In Conversation: Mike Harris explains why he was drawn to Monolith
Tags: Mike Harris, Fintech, Ethereum Blockchain, Defi, Monolith

In Conversation: Mike Harris explains why he was drawn to Monolith Monolith Follow Mar 9 · 7 min read

We’re thrilled to announce that Mike Harris has joined Monolith as our non-executive chairman. Mike is an entrepreneur with over three decades of experience in the fintech sector. We’re incredibly excited to be embarking on this journey together, not least because of his career credentials. A visionary in banking and telecommunication, Mike is best known for setting up first direct, the disruptive all-hours telephone bank that prided itself on the customer experience. Through the 90s, he was CEO at the telephone company Mercury Communications, then went onto lead Egg, one of the world’s first Internet banks.

Having spent the last few years of his career offering his experience to younger businesses, Mike will be joining us as we introduce the magic of decentralised finance to the world. When we caught up with him for our In Conversation series, he spoke about his experiences of watching technology evolve over the last 30 years, how they relate to decentralised finance on Ethereum, and why he’s so excited about the tokenized world we’re heading towards.

Hi Mike, we’re thrilled to have you joining us. Can you tell us about your beginnings in the crypto space?

Personally, I never got Bitcoin. I still don’t really. But I think Ethereum and DeFi is a different kettle of fish. I’m very taken by the idea of tokenization. When you tokenize assets, you can create innovative financial products. With DeFi, you have a variety of tokens with different characteristics. That’s what attracted me to Monolith: the vision of a tokenized world built on Ethereum.

Digital gold vs. programmable money (Source: Ethereum Price)

It’s interesting that Bitcoin has started to see wider adoption as a store-of-value in the last year. It wasn’t always seen that way.

It’s often the case that when somebody sets something up — particularly if it’s altruistic, as that one was — it tends to go in a way you can’t control, and is unpredictable. The web is a perfect example. Tim Berners-Lee and his collaborators could not have foreseen an information space dominated by five players. But when you release something into the world, you can’t control it.

Over the last year, we’ve seen that Ethereum’s “killer app” is DeFi, at least for now.

I see parallels between Ethereum and the web. It reminds me of the Wild West stage of the web in 1998-99. It was a platform for people to build things that they couldn’t have built another way. I think Ethereum is doing the same for finance. Every platform like it that has emerged in the last 50 years has caused a massive explosion of innovation. The PC, the Internet, smartphones. I think Ethereum is a similar platform for tokens. And these tokens have value, and innovation can flourish. If you look at traditional financial services, it’s not easy to innovate. Because it’s dominated by big beasts, the fixed costs are high, and the regulatory requirements are stringent.

What do you think the space needs to provide those services to a wider user base?

There’s a journey to go on to make it accessible to “mere mortals” rather than crypto enthusiasts, and to navigate the regulations and response of central governments. A lot of that can be positive and powerful. I think the central governments and large banks will need to prepare themselves for a different world. As Ethereum is a shared platform, the innovators are left to innovate. So who knows, but it feels like an exciting journey.

“Every platform like Ethereum that has emerged in the last 50 years has caused a massive explosion of innovation”

It’s definitely still early.

I see strong parallels to the Internet’s explosion in 1999 and 2000. We had the Dot-com boom, followed by a nuclear winter. Everyone thought it was all hype and that there was no value. Suddenly we saw the rise of Google, social media and smartphones. And off it went, never to look back. I wouldn’t be surprised to see DeFi go through a similar cycle. A lot of big players are getting into the game, but as with the Internet, they look slow compared to the nimble natives.

NASDAQ Composite Index 1997–2004. Stock prices soared and crashed at the turn of the millennium in what became known as “the Dot-com bubble” (Source: TradingView)

Have you ever noticed a trend where newer technology takes a while to see adoption outside a small circle of tech geeks?

