The Celsius Network app is a great solution for those who want HODL and earn weekly interests, but it does not matter if you fill out the KYC / AML forms. There are many people who buy BTC, LTC and / or ETH on Coinbase or Binance, so they keep their assets in a portfolio that does not guarantee them full custody of the funds and does not bring any kind of financial return. It's like keeping your money in a bank account for security, only that you do not receive any financial compensation for it.
Alex Mashinsky brought us Celsius exactly for a clear reason: to create a service that looks like a bank, except that it only works with the main cryptocurrencies. As a result, anyone willing to earn interest in the property that holds those who do not care about revealing their properties can simply download a mobile app and make a quick transfer. Interest amounts are not fabulous, average yields can be rounded to 5% per year, and this approach only encourages those who are in the long term play. A week worth of HODLing only brings returns of 0.01% (5 divided by 52) – which is still something, instead of allowing the exchange to have full custody of your cryptography.
However, as explained by the creator of Litecoin Charlie Lee during the exclusive interview of Crypto Insider, it is sometimes safer to keep the coins in an exchange with reliable security than to transfer them to a computer full of malware and other types of malware. potentially harmful software. And Celsius is based on the foundations of BitGo, which still has a good track record when it comes to security (it was a hack in Bitfinex's services in 2016, but BitGo was not officially found guilty).
The idea of a bank custodian goes against the encrypted ideals that precede Bitcoin, which Tim May also repeated before his death. However, the crowd of passionate crypts has really diversified over the years and there are certainly people who do not bother to reveal the coins they own and who would willingly pay the taxes required by the government. For those to whom earnings and accumulation are much more important than the privacy of funds, services such as Celsius should be considered.
Attached you will find a video interview with Celsius CEO Alex Mashinsky, as well as a complete transcript of the entire conversation. During the discussions, 3 LTC and 1 ETH were deposited in the Celsius app to better demonstrate how it works. The content has not been paid or sponsored in any way by Celsius or any other company or individual, and it is all part of the journalistic report we have done in the name of providing accurate information. We have made sure you have all the details and explanations before deciding to entrust your funds to this third-party custodian. Therefore, none of this is an endorsement and you will also find some critical points of view to balance the otherwise rather positive presentation.
Read the complete transcription:
Vlad Costea: Ok, welcome back and for the second part we will see the functions of Celsius to better understand how it works and how this could just be a replacement for the banks one day when we switch to Bitcoin instead of US dollars.
Alex MashinskySo, yes, so, look, our purpose … Celsius' purpose is really to grow and empower the community. And I think the only way Bitcoin or Ethereum or other currencies we support become true substitutions or alternatives to the currency issued by the government is if you have a very large community around the world that supports, accepts and uses these currencies.
So what Celsius did is focus on the three most important services – which we think are the most critical services for the cryptic community. One is making a deposit and earning, right? So we created the only solution, the only app, for sure, that you can simply download, make simple KYC and start earning … revenue – you do not need to know anything, you do not have to trade, do not do know when to enter or when to go out. Deposited and automatically, every Monday, interests are displayed in your portfolio. If you have BTC, you have more BTC. If you have ETH, you have more ETHs, and so on.
At any time you can withdraw your coins and use them for anything you need to use. So, there is no blockage. There are no special agreements and so on. We work with BitGo, so we keep the coins with a custodian. When we issue a loan or issue coins or lend coins to earn interest … we basically take guarantees, so there are always your coins in the wallet, or the collateral for your coins is in your wallet. So, the earning interest is a very simple service, once again, everything we do is open and transparent.
You can see where the coins go. You can see what they were used for. You can see what the community earns. And if you are one percent of the total BTC you will earn 1% of the total interest distribution. Every Monday we publish the interest. And every Monday we deposit the interest on everyone's account. And you can do it only with the blockchain. Because if tomorrow we had 100 million users and we could distribute interests to 100 million users we could not do it with the Visa / Master Card – you could not do it with the bank, because the fees that all these people could charge could be more than the distribution of interests. So this model works only on the block chain. And it allows people with 10 or 5 dollars to earn as much as people with 1 million dollars. So, this is a simple service. Once again, to use it, just download the app, register and log in and simply start using the service we provide.
