The future of finance, ICO slated for April 25th, 2107 at US market open
The man that called Bear Stearns, Lehman, the real estate and EU sovereign debt crashes as well as mobile tech booms is now mobilizing his films blockchain technology to go head-to-head with the captains of global industry - Wall Street. Unlike the vast majority of blockchain tech start-ups that strive to improve upon the business processes within the leaders of the finance , Reggie Middleton’s Veritaseum seeks to disintermediate said leaders in totality, thereby releasing an unprecedented cascading wave of value currently tied up in excessive fees, commissions and economic ents.
This disintermediation is accomplished by using a DAO (digital autonomous organization consisting purely of distributed software that lives on no single computer or server) which is essentially a smart contract (autonomous computer code, analogous to a legal or social contract that produces y or z result after X input, contingent upon the input).
Veritaseum’s ICODAO will have the ability to accept requests for Eth from prospective ICO issuers, evaluate said requests and if the requests past muster from the DAO’s perspective, then dig in deeper with due diligence and proprietary analysis to ascertain whether the offering will be participated in.
This occurs at a cost that is up to 90% cheaper than fund-like vehicles, meaning the ICODAO token holders (those who submitted Veritaseum’s Veritas tokens to the DAO) stand to benefit significantly more than those who may have invested in a fund with a similar gross return and risk profile, reference this complete illustration for more).
Reggie Middleton the Veritaseum team will support the ICODAO with analysis and development services. ICODAO takes robo-investing and brings it to a new, autonomous and significantly more paradigm shifting level, threatening the highest paid of professional financial investors - VCs and fund managers.
Veritaseum is planning its own ICO (initial coin offering) on April 25th, starting at the open of NY financial markets, through May 26th or as long as supply lasts. Click here for more information.
Veritaseum is in the process of building peer-to-peer capital markets that enable financial and value market participants to deal directly with each other on a counterparty risk-free basis in lieu of going through middlemen, intermediaries and authoritative 3rd parties. We are holding an ICO for our Veritas tokens: the sole means of accessing the vehicles for the P2P economic markets. Here is an overview of the ICO details. The online Veritas presentation deck is rich with descriptions and links to other documentation and instructions on participating should you want to dig in deeper.
Veritaseum is to be considered a gateway, or onramp to the P2P economy, akin to how a browser is used to access the World Wide Web, or a Bitcoin or Ethereum wallet is used to access those distributed ledger platforms.
Veritaseum’s wallet uses a layman friendly interface to build, distribute, read and execute smart contracts.
The Veritaseum wallet interacts with Bitcoin and (soon) Ethereum blockhains and oracles to conditionally store and transfer value.
Veritaseum’s primary competition will initially be the sell side Wall Street status quo. Its aim is two-fold:
o provide autonomous asset management and investment vehicles (DAOs) at near zero profit margin, drawing assets from the more traditional players and then selling information, data and advisory services on top of it;
Enable self-service P2P smart contract transactions over-the-counter, that mimic the transactional services of the legacy players, at considerably lower cost and without balance sheet exposures, credit risks or counterparty risks.
This near zero margin model will be replicated as a platform across the entire FIRE sector (finance, insurance and real estate), and then to sharing economy models (ie. Uber, AirBbB).
Veritas launched a long-running beta of its OTC value trading platform in 2013 and claims to not only be the first publicly viable P2P capital markets implementation of smart contracts technology but to to be the first to file for patent protection of the same.
Management pulled the Wallet from public access soon after the CFTC announced their regulation of bitcoin out of concerns of a requirement to register as an SEF (swap execution facility). Management’s goal is to be, and to remain, solely a software, software data services and advisory provider - and explicitly not a financial concern.
Veritaseum is moving to the Ethereum blockchain, while still retaining exposure to the Bitcoin token, in order to broaden its smart contract capabilities.
Product: What is Veritaseum Providing and How?
Veritaseum provides direct access to smart contract construction, execution and related products the non-technical individual. This direct access facilitates access to what Veritaseum management has coined the “Peer-to-Peer capital markets” - essentially an ever growing pool of users who transact value directly with each other instead of through intermediaries and middlemen, ie. Wall Street banks and brokerages. Veritaseum sees highly customizable and programmatic, direct, P2P transactions as the future of capital markets.
In addition, with the advent of low cost networking and geographically aware computing power (smart phones), blockchain tech and smart contracts, the concept of transferable value is easily expanded past real and financial assets to privacy, labor, data and a cornucopia of things none of us have through of yet.
All assets are stored client side, fully encrypted and are always in the complete control of the client (i.e., you, the individual user). Veritaseum doesn’t even store encrypted copies on its servers. Even in the event of a password compromise, bad actors must also locate the assets to access them. Something that is much easier to do on a centralized server (e.g., JP Morgan or Citibank) than a fully distributed system.
