Tuesday, 22 August 2017

A Analysis

Getting Started Down the Road to Purchasing the Keys to the Peer-to-Peer Capital Markets

Veritas sale date: 9:30 am, EST - April 25th, 2017

This Veritas Offering Summary is available for download and sharing with live links. A step-by-step guide to purchasing Veritas can be downloaded here.

The Veritaseum token offering - Veritas - is now available for sale (as of today, 9:30 am, eastern standard time - 4/25/2017). If you are already familiar with Veritaseum and our tokens offering, you can proceed directly to our purchase instructions (by downloading purchasing our tokens, you assent to our Term and Conditions and Purchase Agreement). Click here to proceed to the Veritas 2017 Token Purchase: Step-by-Step Tutorial

For those who prefer a quick primer on Veritas, please proceed to the Veritas Informational Tear Sheet with live links to a plethora of information. 

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

Veritas Deal Sheet

An Executive Summary

Informational PresentationTo 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.

Veritas Product Purchase Agreement

Terms & Conditions of the Veritaseum 2017 Veritas Sale

 

Veritas 2017 ICO Purchase: Step-by-Step Tutorial

Very Important Note: By continuing past this point and purchasing Veritas tokens, you are hereby acknowledging that you have read, understood and accepted both the Veritas Product Purchase Agreementand theTerms & Conditions of the Veritaseum 2017 Veritas Sale..

_______________________________________________________________________________________________________________

  • Veritaseum Token Tutorial

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

  • Step 1

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.

  • Get Ether

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.

Very Important Note: By continuing past this point and purchasing Veritas tokens, you are hereby acknowledging that you have read, understood and accepted both the Veritas Product Purchase Agreementand the Terms & Conditions of the Veritaseum 2017 Veritas Sale..

The address of the VeritaseumToken is at: 0x8f3470a7388c05ee4e7af3d01d8c722b0ff52374

The source code of the VeritaseumToken can be found at: https://github.com/RFVenter/Veritaseum/blob/master/contracts/VeritaseumToken.sol

To purchase VERI tokens during the ICO phase you will have to use another smart contract which has been designed to sell tokens at the correct price during this time.

Very Important Note: By continuing past this point and purchasing Veritas tokens, you are hereby acknowledging that you have read, understood and accepted both the Veritas Product Purchase Agreementand the Terms & Conditions of the Veritaseum 2017 Veritas Sale..

The address of the TokenPurchase is at: 0x599a4b8188676224d4c9b393b947e332b60b15e3

The source code of the TokenPurchase can be found at:

https://github.com/RFVenter/Veritaseum/blob/master/contracts/TokenPurchase.sol

To purchase Veritas, go to the “Contracts” menu in MyEtherWallet as shown below.

Set the selections as shown below...

Click on the Interact with Contract tab at the top of the page. Enter Contract address 0x599a4b8188676224d4c9b393b947e332b60b15e3.

Copy and paste the TokenPurchase ABI code from the box below:

[{"constant":false,"inputs":[],"name":"purchaseTokens","outputs":[{"name":"","type":"uint256"}],"payable":true,"type":"function"},{"constant":true,"inputs":[],"name":"startTime","outputs":[{"name":"","type":"uint256"}],"payable":false,"type":"function"},{"constant":true,"inputs":[],"name":"closeTime","outputs":[{"name":"","type":"uint256"}],"payable":false,"type":"function"},{"constant":true,"inputs":[],"name":"owner","outputs":[{"name":"","type":"address"}],"payable":false,"type":"function"},{"constant":true,"inputs":[],"name":"price","outputs":[{"name":"","type":"uint256"}],"payable":false,"type":"function"}]

If the site asks you again, then enter your private key again and Unlock.