Vlad Costea: All right. Before going ahead and describing each function of the app, I have to ask you one thing because every day, just like any cryptocurrency, check Coin Market Cap. And recently, I saw that they added this feature that allows you to get a loan to buy encryption. And this service that sponsors them is called Nexo. And, it is labeled as instant cryptographic loans. So, how Celsius is different from Nexo?
Alex Mashinsky: So, two big differences. First, let's pay, I think, half of what Nexo charges. Therefore, we issue loans at 9% and 5% per year. And, I think Nexo charges anywhere from 16 to 20%. And now Nexo claims that you can use their coins to pay, and when you pay with their coins is half, but if you try, you'll see that it works only when their currency has a certain price. You can not use it all the time.
So you will always pay more interest with Nexo. Also, I think that Nexo only issues loans in euros, they do not issue loans in dollars. We issue loans in all different currencies. And the biggest difference – the most important difference – is that Nexo takes profit, they make you pay double, then take that profit and give it to their wealthy investors.
Everything we earn goes back to the community as a distribution of interests. So, let's give all the profit, or 80% of the profits from interest income, to the community. So, one day you could be a borrower and pay interest, and the next day you could just be the person who deposits the coins and gains interest – and you know exactly where it came from. I have no water here, so it will be difficult …
Vlad Costea: Ok, I think the next question is about an article you wrote a few months ago. And you're talking about the approach you're taking with Celsius and you wanted it to have organic growth, because you started an ICO at the start of 2018 and succeeded in fundraising. And you said it was not the only way to finance. You also managed to get funds from other sources.
But you did not pay these funds to be listed in the exchanges or to get sponsored advertising and content, so you wanted it to grow organically and have a word-based approach, so people recommend Celsius because they like it and because they see that maybe they earn interest based on their deposits. And how did it go compared to other Icos who maybe spent a lot of money just to be listed on the stock exchange and get promoted and have sponsored articles and all those things that are stuff in practice …
Alex MashinskySo basically, a few things in the first place, we did not take money from big cryptic investors. So, if you look at Nexo, for example, Nexo has taken a lot of money from 4 or 5 big investors. They promised the community that they will do an ICO but have not made the ICO. All 4 or 5 of their big investors took all the capital of the company – or all the company's coins.
So, from the beginning, we will not allow big investors, the rich, to become even richer. This is built for the community, by the community. I do not need more money. I have already made a lot of money in my career. I'm doing it for the community. And, if you do not, believe me, you can go check and … my background and how much I've got out and how many good businesses. And I took two public companies. I managed a public company as a CEO, so I earned 10 million dollars over the years and I do not need more money. It will not help me with anything. So, one, all our members are small investors.
We do not have a single large venture capital, or private equity, or Wall Street investor in our community. Which is the opposite of what many other ICOs have done. Furthermore, we have decided not to list exchanges because all the people who have traded trades the main reason they list trades is because they wanted their coins or tokens to go up in value so that they could download them. And then their community will remain with tokens that have lost 90% of the value. So, if you look at Celsius, we have not listed the exchanges because these exchanges have not agreed to commit ourselves to not doing bad things for their members, like Binance and Bitmex.
And the second reason was, we decided that we would start selling our tokens only after our shareholders or after our token holders have created value for themselves. So, the team in Celsius, you can check it on Telegram, he agreed to block – we already had the first 6 months of expiry – but the team agreed to block all the tokens again, to be 6 months after listing them in an exchange . So, we plan to list an exchange in March. And the team agreed to block the tokens for another 6 months. That is to say, there will be a year and a half between the time we made the ICO and the time when Celsius will start selling coins or tokens on the market. So, all this should communicate to our community, show the community, our commitment – that we will benefit only after our members have benefited; after our members have had a year of interest – to see how everything works, telling their friends, building this company.
And then the value of the token, I think, will be higher than it is today. It's in our interest It's a victory for everyone. So, I do not think there's another company that did it. So, I think we are the only one who is really doing it because we believe in the community. We are doing it for the community. And I hope the actions will convince many of your viewers and many other people that Celsius is different from all the other projects out there.
Vlad Costea: Ok, because if you work as a journalist in the blockchain business, you have to write many roadmap-based reports. When checking any ICOs, see that part of the roadmap should be listed on as many exchanges as possible. And, for investors, or for people who buy presale, this is a guarantee that at a certain point the pawns they buy will be much more valuable and will probably download them as soon as they are listed.
