Saturday, 21 September 2019

A Analysis

In BitLicense Part 1, we explained how debilitating the proposed NYS Department of Financial Services rules on Bitcoin companies would have been had it been applied to the last major technological breakthrough - the Internet. In a nutshell, we would all be surfing to slow web pages controlled by bank portals.

In BitLicense Part 2, we clearly demonstrated that while Internet technologies have pushed the prices of practically EVERYTHING down while the performance and quality have risen, bank product pricing has literallly skyrocketed in the same timeframe with no material increase in quality. Why is that? Well...

In BitLicense Part 3, we showed all that the proposed (and applied) regulations act as a monopolistic/oligarchal barrier that prevents smaller companies from pushing innovation to increase product/service quality and from dropping prices. We even went so far as to rewrite the proposed BitLicense to prevent and avoid the inevitable "robbing" of the consumer by entities that are essentially protected by regulation and seemingly immune and definitely resistant to the (vastly consumer beneficial) advances of technological change.

Well, here, we will clearly and succinctly demonstrate exactly how much that 'inevitable "robbing" of the consumer by entities that are essentially protected by regulation and seemingly immune to technological progress actually costs over time in two very simple, but information-packed charts....

banking prices normalized and adjusted for inflation

 As you can see from the chart above, banking products and services pricing has outstripped every consumer staple in price appreciation since the 1997 base year sans the two year period where the US put over $1 trillion in bailout aid into the industry (which essentially makes the services even more expensive, during said period, to the tax paying, savings orientated consumer)!

banking prices compared to inflation adjusted income

The chart above illustrates how banking product pricing growth rates outstrip income growth rates when inflation adjusted and normalized. Why haven't bank profits and revenues reflected such a stark increase in pricing? Because the monies are going to fund the (oft hidden) black holes in bank balance sheets and businesses that caused the 2008 financial crisis. 

Veritaseum's UltraCoin easily beats conventional bank product and service pricing by a magnitude. From the mundane, to the complex. I urge all to read "Using Veritaseum's UltraCoin To Take Direct, Specific Positions On The Argentine Default For As Little As $5!" for an example or download our quick start guide to get an idea of what the new wave of value transfer feels like.

Are you interested in a more competitive financial landscape that breeds better pricing and superior services? Well, now you can do something about it.

  1. Step oneDownload the future of money, now! See for yourself what the banking industry is up in arms about. More importantly, witness first hand, the power of Bitcoin technology. 
  2. Step two: Stop the BitLicense proposed legislation that simply furthes the forces that allow these price increases in the face of global price deflation.  We strongly urge you to  voice your own opinions to Superintendent Lawsky, the man who has the authority to put a stop to this overpricing power (althought current actions are heading in the opposite direction) right now.
  3. Step three:Become proficient in the “new” way of performing trades of value. I’m quite confident that once investors, traders, speculators and those in need of hedging services become aware of what’s possible with programmable money, there’s no turning back – regardless of legislation. Think of how far Uber has gotten in the livery industry simply by offering superior services! Look here for a strong example, and remember this is not going though and exchange, is peer to peer, and has less credit or counterparty risk than any comparable product we can think of. Download the future of money, now and experience a new way of trading value - witness a simultaneous increase in value and decrease in price over existing finacial services by taking advantage of the Bitcoin protocol. The Bitcoin protocol is to the banking industry what the Internet protocol was to the media industry.

An Op-Ed piece penned by Veritaseum Chief Contracts Officer, Matt Bogosian

This past weekend (despite American Airlines' best efforts), Reggie and I made it to the Second Annual North American Bitcoin Conference in Chicago. While there were some very creative (and very ambitious) ideas on how to try to realize the disruptive Bitcoin protocol, one of the predominant topics of discussion was New York Superintendent of Financial Services Benjamin Lawsky's proposed Bitcoin regulations (the BitLicense proposal) - percieved by many participants at the event as an apparent attempt to regulate Bitcoin out of existence.

