Ladies and Gentlemen Thank You for Joining me . . . I am the Crypto Crow here with my esteemed guest for the second attempt Alex Mashinsky now before I really get to talking to him I’m gonna read a little bit about what this man has accomplished so that you guys get an idea that yeah who you’re talking to who you’re gonna be listening to here now alex has received numerous awards notably the prestigious Albert Einstein technology medal in 2000 the technology foresight award for innovation presented in Geneva at telecom in 1999 and cranes top Entrepreneur Award in 2010 he has also been nominated for ian wise Entrepreneur of the Year award in 2002 and 2011 and my guess he’s gonna try and obtain a new award through Celsius Network so Alex thank you for joining me and welcome thank you thank you for .
now before we get going I want to make sure that everybody can hear everything clearly that everything is clean give me some yes in the chat to let me know that all is good run a slight delay so we’ll see. yes okay all right good deal so Alex thank you and and thank you for understanding because when I was having some serious technical issues I was looking at your face on screen and and you know in my review I was talking about the two hands clasping and how you’re right there but I just couldn’t get to you so you couldn’t save me from that fall to my own death so I do apologize and I thank you very much for being patient and I’m very very glad you’re here no worries give us the second opportunity so here we are okay so tell me honestly tell me a little bit first about you I would have know a little bit more about you what I mean you you are Israeli born correct and moved into the to the United States we were born here tell me I want to go as far back as you’re willing to go I just kind of want to learn like how did this man sitting before me kind of get started in all of us .
well I was actually born in the Ukraine and so I always laughed at I was born in communism rare than socialism and thriving in capitalism you know so I tried all three systems I can tell all all of your viewers who have not tried even two of the systems or three of the system the capitalism is the best system in the world and as someone who lived in all three systems so I did the military in Israel and I came to the United States and after doing one semester and in Tel Aviv University that was about it for me so I’m a college dropout and you know kind of landed in New York and it was like just an amazing experience of you know being able to walk in tell people what you want to do and people like great let’s do it you know that was definitely my not my experience in Europe or in Israel growing up so so this is an amazing country and and this is all about people from all over the world getting together on building great things and this is the Celsius is all about so what what was your first big PAC project like what was the first thing that kind of alright I know I am meant to be doing this .
what was the first thing to kind of hope you take shape well so the the first thing was voicemail believe it voicemail back in 1988-89 well it was a new idea and back then you had these monolithic big companies called octal and vmx that that were based on the mainframe computer and I came in I said again I was like 22 or 23 years all I said no we can do it on a PC and people said looked at me and said no you can’t you can’t do it and I proceeded takes a mainframe to build it and we build it on a PC we were the first PC based voice mail and basically we saw tens of thousands of these systems all over the world many many PBX companies and phone companies use them and then from that from the basic PC based voicemail system I started looking at the internet and I said wow look at this internet thing would it be magical if we could put voice over the Internet and people told me nah it’s not possible you know I’m a thing his dial-up modem like .
I remember I had like a 300 baud modem and I remember the 300 baud modem on my Commodore exactly so so back then and I think the speed that when I when I built the first VoIP gateway the modem speaker was like 14.4 KBS you know and people told me just impossible to put the voice of the speed and we figured it out and I went to 880 I showed it to them and they’re like all great invention we’re gonna use it inside our system to make ourselves even more profitable you know and I was like no you don’t understand I want to give free voice to all the people in the world that will pay $3 a minute they’re like no no that’s a bad plan so this is like JP Morgan trying to you know grab the blockchain and inject it into their back office and make themselves more profitable instead of all of us you know taking crypto and make it available to the seven billion people on this planet sir you know I’ve seen this movie again and again again every time they told us it’s not going to be possible we figured out how to make it work so Savoy was a huge breakthrough because you know unlike now you couldn’t monetize the protocols that algorithms right but .
but back then everybody understood in a second that that you know if you could basically make a free phone call between two countries why would you go through AT&T; or ktd or Japan Telecom on him down the guys right so so that was a very easy concept to sell and you know our mission now is basically saying from voice to MoIT right the money over IP and and we think that oil is the same it’s even a bigger revolution I mean in history there were money only moved four times the beginning was barter then we had gold coins then we moved to notes right we have look at these fake pieces of paper that we carry in our pockets and now we’re moving into Kryptos this is this is the biggest thing ever I mean I’m you know I’m feeling quite hold at 6:00 2013 and frankly I’m shocked that only 30 or 40 million then used this anywhere on the planet I mean this should be used by everybody so this is one of the key things this is one of the big things .