With Veritaseum, one can literally tweet an entire trade, or click a Friend on Facebook to take the other side of a short Goldman long Facebook trade, or transfer BTC linked to the price of gold through a text message. All without having to trust who’s on the other side! This level of friction free finance leads to the inevitable…
Pathogenic Finance - the Rise of Viral Financial Transactions
In the legacy financial world, in order to open a bank account, you have to present various forms of ID, go through multiple levels of KYC/AML, and wait a few days for funds to clear. In order to open a brokerage account, you have to fill out forms, answer questionnaires, meet minimum account balances and wait up to 3 days for funds to clear and 10 to 20 business days for assets to be transferred from account to account. All this is done to essentially remand control, custody, possession, and ownership of your funds and assets to a centralized hosted wallet (bank or brokerage) with oodles of balance sheet exposure to other centralized hosted wallets (banks, brokerages and exchanges). In return, you are given a promise not to plunder. With Veritaseum, you can create multiple accounts in under 60 seconds. You can start trading and transacting with others almost immediately, and in all cases no less than 60 minutes provided you have bitcoin on hand.
This ability to do practically everything your bank and brokerage offers through your browser (for dramatically less money) on practically any web-connected device with a modern browser, practically anywhere, with almost anyone, and without having to trust them inevitably leads to a massive proliferation of transactions. This proliferation will spread exponentially, not linearly, as more and more people realize they have been essentially freed from the “Matrix”.
·This is what AT&T was afraid of in 1915, causing them to miss out on roughly 7 billion “new” customer accounts, and potentially controlling the telecommunications space.
·This is what AOL was afraid of in the mid to late ‘90s, causing them to go from the Internet access market leader to an “also ran” in the space.
·This is what the banks and financial industry are fighting against now, likely to have no more success than their historical compatriots in other industries.
This growth and proliferation in peer-to-peer transactions, is truly viral. The outbreak will not be media or telecomm this time around, but the very meaning, application, and use of money and value itself! This is the dawn of “Pathogenic Finance”!
What is the Disruption of the Normal Physiology of the Legacy Finance Mechanism?
Autonomy vs. Heteronomy
A pathogen is an infectious agent that disrupts the normal physiology of an organism. In this case, the disease is a new cultural meme. Pathogenic finance is a concept discovered and coined by Reggie Middleton, Disruptor-in-Chief at Veritaseum. Veritaseum acts as a virion (infectious virus particle) for carrying new pathogeniccultural memes, ideas, and practices of finance that can be transmitted from one mind to another through writing, speech, rituals, or media. Regardless of what the meme is transmitted through, it is transmitted by… Veritaseum. It is analogous to a virus in that it self-replicates, mutates, and respond to selective pressures on organisms to evolve (i.e., changes in habitat, weather, food availability and type, etc.). Veritaseum, like its biological counterpart, can infect multiple forms found throughout multipleecosystems. Viruses are the most abundant type of biological entity. Being that Veritaseum now lives as a web page, it can live and multiply anywhere there’s an Internet connection and modern browser. Any geographic location, any device, any user. All it takes is a single Tweet, text, email, or drag and drop to get Veritaseum value transactions to spread and multiply.
Why is the Veritas token needed?
The Veritas token will act as the key and only gateway to access the contracts that build the P2P capital markets. The Veritas token is easily programmed (by the non-technical user) to take on the market exposure attributes of nearly any other financial or real asset or commodity that has a generally accepted and accessible data feed and/or price discovery. As such, Veritas also acts as the fuel to run the P2P capital market’s engines.
The Veritas ICO will be capped, guaranteeing the scarcity of Veritas, Negotiations are being made to have Veritas accepted off blockchain by legacy institutions.
The New Age, 21st Century Gold Rush: The Grab for Intellectual Property Rights in Smart Contract and Blockchain Technologies First things, first – let’s quantify the sum of money that is in question. Veritaseum’s platform deals in value transfer. That is not the same as securities, banking or even Wall Street industry. It is literally the exchange of things that are worth something. It is literally the largest potential market in existence. This is a page taken from our crowdfunding information deck.
Addressible market Putting this into perspective, that.s $16.35 of value for every basis point of market penetration. Five basis points of real penetration across markets will dramatically increase the demand and scarcity of Veritas.
Veritaseum doesn’t have to take over markets, it simply has to ensure reliable usage in a very small subsection of markets.