Even assuming that the entities sought to be regulated under the (seemingly draconian) BitLicens[ing] proposal qualify as "financial services institutions" (which I think is tenuous and highly debatable), to say that the proposal is in violation of New York's statutory mandate, "[t]o encourage, promote and assist ... other financial services institutions to effectively and productively locate, operate, employ, grow, remain, and expand in New York state ... [and] ... [t]o establish a modern system of regulation, rule making and adjudication that is responsive ... to the needs of the state's consumers and residents," (NY Fin. Svcs. Law, § 102(a)emphasis mine), is not only an understatement, it's probably totally irrelevant. Courts typically (and perhaps frustratingly) don't second guess legislators and regulators on whether their laws have any correlation to any stated goals, even if those laws have the exact opposite effect of what was alleged as intended. Instead, courts leave that to the voters, effectively saying, "If you don't like the law, change the legislator," and we all know how effective that is.

In other words, Orwell was (and still is) right. The stated purpose of BitLicenses is not corollary to the apparent purpose, which is to maintain the status quo. The status quo doesn't contemplate disruptive innovations like the blockchain. Unless and until a higher authority intervenes ("higher authority" perhaps referring to you, the consituent, or the particularly the avid and concerned social media user), Lawsky's proposal, if achieved, will quite likely end (or at least drive underground) the most significant economic and technological breakthrough known to this century, not only in New York, but very likely the United States.

Imagine if Lawsky had been Superintendent in 1994. Imagine that (for whatever reason) Lawsky felt compelled to frustrate the dissemination of another set of disruptive innovations known as the Internet Protocols.

 

World Wide Web timeline

By analogy, imagine that he proposed a regulatory scheme known as "PacketLicense", wherein anyone routing IP packets that arrived at or passed through devices located in or belonging to residents of New York had to acquire a PacketLicense (unless they were a New York bank, or a retailer incorporated in New York), which (in small part) involved fingerprinting everyone employed by the owner of the device, or any affiliate of that owner. In retrospect, we would laugh at its absurdity, and likely recoil in horror imagining the economic Armageddon such a regulation would cause.

World Wide Web timeline as per Lasskeys Vision

But that is precisely what Lawsky is trying to do with the blockchain. Others have provided extensive treatment on various parts of the proposal. Over my next few posts, I will add my voice to that chorus by providing detailed analysis (and possible fixes) for some of the requirements that I find particularly bothersome. Stay tuned.

In the meantime, if you don't want the natural evolution of the Internet to look like the graphic above, I strongly urge you to voice your own opinions to Superintendent Lassky.

UltraCoin Public Info Deck 1.0 1

Above is a screenshot of the Veritaseum UltraCoin client performing a swap of a bitcoin British pound forex pair for GLD (the gold ETF). This is interesting stuff, eh? Something you definitely couldn't do at your local investment bank without setting up an expensive (as in 2-12%) OTC swap in which you can't get out of until you start losing. 

Consider this an example of what I consider the power of Bitcoin to be. To put this accomplishment into perspective, the vast majority of all of the big Wall Street bank (Goldman, JP Morgan, Morgan Stanley, etc.) clients don't have access to 60,000 products, and if and when they do, it's at prices that are several multiples of what you can achieve via exposures with this download. We have essentially taken the entire trading capabilities of the big Wall Street banks, converted them into D-I-Y software and facilitated peer to peer trading through the blockchain - dramatically reducing risk, inefficiencies and increasing autonomy. Keep this in mind when someone tells you the primary value of Bitcoin is payment processing. Download the wallet for Windows and Mac here. Get your test coins here (live BTC prototype will be available in 24 hours wherein you can test it with real money).

UltraCoin JPM for GOOG swap Here is an unique swap that sells Google exposure for JP Morgan exposure. If that's not unique and interesting enough as it is, notice the amount of the trade. You can do $5 million trades or .1 BTC (at today's price, roughly $62.39) trades, and do so profitably.

Here's the result of that 5 minute trade. Also visible is the encapsulation of the spread between paper gold (GLD ETF) and physical gold (or at least a future for said gold)...

dcihdhci

 

I invite all to chat with me and my CTO in my suite at the Chicago Drake hotel this Saturday evening (7 pm) over sushi and wine as we discuss and play with the UltraCoin wallet. It's a pure bitcoin wallet (no sidechains, alt coins, or off chain transactions) that can trade exposure to over 58,000 tickers (global equities, currencies, cryptos, forex pairs, commodities, bonds, futures, options, indices, etc.). If you're interested in coming by to chat (it's informal, just me and my tech guy in a suite - but I have room for everyone), email me [reggie at ultra-coin.com].
The app is quite flexible, and is capable of not just exposure trading, but peer to peer zero trust letters of credit, zero trust P2P lending, and micropayments. 

