I am Frank Schuil, CEO & co-founder Safello, we did the deal with Barclays. AMA!

[FrankSchuil]

Hi everyone,

How is it going?

Bit of background straight from my Linkedin:

Founded several companies in various industries including location based social network IRL Connect, fashion company ClickClacks and indoor positioning company Qubulus. I was also part of initiating the Verbeterdebuurt foundation that unites citizens and municipalities to improve neighbourhoods and I pioneered as a Dutch rapper pre-dating my entrepreneurial life.

In my current position as CEO & Co-founder of Safello (https://safello.com) I'm heading our efforts to build a Bitcoin spending platform that can also help financial institutions enter the Bitcoin & blockchain technology era. Safello was part of the Techstars program in London and we were the first Bitcoin company to close a partnership with a global tier I bank, Barclays.

For reference, some questions I've already publicly answered:
https://wiselike.com/frank-schuil

Alright, all ears.

Frank

[Chris]

Hello Frank what do you think about bitcoin price in 2016 ? recently we saw a debate about block size what is your opinion about it?

[TGBEX]

I'll ask then!

Whilst working with Barclays might be positive for Safello, given they have shut down bitcoin accounts and their track record over manipulating markets, involvement in misselling products etc, do you think this is beneficical to the bitcoin ecosystem to be 'jumping into bed' with institutions like this?

Do you see bitcoin as something that can build a better world, or is it something you are purely looking at to make money from?

You have said some banks are looking to 'hedge their bets' when it comes to bitcoin, do you think an institution like Barclays can embrace something for the wider good, even at their own cost? (or are they more likely to hinder its development to try and protect themselves as eg as JPMorgan seem to be doing?)

[FrankSchuil]

*messed this reply up*

[FrankSchuil]

Hello Frank what do you think about bitcoin price in 2016 ? recently we saw a debate about block size what is your opinion about it?

Regarding the price I did a recent write up here: https://wiselike.com/frank-schuil/quest ... n-for-2016
TLDR: there are some events that may impact the price like the halving and the block size debate, but the overall long term prospect is positive.

As for the block size debate, it's obvious that we need a solution a opposed to no solution. In a way the debate is a scalability test on itself, can this industry get behind a way forward. When this does get resolved, even if it's a compromise and/or a temporary solution, it signals a new maturity level of Bitcoin. It may therefore be a defining moment to tip the blockchain vs Bitcoin in Bitcoin's favour.

[FrankSchuil]

I'll ask then!

Whilst working with Barclays might be positive for Safello, given they have shut down bitcoin accounts and their track record over manipulating markets, involvement in misselling products etc, do you think this is beneficical to the bitcoin ecosystem to be 'jumping into bed' with institutions like this?

Do you see bitcoin as something that can build a better world, or is it something you are purely looking at to make money from?

You have said some banks are looking to 'hedge their bets' when it comes to bitcoin, do you think an institution like Barclays can embrace something for the wider good, even at their own cost? (or are they more likely to hinder its development to try and protect themselves as eg as JPMorgan seem to be doing?)

Good question, I have a counter-question: Do you believe that working against the financial institutions would speed up adoption or delay it?

We did a proof-of-concept around Bitcoin. If we were about making a quick buck, we would have gone the permissioned or private ledger route. I think ignoring the existing financial players is a strategic mistake as it at best delays adoption and at worst threatens Bitcoin's future by pushing the FI's in the opposite direction.

As for motivation, I see Bitcoin as a way to democratise money and foresee that it might have its own version of the Arab Spring down the line. As for the positioning of our platform, we don't seek to recreate the existing financial structures, i.e. we don't hold customer funds but believe in customer control and choice.

Final point on banks, we have had 3 accounts closed in our lifetime already. Now, one can be angry about that or try to understand why this happens. We chose the latter path and in doing so we were able to get a good understanding about the real worries of those who work in compliance and fincrime within the banks. That is not to say that there may not be ulterior motives, but it puts things in perspective. And again, looking at adoption, the quickest way into Bitcoin/crypto is through fiat to crypto conversion - so we need them!

[TGBEX]

In answer to the counter question, imho would say if they fully embraced bitcoin and integrated it, then it would help short term (at a cost to the potential social benefits that bitcoin could bring), arguably it defeats the whole purpose a decentralized currency though (certainly as a force to disintermediate the banks).

Personally I think bitcoin could be of huge use to banks in a huge number of ways eg transactional efficiency/ record-keeping/ alternative asset class, but would prefer it if they keep their distance a bit longer until ownership is more widely spread (maybe dreaming at this point).

Intrigued to see what you think about the third question? (though will forgive you if you ignore it, as slightly 'damned if you, damned if you don't'!)

As someone with experience of dealing with all areas and senior management of a 'tier 1' bank - compliance and fincrime (or innovation depts) do not generally make decisions and can be overruled at any time, so make sure any agreements you have are in writing!

