https://cryptosigma.wordpress.com/2015/03/21/why-we-created-cryptosigma/A little blog entry on why we created Cryptosigma, for anyone who doesnt like clicking links to see the original post on my blog ive also included the article below. I hope you enjoy, and constructive input if youve signed up for our private beta is always welcome.
Cryptosigma is a sincere company with a straightforward vision created in 2014. We believe that money should be simple & we want to use something called ‘The Blockchain’ to revolutionise the way the world interacts with money and finance. We want money to be democratic, from individuals to small or large companies everyone should be able to send money anywhere in the world as easily as sending an email. We created Cryptosigma because everyone should control & have access to 100% of their money at all times. Everyone should be able to earn interest on their money even if they only have $10. Everyone should have access to micro loans.
Transferring money (especially internationally / cross border / cross currency) is massively behind the times & very expensive. To make matters more frustrating for us its all backed by incredibly careless customer service (who wants to speak to a Robot? Not me! Unless its Short Circuit or to those of us who know him well…. Johnny Five!). With limited options I had found it incredibly difficult to transfer money abroad without losing a large percentage in fee’s and forex spreads which courtesy of the Banks have profit margins built into them of up to 3%, when you couple this together with an international transfer fee of $40 then a transfer of $500 just cost 14% in fee’s! Anyone who has made an online banking transfer has arrived at the stage where the bank asks who will pay the fees, you or the payment beneficiary? The options are as follows:
1) ‘you pay the fees’
2)’share fees with the beneficiary’ or
3) ‘The Beneficiary pays all the fees’.
At no point in this process is there ever a pop up notification that tells you how much these fee’s will be, its a guessing game of the worst kind. On top of this dire scenario if you do the same transfer with the same options multiple times, the amount of money the person you are sending the money to actually receives is different every single time. This means that to add insult to injury there is also a massive lack of transparency when using Banks today.
When i first bought into bitcoin 3 years ago i realised that the real value in Bitcoin was not bitcoin itself but the ‘Blockchain’. What is the Blockchain? Well in the same way the internet is a communication transfer protocol that allows us to send things like emails, the Blockchain is a value transfer protocol that allows one individual to transfer value of any kind to another individual anywhere in the world (money, shares, contracts etc). I understand that Bitcoin is a terrible currency at present because it lacks many of the fundamental characteristics a currency needs to be widely adopted such as fungibility, stability and recognisability. This is changing rapidly but when it comes to problems, we need solutions now, not in 5 years.
I was very interested in what Transferwise was doing in the arena of sending money without a Bank. Their fundamental business model is that they match currency flows between users who wish to remit money from one country to another, but therein lies a problem, no matter what they do, their ‘order book’ that matches person A with Person B will always be centralised. The problem this presents is that the centralisation of pretty much any business model limits scalability and its network effect (imagine if Mark Zuckerberg had to submit his idea to a central authority to get Facebook approved and they did believe in it, and if it did get approved to be a Facebook user this central authority had to ‘approve’ you); centralisation is a classic double edged sword that stifles growth and in todays ever evolving distributed & decentralised world this flaw eats away at first mover advantages as rapidly as Pacman eats ghosts.
When we looked deeper at what Transferwise was doing, we realised that the places you can actually send money with Transferwise are massively limited (because of the fact they are using a centralised order book). When we looked even closer we realised that the majority of the money they move doesn’t happen on their order book as they said it does, it actually happens via a wholesale Forex solution service called ‘The Currency Cloud’ who are a customer of ‘Barclays Bank’.. so the fact is, even though Transferwise says they send money without using the Banks in their marketing campaigns. Thats actually not true, they do use the Banks, and like snakes and ladders this brings us crashing back to the beginning of the problem we had in the first place which is a lack of transparency. So i asked myself, is it possible to build this model on top of the Blockchain, to make the process honest & transparent once and for all by simply using Bitcoins the ‘native currency’ of this distributed global value transfer protocol as ‘tokens’ that instead of being their own currency represent the Fiat denominations people really want to send, like US Dollar. The answer was yes and that is why today we have a very young but functional version of a instant and incredibly cheap money transfer application that can really send money anywhere without involving a Bank & when you send money without a Bank there are a few really interesting things that start to happen.
1) it gets cheaper to send money, 97% cheaper!
2) It gets infinitesimally faster, instant to be precise!
3) as a result of point 1 & 2 money starts to move as freely as communication does today
4) as a result of 3 economies get healthier and individuals experience more prosperity than they have since 1972 (nearly half a century ago).
Welcome to the Cryptosigma.
Aaron Siwoku