Here is an example of how we could have used the app to save Harvard Univ. a bundle: How Veritaseum's UltraCoin Technology Could Have Saved Harvard Over $1 Billion! http://ultra-coin.com/index.php/homes/item/41-how-veritaseum-s-ultracoin-technology-could-have-saved-harvard-over-1-billion
Reggie Middletons UltraCoin challenge to take any side of any trade - all takersReggie Middletons UltraCoin challenge to take any side of any trade - all takers paper gold vs sot goldShort Tesla Long Ford - UltraCoinUltraCoin going short 30 yr treasury rates and long 2 yr treasury futures

In the 2008 to 2013 period, Harvard suffered huge losses due to their exposure to interest rate swaps which were used to swap floating for fixed interest rates. Things went downhill when the rates started to collapse and Harvard received a massive margin call on the swaps.

To limit its exposure to the interest rate swaps, Harvard took offsetting swaps, paying a huge premium to the other party. Harvard’s total losses look something like this…

Loss to Harvard = Loss of value of extant interest rate swaps + Premium of Offsetting Swaps + Penalty / charges          payable to the swap issuing entities (JP Morgan and Morgan Stanley)

harvard swap diagram

Our downloadable report illustrates how Veritaseum's UltraCoin peer to peer swap technology could have easily saved Harvard a bundle relative to what JP Morgan and Morgan Stanley charged them. Below is an excerpt from the full report, which is available for free download here.

UltraCoin Couldve Saved Harvard Over A 1 Billion

My last post on the topic of disintermediation during a paradigm shift was Wall Street Should Be First To Invest In Reggie Middleton's UltraCoin, Much Of It Won't Be Here In 10 Years! I clearly illustrated the potential for growth of Bitcoin related companies and cited statistics for the transformation of the financial industry as we know it today.

This post introduces long form research from the analysts at Veritaseum, the same team that brought you the hard hitting BoomBustBlog research. The first page of the report says it all - "Stress Test on Banks’ Earnings Facing the Veritaseum UltraCoin Value Transaction Platform".

research report cover

Excerpts from deeper into the report...

research report 2research report 3

And of course the inevitable... What happens when a less expensive product is introduced into the market with similar or superior attributes? Margin Compression! We analyzed three big Wall Street banks, starting with the "Riskiest Bank on the Street" (time permitting, reference our hard hitting, prescient research from early 2008).

Veritaseum research report on Morgan Stanley Margin Compression

I invite all to download the free Veritasuem Research Report for July 2014. I also invite all to meet me for the soft beta launch of Veritaseum's UltraCoin Value Trading Platform in my suite at the Drake Hotel in downtown Chicago, the evening of Saturday July 19th (this is also the weekend of The North American Bitcoin Conference in Chicago, where I will be speaking on the topic of money center bank disintermediation.

You will get to touch, play with and trade value via UltraCoin. Below is a screenshot of UltraCoin running on a Mac. I will also be taking applications for large scale beta testers and entities who wish to have customized value trading solutions created for them.

Screen Shot 2014-06-26 at 11.05.24 

 

In continuing my PSA on well funded bitcoin startup valuations (reference Imy valuation estimate of Bitpay, a rapidly growing payment processor), I bring a forensic analysis and valuation of Coinbase, likely the 2nd largest money exchanger in the bitcoin business.

 Valuation Case 2- COINBASE

Revenues for Coinbase is calculated based on global monthly transaction size (US$) of the company. Annualizing the transaction resulted in Total transactions for 2014  

As per the information available, Coinbase charges 1% as transaction fee resulting in the revenue of the company.    