I am always trying to figure out ways to reach new people outside of the crypto sphere and bring them into our world both for a lot of Malta for a lot of different reasons and I and I see this drive in you and the videos that I’ve been watching of you just your overall goal your mission to achieve is you know I’ve watched several videos of yours and I was thoroughly impressed and and not to just not you know it’s gonna sound like some I’m some creeper but I’m just I’m extremely impressed by you and I really value your mission and so I guess at this point tell tell everybody a little bit more so what you know when I first saw Celsius Network some of the key words that stood out to me initially were lending right and I’m like oh god another one of these right and I’m like I don’t want to touch this shit with a 10-foot Pole right you know like that hasn’t anybody learned you know and so in digging deeper and realizing that this is absolutely nothing like what we’re used to seeing in the press right now in terms of crypto and lending .
so go ahead and and just kind of tell everybody a little bit about what what what spawned the idea for Celsius Network and and where you’re at now and then we’ll go from there so yes so you know the crypto community started with anarchists right and we had basically just a few hundred thousand anarchist to kind of look at this adopted this whole Satoshi idea and and and went crazy with it right but we ran out thank you very quickly within the Yuriko we ran out of anarchists and then the libertarians came and said oh my god this is perfect that’s exactly what we need to make the world a better place and two years later we ran out of libertarians and then the speculators showed up all the specular showed up and said oh my God look how much money we can make out of this thing right so and now we’re running out of speculators so so if you think about the adoption curve right and the early adopter phase and then you have the chasm right where people fall through the chasm .
we’re arrived at that stage we have the stage where we are not at mass adoption but we’re running out of all the people the early adopters that basically got us to where we are and what’s missing is the killer app what’s missing is the Netscape moment back in 95 when I was doing void you know Netscape suddenly showed up and gave their browser for free to everybody and everybody realized that that you know the browser is the future and everybody did a left turn overnight a left turn a hundred million people downloaded the browser it was shocking now no application on the internet had that massive amounts of download until then right and that’s what’s missing in the crypto community what’s missing is the Netscape moment and we think that that the mass adoption is all about giving the next 100 million people something that they all need what is that something that they need they need to borrow at a low rate and they want to earn some interest on their hard-earned cash and most of the next 100 million people can’t afford to just buy a Bitcoin or buy two ethers and just bark them somewhere in a wallet right .
so what we’re trying to do is really give you a wallet that enables you to earn some interest or enables it to borrow against your hard earned money so you can actually afford to buy some of these coins and by doing so many many many people are gonna join the community right so I tried to kind of summarize it in the simple formula II MC squared right these stands for theory amour any coin right Emmys membership right and C squared double C’s right stands for Community Credit if you put those things you want to eat it to be valuable you need a hundred million members and you need to shower them with credit and that’s what the secret of the United States of America is somebody who again tried all these other systems the secret of the United States is credit half of all the credit on the planet is issued in the United States and that’s what drives GDP and that’s what drives the dollar as the reserve currency of the world and so on so on so all these things are connected and basically what I’m suggesting is a proven formula that worked pretty well for the United States and I’m just trying to apply it to crypto .
so give me a bit of an idea for those who either haven’t seen my review or they haven’t read through your white paper itself what explain your business model like I’m I’m an investor okay and I and I see this I’m on the Celsius Network website why am I putting my investment into you what what what am I getting out of it what kind of community I might be becoming a part of what is where do you see this you know and I know you can’t speculate off obviously on your own project but you know give me an idea from you know realistically right because something like this is ultimately it’s a project you’re you’re going for to obtain mass adoption you want to bring that next hundred million people into the crypto space so given your business model .