Click WRITE

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.

click Access

[{"constant":true,"inputs":[],"name":"name","outputs":[{"name":"","type":"string"}],"payable":false,"type":"function"},{"constant":false,"inputs":[{"name":"_spender","type":"address"},{"name":"_value","type":"uint256"}],"name":"approve","outputs":[{"name":"success","type":"bool"}],"payable":false,"type":"function"},{"constant":true,"inputs":[],"name":"totalSupply","outputs":[{"name":"","type":"uint256"}],"payable":false,"type":"function"},{"constant":false,"inputs":[{"name":"_from","type":"address"},{"name":"_to","type":"address"},{"name":"_value","type":"uint256"}],"name":"transferFrom","outputs":[{"name":"success","type":"bool"}],"payable":false,"type":"function"},{"constant":true,"inputs":[],"name":"decimals","outputs":[{"name":"","type":"uint256"}],"payable":false,"type":"function"},{"constant":true,"inputs":[{"name":"_owner","type":"address"}],"name":"balanceOf","outputs":[{"name":"balance","type":"uint256"}],"payable":false,"type":"function"},{"constant":true,"inputs":[],"name":"owner","outputs":[{"name":"","type":"address"}],"payable":false,"type":"function"},{"constant":true,"inputs":[],"name":"symbol","outputs":[{"name":"","type":"string"}],"payable":false,"type":"function"},{"constant":false,"inputs":[{"name":"_to","type":"address"},{"name":"_value","type":"uint256"}],"name":"transfer","outputs":[{"name":"success","type":"bool"}],"payable":false,"type":"function"},{"constant":true,"inputs":[{"name":"_owner","type":"address"},{"name":"_spender","type":"address"}],"name":"allowance","outputs":[{"name":"remaining","type":"uint256"}],"payable":false,"type":"function"},{"inputs":[],"payable":false,"type":"constructor"},{"anonymous":false,"inputs":[{"indexed":true,"name":"from","type":"address"},{"indexed":true,"name":"to","type":"address"},{"indexed":false,"name":"value","type":"uint256"}],"name":"Transfer","type":"event"},{"anonymous":false,"inputs":[{"indexed":true,"name":"owner","type":"address"},{"indexed":true,"name":"spender","type":"address"},{"indexed":false,"name":"value","type":"uint256"}],"name":"Approval","type":"event"}]

Now you can access all the public functions that this smart contract has. For more information about ERC20 compliant Tokens goto to ERC20

If you select price you can see that it has a lot of digits. Ethereum has high precision and uses 18 decimal standard precision.

The cost of this token is 0.033,333,333,333,333,333 Ether per one token. OR 1 Ether is 30 tokens.

The function shows you how many tokens your account has.

This function allows you to transfer your tokens to another Ethereum address, like your friends.

  • Conclusion

Using Veritaseum Tokens are fun and easy. If you need more information about Ethereum Tokens, just Google it.

 Ve value flow chart small

 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.

Veritaseum 5x Short DB Smart Contract

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.

Oh yeah, if you haven't heard...

An Analysis of Deutsche Bank's Likely Recapitalization - German Tax Payer Bailout or German Bank Depositor Bail-in?

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.

As excerpted:

Susceptible Bank 1: Financial Modeling

 

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. 1) Downward movement for them, or
  2. 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.

Click here to access the Veritaseum Socioeconomic (Social Class) model... 

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 Mobility

 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":

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 Strata

Underclass/Poor

 
 

Working Poor

 

Middle Strata

Lower Middle Class

 
 

Upper Middle Class

 

Upper Strata

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.  

 

Demographic

Source of wealth

Net Worth

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...

Access our knowledge through our proprietary research, analysis and education courses.

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.

 

 

 

During the financial crisis of 2008, money market funds who subjectively agreed to hold their NAV (net asset value) unit prices at $1 “broke the buck”. That is, the unit of share of the fund fell below $1 (the $62.5 billion Reserve Fund, to be specific, one of only two funds to “break the buck”), which was a significant problem for the investors who used (and considered) said money market funds as cash in the bank. All of a sudden, everyone’s cash account at the Reserve Fund just dipped in value. Uh Oh! This caused short term credit to literally freeze, worldwide, because others were concerned that their bank-like security and liquidity was no longer that secure nor liquid.