Table 3- Revenue Forecast, US$

 
 

2014F

2015F

2016F

 

Annual Transactions*, US$

1,085,488,973

     1,248,312,319

     1,435,559,166

 

Transaction Fee (%)

1.0%

1.0%

1.0%

 

Total Revenue

        10,854,890

    12,483,123

    14,355,592

 

*Growth assumed under moderate scenario

 

As per the news for funding in Coinbase, the valuation of Coinbase ranged between US$140 million – US$1 billion. Based on weighted average (by applying 70% weight to the lower figure in the range), the above valuation is derived at US$398 million. Applying the multiples at which Bitpay and Circle are estimated to have been funded recently (using average revenue multiple of Bitpay and Circle), the valuation based on 2015 and 2016 revenues is as shown below:

Table 4- Relative valuation

Particulars

2015F

2016F

Revenue ($)

    12,483,123

    14,355,592

Multiple Comparable- Bitpay and Circle

16.0x

13.5x

Valuation (US$mn)

                      200.31

                      194.23

 

Of course, we feel that these rapidly growing payment processor companies, although now profitable and expanding their reach like weeds, are barely touching the tip of what the Bitcoin industry will look like just two years into the future. 

Wall street, pay attention!!!

Veritaseum short summmary pic - public.docx Page 01

Veritaseum short summmary pic - public.docx Page 02Veritaseum short summmary pic - public.docx Page 03Veritaseum short summmary pic - public.docx Page 04

See also:

  1. Payment Processors, Patents and a Dollop of Healthy Paranoia
  2. Margin Compression Is Coming in the Payment Processing Space As $100 Million Pours Into Startups
  3. Bitcoin Myth Busting 101

 

Continuing on the margin compression theme originally laid out in Margin Compression Is Coming in the Payment Processing Space As $100 Million Pours Into Startups, I illustrate mathematically how the bit startups in the Bitcoin space will be forced to reach up the foodchain rungs faster than many think.

Valuation of BITPAY, COINBASE and CIRCLE

This is an exercise to arrive at valuation of three of the well-known Bitcoin applications that have recently been in news for funding from investors. Unlike high-level valuations assigned to these companies we analyzed revenues in much deeper detail, segregating value drivers and revenue streams and projecting them for the foreseeable future. This thus has enabled a more granular valuation than the high-level valuation that we see in the news for these companies in their recent funding rounds. 

Valuation Case 1- BITPAY

BITPAY revenue plan is based on monthly subscription model wherein the company charges $30, $300 and custom negotiated rates that are not published, under different subscription plans.  Currently, Bitpay claims ~30,000 subscribers.

For the purpose of calculating revenue from each plan, total subscribers (30,000) have been segregated under each plan based on their probability of occurrence (and put a nominal fee for ad hoc, a la carte and custom services on the higher ends of the range). Multiplying probable subscribers with subscription fee resulted in total revenue for the company. 

Table 1- Revenue Forecast, US$

 

Subscription Plans

2014F

2015F

2016F

 

     Plan 1

         10,260,000

         11,850,300

         13,310,257

 

     Plan 2

            4,320,000

            4,944,240

            5,501,950

 

     Plan 3

         10,260,000

         11,634,840

         12,826,248

 

     Plan 4

            5,400,000

            6,066,900

            6,625,055

 

Total Revenue

         30,240,000

         34,496,280

         38,263,510

 

As per the news for funding in Bitpay, its valuation is estimated at $160 million. If we apply multiple at which Coinbase and Circle are estimated to have been funded recently (using average revenue multiple of Coinbase and Circle), the valuation based on 2015 and 2016 revenues is as shown below:

  Table 2- Relative valuation

Particulars

2015F

2016F

Revenue ($)

         34,496,280

         38,263,510

Multiple Comparable- Coinbase and Circle

29.7x

25.3x

Valuation (US$mn)

                   1,023.47

                      968.13

Now, those of you who pay attention are likely to query, "Looks interesting... A billion dollar company within two years, but why is the valuation actually droppingin the 3rd year?". Well, this brings back to the article "Margin Compression Is Coming in the Payment Processing Space As $100 Million Pours Into Startups". You see, Bitpay and its contemporaries are growing like gangbusters (~6% to 10% per month!), but they are selling service with relatively low barriers to entry, and a lot of capital and competition climbing over the bow.

High competitionin a liquidiy bubble yields low, zero or negative (loss leader) margins. Valuations will follow suit, even as revenues and growth rates continue climb.