JP Morgan, Bank of America, Goldman Sachs and IBM are just a sampling of the some of the largest, most powerful and most influential companies that have rushed to file patents in this potentially unprecedented arena of profit. From a financial, technological and value perspective, it is literally the second coming of the Internet. The smart(er) money appears to have started filing financially focused cryptocurrency-related patent applications in the 1st and 2nd quarter of 2014.
Below you will find the Veritas digital road show - a slide presentation that goes through what Veritas is, what Veritaseum does, and why you should get involved. This presentation is interactive and chocked full of content. To get the most out of such a dense offering, be sure to make use of the interactive table of contents on the 2nd slide, and please click through all of the videos, links to download the various documents and take your time to read and understand what Veritas is and is not, and what Veritaseum is and plans to be.
Come back here on the 25th of April for more information and the links necessary to access our crowdsale and initial coin offering smart contracts, be ready to get started! In the meantime, come and find out why we're so excited about this... transformation of capital markets...
A long form, interactive presentation can be found here in the form of a virtual roadshow - Informational Presentation. To get the most out of such a dense offering, be sure to make use of the interactive table of contents on the 2nd slide, and please click through all of the videos, links to download the various documents and take your time to read and understand what Veritas is and is not, and what Veritaseum is and plans to be.
A last minute Q&A and AMA (ask me anything) video on the Veritas sale can be found here.
Informational Presentation: To get the most out of such a dense offering, be sure to make use of the interactive table of contents on the 2nd slide, and please click through all of the videos, links to download the various documents and take your time to read and understand what Veritas is and is not, and what Veritaseum is and plans to be.
In order to use anything on the Ethereum network a person needs to have an Ethereum account. The easiest way to do this, is with MyEtherWallet
Generate an Ethereum Account
Click on Generate Wallet and enter a good password. You will always be able to regenerate the same account from the same password.
Click download and save the json file BUT keep this file safe and private. Any person who gets their hands on this file can now access your account, so store it safely.
Open the file and look at ciphertext. This value is your private key. This private key is the part that MUST be kept secret.
Copy this ciphertext/private key into memory and go to the View Wallet Info tab at the top of the page.
Select the Private Key radio button and paste your private key into the box. Click Unlock.
Now you can access your Ethereum account! It is here that you will find your Ethereum address, view the balance that this account has in it, view any tokens that it has, and other interesting things also.
As you can see, new accounts do not hold any Ether and you will have to get some.
Click on the Swap tab at the top of the page to exchange your bitcoins for Ether. Alternatively you may use ShapeShift. Be aware that this method is more expensive than sourcing Eth of exchanging it through an established token exchange, ie. Poloniex or Coinbase.
Exchange for VERI Tokens
Once you have some Ether, you are ready to exchange those Ether for Veritaseum Tokens! One VERI Token costs 0.03333333333 Ether, so for one Ether you get 30 VERI Tokens!
The ICO crowdfunding stage is from 2017 April 25th 9:30 EST (14:30 UTC) and lasts for 31 days. There is even a 20% discount for tokens purchased on day one (after the start), a 10% discount for tokens purchased on day two (after the start), and every consecutive day the discounted rate will reduce by 1% per day until the normal price is reached (day 12)!
The VeritaseumToken smart contract is an Ethereum ERC20 compliant token, which means that you can exchange VERI tokens on any Ethereum based exchange.
If the site asks you again, then enter your private key again and Unlock.
To exchange Ether for VERI tokens you simply have to send the amount of Ether you wish to convert to VERI tokens, to the TokenPurchase smart contract. The smart contract will automatically allocate your tokens to your Ethereum address.
Increase the Gas Limit to about 80,000 and Click Generate Transaction
Congratulations, you now have VERI tokens!
Next you will want to go to your Ethereum account and see your VERI tokens. Click on the View Wallet Info tab and enter your private key again, if the site asks you for it.
Click Add Custom Token and enter the address (0x8f3470a7388c05ee4e7af3d01d8c722b0ff52374) of VeritaseumToken into the Address box, VERI into the Token Symbol box, and 18 into the Decimals box and Save
You will now be able to see VERI tokens for any and each Ethereum account that you may have.
Use VeritaseumToken smart contract and Tokens
Once you have Veritaseum Tokens you can do several things with it. Since this is an ERC20 compliant token you can basically exchange VERI tokens on any Ethereum exchange, and there are several. You can exchange them for other tokens, or sell them back to Ether at a later stage.
To use them on MyEtherWallet, click on Send Ether & Tokens tab. Enter your private key and Unlock.
Now, enter the address (0x8f3470a7388c05ee4e7af3d01d8c722b0ff52374) of VeritaseumToken into the Contract Address box.
Copy and paste the VeritaseumToken ABI code from the box below.
