TOKEN2049 - Bitwala: The Only Bank - Benjamin Jones (Bitwala)

can we get the presentation please okay cool yeah so I'm the CTO and co-founder of koala and we are a German startup and we've created the world's first crypto bank account so our mission is to be the gateway between the old money and the new money I think most of us by now I don't believe in the decentralized vision of cryptocurrency that we once had shortly banks down with the banks I think most of us realize that there's a synergy that can be achieved between traditional finance and crypto finance so yeah there's massive advantages of both sides so still with tradition and traditional markets you can't buy stocks on the weekend because the market is closed in fact the biggest book market in Asia actually has a one hour lunch break when you can't trade and if we look at crypto it's absolutely tiny in terms of value compared to traditional finance and so if you give somehow leverage the benefits of cryptocurrency and blockchain and apply it to traditional finance and that will be a massive win for everyone I think most of the people in this room are already convinced by that some personal experiences for me our last funding round it was a venture capital round it costs 100,000 euros and we spent 15 hours in a notary appointment so there's definitely a big opportunity to cut out the middlemen and make things more easy for both sides another example I used to be involved with startups in Africa and when there was a really good project it was the case of Silicon Valley wouldn't be able to invest in it because they would have no idea how to invest in a Ghanaian limited for example so we actually see the traditional finance and the legal structure is blocking capital from flowing into interesting investments we all know that the world is going to be tokenized and I think one of the macro trends that we see is that the Millennials who are going to inherit a lot of money they already have a preference for digital assets so the money and Millennials of people who grew up in the financial crisis and they already b'fer cryptocurrencies and digital forms of assets over the hedge funds that their parents over the air that the real estate that their parents preferred and so that's a macro trend that we're seeing so yeah I'm from Berlin and in one of the Berlin neighborhoods Kreuzberg it was very famous from this cyberpunk movement the early adopters of Bitcoin was like Oh Punk's or libertarians and they believed in the most decentralized societies possible they believed that banks were evil banks for middlemen who controlled money and took profit and used their monopoly position to make the world a worse place and and we were promised a decentralized revolution and the question is where is it so what is this it's a picture with flying cars this is a country called liberland it's a small island between Croatia and Serbia and it's trying to be decentralized country in many regards they Bitcoin is the national currency and it's trying to make US government is decentralized and as small as possible voluntary taxation and of course things like registering a birth or registering a company would always on via smart contracts on decentralized block chains but the sad truth is or maybe it's not so sad is a banks are here to stay so first of all why well what is a bank so a bank is just a company from the government that's been given a license by the government to do certain things with people's money so I don't think any of us expect spanks to have exactly the same role as they do today but in the future as long as we have a centralized government there's going to be certain entities a given permission to do things with the wealth and with the money pertaining to those centralized entities secondly our real-world assets so something like Bitcoin the value is natively stored on chain that's fine but if you want to have a blockchain for commodities if you want to put something like wheat on the blockchain then there's a connection between the real world and the blockchain and whenever there's a connection that's got to be enforced with some kind of legislation there's got to be a contract there and even if that contract is some kind of smart contract at one point it's got to have a reference to the real world it's got to have an institution like a bank on to write underwriting it and saying that yes this token does correspond to this fund that corresponds to ad ownership in this building for example so as long as you have real-world acids you're always going to have a degree of centralization and centralization means banks and then finally they already did it so if we look at the markets today it was the banks that put all of the assets in a form that made them liquid where they could be tradable so if they were the guys who already did it then most likely it's going to be the guys that they do it again and all of us know that economy is going to be tokenized it's not all going to be on chain native assets like Bitcoin it's going to be real world assets and it's going to be the guys who did last time we do it again so we went from the dream to the reality this is a level on today and you can see the fully decentralized future is very much a work in progress and I think that's a good thing so this is a quote from the founder of spice VC which is a tokenize VC fund placing the bankers at the center of the ecosystem is the fastest way to grow the industry so I think a lot of us are here because we believe in the promises of blockchain we believe in decentralization we believe that it'll make finance and investing and and making contracts a cheaper more efficient and more accessible and I think we can really welcome any kind of force that brings that closer that makes it happen quicker so what the banks do first of all they do know your asset so investment banks for example if you're an IPO then you need to go through an investment bank he will make sure that your books are correct and then when you're selling that share on the market you can trust that a third party has validated that this company is actually doing what it said it is doing and is actually underwriting that asset secondly it's increasing demand so and we know that the institutional players need to come in to actually create a greater demand for blockchain right now the demand for on blockchain assets is still very very small and so by pulling in the institutional banks then we can also pull in the institutional investors and there's this way creates increased demand and that will lift up the whole ecosystem and then finally new wealth