I want to know a little bit more about your business model in detail and how you plan to reach that first hundred million people sure two elements one is basically we’re launching a wallet it’s a simple wallet it will be available in the App Store next week so you can just go download a Celsius wallet the wallet will enable do two simple things it will enable you to deposit coins and earn interest it will enable you to apply for a loan against your crypto now that sounds very simple but it actually solves a huge problem until now no one has solved in scale the ability to borrow dollars against your crypto right so if you think of salt if you think of some of the other attempts today they have very limited supply of capital right they’ve not been able to park them in any major financial institution to a now enable them to do loans and the hundreds of millions of dollars of billions without .
and as you mentioned before because of my background because of the fact that I’ve returned billions of dollars to my investors they trust me with what I’m trying to do and they’re enabling us to do a much larger scale implementation of what sold already has started right so what we’ve done is basically created a wallet that works in your best interests so if you’re looking at other peer-to-peer platforms Lending Club and all these other ones that you mentioned before that really have not been so successful therefore they’re centralized solution including as so they’re all a centralized solution who’s trying to maximize the profit for the service provider right so Lending Club is an example their job is to extract as much value from the borrower from the lender and generate as much profit as possible which is the same job as at any bank or any insurance company has right .
that’s the job of centralized companies to maximize profit we’re coming in it in a completely different way what we’re saying is is that if you think about the most successful cricketer or not even even on crypto companies if you look at what’s up right make sure it’s nothing but they have a community of a billion users and then commute is worth twenty two billion dollars that’s what a Facebook paid for what’s up a theory the way I look at material if they’re for me is when the theorem invented is not really just a smart country if they’re armed invented a whole new way of creating value right so they they basically created a system in which they the value creation that the coin was separated from that platform so the platform the theorem blockchain could charge nothing right a theorem is a non-profit they’ve not charged the dollars or they’ve not made a dollar since they were created all the value inside the third platform is created by you the miners or by people who hold the coins right so and the value of the coin the value of the Easter represents the value of the community right so if you’re thinking about a theorem as a amazing value creation sixty seventy billion dollars worth of value being created .
the people are enjoying it other people in the community right so there’s no toll collector like Lending Club that is measured based on their profits it’s measured by the size of the community as the size the community grow the size of the ether grow as the size of the Bitcoin community growth so does the price of a Bitcoin so what we’re trying to do is create a new community right it’s a new community then is your going to be inclusive that is not going to try to maximize profit and that’s why we issuing loans at 9% right no one right now issues anything with a single digit then we’re saying we’re a single digit lender right if you’re looking at salt I think it’s 16 percent if you go on Wall Street and you try to get along it’s gonna cost you probably more than 20% most credit cards of more than 20% so the fact that we’re going through the community and saying hey we’re gonna charge you much less but at the same time we’re gonna pay our members much more how is it possible how can we pay so much more than the banks do right the bank’s pay 1% one and a half percent at best to their depositors .
we’re planning to pay five percent because we’re going to take the 90% that we collect from the membership and distributed five percent back to the community because happens to the other 4% so the rest of the four percent is used for two purposes one way of operating costs we have a cost of capital we have all kind of other costs we have the salaries that we have to maintain and then the rest of the coins are going back into Treasury what does it mean we’re reducing the float each transaction reduces the flow so if you’re thinking about how buy gas uses their coin right to effectively they were just hacked apparently by the way sorry yeah yes I saw that before interview right maybe we talked about that yeah but but they are a very good mechanism which is a win win went to the to the finance community right and we trying to do the same thing we tried to create a win-win-win scenario in which both the borrower and the lender win the people who lose of the banks because the banks because they became this monopoly they became a centralized toll collector that is bigger than ever right too big to fail you’ve heard that expression before they could pay you almost nothing and take your hard-earned money and lend it to someone else instantly for 25% so always saying is hey let’s do exactly the same function that the banks do by huddling all of our coins together and let’s lend at 9% and pay 5% of that back to the community .