If you haven't heard, we're giving out free, fully smart contracts as a 5% rebate to anyone who purchases any of our research packages above the introductory novice $50 level. This is not your Daddy's rebate! The rebate actually gets larger as DB goes down in price. For those who may be coming late to the party, we can offer a 5x long gold (or even a long gold, short DB) smart contract rebate as well. Of course, the bulk of our research targets banks and entities other than DB, but I thought we'd make DB the subject of the rebate to drive the point home. Below is an actual contract crafted off of the price of a single share of DB for about 2 weeks.
Click here to explore and subscribe to our research. You will have to be willing to fully identify yourself and comply to the terms or our program (in essence, promise not to use the package for anything other than our rebate) in order to qualify for the rebate. Once the subsciption is paid for, email us to get started.
Deutsche Bank is going to need some money, and it's going to need some quite soon. The next two or three articles that I write will focus on why there is such a need. In a concerted effort to reduce or potentially eliminated the risk of taxpayer-funded bail-outs of European banks, the EU implemented a new “bail-in” regime beginning on January 1, 2016. As such, rules which require banks and certain systemically significant market participants in EU member states will have to write-down, cancel, convert into equity or otherwise modify certain unsecured liabilities if such steps are required to recapitalize the institution. What is the most bountiful unsecured liabilities of a bank? Read more...
Our next article will continue to hammer home the liklhood that DB will have to recapitalize, and where they probably WONT'T be getting the money from, as well as the likelihood it will come from someone who really didn't plan on giving it up (Ahem, depositors/savers/checking account holders). For those who are not yet convinced, peruse these related items...
The research and knowledge subscription module "European Bank Contagion Assessment, Forensic Analysis & Valuation" contains a full report of a very large European Deutsche Bank counterparty that faces a full 27% downside from current levels. It appears as if no one suspects a clue. It also contains much, much more (including at least 3 to 5 suspect banks). We can break this apart a la carte, if requested.
Americans are trained to know and to cherish the ideals of democracy and to believe in the American Dream which teaches most Americans that equal opportunity is here for all and that the chances for success for anyone lie within him/herself. None of us are taught to know and understand the American status system which is an important part of our American Dream and often makes the success story a brilliant reality. We all are trained in school to understand democratic ideals and principles and to believe in their fullest expression in American life, but we only learn by hard experience, often damaging to us, that some of the things we learned in early life exist only in our political ideals and are rarely found in the real world. We never learn these things in school, and no teacher teaches us the hard facts of our social-class system, and by extension, our capitalist class system.
We posit that one should study the basic facts of our status system and learn them through systematic, explicit training which will teach at least the adult student much of what he/she needs to know about our status order, how it operates, how he/she fits into the system, and what he/she should do to improve their position or make their present one more tolerable.
The primary drivers of social class mobility (i.e. Less stringent socio-economic stratification) are knowledge and access. Barriers to each of these is what drives socio-economic stratification and stifles social class mobility. For the extreme minority on the top of the socio-economic ladder, it is in their best interest to stifle mobility as much as possible, for mobility only represents:
1)Downward movement for them, or
2)Upward movement for those below them.
Any which way one can look at it, mobility, at best, represents displacement and lesser access, less capital, less relative status.
For those who are not members of the very top minority, socio-economic mobility usually means brighter outlooks – as long as said mobility is upward-facing (remember, mobility can be in both directions). As a matter of fact,
The primary products of Veritaseum are knowledge (through our interactively delivered research and opinion) …the lower you move down the socio-economic hierarchy, the more critical and leveraged the shift in socio-economic status becomes.... And access (through our patent-pending blockchain technologies) …
We are, in essence, the socio-economic mobility vendors.
This model congeals basic materials about social class in America, identifies the multiple levels, and makes apparent the categories that can facilitate the movement from lower levels to higher ones, and vice versa. Its fundamental goals are to tell the reader (1) how to identify any class level, and (2) how to find the class level of any individual.
Social class enters into almost every aspect of our lives, into marriage, family, business, government, work, and play. It is an important determinant of personality development and is a factor in the kind of skills, abilities, and intelligence an individual uses to solve his problems. Knowledge of what it is and how it works is necessary in working with school records and the files of personnel offices of business and industry. What a woman buys to furnish her house and clothe her family is highly controlled by her social-class values. Keeping up with the Joneses and proving "I'm just as good as anybody else," although fit subjects for the wit of cartoonists because these slogans touch the self-regard of all Americans, are grim expressions of the serious life of most American families. The house they live in, the neighborhood they choose to live in, and the friends they invite to their home, consciously, or more often unconsciously, demonstrate that class values help determine what things we select and what people we choose as our associates.