Regulators stepped in to make sure this didn’t happen again by demanding that all money funds who do not invest in sovereign securities (those entities who “should” be able to print their own monies, but we’ll get into that in a later post) allow their NAV to freely float with market prices.

The result? Money flew out of prime money funds into perceived safer vehicles.

Demand for government short term paper has increased (to the tune of hundreds of billion of dollars).

 

... and demand for private commercial paper, ie. banks, have dropped by a similar amount, materially driving costs - materially, as in doubling it!

What does this mean?

No, this is not a punishment. This is actually a good thing, for it forces money to have an appropriately derived price tag attached to it. Risky banks were being funded at the same risk rate as (less risky) sovereign governments. That didn’t make sense. Now the system makes more sense, and banks should be repriced according to their access to, and true cost of, capital. The true cost of capital means that banks can no longer hide behind fake LIBOR quotes to conceal their deteriorating credit metrics. Reference Wikipedia:

The Libor scandal was a series of fraudulent actions connected to the Libor (London Interbank Offered Rate) and also the resulting investigation and reaction. The Libor is an average interest rate calculated through submissions of interest rates by major banks across the world. The scandal arose when it was discovered that banks were falsely inflating or deflating their rates so as to profit from trades, or to give the impression that they were more creditworthy than they were.[3] Libor underpins approximately $350 trillion in derivatives. It is currently administered by NYSE Euronext, which took over running the Libor in January 2014.[4]

Look at what happened to LIBOR consistently after NYSE Euronext took over adminstration. Those spikes that you see previous to that takeover stem from the European sovereign debt crisis. Those numbers had been faked! No telling what the true level of stress really was. Well, this time around we may get to find out. To put this into perspective, the global money market industry is $2.6 trillion in assets. Deutsche Bank’s (a bank that is in trouble) balance sheet is almost $2 trillion dollars. JP Morgan’s balance sheet is $2.4 trillion dollars. Both of these banks have been shrinking their balance sheets.

As excerpted from Bloomberg:

With a seismic overhaul of the $2.6 trillion money-market industry weeks away from kicking in, money managers are bracing for a last-minute exodus of as much as $300 billion from funds in regulators’ cross hairs.

Prime funds, which seek higher yields by buying securities like commercial paper, are at the center of the upheaval. Their assets have already plunged by almost $700 billion since the start of 2015, to $789 billion, Investment Company Institute data show. The outflow has rippled across financial markets, shattering demand for banks’ and other companies’ short-term debt and raising their funding costs.

Interestingly enough, and as is par for the course, we see things differently from the Street, as also excerpted:

Financial firms paying higher rates to attract investors to their IOUs will push three-month Libor to about 0.95 percent by the end of September, according to JPMorgan Chase & Co.

Click here to read more about rising Libor rates.

Although bank funding costs are rising, it isn’t a signal of financial strain as in 2008, said Jerome Schneider, head of short-term portfolio management at Newport Beach, California-based Pacific Investment Management Co., which oversees about $1.5 trillion.

“This is not a credit stress event, it’s a credit repricing due to systemic and structural changes,” he said.

He’s right. It’s not a credit stress event… yet! But, the credit repricing will force a reality and discipline on an industry accustomed to near zero and negative interest rates that it is ill-fitted to handle, and thus in due time, it will likely provide at least a partial impetus for… “a credit stress event”.

NiM (net interest margin - the profit from actual old school banking businesses, ie. lending) is still quite sparse in banks. So, revenue is slim, but expenses to access said capital to conduct business are going up. That's never a good sign. Worse yet, the Fed has signalled it will, yet again, hold off on an interest rate increase - As I have been telling you since December of 2014.

The issue is, the Fed does not truly control the market, it simply manipulates it to the best of its ability. When it's ready, the market will raise rates on its own. Reference where short term rates are trending now, likely as reflection of the Fed not raising rates.

This is particularly true for the European banks...