so it’s actually a very simple concept but we can only do that if we follow the theory model of separating the value creation on the token from the community itself so effectively our community is a non-profit all the profits go back to the community or to reduce the float of our tokens and then the token value is determined by all the people on the outside who look at our growth success and every day they measure the price of our token to be what’s the value of our community so the community the consensus of the community is the price of our token so here’s here’s so basically if I let’s say I were to put ten aetherium into the platform to you know to make it available for lending right the idea is that I’m ultimately earning five percent interest and that’s annually right the plan is 5% annually okay how often are the interest payments made and it is that so and I’m receiving my interest in sell tokens correct the price before and I’m trying to figure out just so that you understand my angle here is if let’s say let’s say I’m earning sale tokens right but the value of the sell tokens at the time I’m earning my interest payment is maybe it’s a dollar just hypothetically speaking maybe that sell token is worth a dollar so I’m making interest on my 10 etherium based off of a $1 sell token but then that same interest payment continue so as the the value of the sell token rises .
I’m still that I’m getting less sell token but the same u.s. value however the payments that I’ve already received due to my lending prior to that are ultimately going up so in essence you could potentially generate more than five percent interest on your lending correct I mean is that right that’s exactly right yes so if our membership increases our loans increased everybody in the community is happening hopefully the value of the token will increase in value right if the opposite happens then the value of the token will decrease in value and as that a price changes if you hold the tokens and you got them or they’re valuable behind you will obviously earn more than the 5% come and interest so that the 5% is almost like the minimum we’re basically telling the community we’re not going to do transactions for less than 5% because we have several sources of income that will happen that the wallet is think of the wallet is like Costco when you’re walking to Costco you only buy a milk of the usual sometimes also buy orange juice and toilet paper and all kind of other stuff so the wallet is like Costco .
our job is to fill out the warehouse with as many great products as possible all of which is supposed to do what’s in your best interest you’re the consumer why because you bought a membership in our organization and you want us to do the best for you best on your behalf and make sure that your money works for you so we’re going to focus only on financial products don’t expect to get any milk orange juice in the Celsius wallet and those financial products are going to be cheaper better and faster than anything else you used before because if they’re not they’re not gonna find their way into our wallet so we planning to for example do a proof of stake implementation when aetherium finally comes up with closet plasma and they actually start paying out their proof of stake fees instead of mining fees they’re only gonna pay them to people who have a thousand Etha or more so if your guy were that money if there are five if there were ten you three are you gonna go and set up a node and try to huddle together all of your bodies and get to a thousand no you just you can park your coins with Celsius and Celsius will distribute at least 90% of that POS distribution right because it’s in our best interest .
if we want more members and by getting more members we’re gonna get all the things that are have to do with POS on any coin any of the top 20 coins so if your problem is gonna be the first one to do a POS implementation and on their blockchain but basically if you look at all the other ones everybody already kind of made a move towards proof of stake so so the wallet is going to become a very important element of where you are where you parking your coins going to be very important your parking to them on an exchange you have much more risk than parking them with Celsius why because we actually when we give you an address the address we give you is with our custodian it’s an institution with trillions of dollars not billions trillions of dollars and agreed to work with us to park those coins and coal storage so you must rather do that then have them stored on an exchange or have them stored even on your own cold storage because that’s more risky than having it done by an insurance by an institution that have insurance and have obviously much more in assets than then I do anyone else so that’s actually a key point because I was gonna ask you my next question was gonna go into security you know .
if because here it looks like you’re you’re looking for those big ha blurs those people who are crowing their coins as we say around these parts but in a substantial amount right so you know security is obviously a pretty big concern for some people if I let’s say I do have a thousand aetherium I want to make sure that it’s going to secure and if anything insured platform so that if something should happen are not at risk of losing my investment yes that’s correct and for us to again to cross the chasm and a lot of the chasm has to do with trust and you know we see bad news about crypto every day and so a lot of people the next hundred million a lot of those people are afraid of it right there fraid of committing their hard-earned dollars they can’t afford to lose a thousand dollars or three thousand dollars right so yeah you have the big guys but you also allow a little guys and and our job is to convince them that our platform is safer than any solution they have today so we will be announcing our partner they’re obviously a very famous company and it’s going to be the first time that anyone any any crypto company has partnered with a major financial institution .