This model provides a ready and easy means for anyone to equip him or herself with the basic knowledge of socio-economic class so that they can use this type of analysis whenever such factors are important in helping them to know a situation and adjust to it. I have used the model to help predict behavior in the investment real estate market, particularly the residential market in the NYC area where gentrification was rampant. It is now even more apropos, given the significant asset deflation, constriction and selective re-expansion of credit, and considerable shifting of wealth and resources within the US and worldwide.
The businesses of those who make, sell, and advertise merchandise as diverse as houses and women's garments, magazines and motion pictures, or, for that matter, all other mass products and media of communication, are forever at the mercy of the status evaluations of their customers, for their products are not only items of utility for those who buy but powerful symbols of status and social class. This model, and the more detailed and sophisticated one that shall follow, can greatly aid them in measuring and understanding the human beings who make up their markets. Note: This model has been geared towards the NYC Metropolitan area, hence may need to be fine-tuned for dissimilar rural, suburban or non-US areas.
The model has been built upon a modified version of the Index of Status Characteristics (I.S.C.).
Social class is defined (on this blog) as the amount of control one has over one's socio-economic environment. It is much more than money, although money is a large component. For instance, Barack Obama is in a higher class than Robert DeNiro or Michael Jackson, although Robert DeNiro and Jay-Z are most likely wealthier. Obama's higher class stems from his ability to exert more control over his socio-economic environment. The factors that this author uses to determine class combine (with the associated weights) to create a "socioeconomic index":
(Occupation X 12) + (Income source X12) + (Income X 7) + (Wealth X 14) +
(Education X 7) + (Dwelling area X 15) + (Class Consciousness X 7) +
(Housing X 12)
As you can see, wealth is the largest contributor to the class standing, and coincidentally it is the factor that is the most at risk in this current economic climate. I believe that there will be a significant entry into the upper middle class by those who were once firmly entrenched into the upper classes! While that may not seem like a big deal to many, it is damn big deal to those who are moving down the ladder. This also means, that there will be some space for others to move (relatively speaking) up the ladder. One man's (or woman's) misfortune is another's opportunity. I believe this blog can not only be used to insure and proof against downward mobility for those in the upper strata, but can also be used by those in the lower, middle and lower upper strata to rise upward a notch or even two. Social Mobility is the name of the game in times of severe dislocation - times like we will ikely be experiencing soon.
Lower Middle Class
Upper Middle Class
Lower Upper Class
<-- 20% to 30% of Veritaseum users are here, roughly 1,000 of you! We would like to diversify and smooth this out...
Higher Upper Class
Now, in term of wealth (not social class and influence, just wealth) we can split the upper strata into three different categories (there are only two above because of the other factors that come into play when social class or socioeconomic standing is taken into consideration). There is the poor wealthy, those guys and girls that are just a hair's breath from being pulled into the upper middle class strata due to marginal wealth. This would be the $1m to $10m net worth crowd, who rely on business profits, salary and investment returns for income. The next would be the middle strata of the wealthy, hailing between $10 t0 $100 million in Net Worth, and then there is the upper strata wealthy at above $100 million. Each of these three strata of wealth represent, in my opinion, distinct behavior tranches in terms of discretionary expenditures, investment, and politics and (what passes as, this is a story for another post) philanthropic activities.
Source of wealth
Lower strata wealthy (High net worth)
Service professionals, corporate executives, entrepreneurs, inheritors
Salaries, stock options, restricted stock, small business profits, investment returns
$1 m to $10 m
Middle strata wealthy (Very High Net Worth)
Corporate executives, entrepreneurs, inheritors
Business ownership, investment returns, salaries, restricted stock, stock options
$10 m to $100 m
Upper strata(the truly Rich!)
Entrepreneurs, inheritors, very few CEOs
Business ownership, investment returns
$100 m to several $billion
A trip to practically any decent sized yacht club or recreational vehicle port reveals the relatively stark differences in discretionary spending behavior. The first strata can be found in the 36 ft. to 68 ft. yacht docks (where a captain is optional, but not mandatory and you really don't need a crew). The second strata can be found 50 ft to 120 ft docks, where captains, crews and semi-custom fiberglass boats abound. The third strata are almost exclusively in the super yacht category, where the carrying cost alone for these (basically waste of money) fully custom built hulls and vehicles are about million a year to start with. You can also see the other social economic strata as well, upper middle class in the 20 to 35 ft boats, the middle and working class in the considerably smaller fishing boats - as opposed to the ultra fast Viking and Hatteras deep sea fishers, etc. It is an interesting and instructional study in social studies and anthropology just walking along your local docks! Once you are aware of how these things break down, you will see many settings in a different light.