Bitpay revenue multiple forecast

If I am correct, then Bitpay (as well as contemporary start-up competitor Circle and Coinbase, in addition to more entrenched competitions Master Card, Visa, American Express and PayPal) will offer plain vanilla payment processing at negative margins in an attempt have it serve as a loss leader to rope merchants (etc.) into high margin, better defensible products and services. Cue...

Veritaseum Short public summary

Wednesday, 04 June 2014 00:00

Bitcoin Myth Busting 101

Yesterday, I did a radio interview with Benzinga. In it I busted myths about Apple, Bitcoin and Coins in general (ABCs). Listen to the interview below and the info sheets afterwards and let me know if you knew this stuff was possible with today's tech - and Apple! 

As for Apple...

And more on http://Ultra-Coin.com...

Why am I so bullish on Bitcoin? Note: this is not an offer to buy or solicitation for securities and is presented for illustrative purposes only.

Veritaseum Executive Summary page one

Veritaseum Executive Summary page two

As we roll out Veritaseum's UltraCoin ZeroTrust Smart Contracts, I'll be posting much more on "the new way of doing business".

Media Exposure

  1. Reggie Middleton Intro
  2. How Reggie Middleton's Start-up Patented The Future of Global Finance!
  3. Reggie Middleton on Wikipedia
  4. Who is Reggie Middleton?
  5. Bitcoin is not just digital currency. It's Napster for finance.
  6. Reggie Middleton's UltraCoin @ NYC CryptoCurrency Convention
  7. Reggie Middleton Wins CNBC Stock Draft for the 2nd time in a row - with the same stock

After an interesting discussion with those in my laboratory, I've decided to apply the forensic analysis team from BoomBustBlog to the privately funded companies in the Bitcoin space. See my post from yesterday for much of the reason why.

As clearly predicted yesterday, the better funded of the payment processors will initiate a pricing blood bath they'd likely kill for...

From PayPal's subsite on Mass Payments:

Paypal Mass Pay Site Screenshot

 As you can see, PayPal has already imbued its service with much of the attributes that are being offered by the Bitcoin payment processors. They also have a material advantage as of right now, a massive installed base.

I also cannot emphasize enough how damaging the all too necessary customer service option is to margins. You see, the problem is most service companies don't put enough into customer service and handholding of the customer. From an optimal perspective, this should actually be part of the marketing and sales process, but it's often either non-existent or implemented as an after thought after enough customers start bitching and complaining, or worse yet (and likely most often the case) leaving!

As a company with mature management, it appears as if PayPal is trying to head this off at the pass as it attempts to change consumer behavior and prod them into adopting its new electronic currency payment system...

Paypal Mass Pay Site Support Screenshot

 Now, let's compare PayPal to the newly funded Bitcoin payment processors...

Bitpay

Funding Rounds (3) - $32.50M

- See more at: http://www.crunchbase.com/organization/bitpay#sthash.yvlqpNtr.dpufBitpay prices

An interesting departure from the per transaction/fee model, Bitpay implemented a subscription system which benefits those customers who perform a large quantity of relatively small transactions moreso than those who process large orders.

I calculate Bitpay's most recent $30 million series A round to have been at around 9.2x sales, valuing the company at $160 million. This is a guestimate, of course, since I do not have access to internal numbers.  

Next we have Coinbase...

Funding Rounds (3) - $31.70M

- See more at: http://www.crunchbase.com/organization/coinbase#sthash.CD8IPTp6.dpufCoinbase 

There's also Circle, founded by Mr. Allaire of Coldfusion fame (sold to Adobe Systems).

Funding Rounds (2) - $26M 

- See more at: http://www.crunchbase.com/organization/nfc-direct#sthash.dd0DaxHc.dpuf

Circle has not publicly launched yet but promises to bring a new level of simplicity and user-friendliness to the bitcoin payment ecosystem, concentrating more on a banking paradigm then the technical bent that bitcoin is known to represent. This is all you need ot know about the Circle business model as it relates to this discussion of impending margin compression...

Circle

Free=Margin Compression!

Let's see how this plays out for customers. The most lucrative segments for this industry is the SME (small and medium business enterprises) who process anywhere between 10 and 1,000 transactions per month. Why? Because there are simply more SMEs than there are big companies in the world. Let's see what the two biggest bitcoin processors look like when stacked up against PayPal's Mass Pay product for the SME market...

image019

image027image028image029

Of course, the Bitcoin transactions are likely a loss leader for additional, value added services for many companies in the not too distant future. As a matter of fact, I feel that the payment space will quickly become commoditized by Bitcoin technology - forcing these companies and many more (I'm talking about you Mastercard, Visa and Western Union) to innovate and offer significantly and materially better value for the buck.