so they’re gonna wait you’re gonna wait to announce this partner after the coin has hit exchanges that the rest of the US has had the opportunity to buy in first right is that the plan well that is we’re not planning based on exchanges or anything else we’re planning based on when our partner is ready to do their announcements so we are they’re probably going to be ready around the June July timeframe and that’s what we’re focused on we’re not trying to manipulate go take advantage of listings or anything like that yeah oh no I’m not saying that I’m hopeful thinking for everybody that’s in my channel right now from the US and can’t participate due to the u.s. accreditation issue so I would I would love to know that all of my viewers are gonna get the opportunity to buy in at the exchange before any big giant news comes out yes this announcement will come after we already listed on at least one or multiple exchanges so that’s probably that’s probably what’s going to happen but I can’t promise that since you know everything changes every day so hey but back back to the wallet look .
look what I’m really excited about is because you know I’m an I’m a large coin holder I’m suffering today you know a lot of be fair but but I ask myself are you are you gonna just still because of this problem of the mass adoption are you gonna sell your coins or you’re gonna solve the problem right and and I decided to solve the problem I’m all in on this I’m not doing anything else okay I’m not doing five other adventures I’m not there running around doing investments 24/7 you know I’m here twenty of you can see there’s almost no one in the office because of the storm in New York and I’m here I’m working hard because there’s millions of people waiting for this to be implemented so so it’s very important and I’m passionate about it and it’s you know it’s more important than anything else I’ve ever done I I’m all for you I absolutely support your effort here I support the project which is pretty obvious I I don’t typically get as excited about I cos that I review but there been a couple lately where I’ve just been you know very very very bullish on .
let’s go to chat for those of you in the chat with some questions related to Celsius Network things that maybe have not been answered yet I’m gonna look into chat here give it a couple seconds here see what kind of questions the public has I know that a lot of people have been talking about buying ants and that issue so you know yeah I’m curious I just heard about this so you know it is what it is because part of what we’re trying to do is not just solve the problem for the very rich guys who have thousands of coins and for example we partnered with micro money which is one of our a micron is a great company that operates in twelve countries in Asia and they basically provide micro loans to small borrowers they do zero to a hundred dollars we do will basically take their best customers and go from $100 to $1,000 we’re partnering with the largest payment processor Africa so we’ll be able to offer our wallet in 21 countries except local currencies of credit card or for example in pass sign Kenya and then sell to sell coins against death or cash in points against it so that that and the minimum is is you know single-digit meaning you can come in and buy five dollars worth of each there were five dollars worth of Bitcoin .
so so we’re not we tried unlike again not to bash my competitors but salts minimum I think is $10,000 right so they’re there and they charge 16% so that they’re not trying to solve the problem for that hundred million people because their focus is how do I make the most money possible our focus is how do I include as many people as possible because without those people neither my ether or your ether is going to be more valuable so if we think about the community and we’re doing it for the right reasons everything else will take care of itself it will be equals mc-squared that’s really what what we need to believe would you consider this a Legacy Project for you I said it publicly and I’m saying it again if this does not survive me if this project is not long and lives longer than I do then I fail that’s how I measure my success in this project because this is all about giving back to the community and building something for the community yes I’m going to benefit personally I’ve tokens all of our team members of tokens there’s no other way for us to benefit we cannot make a lot of money unless the token value increases so sure we win or lose with the community so one question here so I’ve been getting some questions and this is actually one that I was thinking .
I mean to take things in another angle if this whole thing really blows up the way I see the potential for it being what do we do have you just happen to like and I when I say disappear I don’t mean on your own accord like are you surrounded by security yourself I mean because you know the question was how will you fight pushback from the banks we’ll take this lying down right so you know what I mean how do you feel about that this is does that not concern you that you know you might get a shot between the toes and your sleep someday I mean like this is crazy stuff I mean this is a very bold move into this financial space well I the military for three years somebody asked me the other day like why do you have all these marks on your hands I like scrap metal you know like this doesn’t scare me at all you want me to go one-on-one with Jamie Dimon pick up the place I’m ready for it no okay okay I mean fair enough fair enough III you know so let’s see here the point is not to compare myself to Satoshi but obviously when you have a great idea looks at all she had with with Bitcoin it survived him wherever he or she is .
