Thank you to everyone who participated in our Reddit AMA earlier this week. Great questions were asked and we had a lot of fun answering all of them.
In case you weren’t able to join us, here’s a recap of highlights:
Hi Byrne, congrats for Bitreserve, it’s a great service and the product is amazing, very well designed and implemented, I can see there is a top-notch team behind that. Deposits and withdrawals: do you plan to accept fiat money anytime soon? what about withdrawals in fiat?
It would be foolish not to, because one of our goals is to help people transition to the digital money world, and the best way to do that, in my opinion, is to build a bridge between fiat and digital money systems. I wish I could comment on timeframes, because I am sure that would be the very next question one might ask, but that is a far more difficult question to answer given all the externalities we have to interface with. But suffice it to say, it is a priority for us.
Assets: what options or assets classes do you plan to include in the future?
I think every currency on Earth is in play. We want to give our members the freedom to chose the store of value with which they feel most comfortable. And while the US dollar is one of the world’s most “popular” currencies, it would be pretty American-centric of me to assume that everyone else in the world wants to use the dollar. Last week, we released support for the Swiss Franc, and we plan on releasing many, many more. Of course, I feel it important to give people a choice that goes beyond fiat – which is why we support precious metals as well, and why we are creating new forms of currency like bitoil.
Global: can people around the world presently open accounts, send Bitcoin, and pass it to gold, swiss francs, and the other options? Thx!
For the most part, yes. We do not yet operate in every state of the US, though, for reasons best documented at this URL, it is our intent and plan to be available everywhere in the world, without exception.
Hi Byrne, The Bitreserve site says lots of things about what it is but not a lot about how or why I would use it. Who is the target market and how do you think those people will use it?
Great question. We are certainly focused on the everyday consumer. That said, our reach is limited by the fact that we are a bitcoin-in/bitcoin-out system. Needless to say, we are focused on making it super easy and super useful for every person with a networked device to participate in the digital economy. Why? Because it’s way less expensive to convert currency with us than legacy money exchange services, and it’s absolutely free to hold, send and receive money from anyone, anytime.
The primary use case for Bitreserve at this time, first and foremost, is giving bitcoin holders the ability to escape bitcoin volatility. We feel that volatile money isn’t “money” by definition — people can’t rely on it month after month to pay their rent, car insurance, etc. And let’s face it, I and most of the world (I believe), live far closer to the bone than we care to admit. If, for example, the US dollar lost even a half a percent of its value, it would mean changes in my household, and some may be quite serious.
So, Bitreserve gives bitcoin holders a way for them to protect their value while still being able to send and spend their value as bitcoin — getting the advantages of bitcoin, but without the risk.
The next great use case for digital money is remittances. I think everyone in the digital currency industry knows this as digital money systems allowing for value to move frictionlessly around the globe, bringing more value to the people who need it most in the world. To this end, the greatest value we can bring, and anyone can bring for that matter, is focusing on the “last mile” problem. People in US are sending money to people in other countries and places where Internet connectivity is not quite as ubiquitous as I think most Westerners take for granted. Nor have these parts of the world made the kind of progress towards merchant adoption that we have in the more connected part of the world.
The long game is helping consumers experience the “ah-ha” moment of digital currency. A feeling similar to the one I had when I stepped out of an Uber for the first time and realized how much I hate dealing with money at the end of my ride when all I really want to do is get out of the car and get on with my day. Or, that moment when you turned on your iPhone for the first time and saw such a beautiful and responsive interface. Or, and I am not sure how many people share this one, that time you used TiVo for the first time and were like, “oooooooh, yeeeeeeaah.”
Who is Satoshi Nakamoto?
We could tell you, but then we’d have kill you. 🙂 Your guess is as good as mine, but the best answer I can give you is that he is known as the inventor of bitcoin.
I just started using Bitreserve and can immediately see how easily one can diversify a portfolio, however my concerns are about bitreserve just vanishing overnight or shutting down due to regulatory pressures. How secure and solvent is the company?