Imagine what this competitive landscape will look like when Mastercard, Visa, American Express, Discover and Western Union jump into the fray. Of course, before that a much greater portion of the VC and private equity community will wake up and realize the opportunity in Bitcoin to pour more cash into it than sugar into a Bubble gum machine (emphasis on "Bubble"). The key is to get in early, and get in right. But how does one do that and where will this tale of uber margin compression end?

Well, the research report from which this info is being prepared will be offered to accredited and instituional investors starting next week, at least those who have an interest in UltraCoin. 

My next article on this topic will explicitly illustrate how UltraCoin can assist ALL players (that's right, including PayPal, Bitpay, Circle, Coinbase, Mastercard, Visa, American Express, Discover and Western Union) as well as their direct customers, in climbing up both the food chain and the value proposition ladder - thus rapidly repairing the margin compression damage they are about to bring upon thier business models.

 image014

 

picsay-1400512647Reggie Middleton discussion UltraCoin at the 2014 FinTech conference at Dechert LLP.Coindesk asks "Do Patent Filings from eBay and Western Union Pose a Threat to Bitcoin?" I feel the question is in and of itself missing the point. To explain this fully, I have to share a little bit about myself, particularly my weaknesses. I'm the type of person who is very knowledgeable about his strengths and his weaknesses, but sometimes I don't see my strength for what it is, and that is tantamount to a weakness in a highly competitive environment.

Case in point, in discussing whether or not competing patents have been filed for smart contract transacion processes by those who seek to be in my space with my contract engineer (a very skilled software architect and IP attorney), I displayed what I considered a healthy level of paranoid concern. I found it hard to believe that no one bothered to patent the most innovative, disruptive and groundbreaking aspect of this new crop of digital currencies - the ability to program them. As those who follow me know, I've spent a lot of resources developing, designing, refining and patenting advanced smart contracts (see How Reggie Middleton's Start-up Patented The Future of Global Finance!). I actually found it highly unlikely that no one had come up with this idea before me. Matt (my contracts engineer) said, "You know, it actually takes an uncanny amount of vision to have seen the scope of this stuff and act upon it, not to mention to have done so 6 months ago. Not many people are like you." Right then and there, it hit me. People really do not see things the way I do! 

Most know me from my prescient calls in banking, finance, real estate and tech (see Who is Reggie Middleton?). I've demonstrated a knack for seeing future trends and determining when things (such as valuations and opportunities) are out of whack. With that being said, the big media interest in Bitcoin combined with the increasing VC interest in Bitcoin companies (reference BitPay Gets $30 Million in Venture Capital Funding) is a very good thing for the industry, but also illustrates shortsigtedness in both the investment community and many practitioners.

The problem with the processors...

When bitcoin is as easy as PayPal to use then it will be on the path to mass adoption, but to assume that’s the most lucrative path to take in bitcoin company private equity investment begs the wrong question. Here’s the strategic landscape as I see it.

Bitcoin is very inexpensive to use as a transfer agent. A transaction may be safely sent without fees if these conditions are met (this is excerpted directly from the Bitcoin Wiki, verbatum):

  1. It is smaller than 1,000 bytes.
  2. All outputs are 0.01 BTC or larger.
  3. Its priority is large enough

Otherwise, the reference implementation will round up the transaction size to the next thousand bytes and add a fee of 0.1 mBTC (0.0001 BTC) per thousand bytes. Note that a typical transaction is 500 bytes, so the typical transaction fee for low-priority transactions is 0.1 mBTC (0.0001 BTC), regardless of the number of bitcoins sent.

Bitcoin as of 5/18/2014 is $444.74m, thus the fee for this transaction is roughly 4 cents, if not outright free. If a processor is transferring $10,000 on behalf of a customer, whether at one time or 100 times throughout the course of a month, the processor’s fee cost would range from $0 to $4, while the processor would likely charge (as of the date of this writing, $0 to $100). The traditional processors such a Visa or Paypal  would charge hundreds (as in up to 50x more!) for the same deal!

