Torbjorn Bull Jenssen is the leading specialist on Bitcoin and blockchain in Norway and a popular public speaker. He has an MSc in Economics, did his theses on Bitcoin in 2014, and has consulted agencies such as the Office of the Prime Minister, the Norwegian Central Bank, and the Norwegian Ministry of Finance, also companies in the financial and tech industry.
Interview Date : 13th August 2020
- Torbjorn Bull Jenssen (All Interviews)
- Oslo University and SOAS Student, Now CEO of Arcane Crypto
- Did You read the White Paper by Satoshi Nakamoto?
- How did you proceed with your career after coming back to Norway?
- How has the Norwegian crypto community grown?
- Is it easier for Norwegians to participate in groups outside of Norway?
- What draws you and other Norwegians into the crypto space?
- How is Crypto being regulated in Norway?
- The Money Shift
- Scandinavian Crypto Infrastructure
- Why is Arcane Crypto needed in the Nordic region?
- Arcane Crypto on NASDAQ Exchange in Stockholm
- Why Sweden and not Norway’s Stock Exchange Market?
Torbjorn Bull Jenssen (All Interviews)
Oslo University and SOAS Student, Now CEO of Arcane Crypto
I am an economist by education, and I was studying at the University of Oslo. At the University of Oslo, the economic study was pretty conservative and orthodox. I felt like there must be something more, so I searched around and came across the SOAS University of London. Rather than only teaching mainstream economics, they were teaching different schools of thought as well, and that was very interesting to me. I ended up doing my whole 4th year as an exchange student at SOAS. Several professors taught us how to be critical and think to think about the role of money in society. What makes something money, and what makes it special? How is it interacting with power structures? In other words, how can we understand and analyze money as a social phenomenon?
All of this was new to me. Even though I had monetary economics at the University of Oslo, in mainstream economics studies, there is no money, only interest rates. Money is only viewed as a veil over the so-called “real economy” or as oil in machinery. It has to be in the right amounts, not too little and not too much, or it will not work. However, in reality, the complexity of financial constructs like money and credits is important, and money is anything but neutral in the economy. I found these ideas really fascinating, so I fell into the rabbit hole and started reading up different schools and theories about money and credit.
Around the same time, a friend of mine pitched bitcoin to me as an investment. At that time, I dismissed it as it looked like something between a scam and a tool for illegal activities. Nevertheless, I guess it piqued my interest. So, when I started looking a little closer into Bitcoin, I realized that it could be a great case-study. Most authors who analyze and write about money, look back in time and investigate archaeological findings, etc. They try to understand how money emerges because new forms of money appear so seldom. With bitcoin, however, this could be studied now and in real-time. Someone clearly viewed this as a new form of money, and it clearly had an exchange value, without having a use-value. I was sold, this would be a case study that I would look into. I did my thesis on bitcoin, trying to apply these different schools of thought, to shed light on what is bitcoin in the context of “what is money”. Through this process, I fell into the bitcoin rabbit hole and started digging around, and I’ve been there since.
I consider myself really lucky that I discovered bitcoin. I started to read about it in 2012-2013, and at the time, I felt that I was late to the party. So much had happened, and things were moving really fast. Now I realize that it was really early and that the development has only accelerated. The benefit of being early was that there were not too many crappy, easily readable articles out there that were full of misinterpreted logic. Instead, I was forced to dig deeper and read more technical and heavy articles and discussions. That gave me the basics of understanding this technology. As the years progressed, there were different hypes about all the different altcoins and enterprise blockchains. Looking at some of those hype cycles, and having a deeper understanding of it helped me navigate to understand what makes sense and what doesn’t in the space.
Did You read the White Paper by Satoshi Nakamoto?
I read the white paper by Satoshi Nakamoto and it is only 8 pages. If you have studied economics, then the paper is pretty straight forward to read. Also, cryptography’s math is almost the same type of math as in advanced economics. I am not a programmer, but understanding and analyzing the architecture of a crypto-economic system was something that came relatively naturally to me. It is very much built around economic axioms, cryptographic tools, network effects, evolution, and emergence. You combine it into a larger architecture, which is exactly how (some) economists work and think. It felt close to what I learned from my studies.
How did you proceed with your career after coming back to Norway?