[ball4thegame]

Hi Frank, can you give us any interesting details regarding the project your team is working on with Barclays? Where do you see this relationship and project going?

[FrankSchuil]

In answer to the counter question, imho would say if they fully embraced bitcoin and integrated it, then it would help short term (at a cost to the potential social benefits that bitcoin could bring), arguably it defeats the whole purpose a decentralized currency though (certainly as a force to disintermediate the banks).

Personally I think bitcoin could be of huge use to banks in a huge number of ways eg transactional efficiency/ record-keeping/ alternative asset class, but would prefer it if they keep their distance a bit longer until ownership is more widely spread (maybe dreaming at this point).

Intrigued to see what you think about the third question? (though will forgive you if you ignore it, as slightly 'damned if you, damned if you don't'!)

As someone with experience of dealing with all areas and senior management of a 'tier 1' bank - compliance and fincrime (or innovation depts) do not generally make decisions and can be overruled at any time, so make sure any agreements you have are in writing!

With regards to your "defeats the potential social benefits", I'm not entirely sure it would play out like that. If in parallel we would see the Bitcoin adoption that we anticipate to happen and regulation shapes up to be embracive, the logical route for banks would be to open up and interact with the wider Bitcoin economy. This could be accelerated by - at least the UK and I believe European - legislation moving towards open data (https://www.gov.uk/government/uploads/s ... sponse.pdf).

Ownership being more widely spread, yes ideally, but it's hard to dictate the timeline. The banks have woken up and it's full speed ahead.

As for the third question, financial institutions come in different flavours. Some aggressive, some exploring and some taking the back seat. I would categorise most of them in the latter category. Primarily challenger banks and fintech companies have a different modus operandi. For those following an aggressive agenda it's of course profit-driven and they have different ways to approach their SWOT. It is smart to hedge bets. They should both embrace blockchain and bitcoin as a hedge against fiat / existing structures. And it also make sense to invest in companies that directly compete with and may disrupt them one day as well as form early alliances and cooperations (accelerators, challenges and the type of coop. we have done with Barclays). Banks in particular have historically been able to keep a moat of compliance around them where they were able to influence policy makers to maintain their oligarchy. Although fintech companies have been disrupting the banks to some extent, it has not been the threat they may face from blockchain/bitcoin which is fundamentally different; bottom-up movement, decentralised and - for the time being - resistant to compliance.

[FrankSchuil]

Hi Frank, can you give us any interesting details regarding the project your team is working on with Barclays? Where do you see this relationship and project going?

As you can imagine we are under a strict non-disclosure agreement. What I can say is that it's been a pleasure working with the folks at Barclays and that many within the organisation are supportive and excited about our collaboration. Hopefully we can soon reveal more.

When it comes to the future, we have ongoing discussions with many financial institutions. Barclays in particular is making great strides to be on the forefront of Bitcoin/blockchain adoption, driven by knowledgeable people like Simon Taylor and Anthony Macey, and therefore continues to be a perfect enterprise partner for us.

[maxi_malism]

Question:

Swedish dark-market Flugsvamp has the line "Don't use Safello!" at the top of it's page. Do they know something about Safello that we don't?

/ Safello user with privacy concerns

[Smartie]

Hi Frank,

Can you tell us, if they pro Bitcoin or pro Blockchain? Will they also join forces and close accounts linked to Bitcoin, like the Australian banks did?

Thanks for doing this AMA.

[FrankSchuil]

Question:

Swedish dark-market Flugsvamp has the line "Don't use Safello!" at the top of it's page. Do they know something about Safello that we don't?

/ Safello user with privacy concerns

That one is rather simple. We are registered with the financial inspection and follow the AML regulation, i.e. we need to do full verification of people's identity, monitor transactions, etc. So if you want to buy drugs, which is what you do on Flugsvamp afaik, buying bitcoins through our platform and sending it there isn't the best idea.

[FrankSchuil]

Hi Frank,

Can you tell us, if they pro Bitcoin or pro Blockchain? Will they also join forces and close accounts linked to Bitcoin, like the Australian banks did?

Thanks for doing this AMA.

I assume you are referring to Barclays. They are technology agnostic and are hedging their bets between bitcoin and blockchain. They are the first tier I bank to do a proof of concept with Bitcoin, so in a way they are more progressive than most.

The closure of bank accounts is heavily dependent on how the regulatory landscape evolves and how they see themselves protecting their position. The way legislation is progressing (https://www.gov.uk/government/uploads/s ... hanges.pdf) indicates a favourable landscape is forming.

[jan.beeck]

Hi there!

Do you think that big banks will eventually work together with startups, who work with the unbanked people with the Bitcoin’s protocol?

Thanks.
www.crowbe.com

[nagleatorcoin]

Hi Frank,

Can you tell us more about your new wallet feature? From what I gather you said you won't hold customer coins like coinbase or bitstamp but they will be able to send from Safello through their own wallet?