That 25x markup on the high end is significant (even for the Bitcoin companies), and ripe for disintermediation itself (that's right, the disintermediaing agents are poised for disintermediaion). Particularly once the UX of Bitcoin evolves, as email and web browsing did, and users realize how easy and cheap it is to jump onto the blockchain and do this stuff themselves.

Even assuming users don’t follow the historical model of those that left proprietary walled gardens (think AOL) and jumped directly into the open World Wide Web themselves, there are no material barriers to entry to enter into the processing business other than potentially a money transmitter license. The only material barrier, hence the business opportunity, is that Bitcoin is cumbersome to use. As the UI/UX polish increases and the amount of competitors in the space increase, the lower the prices charged - hence the margins - will be.

With such low barriers to entry and potentially humongous markups to exploit, what do you think happens next? The wild, untamed hordes of competitors swoop down upon the masses, and we have a concerted race to zero, and likely negative margin as competitors attempt to make processing a loss leader to draw users into the folds of richer, higher margin services!!!

 The race to marginal zero, then negative, does not make a strong business plan. So, what do these companies such as BitPay, Coinbase, etc. do once that point is reached (rather quickly)? They look to value added (high margin) services on top of their low margin, utility-like payment infrastructures.

Enter smart contracts and the true use of programmability in the crypto-currencies. The easiest and the likely first implementation of such will be multi-sig operations which allow multiple parties to share funds without having to worry about trusting and single party in a transaction. Our ZeroTrust Letters of Credit (patent pending) is just such a product. It allows for multiple parties to tranfer payment for simple and complex transactions contingent upon the mutual agreed upon successful execution of said transactions. This is done without the parties having to:

  1. Know each other
  2. Trust each other
  3. Have any form of proximity to each other;

and can be done using micropayments all the way up to multi-million dollar macro payments. The barriers to this business are much higher. For one, it takes more than just programming code. You have to be able to congeal the legal logic of the conventional law in equity contract into code. You have to be able to congeal the business logic into code, and you have to be able to implement it into the blockchain or whatever other underlying transmission mechanism you choose to utilize.

Once the race to negative zero is in full swing, a few of the wiser companies will wake-up and say "Hey, there has to be a better way, and we think we found it!". It is at that point Reggie Middleton's UltraCoin products and assets will shine. It is not hard to foresee that the entrenched companies (Visa, Mastercard, PayPal, Western Union) may enter a bidding war with the new comers armed with material VC warchests (much more than we're seeing with $30 million investments of today - all over the guys who had the foresight to see the next evolutionary step in plain vanilla payments - smart transactions and self-executing digital contracts and transactions.

We're actively looking for financial and intellectual capital. If you, as an accredited investor, are looking for an opportunity in the higher end of the digital currency space, I think we should talk. In addition, if you are a higher level Java/C++ developer willing to take risk, we need to talk. I'm available at reggie at ultra-coin.com.

Page 2 of 3

My Twitter Updates

From TweetDeck
ReggieMiddleton @rwfortunato Depending on how things go at the hearing, I may definitely take you up on that offer. Legal fees are… https://t.co/M8H78M0up8
Thursday, 22 August 2019 12:45
ReggieMiddleton @CryptoNana4MAGA @ArcadiaEconomic Thank you all. The court date has been moved to Monday, the 26th.
Thursday, 22 August 2019 04:43
ReggieMiddleton Our response to SEC allegations has been filed and is now public. While it may appear voluminous, it should be cons… https://t.co/f3SH6jTNpo
Tuesday, 20 August 2019 10:17
ReggieMiddleton Asia Surprises With Cuts in Global Race to Monetary Bottom: New Zealand, India, Thailand cut rates today, which cau… https://t.co/bdY8cZqYqZ
Wednesday, 07 August 2019 11:05
From TweetDeck
ReggieMiddleton @fortunekr75 @venmo We have our own internal USD token. We actually use our metal tokens as private currency for transactions.
Tuesday, 06 August 2019 14:41

Right add

Newsletter

Tell Us What You Think

Which forensic research are you most apt to buy?
Right add (2)

Contact

Veritaseum

1-718-407-4751

info@veritaseum.com