could only become an official currency if Scotland was independent of the UK or current legislation was changed.
Why a London based fintech chose to grow in Scotland
David Brown, Co-founder & Chief Product Officer at Previse, spoke to us about the reasons behind the company’s expansion in Scotland.
It was first and foremost a very early meeting with the Datalabs that triggered the interest of the senior management team.
With a highly skilled workforce and a huge amount of new talents fresh out of world class universities, Scotland appeared to be the ideal place for Previse to locate, develop and recruit talent in data science with an ambition to use artificial intelligence technology to fix global trade finance.
Previse are still growing their presence in Scotland helped by Scottish Enterprise who awarded them a significant grant in order to support the company’s hiring strategy.
Clockwise, the co-working space in Glasgow, currently hosts the first Scottish recruits. Datalabs are still heavily involved as their R&D partner.
Previse is also working with the leading Scottish universities to disrupt trade finance by bringing data together with artificial intelligence.
David added that the required skills were “in short supply, but, by investing in developing these talents, Scotland can become a destination of choice and lead the way in providing high quality and high paying jobs in this sector.”
LendingCrowd toasts Scottish Enterprise anniversary
LendingCrowd, the only peer-to-peer (P2P) lending platform headquartered in Scotland, has completed 33 loan deals ”“ worth some £3 million ”“ to companies based north of the Border since forming its groundbreaking partnership with Scottish Enterprise a year ago.
Loans have been secured by a range of fast-growing companies, including restaurant chain Tony Macaroni, property lettings agency Umega Lettings and Summerhall Distillery, the producer of award-winning spirits brand Pickering’s Gin.
The Scottish Enterprise tie-up, announced in October last year, will see the economic development agency provide LendingCrowd with £2.75m to lend to Scottish SMEs across its platform.
Stuart Lunn, co-founder and CEO of Edinburgh-based LendingCrowd, is now targeting total lending of £15m to Scottish SMEs in 2018, more than a third of forecast overall lending of £40m across the UK next year, and said growth in the platform’s investor funds has been driven by the launch in February of its Innovative Finance ISA product.
He said: “The flexibility of our funding packages combined with our ability to offer a highly personalised service and much quicker turnarounds on loan decisions than are available on the high street are starting to make an impression in the Scottish market.
“LendingCrowd has seen significant growth in 2017 and is anticipating doing £18m of deals this year, versus £4.5m in 2016. Much of the growth in investor funds on the platform results from LendingCrowd launching its ISA in February this year.”
LendingCrowd, which was established in October 2014, is fully authorised by the Financial Conduct Authority. To help drive growth and scale the business, former RBS and Clydesdale Bank director Adrian Innes joined as Head of Origination in September and now leads business development activity.
FCA Innovate to visit Scottish fintechs
Launch of AG Elevate 2018 for Scottish fintechs
3 Scottish universities collaborate on fintech
In a first for Scotland and the United Kingdom, Tatja Karkkainen, is to undertake a PhD in Fintech. Her research is lead supervised by Glasgow University’s Adam Smith Business School and co-mentored by Strathclyde and Stirling Universities.
Ms Karkkainen will research distributed ledger technologies as well as smart contract solutions for the efficiency of financial markets. This will source from the fields of pure finance as well as IT. She regards the university cluster an ideal base for Fintech research for its accessible skills and resources.
The three universities provide a formidable fintech combination, providing a multi disciplinary environment for Ms Karkkainen’s Research. Glasgow University was named Scottish University of the Year in the Times and Sunday Times Good University Guide 2018. The Department of Accounting and Finance at Strathclyde Business School was ranked first in Accounting and Finance in the United Kingdom and Stirling University Computing Department is part of the Scottish Informatics and Computer Science Alliance.
Blockchain breakthrough for Strathclyde Business School
Another breakthrough from the Strathclyde Business School in collaboration with the National Physical Laboratory, the Toronto Stock Exchange (TMX), and consultancy firm Z/Yen. They managed to timestamp financial stock trades with an atomic clock.
Over 20 million transactions were timestamped by The Atomic Ledger’ project during three hours of trading.
Director of the Strathclyde’s Centre for Financial Regulation and Innovation, Daniel Broby and his team will now analyse the results.
Mr Broby said: “The role of distributed ledgers and precision timing is becoming ever more relevant as Fintech companies adopt blockchain for financial transactions.
This is an exciting trial that will have real world policy impact.
It is at the cutting edge of both finance and technology, helping make money payments over the internet cheaper, faster and more efficient.”
Different processing speeds, server capabilities and execution code are today leading to orders arriving at a market place at different times.
However, current regulatory guidance implies that trades need to be recorded in microseconds (a millionth of a second).
The Atomic Ledger’ project test went beyond microseconds. The Project was able to provide nanosecond resolution.
It is believed the results will provide a benchmark to incorporate the concept of timing into financial asset price discovery.
ShareIn Targets Property Market
ShareIn , the fast growing Edinburgh-based software provider, has announced a surge of enquiries from property specialists seeking to raise capital online.
Formed in 2011 by founders Jude Cook and Andrew Pickett, ShareIn builds online investment platforms for companies using financially compliant software services. It provides the technology, expertise and regulation to link a network of investors to fund projects.
Throughout 2017, ShareIn has noted an increase in the number of new initiatives coming from property developers and investment managers, fuelled by a need to streamline existing paper driven methods and a desire to open up investments to a wider audience.
Jude Cook, CEO and Co-founder of ShareIn said:
“Property developers and investment managers have a pipeline of projects and a need to raise capital quickly and simply from established and new investors. In relying on traditional capital raising routes they fear being left behind by new technology. At the same time UK investors are looking for new investment opportunities and are comfortable investing online.
ShareIn gets them together and eliminates the challenge, cost and time associated with setting up and maintaining their own investment platform. We connect organisations with their network swiftly to raise target capital and get deals done.
Our platform handles each step in the investment process from listing opportunities to paying returns and ensures compliance with the UK regulator, The Financial Conduct Authority. Having their own platform enables property specialists to focus on the important matter of sourcing attractive deals and building their network”.
To date, ShareIn has supported a wide range of capital raising initiatives from medical, sports, utilities and energy sectors. It is the software platform of choice for many new capital raising initiatives in the UK, many of which have become Appointed Representatives of ShareIn using their regulatory umbrella services. This includes Simple Equity, which raised £1.6 million pounds in 17 minutes on their London based property crowdfunding platform in June 2017.
ShareIn is one of the founding members of the UK Crowdfunding Association and is headquartered in Edinburgh at Codebase, the UK’s largest technology incubator. It has experienced significant growth since formation now employing 12 specialists with plans to recruit further