Alex Mashinsky: It was 2018 and 2017. It's not 2019. So, you know, I think most people will not be able to get their tokens off at a higher price than they bought. Unless the project has become much … a viable project and actually creates value for their community. Therefore, our task is to create community and create value for our community. This is the only way our tokens will become more valuable.
Vlad Costea: How do you consider all this buzz about the FCC trying to close ICO operations because they are not compliant? Do you think it was silly of them to think that just because it's built on the blockchain escapes laws and regulations?
Alex Mashinsky: Well, I do not think the FCC is trying to close everything. I think the FCC has told all the non-compliant projects, all the projects they think are titles, that they have to change the way they do things or they quit – they have to cease and desist. Right? They have to stop the operation or have to return the money to their investors. We deposited reg-d, we filed the documentation with the FCC, when we deposited our ICO.
We have filed with FinCEN. So we deposited all the regulatory bodies telling them what we will do, explaining all the terms and conditions. And, I think we did everything by following the rules. So, the FCC is not asking us questions. They do not ask us to close, because we are doing everything from the book. And today, there's a lot more emphasis on security tokens and I think security tokens will have their own set of problems, but there will be … look, out of the communication wave of the utility – I think there were 3 or 4 thousand of those – I think there will be some great projects that will prove to be the google or Netscape or Microsoft of the blockchain.
And the problem today with most investors is just trying to see through noise and through smoking – who is a real company. Who is doing it for the wrong reason? Who has a real community? I can tell you that we … the only project that has doubled their telegram membership in the last 6 months, ok? First, we did not make any flights – so we did not have false accounts on our telegram. Secondly, we are growing organically. Our friends tell their friends – and we have gone from 6 or 7 thousand users to something like 13 or 14 thousand users on Telegram. So you can see our progress, or our momentum, only from deposits. We have not had a single day since we launched, about 3 months ago, where we had more withdrawals than deposits.
Every day we have more deposits than withdrawals. And this is because we provide a very valuable service to the community. What we do and no one else does it. And the reason why nobody else does it is because we are returning most of what we generate to the community. Everyone thinks we're crazy. Everyone says, "Alex, why are you giving everything back to people?" So, I think, if you, again, if you really believe in socialism, if you really believe in all these things, then you should do it – you can do well and do good at the same time. And that's what we're trying to do. There is much value here for us if the community is big enough. If we have 10 thousand users, we have not done anything. But if we have 100 million users, this will change the world.
Vlad Costea: If you have 100 million users, I think you will be the biggest utility and application of the Ethereum blockchain.
Alex Mashinsky: Yes. Yes. Well, remember, we're not just working on Ethereum. We support Bitcoin, we support Stellar, we support Ripple. Today we support the best 8 blockchains. So we are not only married to Ethereum. When I send you Bitcoin via CelPay I'm using Bitcoin blockchain, right? I do not use Ethereum's blockchain.
Vlad Costea: Mhm. So, you're currently listing … well, not on the list … you're supporting Bitcoin, Ethereum, Bitcoin Cash, but it's written as bitcash here, and I'm not sure it's the ABC or Satoshi version of Vision. ..
Alex Mashinsky: Yes, since the separation, we are supporting both. Because we keep the coins for our customers for both after the split. So, we have support for both coins. Both chains.
Vlad Costea: And, I guess when you showed the price is like the sum of both?
Alex Mashinsky: So, I think the app does not show each one yet. But it will show each one separately.
Vlad Costea: All right. You will also support Litecoin and Ripple, and … wait, is it Ripple or XRP?
Alex Mashinsky: It's XRP.
Vlad Costea: Ok, and OmiseGo. Does OMG have a blockchain in its own right? I think I remember it was on the Ethereum blockchain.
Alex Mashinsky: This is a good question, I have to check it out.
Vlad Costea: But, because you're not supporting EOS or other projects.
Alex Mashinsky: So, we use BitGo as our caretaker. So, under our platform, we use a custodian who holds all the coins and, at the moment, we can only support what they support. So, if you go to the BitGo.com site you can see the 50 coins that they support. We have just taken the biggest blockchains and this is what we support. We are planning to add Stellar and EOS and so on. When we add them, we will add them. It is only a matter of time
Vlad Costea: Ok. So, let's talk about the functions. We borrowed, earning and paying. I'm not sure it can be seen … ok. So, with a loan, let's say I need $ 1,000 dollars and I want to have them at Litecoin. Oh, so to borrow only Bitcoin, Ethereum, Litecoin and XRP supports – as far as I can see.
