Crypto-Barcelona

Just a stone’s throw away from Park Güell, there’s an old Guardia Civil watchstation nicknamed Kasa de Muntanya. Here, in an occupied fortress, lives Amir Taaki, a world-renowned crypto-anarchist, named one of Forbes’ top 30 tech entrepreneurs under the age of 30.

Amir Taaki hides out with a merry band of progressive software developers, collectively known as Unsystem, developing a project that is both politically incendiary, and a potential economic game changer on a global scale.

The project, called Darkwallet, is an off-the-grid money transfer software which uses the cryptocurrency, BitCoin, to transfer funds anywhere in the world, obscuring the user’s identity and circumnavigating established banking systems.

Darkwallet cuts out the middleman and allows a free flow of funds. Transactions are grouped together and become completely untraceable, thanks to a system known as ‘trustless mixing’. It has the ability to cross frontiers where investment and financial transactions are prohibited due to political sanctions, such as between the USA and Iran. The software works like an anarchist version of Western Union, without the exchange rates and charges, and its recent release has got governments across the world scrambling to impose regulations and legislation.

BitCoin came into existence in 2008, known officially as a cryptocurrency. The word ‘crypto’ is based on the cryptography branch of mathematics and represents the process of writing and programming electronic codes. Digital cryptocurrencies have undergone a steady and controversial rise, gradually gaining a foothold in the infrastructure of the world’s economy. From his base in Barcelona, Amir Taaki has been a global pioneer in establishing digital currency as a potential, and more stable, alternative to the current monetary situation.

BitCoin was created by a mysterious software developer based in Japan, known as Satoshi Nakamoto. The idea was to create a decentralised digital currency that does not rely on market fluctuations, with an infrastructure that works using peer-to-peer technology. In other words, instead of using a centrally established computer system, Bitcoin uses individual computers, so that every BitCoin holder provides a framework for its existence. In order to approve and solve the complex mathematical transactions needed to support a digital currency, a mining process is used. This began as individual computer processors but, with the growth of BitCoin, has since evolved into a complex, sophisticated operation, instigating the growth of a spin-off industry, comprised of entire computer chip farms dedicated to processing transactions.

The movements of BitCoins are electronically recorded in a public ledger known as the Block-Chain, which makes sure the transactions are legitimate and the currency cannot be double-spent. All transactions are signed off digitally using a private key that belongs to the BitCoin owner, stored in their virtual wallet on their computer hard drive or smartphone.

BitCoin’s rise to fame has been controversial. It began with Silk Road—an eBay-style marketplace website that allowed people to clandestinely buy and sell drugs and arms via secure web browsers—and it gained infamy as a quick and easy money laundering tool. The users would simply purchase the BitCoins in a perfectly legal way via exchange websites.

At its height, Silk Road had an annual turnover of $20 million, but the online black market was shut down in 2013 by the FBI, and its creators were eventually charged with drug trafficking and murder for hire. Since the site’s closure, however, a multitude of sites have sprung up in its place. One such website is OpenBazaar, which was created by Amir Taaki and his Unsystem team. It does not use centralised servers, and therefore cannot be traced or shut down by the authorities. CytoCoin News, an online independent BitCoin news source, called it “The unstoppable evolution of the Dark Net”.

The Dark Net refers to the web space where these pages exist, which can only be accessed via a private, secure web browser. Only 0.03% of the internet is openly searchable; the rest belongs to the Dark Net.

Despite its sinister connections, BitCoin continues to grow exponentially. In Barcelona, a local startup company, BTC Point, founded by Borja Rossell and Albert Caus, has created one of the world’s first two-way BitCoin cash machines, which allows users to buy and sell BitCoins with local currency, with a limit of €2,500.

The first prototype ATM was installed in Madrid in April 2014, and proved to be a huge success. Since then, a couple of machines have been installed in Barcelona, and BTC Point has gone from strength to strength, producing ATMs that have been shipped from Washington DC to Equatorial Guinea.

“BitCoin is still in its early stages,” says Rossell. “The one great strength it has is that it cannot be stopped because there is no way to lock it down. People will have no choice but to accept it.”

Rossell and Caus are now seeking to implement  an idea called Boulevard BitCoin in Barcelona, which has already been implemented in Madrid. The objective is to encourage businesses to accept digital payments.

The initiative was first launched on Calle Serrano, in the heart of the Spanish capital, and participants have grown steadily, with more than 20 businesses now accepting payments. In Barcelona, the chosen area will be within Ciutat Vella. The BTC Point pioneers are aiming to incorporate between 20 and 30 businesses into the scheme by February, in time for the Mobile World Congress, when the eyes of the technology world turn to Barcelona.

The promotion of BitCoin as an alternative currency has been increasingly at the forefront of global business, and while it remains the dominant market leader, it is not alone. The former executive chairman of BitCoin, Jon Matonis, submitted an open letter to the Mobile World Congress in 2014, describing BitCoin as “Money without government”. “BitCoin is a survivable digital scarcity,” stated Matonis. “In just five short years, BitCoin has unequivocally demonstrated that we don't need kings to coin our money and we don't need central banks issuing debt-based paper notes and deciding what our money should be. Money is anything we collectively determine it to be.”

On the whole, banks have yet to fully acknowledge the potential of cryptocurrencies, although some are starting to pay more attention. Just recently, Bankinter invested in a Barcelona-based startup, Coinffeine, that provides an online BitCoin exchange for people wishing to buy and sell their BitCoins, with the platform acting as a negotiator for the exchange.

BitCoin, and cryptocurrencies in general, are still suffering from the stigma of money laundering and drug trafficking. Currently, the cryptocurrency concept is a double-edged sword balancing a fine line between opportunity and anarchy. Some sceptics have referred to it as little more than a pyramid scheme, whilst others have been quick to attach Orwellian connotations. Supporters (and optimists), on the other hand, believe that the cryptocurrency concept could offer a real alternative to the current status quo, by providing a monetary system that cannot be manipulated by central banks, and escapes political influences. However you see it, BitCoin et al could be key stakeholders in the future of currency, although how it could be controlled or regularised is yet to be seen.