Tuesday, October 15, 2019

Security and Safe Custody is what’s holding Crypto back

Crypto people globally are like voters in the US – either you are all in or think it’s a scam.  There’s no convincing a Democrat that it’s actually the Clinton’s and the Biden’s that are guilty of corruption, and many other crimes.  You can throw facts in their face and they will just retort with pictures of their cat or insult you.  Faced with evidence disproving their opinions, they revert to screaming and running around in circles.  Similarly, you can show establishment bankers any kind of evidence that Cryptocurrency is the future of finance, and they will similarly scream and run around in circles.

The US banking system is the largest and was once one of the most dynamic in the world. It enabled a generation of growth fueling the biggest economic boom known in modern history. But as the world changes, the US Banking system is aging and the big banks aren't looking to repair it anytime soon. ..BAC is covered widely in the financial media, and is held by many mutual funds. One could even say that it's over-covered. What we're looking at in this article isn't bashing, it's the word on the street. Anecdotal evidence is powerful, as we have watched the Cryptocurrency market grow from nothing to a multi-billion dollar industry. Unfortunately, it hasn't taken off as expected. But we believe it will.

We have to bear in mind the size – Bank of America is a $264 Billion company, and it’s just one bank (although it’s one of the biggest).  There is a long way to go before everyone is using Crypto.  But recently US Lawmakers have asked the Fed to look into developing a “Crypto Dollar” –

Two U.S. lawmakers want the Federal Reserve to consider creating a digital dollar.  In a letter sent to Federal Reserve Chairman Jerome Powell, Rep. French Hill (R-Ark.) and Rep. Bill Foster (D-Ill.) outline concerns they have about risks to the U.S. dollar if another country or private company creates a widely used cryptocurrency, and ask whether the central bank is looking into creating its own version.  First reported by Bloomberg Law, the letter details how the Fed has the right to create and manage U.S. currency policy.“The Federal Reserve, as the central bank of the United States, has the ability and the natural role to develop a national digital currency,” the Congressmen wrote, adding:  “We are concerned that the primacy of the U.S. Dollar could be in long-term jeopardy from wide adoption of digital fiat currencies. Internationally, the Bank for International Settlements conducted a study that found that over 40 countries around the world have currently developed or are looking into developing a digital currency.”

The point is that the banking system is in major need of a tech overhaul.  Another example comes from FX, as evidenced by this article about Dinosaur Money Gram International (MGI) –

Unfortunately for MGI there are tons of competitors. Just to name a few; Xoom, CurrencyFair, InstaReM, OFX, PayPal, Remitly, Ria Money Transfer, Transfast, TransferMate, TransferWise, Travelex, Western Union, WorldRemit, XE. Then there are small shops that can be only a website like this one we found DiscountCurrencyTransfers.com.  As stated on the website:The "Cartel" as they are referred to, a.k.a. "The Big FX Banks" Continue to overcharge individual senders of foreign currency by as much as 15% or more. They pay the fines and continue these abusive practices, because, they are so big, they can do what they want. You're probably thinking there's no way out - but there is. We have a solution that can save you up to 90% on foreign transactions.  The barriers to entry are very low, so it's easy for a new company to setup shop and compete. To make matters even worse, banks are feeling the pressure of the competitors so banks are becoming more competitive themselves.

So if these banks and other financial services companies are so terrible, why hasn’t Crypto taken off more?  That’s what we have always asked, but there is a clear answer:  investors are afraid to get hacked.  Security of large quantities of digital assets is what remains as the last puzzle to be solved before we can count Crypto assets in Trillions, rather than Billions.

Crediblock has been working on this solution and is now in the process of launching the service at several exchanges, banks, and other companies that have large quantities of Crypto; it’s called Black Watch Digital.

We are accepting investors for a Series A (Must be accredited) at a $15 Million valuation, which we think is a steal considering the value of the solution they are providing. 

We believe in this solution because we have been hacked ourselves.  Being the victim of a hack like Mt. Gox is no fun.  Whether you get your money back is not the point, waiting 3 years to get .30c on the dollar with Refco was unpleasant torture.  Knowing that your assets are safe and secure is the only thing that lets you sleep at night if you have large quantities of digital assets.  Or to say differently, without security of your digital assets it’s like trading without stops and limits.

Crediblock is working on a top secret Crypto algorithm for proprietary trading.  Hopefully, as the strategy is successful, the assets will grow.  As we grow the strategy we will start to demand our counterparties utilize something like Black Watch Digital.

No, this isn’t the only security and custodial solution there are many.  However, many of them are tied to the custodian, i.e. Coinbase has their own solution.  We believe this is a conflict.  It’s best to have an independent objective service provider for the same reasons it’s important to have an independent auditor – they do their job and nothing more.  If audits were internal you can bet auditors would never find any problems. 

Another reason we like Black Watch Digital more than other solutions – the approach is a cybersecurity approach developed from a Big Data perspective; it doesn’t involve Cryptocurrency.  There’s no ‘token’ or asset itself to buy into.  Cryptography is involved just as with any encryption.  The multi-signature / mutli-technology / multi-layer approach allows for multiple points of failure meaning one of the layers could be breached but the asset would be secure.  Or to put it plainly, this is the kind of digital security the CIA uses.