Our next post will describe how well Deutsche Bank is prepared for such an event. Stay tuned, and if you have not already done so, subscribe to our long/short, macro and educational research (including blockchain tech) - see Corporate Valuation & Equity Research.

We have a brand new DB report out today, reference Derivative Risk Exposure of Major Banks to Deutsche Bank.

A summary and critique of the Veritaseum Wallet after one month of use. I'd like to note that in regard to the expiry portion of the comment, you can type in any expiry you wish, or use the advanced granular method. The dropdowns are just suggestions.

One Month Review of Veritaseum 1.2.0 Beta

Written by:  This email address is being protected from spambots. You need JavaScript enabled to view it.

I have tried out the Demo and Live Modes of Veritaseum 1.2.0 Beta.  I am satisfied with this derivative trading platform and look forward to seeing future Beta versions.

The platform fairly & accurately updates your P&L until contract expiration, and trades are updated periodically in real time to reflect market conditions. 

The platform currently gives you four order parameters to choose from -- "Principal", "Receive", "Pay", and "Expiry."  Other variables that can be modified are "Deviation" from Principal and two advanced variables -- "Collateral" as a percentage of Principal, and "Leverage" as a percentage of Principal.  

"Principal" refers to principal at risk.  "Receive" is what you buy.  "Pay" is what you sell.  "Expiry" refers to the terms of the contract, which currently is one of six time periods between one minute and five weeks.  The Receive and Pay inputs are keyword sensitive;  so for example, inputting the letter "F" gives you a drop down list of eight possible visible ticker's.  Additionally, there is a scrolling list of tickers which match your keyword phrase.

Vertias Driven Disintermediation

Team Veritaseum is uniquely trained, and highly motivated. Specialists with few equals, immune to the concept of “can’t”!

—Reggie Middleton, CEO and Founder of Veritaseum, Inc.

Veritaseum is in the business of disintermediation. Our profit model is based on the displacement of rentseeking entities. As a result, our profit is your profit, since we split the difference of monies extracted by those who have gained as financial gatekeeper. We have demonstrated how Veritaseum poses to disintermediate “legacy” banking system (reference “DACe, Disintermediation and the Death of Wall Street”), but our search for capital has opened our eyes to an ever inreasing pool of industries that will likely be disrupted as our technology and methodologies become more widespread. I will present a barrage of facts and data and let you come to your own conclusions as to whether this is the dawn of a new age.

The Evolution that is Veritaseum

The impetus of this article is Veritas, our software token that you can redeem for our products and services. The aim is to provide real-time proof of the value of said services. (I will explain what these tokens are and how to get them as we progress in the article.)

You probably already know that the Internet circa 1994 was the biggest investment opportunity (for those who had the foresight and resources to capitalize on it) of the 20th century. Imagine a world where there was a near “guarantee” of a similar monumental investment opportunity (x2) and where many (but most certainly not all) of the world’s most powerful and influential investors are quietly backing entrepreneurs from all over the world to monetize and stake claims of control well ahead of the lay investor.

In other words, imagine lightening is about to strike twice

Let me show you something (slides with the “Coindesk” designation are sourced from the State of Bitcoin 2015 slide presentation, annotated as shown):

Yes, the opportunity is real. Growth metrics are popping three years in a row, even as media froth and rampant speculation has died down. (BTW, that’s a good thing!)

Some of us saw through the noise years ago. That is why I started Veritaseum (formerly marketed under the moniker “UltraCoin”). As of late the venture capital community is truly starting to come around. What does this Bitcoin VC investment look like? 

The deals are not necessarily small deals either. Here are the latest:

The “Contrarian Badass” (yours truly)—who has shown a strong proclivity for things finance and technological, and who has created a start-up with a crack-shot team and a first mover advantage on many fronts—is in an ideal position considering this activity.

Investors (should) look for four things when plowing money into startup:

  1. Astute, driven management;
  2. A strong, unique product;
  3. Ample opportunity and timing; and
  4. A charismatic, analytical, and communicative leader.

Let’s walk through each of these and examine exactly what it is we’re doing at Veritaseum with Veritas.