Many of those in the higher strata would not be there if they had to compete on a more level playing ground. Alas, elimination of said level playing ground is a goal of those in the upper strata. The problem with that is that such behavior is good for the individual in the upper strata, but bad for society in general for it prevents efficient utilization of human capital. Basically, the best people don't get to do the most things, because they are blocked by those of lesser capability but greater access - access to infrastructure and access to knowledge.
Enter Veritaseum. Our business is to supply said access. We offer knowledge...
We offer access to infrastructure through our gateways to the peer-to-peer capital markets...
If one purchases our research (anything besides the introductory course) we will offer a 5x gold smart contract as a perk. Basically, we will give you a 5% rebate in the form of a Veritaseum smart contract that pays you the price of gold (or a gold index), levered 5x up to a stated maximum. This is a perfect way to both learn and get introduced into the new P2P capital markets and smart contracts.
Banking without Bankers! Trades without Brokers! Contracts without Courts!
Now that bitcoin, blockchain and digital currency technology is starting to go mainstream the discussion of the utility is a moot point. Alas, the implementation of the technology needs to be the new conversation. Nearly a billion dollars of VC money (reference The Evolution That Is Veritaseum: Benchmarking It To Venture Funded Competition) has been poured into the digital currency sector, yet the vast majority of that money has been poured in to a legacy framework that is bound to obsolesce. As a matter of fact, it will likely obsolesce before an acceptable return is realized from the money invested.
Now, this is a bold statement, and one that is liable to piss off a bunch of VCs that have already invested in the space. All I can say in this regard is… “Don’t shoot the messenger!” Let’s carefully walk through how this is the case.
The first bold generation of bitcoin entrepreneurs (it's amazing that you can refer to companies born 2 and 3 years ago as a previous generation, it just goes to show you how fast this space is moving!) built businesses based upon bitcoin as a legacy commodity. Basically, they bought, sold, transmitted or transferred it as a unit of value. They did this because that's how everything was done for the last several thousand years in the financial services industry. Basically, they had no choice - or so they thought. Then came those who read the Satoshi whitepaper and the bitcoin wiki and saw a very different meaning. My team and I are among those entrepreneurs. We saw that bitcoins were malleable, programmable, tools with which one can use to paint upon the canvas of value - any value, in almost any fashion. A far cry from the moving of static financial widgets from place to place. Think of moving bitcoins around (bitcoin 1.0 companies) vs programming bitcoins to act on their own according to their contractual owner's wishes (bitcoin 2.0 companies) akin to pushing a model T Ford around town vs. programming your driverless electric Tesla to go by the grocery store to pick up some fresh produce before swinging by the school to pick up your kids on the way home to meet you to take your wife (girlfriend?) out to dinner.
With this distinction in mind, I view the media with interest as I startup after startup win $25M, $50M, $75M funding rounds for essentially replicating a legacy business model couched in new age bitcoin wrapping. Significant money is spent on regulatory approvals and the fashioning of old systems into new systems - alas those new systems are still straddled with old system limitations which honestly begs the question, "Why bother?". Now, I don't want to assert that regulation is not needed or businesses can succeed without cooperating with regulatory authorities. What I am asserting is that these businesses and business models are being put together to satisfy the shortcomings of last generations technology (1.0) and are not only wasting the capabilities of the next generation tech (2.0) but will eventually (and I belive relatively quickly) be railroaded by nimble, efficient, and tranparent business models built on top of the way bitcoin was meant to be run. Not only does this not break regulations, but in our interpretation it totally sidesteps most regulatory barriers completely, and does so without jeopardizing the trust of institutions (at least those who are smart enough to realize what they are dealing in).
Regulation in the financial services industry (both on the state and federal levels) is aimed primarily at the protection of the consumer. This is a good thing, both for the consumer and the industry in general, for a consumer that can't trust its vendors is a consumer that won't use it's vendors. This is the reason why the big(ger) bitcoin exchanges, money tranmsitters, etc. are getting regulated - as as to comply with the laws and appear more acceptable to the financial mainstream. The problem with this approach is that they are taking a decentralized, autonomous system of value transfer and attempting to shoehorn it into a centralized, legacy system created hundreds of years ago.
Bitcoin 1.0 is where most of the VC money is flowing, but Bitcoin 2.0 is where the true value extraction - the next Google/Apple/Facebook (Veritaseum) will occur. This is all but guaranteed.