[FrankSchuil]

Hi there!

Do you think that big banks will eventually work together with startups, who work with the unbanked people with the Bitcoin’s protocol?

Thanks.
http://www.crowbe.com

The question is whether they can afford not to. Right now the growth potential is there and if partnering up with startups provides an opportunity for land grab or stop competition through acquisition it is the natural way to go. Compliance and risk assessment has historically been a hurdle for FI's and this is where blockchain/bitcoin companies can make a difference - so there's a bonus argument there.

[FrankSchuil]

Hi Frank,

Can you tell us more about your new wallet feature? From what I gather you said you won't hold customer coins like coinbase or bitstamp but they will be able to send from Safello through their own wallet?

Certainly. We looked at the market and identified the recreation of banking services on top of the blockchain by the big boys: Circle, Coinbase, Xapo. They are custodians of funds with the potential to go fractional reserve - transparent audits are still not common practise - and your funds are at risk by the geographically affiliated jurisdiction. On the other hand you have companies who created self-controlled services like blockchain.info, mycelium, armory, etc., but those are lacking the UI/UX simplicity to make it fun and accessible for the average user, i.e. only tech-savvy people find their way around them and even then we've dealt with plenty of those type of customers who got into trouble: lost passphrases, lost backups, etc.

This is why we've spent a great deal of time to make a wallet that is non-custodial while ensuring our benchmark of what a user-friendly experience should be about. Initially we built this on blockchain.info's API, logically so as Nicolas Cary and Roger Ver invested in Safello and they are market leaders with sufficient funds to last a long time. Unfortunately their API didn't allow for 2FA and we had to go back to the drawing board. Now we are working with a partner to implement a multi-sig HD solution where Safello is not able to move your funds. It's getting to the private beta stage soon and I'm keen to see what the initial feedback will be. From there we have plans to significantly change the way people experience bitcoins, but more about that after we get the wallet out.

[nyeko_12]

Hi!

are you planning to release a kind of bitcoin debit card (bitcoin to SEK) in the future? Will you offer a app for google play/apple app store in the upcoming future?

[FrankSchuil]

Hi!

are you planning to release a kind of bitcoin debit card (bitcoin to SEK) in the future? Will you offer a app for google play/apple app store in the upcoming future?

Hi Nyeko,

We have been looking at several suppliers and are in discussion to roll this out, timeline still TBD. Mobile app, absolutely, timeline also TBD

Best,
Frank

[Skin_in_the_game]

hello Frank,

I see that your are still answering question on your topic. Therefore I take the liberty to send you my question:


I was re-reading Antifragile by iconoclast thinker Nassim Taleb recently. He writes

"Never ask anyone for their opinion [...] Just ask them what they have -or don't have- in their portfolio"

Having met or read about a few people in the bitcoin community, I have come to think it's a very relevant question and you can better weight their opinions having an idea of how many Bitcoins they hold (or do not hold.)

I wanted to ask every participants to tell us a range of their bitcoins holdings rather than asking them their opinion on Bitcoin and its future. The first person asked told me percentage of his net worth or liquid assets held in Bitcoins instead. He thought it was more relevant and I also think it feels less like an invasion of financial privacy so..

So my question is:

- Which percentage of your net worth and/or liquid assets do you hold in Bitcoins ?

+ If you wish to do so you can also/instead tell us a range of the number of Bitcoins you own:
a/ <10
b/ 10-100
c/ 100-1,000
d/1,000-10,000
e/10,000-100,000
f/more than 100,000

[FrankSchuil]

hello Frank,

I see that your are still answering question on your topic. Therefore I take the liberty to send you my question:


I was re-reading Antifragile by iconoclast thinker Nassim Taleb recently. He writes

"Never ask anyone for their opinion [...] Just ask them what they have -or don't have- in their portfolio"

Having met or read about a few people in the bitcoin community, I have come to think it's a very relevant question and you can better weight their opinions having an idea of how many Bitcoins they hold (or do not hold.)

I wanted to ask every participants to tell us a range of their bitcoins holdings rather than asking them their opinion on Bitcoin and its future. The first person asked told me percentage of his net worth or liquid assets held in Bitcoins instead. He thought it was more relevant and I also think it feels less like an invasion of financial privacy so..

So my question is:

- Which percentage of your net worth and/or liquid assets do you hold in Bitcoins ?

+ If you wish to do so you can also/instead tell us a range of the number of Bitcoins you own:
a/ <10
b/ 10-100
c/ 100-1,000
d/1,000-10,000
e/10,000-100,000
f/more than 100,000

Let's just say that my investment company started with a diversified crypto currency portfolio and over time it all gravitated towards Bitcoin. It's always been more than 75% of my crypto portfolio, but now I'd say it's closer to 95%. For obvious reasons I won't disclose figures.