obviously everybody picked up the flag and carrying it forward right and if you look at the Christianity right this is the crusade this was not Celsius I’m talking about crypto right say it’s there it’s us against hundreds of years of financial institutions dominating our life right so I know the community is gonna carry the flag even if something does happen to me they’re gonna listen to the idea they’re gonna see the product next week and they’re gonna be like shit this is right this is the way we can break through this right and only if we include the next hundred million people this will happen you know four weeks ago I was in Korea presenting there was talk meeting some of the exchanges and and you know what during my meeting the Minister of Finance comes out and announces that the government decided to shut down the whole thing and you know be crashed an ether crash and then the next morning hundred over two hundred thousand people demonstrated in the street in front of Parliament and 250 thousand signed the petition saying no more you know that we we because Korea has 12% of its population is holding crypto right and immediately immediately the same day the government came out and said no the Finance Minister has no authority to say that we’re taking it back we’re Pro crypto and so on so on right so .
it happened in Korea because they had 12 percent of the population adopting it already but in the United States it’s not even half of 1% right so if the same thing happened here for some reason somebody listen to these bankers and said you know if normal crypto it will be shut down because there’s not enough of us to stand up and say enough is enough so so the time is of the essence here but we cannot just sit on our hands and keep sending coins of each other and think that everything is gonna be wonderful ok I completely agree because the vast majority of the crypto currency trades that are happening right now you know it we’re just trading amongst ourselves you know like somebody had posted something about basically a thousand people owning all of Bitcoin right you know like the ownership of Bitcoin is actually so small and and and you know every trade that happens we’re just giving and taking from each other right now the market is still so relatively small when you compare it to the grand scheme of the financial plane and you know that’s the whole reason I’m here you know that’s the whole reason I’m doing what I’m doing is because I want to educate people about this new foundation of our future and and and it’s and that’s and it’s a lot of the the same message that you carry you know in all of the speeches and everything that I’ve seen you do and we’re definitely on the same page there .
and I think that it’s really up to us that are you know on YouTube watching videos that were you know we’re educating ourselves and each other and others and bringing these people from the outside in in the best light possible and I do believe that your project will Celsius Network is absolutely gonna play a substantial role and and and do now there are other projects as well that have you know different gateways into the crypto space whether you’re talking about you know mobile mining you know for for kids and you know people that are gonna be able to run these mining simulators and earn some points and and there are you know the crypto games that are out there and we’re trying to bring people from all walks of life into this sphere and you know I think that it well let me ask you this so do you have any idea so right now you’re at presale right like is it still entry so I can’t remember to be quite frank yeah we’re in presale through March 15 to March 15th and what’s the presale minimum so right now you have to be in the United States you have to be an accredited investor and you have to put at least ten thousand dollars overseas it’s it’s you know a different minimum so you know .
and you don’t have to be in some some of the countries you don’t have to be an accredited investor and some of the countries you do have to be an accredited investor but basically we are our presale is focused on coin holders who believe that what we’re doing is in their best interest right that’s what we’re looking at we’re not we’re not targeting the VCS or the hedge funds or all the all the crypto funds that are usually the guys that kind of grab big allocations we already have over 7,000 people that we registered to participate so we’re definitely trying to get and we’re gonna finish it I mean there’s hundreds of them coming in every day and you can see that also telegram so it’s a very very broad adoption of the project and the whole point is to get millions of users not thousands of users so also when the wallet and launches we hope to get hundreds of thousands of downloads of people getting in line to get those loans right so the whole this is all about getting that cheap the earlier you download the wallet and the earlier you apply the better your chances of getting it because we probably going to hit the limit also we don’t have unlimited capital .