Alex Mashinsky: Bitcoin, Ethereum, Litecoin … yes. Yup.
Vlad Costea: Let's say I need $ 1,000 in Litecoin. And I have to choose one of the …
Alex Mashinsky: Well, Litecoin and Bitcoin really determine the security that one has. Because we lend only crypto. We do not lend … this app is not for someone who has a home and wants to get money against his house, so he has a car.
So we lend only to the crypto community. And we charge very very little. So, if you already have coins. In practice you say you have BTC and I want to take a loan, how much will you make me pay? This is what shows you the app: it's how much you'll pay in the year in interest, in dollars, against your Bitcoin.
Vlad Costea: Oh, so if I have Bitcoin I can take a few US dollars, can I pay you back in time and can I get my Bitcoin back?
Alex Mashinsky: Exactly.
Vlad CosteaSo, I think it's a big deal during the bull market.
Alex Mashinsky: No, it's also a good deal at any time. Because, remember, if your Bitcoin costs … let's say you have your Bitcoin at 100 dollars and now it's 4,000, if you sell it you have to pay half the taxes immediately. But with Celsius, you do not have to pay taxes because you do not sell it … we keep it for you and give you the loan. So when you return the loan, we return your coins and start earning interest. But you do not sell your coins … you do not have to pay the tax – you have to pay the fee later.
Vlad Costea: Oh, this is a clever loophole. So I …
Alex Mashinsky: This is what the rich use to stay rich. They do not sell their real estate, they do not sell their securities, they only borrow them. You know, if you check how Donald Trump became so rich – he never paid taxes on his real estate. He continued to buy more real estate and borrowed more and more against his real estate assets. So, he never had to sell anything.
Vlad Costea: I've never thought about it, but it's really smart.
Alex Mashinsky: It's a secret. It's a secret that only the rich do, you know? The funny thing is that this is the rule in almost every country in the world. But most people do not use this.
Vlad CosteaSo, if I choose one of these loan amounts … it says $ 200 and 20% LTV. What does LTV mean?
Alex Mashinsky: Loan / value ratio. It is the value of your coins compared to the value of dollars. So if you take a lot of dollars against your coins, this is risky for the community, so we charge you more interest. If you take a few dollars against your coins, this is a low risk for the community, so we charge you less interest.
Vlad Costea: Does this make sense…
Alex Mashinsky: Everything we do is based on "it's good for the community, it's not good for the community, who benefits?" And so on. But really, we have to balance by doing good to the members and doing good to the total community. And that's what we try to do
Vlad Costea: And I also have a 5% annual interest rate. And the monthly interest payment of $ .83. But this is for $ 1,000 in Litecoin.
Alex Mashinsky: Yup.
Vlad CosteaSo, what is the biggest amount anyone can pay at this point?
Alex Mashinsky: We do not have a limit, we issued a loan just a few weeks ago for $ 5 million. Single loan to an individual. I think it's the biggest loan in the industry, bigger than anything that's been done by Nexo or anyone else. We had a person with a value of $ 10 million bitcoins and gave him $ 5 million dollars in dollars.
Vlad Costea: And how much does he have to pay to get his Bitcoin back?
Alex Mashinsky: Pay just like you, if you take a loan of $ 1,000 in percentages, it's exactly the same amount. We do not charge … see when you go to the bank and you have a lot of money that will make you pay a little, but if you do not have a lot of money they will make you pay a lot. Celsius treats the big guy and the little guy exactly the same way, because we try to treat everyone the same way.
Vlad Costea: So, no matter what the amount is, you pay the same. This is what you are saying?
Alex Mashinsky: Exactly, yes. Try to find another institution to do it.
Vlad Costea: I'll try. Just for the sake of it. So, there is the card you earn, where you can deposit your own Bitcoins, Litecoin, Ethereum, Ripple or XRP, OmiseGo and Bitcoin Cash. So, you can take some of them. Let's see, I have Bitcoin, and the interest rate is 3.75%. Let's try with Litecoin …. It is 4.50%, so I guess it's cheaper. And how much do you plan to deposit? Let's see, how much does Litecoin cost today? $ 30 … ish … Let's say $ 30. In addition, I receive an estimated interest rate of $ 0.03 and $ 0.1 per month per week. Total estimated interest per month of $ 68. But, I am getting this in Litecoin if deposit ….
