The payments industry has gone relatively unchanged for decades. Large incumbents like VISA and MasterCard built a global stronghold with merchants after establishing their business in the early 1960s. The Banks these payment networks work with date back even further. In fact, the first banks date back to 2000 BC in India, and later evolved in Ancient Greece and the Roman Empire focused around lending grain or other stores of value.
Fast forward to today, most people pick and stick with a bank or credit card for a long period of time. Consumers typically gravitate towards those with the lowest fees and biggest networks. In fact, a JD Power’s 2019 U.S. Retail Banking Satisfaction Study found just just 4% of consumers switched primary banks in 2018. According to a CreditCards.com survey, a surprising 25 million consumers have stayed with their credit card for at least 10 years. Another 20 million have never changed their credit card.
However, in 2008 a piece of technology was released that would change the way payments are made and with that the world would change forever. That piece of technology was Bitcoin. Bitcoin does not require central banks or intermediaries to function. Transactions are verified by a network of nodes through cryptography and recorded in a public distributed ledger called a blockchain. Think of the blockchain as the protocol that Bitcoin (and other digital currencies) function on top of, similar to the way that the Internet uses TCP/IP as its underlying protocol.
Bitcoin is many things to many people. It can be a store of value, a means of P2P payments, and a speculative asset where a person can profit. It is secure, decentralized, globally available, and always on. Bitcoin being the first digital currency has the largest market cap and has remained the leader for well over a decade. However, Bitcoin is not without its criticisms and many others have launched their own digital currencies to improve upon what they believe Bitcoin should be. Some of these include Bitcoin Cash, Ethereum and Litecoin, all of which operate on a modified version of the blockchain.
In 2017, Ternio co-founders Ian Kane and Daniel Gouldman saw what was happening with Bitcoin and other digital currencies and identified a problem. All of these digital currencies (including Bitcoin) had use cases on the internet such as online marketplaces or trading on exchanges. The blockchain all of these digital currencies ran on top of was significantly more efficient in terms of cost and speed. What was lacking was an easy to use method of taking digital currencies and using them with the financial system people already use and understand like credit cards or bank accounts.