I don’t think we can be successful at our mission of helping people adopt digital money if we try to create innovative work-arounds within the regulatory landscape. We feel it is paramount that we work within the rules, but also work with regulators to expand their understanding of digital money. One somewhat troubling thing I have seen in the industry is a kind of adversarial attitude towards regulators and regulation. And while I certainly sympathize with how these systems can impede innovation, I tend to see us sharing the same mission: to protect consumers. In this way Bitreserve sees these entities as partners more so than as adversaries (our transparency product is a direct reflection of this belief — showcasing every transaction into, within and out of Bitreserve — allowing regulators to monitor the system).
As for the fear of Bitreserve suddenly going belly up, that is why we feel transparency is essential for us, and for all financial services moving forward. We have a saying here, “what you do with your money is your business, what we do with your money is everyone’s business.” That is why we make all of this data public so that in the event we do go belly up, you can rest assured that within our reserves is enough capital to ensure that everyone will get their money back.
Do you ever think that digital currency (like Bitcoin) can be just as useful as real life cash is today? As in you can use Bitcoin to buy for your groceries etc., or do you feel like it will stay digital?
I believe digital currency is the future, but I am not yet convinced it will ever completely displace physical forms of value. In the same way that I think digital books are the future, but I don’t think they represent the end of all bookstores everywhere.
I also find money to be beautiful. I love the art of money, and find it is a great way for people to express themselves and their ideals, not to mention celebrate what unites them. This, for example, is awesome, even though it is conceptual in nature.
But pragmatically speaking, and for all the reasons I think a bitcoiner will tell you: the future is digital. Andreas Antonopoulos once said that bitcoin and digital currency will help “unlock the next level of scale of society,” which I couldn’t agree with more, as I think some of the challenges we see in the money system today are a result of us hitting a global inflection point in how money/value is managed.
Getting there is the million (or trillion) dollar question, because right now our biggest challenge is giving people a reason to hold digital currency in the first place. Why? To be honest, from a consumer perspective, it is hard to make bitcoin more appealing than fiat money when spending fiat money is as easy as it is — especially in light of Apple Pay…sure it is costly and slow, and that is a reason for change. But that friction has been carefully and cleverly hidden from consumers in everyday purchasing. So the solutions we pursue for consumers must go beyond cost and speed and bring refreshing new utility to money.
Can you talk a little about the Reserveledger? How does it work?
The Reserveledger is one of the most important parts of our Transparency product line. It is where I think Bitreserve really differentiates itself from other financial services companies in that it shows the world not what our members are doing, but what we are doing behind the scenes in the Reserve to protect our members’ value. This, when combined with the Reservechain, allows people to verify our solvency for themselves. Visit our Transparency page and see for yourself!
Our transparency system eliminates the opportunities for fraud and destructive risk-taking that have caused the collapse of banks and other financial institutions throughout history. The Reserveledger is a real-time publication of every change in our obligations to our members and every change in assets held in our reserve. Each quarter, we partner with an accounting firm to verify the accuracy of our Reservechain and Reserveledger, so you know your value is safe. My fellow colleagues and I are very proud to be setting a new standard of accountability for the world of finance.
Congrats on Bitreserve so far, it’s a fantastic way to diversify one’s portfolio. Being able to link your savings volatility to precious metals so quickly and easily is fantastic. It seems to me that you could do the same thing but instead of linking it to a precious metal use a listed stock instead. Do you have any plans to implement anything like this? I for example would love to be able to hedge my bitcoin savings to the value of Apple stock.
Now you’re on to something! And yes, we think and talk about this (and this particular use case) quite a bit — at least at a conceptual and intellectual level. I love the idea of making illiquid assets liquid. The idea that you can use Apple stock to buy a cup of coffee is just plain cool, if not useful as hell. Assuming of course Apple stock is where you want to store your value. 🙂
What do you consider the major advantages of digital currencies such as bitcoin?
I believe my views on this will probably align pretty closely with others in the industry, but one recent insight I gained was the result of reading Erik Voorhees post, Is Bitcoin Truly Decentralized? Yes – and Here Is Why It’s Important – a post I sincerely wish I had written myself. 🙂
One value of Bitcoin that Erik clearly outlines is that it will bring to the world financial portability. This echoes similar ideas found in data portability movement of the Web 2.0 era, which states that the data, information and content we all create on services like Twitter, Facebook, Instagram, WordPress, etc belong first and foremost to those who created them, and that everyone should have the right to pick up and move their content easily to other platforms, or delete it all together.