Alex Mashinsky: You're taking it in Litecoin. Every week you receive more Litecoin in your account.
Vlad Costea: All right. But, what if the price changes, and here he says I get …
Alex Mashinsky: We always pay 3.75% of the price. Every Monday we pay interest and is based on the Monday price.
Vlad Costea: And how is it profitable?
Alex Mashinsky: The interest … Well, we have to do more than 3.75%. So, for you today, if you keep your coin in your bag, you do 0. If you keep your coins in cold storage, you do 0. On the contrary, Bitmex and Binance, earn money with your coins. They do not give them to you. Right? Binance earns a billion dollars from people who give them free coins. And we're telling you to stop giving your coins for free. We charge for your Bitcoins and we will give you back 80% of what we can collect for coins. We do exactly the same thing that Binance does. Exactly the same thing that Bitmex does.
But we do it on behalf of the community, they do it to make themselves rich. And, they take that value and extract it in dollars from the community. We take the value and return it to the community as more coins. Therefore, we create the demand for coins because we only distribute BTC, eth and Litecoin. They take the money, they have to sell the coins. So, they are putting pressure on the price to go down even more. So, again, I invite your viewers to understand what's going on and say I should really support Binance? Should I really support Bitmex? Do I have to support exchanges or do I have to put my coins with someone who acts in my best interest?
Vlad Costea: I just had an idea and it's very spontaneous. But right now, while I'm talking to you, I'm going to deposit an ether from my wallet. Because, I think I got it for $ 600, and I think it's $ 100 now and something … maybe $ 200, I'm not sure. But I want to see how I make money.
Alex Mashinsky: It's $ 106, so it's … yes.
Vlad Costea: It's very low.
Alex Mashinsky: Yup.
Vlad Costea: So, I got REKT in the jargon of industry.
Alex Mashinsky: We all did it. And, yes, I also have ether. So … very painful.
Vlad Costea: I do not have much. I only have 1. So, I keep it in this portfolio. It's loading … I suppose it's because I have an older iPhone. Success. So, I have $ 114 of ether.
Alex Mashinsky: So little more than 1 ether.
Vlad Costea: Yes.
Alex Mashinsky: Yup.
Vlad Costea: And I'm going to send it .. .so how can I send it to Celsius?
Alex Mashinsky: So, go to your Celsius wallet, get your address …
Vlad Costea: Wait. So, I go to my wallet and I …
Alex Mashinsky: Go to deposit.
Vlad Costea: Hmmm …. Deposit. You mean…?
Alex Mashinsky: Earn money. Yup.
Vlad Costea: Earn money. All right. And I choose Ethereum.
Alex Mashinsky: Yup.
Vlad Costea: And I need to enter the amount. So, it's … how much was it?
Alex Mashinsky: Just click on the bottom. If you go to the bottom and click on add coins, you do not have to put the amount … it will only show you what you are going to earn. But if you go down and click on deposit coins … Scroll down.
Vlad Costea: All right. Depositing coins … and it's …
Alex Mashinsky: Gives you the address, then copies the address.
Vlad Costea: Yes, so it's just this, in case someone wants to send me more. Um …
Alex Mashinsky: Now go to your other wallet and send your coins to this address.
Vlad Costea: Right. Mhmmm. I go to the sending section … I just want to see how fast it is, but I suppose it depends on the Ethereum blockchain.
Alex Mashinsky: Right. It will have to go through the blockchain, but you'll see fast enough that we see the transaction arrive and so it's just a matter of confirmation.
Vlad Costea: Oh, so the wallet, which I'm using, says it does not support contract addresses. Because this is an intelligent contract.
Alex Mashinsky: It's an intelligent contract, yes. Which wallet do you use?
Vlad Costea: It's Blockchain
Alex Mashinsky: All right.
Vlad Costea: So, you have to remember it. I'm going to try with Litecoin, because I also have some.
Alex Mashinsky: It could be the same problem, because all our stores are addresses … you know, contract addresses.
Vlad Costea: With Litecoin I'm using LoafWallet.
Alex Mashinsky: All right. Well, you need a new address, right? You have to go and get Litecoin's address.