The world of Financial computing used to be highly centralized, with powerful companies basically owning and controlling everything. The advent of the internet brought topological decentralization, but that decentralization is nominal and in name only because the most important aspects, the thing that really needed to be and stay decentralized is centralized and becoming increasingly more so. That thing is... control of the data! Remember, nearly all fiat money is now used as digital currencies. Count the number of physical dollars/euros, etc. in your pocket vs in your electronic bank account - hint: If you didn't realize that banks are some of today's largest data companies, read "Who Are The Three Biggest Data Companies In the World? 1) Google 2) the Fed 3) JP Morgan/ECB"
Many, if not most, are lulled into a false sense of security as they've been led to believe that since they have access to all of this information and all of these financial services, they live in a free and decentralized world. The fact of the matter is, they, you, we have access, but we have sold our control over our own data and capital for said access. That access that all enjoy - meeting friends of Facebook, storing files for later retrieval on Google or Dropbox, or even accessing your coin on Coinbase or money through a regulated bank - all, entail giving up control and data to a centralized data center. He/(she) who hath the (centralized) data center, has the control.
Centralized (A) is how the financial system looks today. Large regulated entities are at the venter of a bunch of other entities who freely send their capital and relinquisih full control of their monies to these central entities in order to access financial services for said capital. This risky for said centralized entities can collapse (MF Global), get hacked (JP Morgan, Citibank) or defraud (Madoff). These are major reasons why regulation is present and needed in such a system. Despite the fact that the flaws are evident, prevalent and pervasive in such a system even with superior solutions invented, this is where the VC money is going today. Veritaseum has multiple patents pending and a fully functional platform that moves us from Centralized (A) to Distributed (B). With Veritaseum, everyone becomes their own bank (without bankers), their own exchange (without brokers or centralized exchanges) and execute and enforce their own contracts (without courts and lawyers). We can do this with similar or materially better functionality seen in the legacy system (reference "The Unbundling of a Money Center Bank") without anybody having to trust anybody else, whether it be a centralized institution (regulated or not) or a counterparty. This is all done through distributed, consensus driven software.
Veritaseum's business model is different. We actually benefit and profit by putting control back into the hands of the people. Our wallets rest on YOUR client and YOU keep control of your financial assets at ALL times unless you put them in contract (via our smart contracts technology). Even then, you have full insight into where your assets are and how they got there at nearly all times. Our ENTIRE business is conducted ON BLOCKCHAIN - for all to see.
We make financial asset trading a distributed affair, hence, even though certain entities may have (or are pursuing) gatekeeper status through supernormal control of the data chokepoints, we enable you to still ride on top of their infrastructure and trade value directly with other, on a peer tp peer basis (in terms of capital) while maintaining full control of your assets. We call this ability to retain control of your money, and of your assets, Economic Soveriegnty! Veritaseum's CEO was one of the very few (if not only) market participants to warn about Lehman Brothers (see Is Lehman really a lemming in disguise? Thursday, February 21st, 2008) and Bear Stearns months before they collapsed (reference Is this the Breaking of the Bear? March 17th 2008). He is now issuing the warning signals again.
The blockchain is capable of mollifyiing the rentseeking effects of centralization and concentration of power through data gatekeepers and server farms.
Veritaseum aims to disintermediate the banking system by congealing the business processes of Wall Street banks into software and code that lives and thrives in the cloud, and the blockchain in particular.
This DACe in the cloud allows disparate consumers of banking products and services to purchase said services directly from each other through Veritasum using unbreachable smart contracts as the medium.
The following is a reacted letter that I just sent to a rather influential person in one of the bulge bracket banks of Wall Street. I decided to simply be frank and tell it like it is. AFter all, why play games or beat around the bush. It is what it is, right?
(Name redacted for the sake of privacy and professional courtesy), this is my more fleshed out missive detailing what I see as the inevitable commoditization of your industry. Wall Street in general (and XXXXXXXXXXX in particular) is about to become “MP3’d” (disintermediated), just as the music industry did along its 75% slide in revenues over a 10 year period. Our goal is, in no uncertain terms, to expedite this disintermediation. In essence, our job is to cleave at least 75% of the revenues off of Wall Street banks!
Hopefully, I’ve gotten your attention. Let’s discuss the opportunity - and the threat - to XXXXXXXXXXX in more detail as I present a clearly laid out roadmap to either your firm’s relative failure, or resounding success.
This is notgrandiloquence. We can show our venture alone cutting over 3-4% off of XXXXXXXXXXX’s non-interest revenues and up to 30% of net income attributable to common within 8 to 12 quarters of gaining traction. This is accomplished by removing your pricing power in your most lucrative businesses – transactions, fees and commissions.
