Cash is on the decline. Even the U.S. government first issued the CARES Act stimulus checks via direct deposit to everyone who had filed their taxes electronically in the past before it sent out paper checks to the Luddites.
But even the value of checks (or wires) from the federal government—i.e. “fiat currency” because it’s issued and backed by a government—is increasingly being scrutinized. Cryptocurrency trading could be just the thing that allows consumer “dollars” to keep up with an increasingly digitized life, according to Robert Bacon, one co-founder of Raleigh-based cryptocurrency trading startup WolfGen.
“The only thing that gives the U.S. dollar value is that the U.S. government says it has value,” Bacon said. “With cryptocurrency, it has applications to it that allow for you to do a whole lot more things than just a piece of paper. It can be built upon, it can be secured, it can be improved.”
Cryptocurrencies are digital currencies that are traded directly between buyers and sellers online 24/7 by eliminating bank and credit card companies as middlemen that take a cut of the transaction. Cryptocurrency transactions are recorded in a decentralized digital ledger—a blockchain—which protects the information using mathematical codes that only high-powered computers can solve.
Bacon, who focuses on the marketing side of WolfGen, explains that the cryptocurrency market can have volatile swings, so if a person misses a big change, they could potentially lose a lot of money. What WolfGen will offer is algorithmic trading, which can set parameters for the technical system to determine at what level a person should sell or buy.
WolfGen’s three co-founders met while students at NC State—the name alludes to State’s Wolfpack and to the film The Wolf of Wall Street. Bacon met John Paul Baric in 2015 through a mutual friend, and Bacon met Nicolas Kiely the next year when he reached out to computer science students at State.
WolfGen formed in 2017, when Bacon and Kiely were working on some projects and Baric brought them an idea. He had a strategy written down for a cryptocurrency trading algorithm but needed them to translate it to code in order to execute it. From there he could get it out to his contacts with institutional investors.
Baric was enrolled at State from 2016-2018 but left at the end of that fall semester and is now CEO of Aurum Capital Ventures, which owns Mining Store. Mining Store directly sells mining equipment for cryptocurrency. “Miners” can unlock new digital currency, such as Bitcoin, when their computers solve highly complicated mathematical problems in order to fit a new “block” on the blockchain. All that computing power helps process the transactions for others on the blockchain.
The dollars make cents
Kiely, who leads the tech side within the team, initially developed an algorithm that he would run for individual clients so they didn’t have to interact with the system. The team soon realized that kind of operation wasn’t scaleable, so they pivoted.
In addition to the current back-end software, Kiely is working on developing a SaaS product that would provide clients with a graphical user interface so they could interact with the system independently.
The team has a goal to roll out this “mini program” in the fall, which would execute the trading algorithm for people who may want to trade but don’t have the time or interest to learn the coding skills to build it themselves.
“The idea of this application is to bridge the gap,” Kiely said. “It effectively gives them programming-like flexibility without having to know programming.”
Bacon says the bootstrapped company is in the process of deciding whether they will primarily target the individual or institutional investor. They could integrate with exchanges (like the stock market for cryptocurrency) and allow individual users to log in and use the WolfGen system on their own; or they could work directly with hedge funds, for example, developing specifically for them and/or providing them the tools to trade themselves.
Either way, Bacon says he sees the need and excitement for the WolfGen software.
“Its applications and its potential use cases are very exciting to me,” Bacon said, “to be able to allow people to control their own assets as opposed to a conventional banking system. I think it’s something that’s very futuristic and disruptive for the world in general.”