I randomly ended up writing an article for a newspaper about bitcoin during the big hype in 2013. Some journalists had reached out to professors at the University of Oslo to do an article about Bitcoin. The professors directed them to a Ph.D. student, and the Ph.D. student reached out to me. None of the professors knew about bitcoin at that time. I ended up writing about Bitcoin and later was invited to live tv for a debate. From there, I rather quickly became known as the “bitcoin expert”. Radios, newspapers, and companies started reaching out to me. But Bitcoin collapsed in 2014, and it got very quiet. I just continued reading, and professionally, I started working for a consultancy firm. I chose that job because it was research-oriented, and there were no job openings for someone to work at Bitcoin-related fields in Norway.
However, in 2016~2017 the interest and the hype came back, amplified. I started to combine bitcoin and work because I started to get paid consultancy, facilitating workshops and presentations. After all, everyone wanted to hear about it. I had a meeting with the prime minister even in 2016 talking about this, as well as banks, labor unions, student organizations, FCI, tech companies, etc., the whole spectrum. Everyone wanted to hear about it, and I loved talking about it, it was exciting.
How has the Norwegian crypto community grown?
Back in 2011, Strule Sunde, who is like a legend in the crypto community in Norway, started to sell bitcoin through local bitcoins and his homepage and communicated with the buyers through IRC chats. IRC’s are the old chatting apps, and he has been serving Norway with bitcoin liquidity, exchanging between Norwegian Krone and BTC ever since. He has been in a big court case, suing Nordea, which is the biggest bank in Norden, for shutting down his account only because he was dealing with bitcoin. So, he was helping a lot of people get on board with it. Many people that were tech-enthusiasts also started to mine as soon as they read about it on e.g. Reddit. Many of them tested out some mining strategies using a GPU, or just an ordinary CPU on their computers.
There was another guy called Andreas Brekken, who found a cryptocurrency exchange called Justcoin. They grew very fast before they got problems due to banks shutting down their accounts. The banks would just say “we don’t like crypto, so no account for you” and they would just kick you out.
The crypto community in Norway is a relatively fast-evolving and active space. One interesting thing with that community is, as the years passed by, and bitcoin started forking, many of the first people who discovered bitcoin went to BCH bitcoin cash. Later, some of them changed to Bitcoin SV. Thus, even the communities have been forking. At the same time, there are a lot of new people who have been joining the broader bitcoin and crypto community, especially after 2017. So, it has been an active community for a long time. I am living in Oslo, so it is much easier to establish a community here than in other places in Norway. However, I know that there are smaller crypto communities in other cities as well. Also, there are a lot of individuals who are joining international communities, because they are living in remote areas.
Is it easier for Norwegians to participate in groups outside of Norway?
Norwegians don’t have any issues with the language barrier of speaking English. All foreign movies, and almost all the content on the internet, which young people are consuming, is in English. Everyone has a smartphone and unlimited data to use. So, it is very easy to go on the internet and interact with different communities. Also, by just being such a small country, we are almost being forced to do so.
What draws you and other Norwegians into the crypto space?
For me, it’s the exciting possibilities emerging with a completely new paradigm for digital interaction. Bitcoin is pretty much a fundamental 0 to 1 innovation. Before bitcoin, you could not transfer and manage value without an intermediary over the internet. That was true for payments, and for the management of digital identities or access to content, for instance. Thus, the internet that enables open and free distribution of information has been centralized around these intermediaries. However, from the day when Satoshi released his white paper, it made it possible to manage value without an intermediary. So, it is a paradigm shift, that I have a fascination for, which evolves over time, and that keeps changing and adapting.
For others, there are probably as many reasons as there are people. Some do a lot of mining due to cheap electricity and natural cooling. You have technical universities where people are drawn to be on the front line of applied cryptography and technology from an academic and technical side. Then you have the gamblers. Lastly, you have the ones who see this as a tool to do good for the world, to do more efficient remittances, and to have a democratization of access to finance. Even though we don’t have an issue with that within Norway, the world is an immense place. There are more people outside of Norway, and their circumstances affect us, so we have to care.
The technology is so freeing and makes it possible to take full control over your own money and digital life, that is the promise of the technology. However, thus far in my life, it’s not anything I personally have needed. I am more than well enough served by the traditional financial system we have here in Norway. I have used bitcoin for payments, investing in solar panels, and getting a lease from South Africa monthly for tiny amounts that wouldn’t work with the traditional financial system. Nevertheless, this was not something I really needed for my own sake. I just wanted to explore the possibilities with Bitcoin. The interest for me is not from my own needs, but it is trying to understand what is beyond one’s understanding. How will this evolve? What possibilities and challenges will it unleash?
How is Crypto being regulated in Norway?
