6 minutes, 27 seconds

4 August 2022

Follow the Thread: How Centbee created a payments system leveraging blockchain

by Lucille Wilcox, Content Marketing Manager

In episode 2 of our newly launched vlog series Follow the Thread, Stitch Head of Business Development Grant James sits down with Centbee co-founder Angus Brown to get a deeper understanding of the business’s journey to create a payments system leveraging blockchain technology.

A vision for a new and improved digital cash system

Satoshi Nakamoto’s influential Bitcoin white paper has catalysed the launch of tens of thousands of blockchain and cryptocurrency companies across the globe in the 13 years since its publication. One of those companies is Centbee, a wallet app that allows its users to store, spend and send Bitcoin SV.

There’s been a lot of debate as to what Satoshi really intended Bitcoin to be, but Centbee co-founder Angus Brown believes it’s all in the white paper’s name: A Peer-to-Peer Electronic Cash System. Simply put, a means for anyone, anywhere to transfer monetary value easily and inexpensively.

With a strong background in traditional banking, having been part of building FNB’s wildly successful rewards programme, eBucks, Brown has a deep understanding of the payments ecosystem and the infrastructure that underpins it. Eager to create a payments system built for the internet age, Brown and Centbee co-founder Lorien Gamaroff revisited the white paper in 2016, recognising the technology’s potential to address many pain points they saw in existing solutions back then.

“It’s really simple when you take the tech and code away. [Bitcoin is] a payment mechanism – it says so in the title. As a banker, I was always looking for a way to get a proper digital cash system that’s fast, secure and modern in nature, which means it’s not reliant on old systems of money. Bitcoin is a new system of money,” Brown told us.

With Brown’s banking expertise and Gamaroff’s blockchain and bitcoin knowledge, the pair officially launched Centbee in 2017, and the digital cash-based business has been running ever since.

What’s in a payments system?

Brown believes many often confuse payments and banking as being the same thing, likely because we so conveniently interact with both via an internet banking app on our phones. He explains that banks have two distinct roles: as a trusted store of money and to facilitate payments. “These are two different functions – you can have a store of value, and you can make payments, but they don’t need to be from the same provider.”

Historically, payments licenses have sat with banks. But in reality, the payments space in South Africa comprises many layers and multiple companies all fulfilling different roles in the payments process. Recent innovation in the space has also enabled the much-welcomed evolution of payments. Solutions like Stitch, for example, make it far easier for businesses to build digital finance products thanks to powerful underlying technology and information that most businesses previously had severely limited access to.

“Bitcoin is the store of value, and we [Centbee] facilitate the transactions in and out of that ledger when you give us an instruction to do so. That act of facilitating payments is an incredibly important function and needs to be as interoperable as possible.”

Brown believes payments need to be trusted, fast, cheap and relatively easy to use – to the point where they become almost invisible. He explains that consumers are only interested in the ‘thing’ they get from the payment, not the actual payment itself. “It’s our job in the payments industry to find a way to make that as easy as possible.” And that’s exactly what Brown and his team have endeavoured to do, harnessing the power of blockchain technology and cryptocurrency as a means of achieving this goal.

“Something we discovered early on and really enjoy about our business is that there’s very little bitcoin coding. That’s one of the great things about blockchain; it’s out there, it’s done. It was implemented and launched, and you can let the miners run the network. They [miners] are effectively the data centres that process the transactions, and our job is to build a business on top of that. Blockchain is the rails, and you can build on top of it. All of our efforts as a business are focused on the on-ramps and off-ramps, and product design.”

Because the technology works and is publicly available for anyone in the world to leverage, many believe Bitcoin is a monumental innovation that’s enabled the potential for globally connected payments systems, fundamentally changing the concept of money. It’s worth mentioning there have been several attempts to create a viable digital cash system, but none have been able to get it right. The ability to leverage this technology is what makes Centbee and other blockchain-enabled businesses facilitate a far more robust payments system than was previously ever possible.

Harnessing cryptocurrency’s real-life utility

There are many arguments surrounding cryptocurrency’s purpose and utility. Some view it as an asset, perfect for a long-term investment. Others view it as a trading instrument, from which you can earn sizeable profits. Brown acknowledges its multi-purpose properties but views it as payment technology. “Centbee was born to leverage the payment technology behind bitcoin as a blockchain to really help people do what they need to do – spend money.”

Whatever your philosophy, he makes a fair point. Every day we go out to buy food, electricity or petrol, and we need to pay to access these essentials. Many are working toward a world in which it’s easier, faster and simpler to make the payments to access those products and services.

“We are very deliberately a cash wallet, and that extends beyond Rands. By positioning ourselves as a cash wallet, we’re telling people what they should do with it. We’re not saying it’s an investment or trading platform. Our positioning is oriented towards our offering, and the technology underpins that.”

It’s this clear mandate that Brown believes has helped Centbee become a sustainable, viable business. His advice to entrepreneurs wanting to get involved in the crypto and/or blockchain industry is to shift the focus from building technology and hone in on creating solutions to people’s problems.

“Don’t build all of the tech yourself. Decide what you actually want to code, and build that. Everything else, borrow – borrow shamelessly in the early stages. Later on, you can figure out where you need to invest deeper in your value chain. In the beginning, do as little as possible yourself. Leverage partners and integrations. Use the ecosystem hustle.”

We recently published an article detailing the various tech and software a typical crypto or blockchain-enabled business might make use of – featuring everything from identity verification, KYC and AML to fraud detection tools. Check out our anatomy of a crypto tech stack here.

Brown adds that it’s important to “Listen to and understand the context of your users, how important what you’re building is to them and what problems you’re actually solving. Pay attention to early adopters and understand that success comes from what your users are saying and what they’re not saying.”

By keeping your business outcome and consumer outcome top of mind, Brown recommends leveraging technology that enables your objective, and if already exists and works elsewhere, make use of it and build something meaningful on top of it.

We launched Follow the Thread to share insights, stories and advice from experts and industry leaders in their fields with the wider tech ecosystem. What would you like to see next? Let us know on Twitter.

For the full story, watch episode 2 of Follow the Thread with Stitch Head of Business Development Grant James and Centbee co-founder Angus Brown.

 

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