Oh yes. The first one was PCs. I remember it would take 15 minutes to load, and you could play games and do some maths on it. I thought “blimey, what’s it going to change?” With the web, my first attempt to get connected was in 1993. After a few hours playing around with it, I got connected and found a mass of bulletin boards and geeky stuff that wasn’t much use. Then we got web browsers, then Internet browsers. Then came Google, and the smartphone. The first one was Blackberry, then we got the Apple iPhone with the app store. Every innovation has followed the same pattern of demystifying it so it’s not just the geeks that can use it. That’s the big opportunity in DeFi.

Vitalik Buterin has previously compared Ethereum to a smartphone. Apple’s iPhone famously introduced the App Store to the world; Ethereum serves a similar purpose for decentralised applications. (Source: WIRED)

Social media has gone through cycles. You had MySpace, which centered on musicians. Then Facebook, Instagram, and now young people are on TikTok.

Exactly. Facebook was the first to make that global and usable. It was way behind MySpace, which was owned by the biggest media company in the world. And Facebook destroyed them. In some areas, small and nimble and innovative smashes the incumbents. In an environment where network effects are strong and fixed costs are not high, nimbleness beats the big beasts. This brings us back to DeFi on Ethereum versus financial services and intermediaries.

Talking of Ethereum, DeFi, and network effects, do you think it’s already reached a point where the race to capture DeFi has a clear winner?

It’s hard to know. What we do know is that open networks smash proprietary networks. When there’s a serious investment and number of users, it’s very hard to knock a network off its perch. Once Facebook got 1 billion customers, that was it. Whether Ethereum has that yet, I don’t know.

What made you interested in Monolith specifically?

I’ve spent my career thinking about innovation in financial services, and putting the customer in the driving seat, rather than these intermediaries that cost a fortune to run. I’m a great believer in innovation on behalf of the customers. When I met Mel and David via Mischa, I was absolutely entranced by the vision of a tokenized world built on a shared platform. I thought “wow, that is the missing link for financial services, built on a blockchain architecture”.

“I was entranced by Monolith’s vision of a tokenized world”

It seems like your work has often focused on the customer experience.

Exactly, and customer experience in its widest sense. The product needs to open up opportunities that wouldn’t otherwise be there. So, new opportunities and beautiful execution sitting on the side of the customer.

How do you think that will be realised at Monolith?

Mel talks about making DeFi accessible and valuable to everyone. You have to make the product really simple and offer new opportunities. There has to be a customer services ethos. The thing with money is it’s boring for most people. And sometimes people come under stress whenever they think about money. If you can make it fun, I think that’s something young people will resonate with. I think that generation is where DeFi will have its moment. Having said that, you don’t always know who’s going to pick your stuff up. I found that 50% of first direct customers were retired. Similarly with Egg, it helped many people get a saving rate of 8–9%, so they were incentivised to get online to get access to it.

Mike Harris at first direct, the groundbreaking all-hours telephone bank (Source: Iconic Shift)

Outside of DeFi, a 9% savings rate is unheard of now.

Can you imagine that? I lived through 15% savings, and now it’s close to 0. There’s too much money in the system. The governments have pumped in so much money through quantitative easing to stop the banks going bust. This is global, and it’s a big argument for non-fiat currency.

It will be interesting to see how DeFi merges with the more traditional world.

Banks have been good at waiting and then getting into something late but big, and absorbing the major players and getting in that way. But there’s never been such a threat to banks, which takes away the fundamental source of their strengths. So it could be different and could be very interesting. It’s a good place to play out your retirement, I say.

We’ve got 10 years, or maybe less.

Yep, it’ll play out over 10 years. What’s shocking is how fast we went from 2007 to 2017. Smartphones were not a player. Social media was not really a player. Silicon Valley was not dominating the world. 10 years later, there’s FANG, Uber, Tesla and Airbnb. In the background, you have AI as well. And we’ve got whatever action we do to get rid of carbon-based energy, which is a massive transformative force for the world. I think tokenization will make a big difference, because you could tokenize the forests. We’re going to have to do that to get a grip on our overuse of global resources. So I think there’s a massive amount of innovation, and 10 years is actually a long time. Who knows where this will lead?

Learn more about Mike Harris here.

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