so its first come first serve until we gather more capital and then we can increase the lending just that we’re not going to get stuck with 20 million dollars you’re going to be able to lend hopefully hundreds of millions of dollars to all of these applicants no it’s the lending itself only going to take place to other crypto holders exactly okay so that is something that people keep asking me in they’re like no but why don’t you lend to other people and earn their interest like no you don’t get it this is about the crypto community it’s about bringing these people from that you want that 9% that’s precious the 9% is something that you cannot get anywhere else and and that’s the reason you finally gonna cross the chasm and join the group the community because I keep talking and see people every day hustling yesterday last night I gave a presentation you know and then then people know I said do you have a wallet they’re like yeah I have one did you have any coins in the wallet no well what’s holding you up and then like well I don’t really have a reason to do it right so we we want to drag them in we want to get them to to buy that first coin after they have that first experience everything changes right so .
so the the nine percent is a way to convince them to finally join the community will you be able to invest will you be accepting Fiat into like will the wallet will your platform Oh enable people to purchase aetherium to lend from here so you buy it elsewhere and bring it into the Celsius Network okay we’re we’re not trying to compete with all the guys of selling coins right so so our wallet is gonna enable you to hold the top twenty coins we’re not accepting all coins either we’re not going to accept tokens and coins and so on we’re only going to accept the top twenty because we can all against the top 20 so we cannot use a very low training token as an asset against which we can walk and land you right so so and that’s all done to protect the community right because if that person doesn’t pay and we cannot liquidate these coins then the community is going to look at us and say hey it took too much risk you lost money for us that’s not your job so it’s a very important point because like if you think about all the other peer-to-peer platforms that are not proof of stake right we’re a proof of stake platform appear to be a platforms it’s me and you right .
I’m the borrower you’re the lender that’s the transaction here the the pool of capital is from the pool of lenders all the lenders get together to create a pool of BTC that pool of BTC of bitcoins is being used as the collateral to paint one person give him one lump right so when he pays the interest that’s why the angels also distributed to the entire pool of capital versus just you on the peer-to-peer analogy right so Lending Club all the other examples you use are all they’re not POS they’re all peer-to-peer implementations and they’re not decentralized they’re all centralized here we use a smart contract that knows who staked what and gives exact value to the people based on their contribution to enable all these loans so one more question and you know it we’ve been at this 40 minutes I know you’ve got more important things to do than ramble on with me but so one of the things that I’ve been seeing pop up I’m pretty sure I know what happens but I’m kind of interested to find out the process as well what happens if let’s say I borrow money and I’ve put up you know ten etherion and that’s ultimately the collateral for the loan right .
so what happens and when do you know that I know I’m no longer paying that back that I basically I can’t afford it I don’t have anymore fiat currency and repay this debt you have my ten aetherium what what is the line in the sand that dictates okay well you’re done you certain ethereal and this is how we part ways like what how does that work right so so first we only charge interest we do not charge principle so if you gave us tech let’s say $10,000 worth of ether I’m just gonna use round numbers to make it easier for us to do the math you gave me $10,000 worth of ether I lent you $3,000 against it and now you have to pay 9% interest in it so let’s round it up to 10% just for you know to make it simple so now you have to pay $300 a year right that’s your entire payout right it’s it’s not 90% of that amount that you borrow right so as long as you’re making monthly payments we don’t have to do anything as long as Experian effectively stays above $300 right if it’s a thousand saying if you gave it to us at a thousand as long as it stays above $300 we don’t have to do anything you can have that long for the rest of your life right .
you will only pay interest for the rest of your life why because we’re holding an asset that is as the value of your loan everybody’s happy the lenders are happy the borrowers are happy everybody’s happy so there’s two scenarios one you stopped paying interest for some reason right we will notify you hey what’s happening we’re not penalizing you unlike the credit card companies and the banks and everybody else who immediately jack up your interest rate immediately report you to the credit agencies to make sure no one else lends you because now they can charge you 25 percent instead of 19 percent right or 30 percent or whatever it is right so we we don’t have any penalty we don’t have any fees we don’t have a fee for the wallet lithography for the loan we don’t have any fees whatsoever we only charge you the nine percent as long as you pay it you’re good if you don’t pay it and we notify you we will start selling some of your coins to to pay that $300 right because we still have the collateral so we don’t have to do any with us now there is a scenario where for whatever reason let’s say bygones get high and it drops 70% so it went from a thousand to three hundred but by the time it’s $330 we will send you an SMS or an email and say look there’s a lot of market volatility .