Drilling Down On XXXXXXXXXXX’s Unique and Particular Vulnerabilities - or- Why You Should Be Paying Attention
XXXXXXXXXXX derives more than 95% of its total revenues from non-interest earning transactions/businesses. This comprises revenues from Investment Banking, Asset Management & Investment, Brokerage Commissions & Fees. Let’s analyze the percentage of business that could be impacted the year after traction of our value transaction system by assuming a certain percentage reduction in fees. We have assessed the potential impact on the bank’s annual revenues and profitability as follows:
XXXXXXXXXXX could see around 3-4% decline in its non-interest income. The bank’s net interest could fall by 7-8% off compression in its net interest margin.
Now, the firm could very well see lower expenses on account of compensation benefits for employees (due to decrease in variable pay, reference the “58% of financial advisors will be replaced” quote above from Oxford), however, this impact is not going to be significant enough to offset the likely decline in revenues. On a more personal level and more to the point, it represents a ~58% chance of you getting fired. The compensation heavy Wall Street culture is ill fitted to battle the disruptors we are bringing to bear during a major technology paradigm shift!
Net Income could drop by a significant percentage ~ 30%.
Who We Are and What We Are Doing
Our core product, UltraCoin, is at the intersection of the Bitcoin protocol software, robotics, and financial services. It is already recognized as a driving factor in the full scale disintermediation of Wall Street:
“The disintermediation caused by Middleton’s UltraCoin has the potential to disrupt the brokerage industry.” AlleyWatch
“… a direct threat to fiat merchant banking.” Fortune
“… the perfect storm of disruption, as it renders trading fees, brokerage fees, and those infamous Wall Street bonuses obsolete. The sheer scale of disruption this technology brings with it makes it something to watch.” The Hash Report
The Bitcoin blockchain threatens to dramatically reduce the ability of financial services companies to charge for transactions - all transactions. We have, through our UltraCoin wallet, enabled synthetic versions of nearly all of the financial assets XXXXXXXXXXX deals with, and enabled them to be traded peer to peer (meaning without an exchange or broker) via the blockchain. These new age tools look very similar to what XXXXXXXXXXX currently sells to its clientele at a significant, and now, ephemeral premium. Our stuff looks no different from your stuff, yet is dramatically cheaper, more flexible and more capable. As a result of being blockchain-based, we’ve also reduced the default/counterparty/credit risk to effectively zero.
XXXXXXXXXXX’s Opportunity - a partnership where you benefit from our rapid development tech and we benefit from your distribution network
Let’s be frank and upfront. The banking hegemony as we know it is about to undergo a dramatic, disruptive structural change. Pretending you are immune simply guarantees you to be the one stepped on in lieu of the one doing the stepping. The same is true in taking too long to act, or acting by moving in the wrong direction. I referenced the record industry and MP3s as a prime example. The assertion that regulation will protect banks from technology where it didn’t for the record industry is a straw man’s argument, at best. Try as they may, at the end of the day - regulators cannot, should not, and probably don’t even want to regulate software and prototcols. It’s a new day and age.
One simply cannot stuff the technology genie back into the bottle. Even before critical mass in adoption is achieved, the bulge bracket banks (XXXXXXXXXXX included) will witness a structural decline in margins. Despite this margin compression, there will be a small contingent of banks who will emerge as winners because they will cannibalize the revenues of their competitors adopting and embracing the forces behind this paradigm shift. Doing this will require not only sufficient vision, dexterity and entrepreneurial expertise (the type seldom found in multi-billion dollar global institutions), but exceptional execution to be among the first movers. Money center banks can try to figure this out on their own (good luck being entrepreneurial and first movers), or they can team up with us.
We are a startup, and we’re the first movers! To maintain our advantage, and to gain traction quickly, we’re soliciting established distribution partners. Teaming with us can essentially be boiled down to whether you are the disintermediators - or the disintermediated!
UltraCoin provides, with full transparency, universal access to any publicly traded financial instrument, on any exchange, at a fraction of the cost of bulge bracket and even many deep discount brokers.
Our patent-pending (we are confident that we’re the first to file, meaning the rest of the Street must come in behind us) products provide access to over 75,000 tickers in all major asset classes from exchanges and bourses from around the world in an innumerable combination of pairs and combinations – not merely just the traditional, binary, long and short. This is not an idea, or mere concept, or whitepaper. This is a tangible product that is available right now and already making significant waves in money center bank circles (download here). Below is a screenshot of my active wallet on my tablet as I type this.
I sat down with about a dozen or so (legal, executiuon, KYC and AML) higher level executives of one of the world's largest banks today. It was a fruitful discussion. The following is the document that was given to serve as a guide to the discussion.
It is interesting to notice how many truly competent individuals and companies truly believe that new technologies are what disrupts industries and markets. Trust me, it is not! Broad disruption occurs at the hands of astute operators that manipulate new (and often not so new) technologies to leverage an innovative business model that strikes at the weakness(es) of the extant market leaders