It has been interesting to watch blockchain-focused companies evolve in 2019. Following the ICO boom of 2017, and the current bear market, a number of blockchain and crypto companies have succumbed to fraud and failure.
However, a handful of blockchain-focused companies are still going strong this year. For example, Chronicled, Inc., a software technology company that gives industries and enterprises the tools to build blockchain-powered supply chain ecosystems, recently raised $16 Million in Series A funding. Also, the blockchain selections from this year’s Forbes Fintech 50 2019 picksappear promising.
Joining the ranks of these companies is Celsius Network, an industry-leading cryptocurrency lending and borrowing platform founded by Alex Mashinsky, one of the inventors of VOIP (Voice Over Internet Protocol). Mashinsky is now working on what he refers to as “MOIP” (Money Over Internet Protocol) technology, which he is bringing to life through Celsius Network.
Announced this month, Celsius originated over $630 million in crypto loans since its July 2018 launch. Celsius Network was founded to provide financial services to cryptocurrency holders, such as interest-earning wallets and low APR loans. Staying true to its motto “Unbank Yourself,” Celsius Network’s mission is to act consistently in the best interests of its community, which according to Mashinsky, is precisely what banks often fail to do.
Celsius Network was created to leverage cryptocurrencies and blockchain technology to create a community in which we act in the best interest of the depositor. When banks make a profit, they give it back to themselves or the shareholders, but nothing goes to depositor. Celsius is taking the same concept as banks by allowing people to take out loans or deposit coins. The only difference is that up to 80% of the income generated is given back to the depositor every week. We are doing exactly what banks are supposed to do, but for the depositor rather than the shareholders,” Mashinsky told me.
Although Celsius launched less than a year ago, the platform already shows signs of success. In addition to originating over $630 million worth of crypt loans to non-U.S. customers, the company has completed over 70,000 transactions with exchanges and hedge funds over the last six months. Additionally, more than 16,000 registered users from over 100 countries have joined Celsius. The company also notes that it has paid bitcoin (BTC) and ether (ETH) interest to all its depositors every week since its launch.
Celsius’ amazing performance these last six months proves that if you act in the best interests of your community, they will recognize your efforts and support you, said Mashinsky. A killer app on the blockchain is not a pipe dream. Every day on our platform, members are borrowing crypto, receiving dollar loans and more, at the lowest APRs. Banks are no longer the only way to borrow, which means they don’t hold the power to decide who gets a loan and at what price. Celsius Network is modeling a new financial future that’s based on the blockchain and designed for the global crypto community.”
Celsius Network also follows a strict KYC (Know Your Customer) process, meaning that everyone who passes this process is already banked with proper records. According to Mashinsky, the majority of Celsius’s users are middle-class individuals who strongly believe in cryptocurrency and are striving for an institution that works in their best interest.
The next growth phase for the company will cater to the unbanked and underbanked. If you look at VOIP, which I worked on for twenty years, it started the same way. The beginning was a bypass of the phone regime, then we opened it up to more carriers and mobile apps, and now everyone is using VOIP. We can’t start with the unbanked simply because we won’t get the adoption or scale needed.”
A New Financial Future In A Bear Market
In regards to the current bear market, Mashinsky alluded to a Bloomberg article that explains how more cryptocurrency accounts were created in 2018, despite the declining price of bitcoin.
Think of the last 10 years as a four man relay race. The first people interested in crypto were anarchists that took the baton from Satoshi Nakomoto and tried to use Bitcoin to blow up the world. However, this group barely managed to pull together a million people to join them. They had to pass the baton to libertarians who wanted to use Bitcoin to bring in people who could save the world using crypto, but they hardly got another 3 million people to join them. Even with 4 million in total, they still couldn’t foster adoption. And while they did manage to get bitcoin up from $0 to $2000 a BTC, the third group to grab the baton were speculators. They said crypto was about making money with bitcoin. Their plan was to pass the baton to the institutions at $20,000 a bitcoin. The problem was that most institutions weren’t ready to finish the race due to technology, regulatory and custody issues. So they dropped the baton,” said Mashinsky.
And even after being down 80%, bitcoin still proves to be the best performing digital asset class in the past decade. While 2018 was dominated with the dropping baton, bitcoin continues to be adopted and new blockchain developers in 2018 have doubled.
We clearly have a wave of adoption with young people in this industry. Statistics show that 90% of young people in Seoul Korea already hold crypto. These are the early adopters. Now, the only thing the crypto community is missing to finish the race to $100k BTC is a killer app to bring the next 100 million people into crypto, because too many speculators have jumped in and there are not enough real users and institutions to get us to the next level of adoption and price,” said Mashinsky.