generated so it's not just the case that we're going to tokenize existing assets it's all so that we can tokenize new assets so a big one is pre-ipo companies so my company for example is doing an sto and it's way too much work for us to do an IPO but because of the new technology available we can actually tokenize part of our company and sell it off in a more public way which wasn't possible before the blockchain so what are we doing today well we say banks are going to stay the role of a bank is going to change but banks are going to be an integral part of this slow but steady transition from the old world to the digital asset world and so what we have we done we've created the world's first crypto bank account so users can go through our onboarding and then they open their own German bank account they get an iron and a Bic when they open a Bitcoin wallet where they hold the private keys and they can trade directly between the two so until now you've had to choose whether you want to keep your money on an exchange where you can trade it or whether you keep it on your bank account or your wallet where you can spend it so you always have to choose between which platform do I keep my money on with bit wallah your bank account is your exchange and you only need to have your money in one platform and finally your money is secure so the euros are protected up to one hundred thousand euros by the German banking deposit scheme and your bitcoins are protected because you hold the private keys even if wallah gets hacked or goes bankrupt then you're the only one who has access to your money so you have the security of keeping the money in a bank or a wallet within the spend ability of using an online card for example and then you can also trade it whenever you want and you can also trade on the weekend because you the money's already in the system so if you want to trade on a Friday night it won't work because you need to make a bank transfer to crack in or the best time whatever and that won't arrive until early next week yeah so what we've done is made it the best way possible to manage your Bitcoin and your liquidity so you don't have to compromise your trade your funds are tradable usable and secure so we launched in December and we're currently doing b2c accounts you can sign up today as long as you're a resident of the EEA later on this year we want to start doing b2b business and this is really interesting because currently blockchain company's extremely underbanked say we have a company in our co-working space and they're not doing anything with moving money around they're not exchanged or anything like that they're just doing a blockchain project and they're paying 15,000 euros a month just for bug normal banking so just for payroll just for invoices and that kind of thing so if you have blockchain anywhere in your business plan and you're basically being penalized and you're having to pay a lot different for normal banking services and so we're saying we're going to bank the digital economy and we're going to Bank blockchain startups in 2020 we want to get our own banking license so currently we're working with a German partner Bank there's no point in reinventing the wheel there's no point in creating a bank to offer current accounts because that's pretty boring build business frankly and so we're currently working with solaris bank also based in berlin germany and that takes me to my next point which is why we're raising capital so as you might imagine getting your own banking license is relatively expensive it takes one year of time and four million euros and the small army of our lawyers and consultants and this is why we're looking for funding now and then secondly we actually want to do what we say we believe in so I'm telling you that the future is gonna be tokenized and that feature is going to be better than the one we have now and I would be a hypocrite if I stood up before you and I wasn't doing something to tokenize my own company so we're taking 15 50% of the company and we're tokenizing it and we're going to make it available for public sale so why is our sto different first of all our token is like equity so we're trying to be if we could we would put equity on the blockchain but unfortunately we can't yet and so what we're doing is a convertible note that has a properties of equity so if we do an SDO if we do an IPO then you can actually flip your tokens for shares and you can appreciate all of the benefit of the dividend payouts and if we do an exit beforehand secondly it's regulated in Germany so our business is based in Germany our banking license in Germany and our FTA will be approved by the barfin which is a german regulatory body and then finally we're a live product with traction so you see a lot of white papers promising something we've been in the market for three years and our new product is live since December and then finally we backed by some of the biggest names in the business so we've closed three VC rounds before deciding to do an sto we're supported by a digital currency group which is the biggest cryptocurrency startup investor and earlybird used to seed investor and 26 and were actually backed by the European Union specifically to help the beat of a use case because even they see that the blockchain sector is is under banked this is a diagram of the security token offering and what will happen is a little bit complicated it's available on a page a bit wallet token calm but what I want you to get out of this is that we've worked really hard to align the incentives of the token holders with the shareholders because just as our mission is to combine old finance with new finance we're combining old fundraising with new fundraising we're combining equity with tokens and it's a messy transition phase we're doing the best that we can in 2019 but you can rest assured that I as a shareholder had the same incentives as you as a token holder yep so again all well the new world I've been in the crypto space since 2013 I got my first Bitcoin when it was 50 euros and and then we're adding traditional bankers to our team as well so my CFO Christophe he has 10 years in normal banking he is first hand seen the pain of traditional banking and so we like to think that our team is like our mission and it's bridging the two worlds crypto in traditional payments and then finally I would ask you to consider investing or to ask anyone who you know to invest so currently it's a private presale and we're looking particular sizes of mini 100k yeah I know the information is online a big wallet token calm thank you very much you