Luxembourg-based startup Scorechain just launched the big data platform of the “Blockchains”. This Bitcoin compliance solution provides analysis and market data, track activity and identity, today for Bitcoin transaction and later for digital or smart contacts. The startup has raised half a million euros of seed funding to start its activities in Europe. We asked Scorechain CEO Pierre Gerard to detail what the startup concept is all about and how Blockchain is disrupting the financial industry.
“Banks are learning more about customers using bitcoin. If someone is coming with €100,000 in cash, pretending it’s coming from bitcoin, we can allow a compliance officer from a bank to check if the person is telling the truth. All the banks today need to check where the money is coming from, if it’s from bitcoin, we provide this.” – said Pierre Gerard to CoinDesk
What is the purpose of Scorechain?
Scorechain will propose all the tools to build trust in the Bitcoin/Blockchain ecosystem. The blockchains are public and decentralised, all the transaction are known but anonymous. We want to provide analysis and market data, track activity and identity, today for Bitcoin transaction and later for digital or smart contacts. Our goal is to create the Big Data platform of the “Blockchains”.
How did you come up with this idea?
We believe that the Blockchain technology will disrupt the financial industry as Internet did for several industries (shops, media, TelCo, etc…) and it will be bigger; Internet is a network to transfer data, Blockchain is a protocol to transfer assets and ownerships with no trusted third-party. But we also believe that if the technology is new, the rules will remain the same and we will provide tools to help companies fulfilling regulations, accounting, tax declarations and also KYC/AML policies.
— scorechain (@scorechain) 6 Octobre 2015
You just announced a fundraising. How easy – or difficult- was it to convince investors to invest in the blockchain concept?
We understood quickly that VC in Europe were quite reluctant to invest in Bitcoin startups. It’s changing now but 9 months ago when we started it wasn’t easy. 900 millions USD have been invested in Bitcoin/Blockchain startups and only a few millions in Europe (less than 5 in France and Luxembourg!) So we targeted business angels and we met really smart investors! Some of them already knew Bitcoin and Blockchain and were looking for startups to invest in and the others had a good knowledge of the financial and we convinced them that there are huge opportunities for creating values in a company like Scorechain.
How could Bitcoin become – at long last – popularized?
I am not sure that Bitcoin will ever be popular in European countries or USA. Bitcoin is the tip of the iceberg. With the Blockchain technology we will be able to implement a lot of new features and simplify a lot of processes.
But we can imagine that in some countries where most of the people have a mobile phone but no bank account and where there is very strict capital control, Bitcoin could find its place.
Don’t you think Bankcoin – i.e. a digital currency ran by a bank – has a brighter future?
I have no crystal ball but I don’t think that the success of Bitcoin or even Blockchain will come from some kind of “re-centralization” of this decentralized technology. 15 years ago some companies wanted to build their own in-house/proprietary network to compete with the Internet, it was not a good idea. In the meantime I believe that semi-public blockchain used by several or all the banks to manage for instance their exchanges (forex, stocks, funds,…) is a very interesting concept.
Why did you set up your Fintech startup in Luxembourg?
Because with my partners we have been running companies for 15 years in Luxembourg and also because Luxembourg is one of the first country in Continental Europe that have shown interest in Fintech and digital currencies and where the regulator is ready to give Bitcoin/Blockchain licence.