In terms of regulation in Norway, it is the same as across Europe. Crypto exchanges are required to have wallets registered with their local financial authorities. It’s up to every single country to create its own framework for this registration and regulations. If you want to open an exchange and target Norwegian users, you have to register with the Norwegian financial authorities. If you want to target Germany, you have to register with BaFin. Likewise, if you want to target Swedish customers, you have to go to Swedish financial authorities. By being regulated by a local regulator and approved by them, the banks are much more willing to work with you. The FSA of Norway announced in a written statement that they expect the banks to provide bank accounts to the companies that are registered with the Norwegian FSA. So, it’s making it easier to get traditional financial services for crypto companies.
The Money Shift
What Arcane is progressing towards is to help companies with cross border payments, leveraging bitcoin. Norway is a small open economy, which means that we import and export all over the world. Norwegian companies receive payments from all over the world, and increasingly, companies in different sectors are being asked if they could accept bitcoin or stable coins. They don’t know how to deal with that. Most of them have done business in fiat currencies in the past. So, what we are developing is a solution for those companies, so they can accept bitcoin and end up with traditional money in their bank, without being crypto experts. Through this, the payments become way faster and cheaper, and you don’t get screwed up due to the exchange rate as you would if you use banks. This is especially important for small to medium-sized companies. If they let their banks do the exchange for them, just that exchange through the bank will quickly cost you around 1% of your payment. So, you can cut that much more by levering bitcoin and the solution we are setting up.
Scandinavian Crypto Infrastructure
In 2018, the prices were collapsing in the spring, but the infrastructure and the technology were progressing at record speed. Big players like Microsoft had come into space, so it looked really bullish when you looked at how it was evolving regardless of its price. At the time, I came in contact with two well-known Norwegian investors who had been looking into space for a long time. They wanted to build a company with robust exposure to this new industry they saw emerging. The investors didn’t want to go into the market in 2017 because there was too much hype. So, the spring of 2018 was what they thought was the best timing. I completely agreed with them. After having several meetings, we started Arcane Crypto together, intending to develop and provide the infrastructure needed to leverage the power of bitcoin and open blockchains.
We have now built a portfolio of several different business lines. Rather than betting on one horse, we wanted the robustness of a portfolio, while going after the benefits of synergies and consolidation. We went after business models that were known from other industries, and that could be applied in the crypto space. It was important for us to have a market fit that would bring fast and effective results, and not a 5-year plan in a space that is moving this fast. We have built a portfolio of 6 businesses that include a market maker, an exchange, an interbank market, a hedge fund, a payment technology company, and research and content creation. By combining several of these businesses, our aim is to go after cross-border payment. We can provide faster and cheaper transactions that would not be possible with traditional payment rails. This can be achieved by leveraging bitcoin and the lightning network as a payment rail for fiat denominated transactions.
Why is Arcane Crypto needed in the Nordic region?
Exchanges need someone to be a market maker to operate smoothly, so you could reach out to some other market makers. However, if there is an external party, you wouldn’t have control over the pricing. By having those businesses under the same roof, it’s much easier to work together. The same thing with payment solutions; the flow from the payment solution needs hedging, and some of that flow could be matched with the demand for buying bitcoin on the exchange. The content we create both informs us of what’s going on in the space, and it also helps to make Arcane much more visible. Thereby, it opens doors for us to get in contact with other companies whom we can build partnerships with or make an investment in.
Arcane Crypto on NASDAQ Exchange in Stockholm
Right now, we are in the process of listing arcane crypto on NASDAQ First North in Stockholm. We are doing it through a “reverse takeover”. By the end of this year, it will be a publicly listed company. This is to accelerate our current lines of businesses because we have seen we have both direction and traction. We already have some revenue streams form most businesses in our portfolio. However, these models are very scalable, so we need to have access scale and seize that opportunity. The companies under the Arcane umbrella benefit from the visibility and credibility of Arcane being a listed company. Lastly, the crypto space is very fragmented, so we want to continue taking an ecosystem approach. We will be investing in both startups and larger companies that are at the forefront when it comes to technology, and that have interesting ideas.
Why Sweden and not Norway’s Stock Exchange Market?
The main reason for listing Arcane Crypto in Sweden is because we already have become a multinational company. Arcane is a Norwegian company, but we do have two offices, one in London and one in Stockholm, in addition to Oslo. Trijo, the retail exchange, and Eric Wall, CIO Arcane Assets is based in Stockholm, and the market in Sweden is bigger, thus there is more liquidity. I think technology companies can do well in the Oslo stock exchange. However, if something would happen with fish and oil industries, it will take all the focus. In Sweden, you have a stronger technology and fintech focus.
Interviewer , Editor : Lina Kamada
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