you’re about to hit your credit limit right because basically if it drops below 300 now we’re risking the community’s capital so to protect the community we are asking you one of three things first do you want to deposit more coins to increase your collateral so we don’t have to liquidate any of your points second do you want to pay down below send us some of the dollars back and then we don’t have to touch your coins or third sell some of your coins now before it drops a bit lower you don’t have to sell all of it you just have to sell a few of them to create more collateral right so these three solutions are again here to protect you to give you their options to lower your risk as well as to protect the community so everything we do is measured by is this the best solution for the community of borrowers and lenders if it’s not if anyone anyone viewing this video right now has a better solution we’re willing to implement a better solution this is the best one we came up with but the idea is to continuously improve both the experience the lower the fees we should be able to land at 8% and 7% as we scale because our cost of capital is going to be lower .
if we have 10 billion dollars worth of deposit we could be able to borrow probably at 7-eleven at 7% of 79% our cost of operations gonna be dropping also because the same number of people will be doing billions in loans there are millions involved so all these things are connected and they’re all there to improve the experience and why are we doing all that because it’s actually not best interest if we did all that if there just went up and I’ll quite went up it’s a win-win-win the only the guys that hold your money today which are the banks and the financial institutions that try not to give you anything because they’re making all the money so and it’s all because they’re the monopolies they are decentralized the institution that became too big to fail right look at 2008 I mean not to go on event you but 2008 all these guys goldman morgan stanley Lehman’s they all took excessive risk there were leveraged fifty to one they lost all their capital they were basically insolvent and they got bailed out by the by the Fed the Fed came in and reflate the entire economy right not a single guy went to jail 2009 .
the banker is the same bankers that basically lost trillions of dollars for the average American on the real estate and on their loans and everything else get record bonuses 2009 was a record bonus year for Wall Street not one not a single person went to jail write a big jokes are we gonna let that happen again because that’s exactly what they’re gonna do there are less financial institutions today than in 2008 so it’s it’s in our hand it’s either we do this we make this revolution take hold are we gonna let JP Morgan inject the blockchain into their back office so they can squeeze an extra ten billion dollars in profits these are the two options you know so I get really mad when I see a project that are about helping centralized companies make more money and our community is funding it I mean that’s just ridiculous that’s ridiculous that the even if you’re speculators should not be funding these projects okay so so my passion is about convincing the community to huddle together and and extract as much value for ourselves again we can extract it through the proof of stake we can extract it through loans and they can extract it through coin landing .
so I want to it’s a very important element today if you put your coins of by names they pay nothing back why because they don’t have to Baggins goes out and lends these coin outs for short sellers or for all kind of other guys they charge twenty to twenty five percent on your coins besides getting hot right so so what we do is we say why don’t we take all these profits that the see of me and the CBOE make some future contracts that finance make some shorting coins and we pull that into the community if somebody wants to borrow 10,000 bitcoins why don’t we charge them 20 percent and distributed to all of the community holders just like we’re doing with the nine percent interest right and that’s what we gonna do right the minute we have these deposits we’re gonna ask these these short sellers to put 50% of cash deposit and then we’ll lend them the coins you go short on on this event exchange and we’ll charge them 20 to 25 percent and distribute it to our community at least if they wanna go short we should benefit from it and the rent hey I’m with you brother ha ha everybody knows .
I love to rent I mean you just you can’t help yourself there’s plenty of opportunity to give rent juice right give me a medal look Alex I really appreciate everything you’re doing I really do and you know let’s just say that I’m gonna be looking into you know I plan to definitely get involved with this personally and you know look anytime you need me just reach out let me know I’m happy to have you I definitely plan on keeping everybody updated on the progress the Celsius Network and yeah all you got to say now man is crow your coins all right Alan see everybody thank you very very much for for joining me and yeah I’m looking forward to seeing what the future holds and I’m really that you’re one of the guys that that that’s pioneering this whole thing and taking things to another level so thank you and everyone else out there in crypto land crow your coins and until next time I’ll see you guys very very soon .