Vlad Costea: Mhmm … This is really exciting. I'm trying the encrypted equivalent of a bank and I'm depositing Litecoin for 50% … let's say I'll put in Litecoin's $ 100. Deposit coins … Copy … I like that it has the address that is for the following ones. It is the most recent. And, if I send … dollar amount, it's $ 100 … to … paste … okay … no memo. I'm going to hit send here.
Alex Mashinsky: Yup.
Vlad CosteaIt will take 2 to 5 minutes to process and I have a fee of $ 0.05. All right. To send.
Alex Mashinsky: It comes from your current supplier, we do not apply any commission. We only pay, we do not charge.
Vlad Costea: All right. So, in this whole ecosystem, I think I asked the question again – but what does the Celsius token do in this whole process?
Alex Mashinsky: So, the Cel token before is a membership token. You must be a member to participate in all our services. Secondly, the CEL token, in the future, will be able to receive interest for Bitcoin or Ethereum or CEL token. If you believe, just like, if you're familiar with BNB for Binance, they're all currency, it's the same thing, it will have its currency that is used to exchange the value between the people who borrowed and the people who gave the loan , quite right?
Therefore, we will use the CEL token as a mechanism for value exchange. Also, CEL tokens were used to distinguishing between people who are long-term hodlers and people who are just speculators or … what are they called? .. I'm alone, you know, just for the money, right? Because if you sell CEL tokens immediately, we give you less interest than people who hold all CEL tokens. So all the people who are making fun of CEL will get more interest, maybe a quarter more, 25% more, than people who do not have CEL tokens. So, CEL tokens are an indication for the community – they are here to help the community – against others who are only here to eliminate profits.
Vlad Costea: It's almost…
Alex Mashinsky: These are just some …
Vlad Costea: Almost sent – the quarrel is almost 40% written in the block.
Alex MashinskyWell, check your wallet to see if it says coins are coming.
Vlad Costea: Wallet … I'm going to Litecoin … still nothing. Transactions … Oh, I understand. But it is still pending.
Alex Mashinsky: Exactly. We can see it, but we need enough blocks to process it to make sure it's there.
Vlad Costea: Mhmm … and from this point on, I … so, I went to earn, and I'm just going to HODL in my wallet.
Alex Mashinsky: You do not have to do anything You do not have to check. You do not have to move. You do not have to do anything. Automatically … every Monday you will receive interest.
Vlad Costea: Posso tenerlo per forse un anno o due. Perché, ho visto il calo dei prezzi, e sono abbastanza deluso.
Alex Mashinsky: Beh, guarda, abbiamo bisogno di nuove persone nella comunità. Se ci limitiamo a spedirci monete, non faremo nulla. Quindi, ancora una volta, tutti i tuoi spettatori, se vogliono creare valore, devono usare, ad esempio, il pagamento CEL, che è un terzo servizio, per inviare monete alle persone. Quindi, quando sei in taxi, devi convincere il tassista ad effettuare un pagamento, ad esempio, Litecoin o Bitcoin o altro.
Quando sei in un ristorante devi convincere la persona a prendere la mancia … Questo è quello che faccio ogni giorno. Ogni interazione che ho, cerco di usare la paga di CEL per spingere più monete a nuove persone. E, quando ci provano, si eccitano davvero. Quando lo leggono capiscono che è per loro. Questo non è per i ricchi per essere più ricchi. Questo è per la gente povera, e per le persone che sono bloccate nel mezzo della loro classe, e le persone che non lo sono mai, la gente in Africa e in India e nel Medio Oriente e ovunque e in Romania, che non hanno la possibilità di rompere nella classe media o per irrompere nell'1%.
Quindi, se tutti noi ci siamo riuniti, funziona solo se tutti noi stiamo insieme e ogni persona deve portare 10 nuove persone in cripto. Quindi, il valore della moneta aumenterà. Perché non ci sono abbastanza venditori per questa ondata di adozione. Sometimes we have a good day and sometimes we have a bad day, but as long as we bring more people into crypto we will always win. It’s that simple.
Vlad Costea: Now that I think about it, that’s a pretty wise business plan, because you’re not looking for short-term gains to maximize your investments. You think about the network effect, and how this can grow into something that has that snowball effect, and get’s very…
Alex Mashinsky: So, you know, I invented VOIP, what we’re using right now to talk to each other, and after 25 years only half of the people on the planet use VOIP. Half of the people pay for the service, pay for voice to call somebody. And it took 25 years for half of the people on the planet. So, when people ask me, you know, how much time do you have? I’m like, I have 50 years. It’s going to take a long time, it’s not going to take a month or a year or two years. I know a lot of you people are in a hurry, but if somebody should be in a hurry it should be me – I’m much older than you guys.