Our launch product is a bitcoin wallet, and there is rapid growth in wallets, worldwide.

But our product is not just any bitcoin wallet. It was (and still is, we believe) the first MULTISIG, smart contract-aware, universal FinTech wallet that we know of. VCs love MULTISIG, they adore smart contracts [Bitcoin 2.0], and if there’s something they cream over even more than those two it would be a universal wallet.

I warned early on that, although a lot of money was going into bitcoin payment processors (ex. Bitpay, Coinbase), it was a bad idea to invest in the strategy that the transaction business would enrich all. The margins are indefensible in a market rife with better capitalized competitors with larger existing customer bases. Reference my post from a year ago, “Payment Processors, Patents and a Dollop of Healthy Paranoia”:

… 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.

...That 25x markup on the high end is significant (even for the Bitcoin companies), and ripe for disintermediation itself (that's right, the disintermediating 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; or
    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.

That was a year ago. Was I right? Well, pricing models changed to drop prices and the business slowed down:

Which led to exactly what I predicted, business model drift:

 And at the same time margins shrunk.

What is Multisig?

A multi-signature address is an address that is associated with more than one private key (in cryptograsphy, security is handled by pairs of unique alphanumeric keys - one private to open a lock, the other public to send to the locked funds/data to others through open passageways [ex. Internet, email]. Once the other side gets the locked package, they will need a private key to open it. The two unique keys must fit with and recognize each other in order to open the lock). The simplest type of multisig is an m-of-n address - it is associated with n private keys, and sending bitcoins from this address requires signatures from at least m keys. A multi-signature transaction is one that sends funds from a multi-signature address.

The primary use case is to greatly increase the difficulty of stealing the coins. With a 2-of-2 address, you can keep the two keys on separate machines, and then theft will require compromising both, which is very difficult - especially if the machines are as different as possible (e.g., one pc and one dedicated device, or two hosted machines with a different host and OS).

It can also be used for redundancy to protect against loss - with a 2-of-3 address, not only does theft require obtaining 2 different keys, but you can still use the coins if you forget any single key. This allows for more flexible options than just backups.

It can also be used for more advanced scenarios such as an address shared by multiple people, where a majority vote is required to use the funds.

Cross-reference the companies below with the green spreadsheet graphic above, and you’ll see that VCs simply love MULTISIG technology.

multisg

Veritaseum is also a universal wallet. VCs adore universal wallets. Cross reference the names in this graphic with the names in the funding sheet above.

Veritaseum was not only one of the early universal wallets, but to finance and investment guys, it’s likely the most powerful universal wallet ever made. You see, not only can it send, receive, and store bitcoins. It allows you to act as your own broker by buying exposure to nearly any publicly traded financial asset (over 45k tickers), in any asset class, through any major exchange around the world, and do this with up to 10,000x leverage. This is all done without counterparty, credit, or default risk.

Here’s some obligatory screenshots:

aapl trade

usd-bkx


Crude Oil Volatility Hedge - veritas

With nothing more than a 15 second download of our trading client (no signups, registrations, no accounts) you can:

  1. Create your own bespoke, custom trading vehicles to...
  2. Directly trade peer-to-peer and OTC, exposure to over 45,000 ticker symbols...
  3. In any asset class...
  4. From exchanges from around the world...
  5. Without an exchange or broker...
  6. With up to 10,000x digital leverage...
  7. Without fear of margin calls or negative equity...
  8. While eliminating practically all counterparty/default/credit risks...
  9. For the least expensive transaction and leverage costs in the industry - as little as 5 bp.

Eliminate your broker, exchange and clearing house - all while actually increasing the safety of your trading.

Veritaseum's offerings and technology are right on time:

Let me show you something more:

So, with Veritaseum you have a universal financial services and self-contained P2P exchange wallet—quintessentially what’s in demand by the “smart money” right now.

When I say we do financial services, I mean we do heavy lifting financial services—going after the big money.