That same idea should apply to our financial lives as well. Consider for a second that 2008 created the perfect market conditions for a consumer finance revolution. Bitcoin was born out of this in fact, but due to the friction of moving money out of the traditional banking world, nothing much has changed. How many people do you think are still doing business with the same bank they had in 2008? Despite those banks having betrayed everyone’s trust. And when I say “everyone” – I mean literally everyone because what they did had ripple effects all over the world. It boggles my mind.
In this way I hope Bitcoin can help revitalize the financial services industry by making it easier, less costly, and less risky for consumers to explore and begin placing their trust in new money systems, products and services.
Thanks for offering to do this Byrne. I love the concept of Bitreserve, however the process of moving from Bitcoin into another bit-asset, and then back into Bitcoin when one wants to make a payment or transfer on the Bitcoin network adds some potential cost to the entire process. In some cases that cost is worth avoiding volatility, but it is still cost / friction nonetheless. As Bitreserve grows and refines its business model, do you see the cost of moving from Bitcoin <–> bit-assets getting closer to zero? If so, how close? Also, when are we going to see BitOil? : ) Thanks again.
I think you hit the nail on the head. Right now, we are stuck between worlds where the only choice for most of us is to constantly flip back and forth between currencies. The cost of this friction is tangible and adds costs to money none of us are accustomed to. This, in turn, creates an even more dangerous form of friction and risk to digital money: cognitive resistance. That is why it is our aim is to continue to drive these costs as close to zero as possible, while dialing convenience up. Over time and with enough volume, this is in the realm of possibility for us. Because as you may or may not know, our primary business model will focus on growing our reserve. As far as bitoil, we are actively working on the ins and outs of this commodity offering and are in conversations with various partners who can provide the most useful/cost-saving/life-changing experience for members.
Why is the Reserve-amount of value in Bitreserve’s system–not growing faster? What is being done to recruit more active members? Bashing bitcoin certainly doesn’t help when you guys are dependent on bitcoin to bring value into your system. What Bitreserve is doing is incredible, but I’m getting a bit concerned about growth. What’s going on?
First of all, thanks for all the support and interest, CaptainCloudMoney. I’ve enjoyed reading many of your opinions over the months and the whole team was delighted and very impressed with the Battle Hymn of the Cloud Money Revolution that you penned. Kudos!
Since launching 4 months ago, our reserve has grown 900% and close to $10M worth of value has been transacted using Bitreserve. While these are encouraging early stats, we understand our limited reach due to the bitcoin-in/bitcoin-out nature of our platform.
The Bitreserve team has been focused on larger, longer-term partnerships that enable more everyday consumers to enter into and participate in the digital economy without the friction that many of us experience today.
Now, let me switch gears a little bit to address the concern you and others have expressed about us “bashing bitcoin.” I think if there is any error to admit here it is poor editing. Because what we didn’t clearly convey is our outlook on Bitcoin the technology vs. bitcoin the currency.
We are a company that has infinite respect for the role of Bitcoin and the effect it is having on the Industry, the Internet and the World. While we understand how Bitcoin (the technology) and bitcoin (the currency) are intrinsically linked, we very purposely maintain a clear distinction between the two. That is because we believe Bitcoin is the future, and by consequence Bitcoin and bitcoin are both here to stay. We believe that they will become so fundamental, that they will become invisible. So much so in fact, that the term “bitcoin” might very well fall out of common parlance all together and be superseded by more accessible, more broadly understood and adopted by technologies build on top of them. For example, while a few in this world understand what “HTTP” is, for the vast majority of the world, “http” is just a strange coupling of characters that enigmatically precedes what we type into the location field of our browser.
Where I think we all of us at Bitreserve come together is a shared vision for the future of digital money and how digital money will help reshape the world into a more egalitarian place. This is where I think everyone in the industry is united — we can all quickly find common ground on our shared vision for the world.