I can see the end of my life, but I think that my job is to make sure that this new opportunity is delivered to all the young people. I have six kids at home, believe me, they have the same problem you have, right? Of basically, make it in this world, because unless you’re a tech genius or you’re born on wall street, you’re not going to be able to make money. It’s going to be very difficult for you to buy and apartment and then… and do well. And, that’s really part of what we need to do here – to enable young people to do much better.
Vlad Costea: That makes sense, and now that I think about it, this whole part sounded like a big advertisement. You know, like I’m trying to promote you, but I’m genuinely interested to see how it works.
Alex Mashinsky: Like you said, this is…
Vlad Costea: To me it’s something new and I wanted to try it, so…
Alex Mashinsky: It’s for the community. Everything we just described is for the community, right? There’s no mechanism where we somehow, we meaning Celsius, we benefit before the community benefits. We only benefit if there’s a lot of users.
Vlad Costea: I just got an email which say “cha ching you just received three Litecoin!”. Okay.
Alex Mashinsky: Yeah, just a shame you sent it to yourself.
Vlad Costea: Mhmm…
Alex Mashinsky: Would have been much nicer if somebody sent it to you.
Vlad Costea: Oh, yeah.
Alex Mashinsky: I gotta run. But, it was great doing this video.
Vlad Costea: I have one last question. If you have two minutes. I feel like I’ve been overly nice. And, you said you’re friends with Nick Szabo? And, he usually says that a trusted third party is a security call. And, how is this security of this wallet guaranteed? So what happens if somebody hacks it and steals private keys and funds from it? Is it guaranteed by any fund or do we get compensated if there is any loss.
Alex Mashinsky: So, we use BitGo. BitGo is the foundation for many exchanges. So, when you put money, for example, in kraken. Kraken does not run it’s own custodian. They actually use BitGo, for example. When you trade on the chicago mercantile exchanges, CME, they use BitGo. So, you can see that they’re one of the oldest and safest… it’s definitely much safer than having your own wallet in cold storage on your phone.
But there’s always risk. There’s risk that they make a mistake or we make a mistake or whatever… And the Celsius community… part of the money that we collect, since we only give 80% back to the community, part of the money we keep is a safety… it’s almost like an insurance policy – it’s a self insured policy, in case something bad happens.
And, sometimes our customers make mistakes, like they send money to the wrong address, or they do silly things, and we have to decide if we want to help them or if we don’t want to help them. But, basically, as long as we are a profitable company, and as long as we are doing everything in the interest of the community, we should be able to recover from any situation – from any disasters. We did not have any hacks, we did not have any coins stolen since we launched. And, I’m not planning to have any, that’s why we chose the best custodian that we could find.
Vlad Costea: Okay, but did you ever get an impression or an opinion from Nick Szabo about the Celsius network?
Alex Mashinsky: Well, Nick is a purist, like I said before. So he believes that people should just keep the coins in cold storage and that’s his view of the world – he doesn’t like exchanges, he doesn’t believe in exchanges. We don’t think that people keeping their own coins is a solution, we think already 3 million Bitcoins were lost. So, we don’t think this is a viable business if all of the people that invest in Bitcoin are going to lose their coins.
So, we think that a centralized custodianship that is using the blockchain, right, is much better solution – as long as the actor, the company running it, is acting in your best interest. The problem that we had until now is that nobody was really acting in your best interest. And, we think that Celsius is the first organization that is trying to everything in the interest of it’s community. That’s the real big difference. Going full circle to Nouriel Roubini and the panel at Milken and everything else.
Vlad Costea: That’s a great way to end it. And, I’m going to check on this Celsius affair and see how it goes with the interest because I deposited some coins. And, I would like to thank you for this interview and for your generous donation of $50 in Celsius tokens.
Alex Mashinsky: Sure, thanks for having us, and let’s stay in touch – let’s see how your coins do over the next few weeks.
Vlad Costea: Let’s see how the project does on the long term.
Alex Mashinsky: Perfect. Thanks for your time.
Vlad Costea: Bye.
Alex Mashinsky: Take care.