Veritaseum Pitch Deck - Public Pre-sale - Copy

This is quite timely from a VC investment perspective:

 

Keep in mind that Veritaseum doesn’t just trade bitcoins. It trades everything that’s available on public exchanges (including stocks, bonds, forex, and commodities) and more!

Veritaseum Pitch Deck - Public Pre-sale 2

Veritaseum Pitch Deck - Public Pre-sale 1

Veritaseum Pitch Deck - Public Pre-sale 3

Veritaseum has a very, very diverse management team with expertise in IP law, software engineering and architecture, investment stategy, forensic/fundamental/global macro strategy and analysis—and we're just getting started. The CEO has a strong media presence as well:

The Business Media Sees This as DISRUPTION!

image001.jpg

"You're going to put JP Morgan out of business! The banks are going to hate you!"

image002.png

"At least one of the top global money center banks have approached us, and I expect to hear from at least 3 of the top 6!" “MP3 technology combined with innovative business models have cut the music industry profits in half, and they're not coming back!  I query all banking execs, 'Do you want to get MP3'd?'"

image003.jpg

"You are building a virtual Goldman Sachs on top of Bitcoin!"

image004.png

“Middleton sounds a bit like an 18th-century pirate striking back against the Empire when he declares that ‘…what I’m doing right now is a direct threat to fiat merchant banking.’”

image005.jpg

“It’s 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.”

image006.png

“Veritaseum is ripe for a strategic investor to approach us before the end of the calendar year, likely payment processors, global banks, and innovative technology companies such as Google, Facebook, Microsoft or Apple.”

These are the reasons to learn more about Veritas and Veritaseum.

In closing, I urge all to read Using Veritaseum's Free Crypto 2.0 Valuation Tool To Value Tokens, Crypto Assets & Smart Properties. Feel free to download the model, tweak the assumptions to your liking or value any other Crytpo 2.0 venture you desire. The results are sure to be illuminating.

Yesterday, I attended (and apparently partially disrupted) the Bitcoin Law: Regulatory and Transactions Symposium at the New York Law School yesterday morning. See pics below, and make no mistake about it... the world is putting serious intellectual capital into the bitcoin economy now. There's no turning back!

20141021 100709

20141021 095354

This panel presided over a discussion of payments and transactions...

20141021 095358

Needless to say, the topic of Apple and Apple Pay came up. All of a sudden... BOOM! The RDF appeared out of nowhere and filled the room. Apple is this, Apple is that, Apple is so great as compared to Google. My regular readers and followers know the routine.

My regular readers and followers also know that I couldn't just sit back and let the Apple RDF simply disrupt everything true, factual and real, so I stepped in and... well, I disrupted :-). Unfortunately, I didn't get video of it since I was the one disrupting so I decided to put a little home made video in after the fact. Enjoy!

Those who wish to try our new trading platform to go long or short Apple or Google, or both - simply download the client and the quickstart guide, and let 'er rip! Remember, this is the only place you can trade at this level - peer to peer, without banks, brokerages or exchanges and the counterparty/credit risk and privacy issues that they introduce.

aapl trade

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

My Twitter Updates

From Commun.it
ReggieMiddleton @BitKnuckle @tin_na1 @jtobar1964 - Hi! Happy to have you in my community :)
About 6 hours ago
From Commun.it
ReggieMiddleton @gnorman169 @martinski1982 @jtobar1964 - Welcome to my community, looking forward to your tweets! :)
About 6 hours ago
From Commun.it
ReggieMiddleton Thanks @AnonymTipster @ForesterTKH @ElGuapitan you're my top engaged community members this week :)
Monday, 21 August 2017 08:12
From Commun.it
ReggieMiddleton @UncleBits @UncleBits @simonaloo - Welcome to my community, looking forward to your tweets! :)
Saturday, 19 August 2017 23:48
From Commun.it
ReggieMiddleton @bradm_93 @bradm_93 @Cekr4u2 - Happy to connect, have a great day :)
Saturday, 19 August 2017 23:07

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