Today, Alex Mashinsky, CEO of Celsius Network, spent 75 minutes answering questions from crypto enthusiasts about the milestones from 2019 as well as his plans for next year. Following the very positive feedback we're received from our coverage of Celsius' CTO Nuke Goldberg's AMA, we've decided to also cover today's AMA extensively by giving you a summary of some of the most interesting questions and answers, in case you don't have the time to go through the entire video.
Answering more than 31 questions from the community, Mashinsky started to thank the Celsius Network members and ambassadors (you can join the ambassador program here) for not only believing in the project, but for joining the so-called Unbank Yourself movement. His view is that banks are not working for the people, but mostly for shareholders and big investors. He wants to change that, by giving 80% of the revenue back to the community.
Tired from traveling all around the globe and working seven days a week, Mashinsky also mentioned that he is giving himself entirely to the cause, making presentations, participating in events and sharing the message not only in the United States but globally. "It's been an amazing year, I've done over 200 speaking engagements and conferences." His primary objective is to bring 100 million users onto his platform, which is definitely an ambitious goal to say the least. But the inventor of Voice over IP (VoIP) is not afraid by the journey ahead of him and already has great plans for 2020.
One question in particular already led to much speculation on social media. When asked about what he is mostly excited about for 2020, Alex Mashinsky explained that Celsius is currently working on massive new partnerships. Some of those major partnerships may first be introduced in Asia and Europe.
It was very obvious when watching Mr. Mashinsky, that he couldn't wait to unveil the veil on these possibly gigantic partnerships, but also wanted to ensure he has formal approval and does not announce deals prematurely.
"Some of the larger companies in the world are partnering with Celsius and I can't wait to tell you, but I (have to) get the permission first, so I don't get in trouble." Known as a very upbeat and forward thinking leader, Mashinsky jokingly explained that "I don't want to get in trouble before 2020 even starts."
Adding on that, "all I can tell you is that you're going to love it."
ADVERTISEMENT AND CELPAY
Strategically, he explained that the firm will start reducing the budget on traditional advertisement. "The solution is not crypto conferences or ads. The solution is all of our members, each one of you, using CelPay, using the referrals – things that we have in our app, to introduce to other people." This seems like a positive move to such an extent that some companies are referring to traditional marketing budgets as black holes, with massive contribution and very little profits, if any. With such classical methods, the CAC (Customer Acquisition Cost) is usually extremely high. His view is that the best marketing strategy will come from the community itself, through referral program and word of mouth.
A suggested example on how to promote the app to potential new members is to use CelPay, a mechanism used to transfer CEL tokens instantly without any fees.
COMPOUNDING vs HIGH INTEREST
Many users of Celsius were wondering if compounding would be announced. Some other crypto lending firms are offering compounding – interests on interests. The CEO explained that "currently we are not adding compounding." While some were hoping for a different answer, Mr. Mashinsky provided a concrete rationale: "If we have to pay compounding, all it's going to do is lower the rates."
This is a clear strategic move, which may be very positive on the long term. When potential new members will compare earning rates online, Celsius will be marked as one of the top performers, if not the best one. In a digital world where everything moves faster, many may prefer higher rates compared to compounding, which effect usually takes year – if not decades – before making a concrete difference. Still, Mashinsky did not close the door on this feature.
WITHDRAWING INTERESTS FIRST
Another featured asked by many was the ability to withdraw interests before touching the principal. As already confirmed by CTO Nuke Goldstein, Mr. Mashinsky confirmed that the feature is coming by the first or second week of January at the very latest. This is good news, as some were reluctant to join Celsius because of this reason.
EARN IN-CEL IN THE US
At present, US residents are not able to earn in-CEL on other crypto, meaning they can only receive interests in-kind (i.e. Bitcoin interests on Bitcoin, Ethereum on Ethereum, etc.)
Mr. Mashinsky explained the reason behind it. "It is legally unclear. (...) Our lawyers (...) said, 'it's not that it's prohibited.' We didn't get any notice or any letter or anything like that."
Celsius Networks wants to ensure they follow the rules, and in that particular case, there is no precise guidance from the American regulator, which leaves things uncertain at the moment. Therefore, they decide to continue working on that aspect and ensuring that the feature is fully and legally approved before moving forward. While this may be negative for US members at the moment, this at least brings security to the Celsius community, all of that in a crypto world that is looking very much like far west and is still in its inception.
Another feature that is insistently asked by members is the ability to purchase crypto coins directly from the app. When asked about it, Mashinsky returned the question to Waseem Shabout, one of the core members from Celsius Network, which revealed that "ideally, we'll have the ability to link your bank by the middle of January."
During the AMA, Mr. Shabout took the stage by going in front of the camera when a member asked if he would soon be able to easily export the data from Celsius when doing his taxes. Shabout shared a new hidden feature that was just released. Members can find this new hidden feature by going into their total wallet balance, then tap the "See all" button at the very bottom. From there, a newly implemented "Send CSV to Email" button will let members export their transactions via email.
Even better, at a later stage, a new third-party feature will be implemented that will let members doing exports dedicated for their tax forms.
THE INFLECTION POINT
Since a few weeks now, a new theory has emerged online. Members realized that if CEL tokens keep being purchased by Celsius Network each and every week, in order to pay some interests from the members, there will be a point where most tokens will be stored into the app, thus vastly increasing the price of each token. One member nicknamed DJ tried to come up with a concept and built a formula that would show this precise date, as times goes by. Working along him, another member named John embraced the theory and then coined the name: the inflection point – the moment when supply will be virtually inexistent while demand increasing exponentially.
After weeks of theorizing about it, CEO Alex Mashinsky was asked about it earlier today and mentioned that "the inflection point is a brilliant idea, which says basically, wait a second, if your membership grows and more and more Celsians are buying CEL every day, or earning in CEL, there's going to be a point in which half or sixty or even seventy percent of all the CELs is going to be deposited with Celsius. (...) Today, Celsius is the larger buyer in the market of CEL."
"The number of people earning in CEL is growing faster than the community, (...) this creates more demand for the coin, (which) will create an increase in price and that should not stop. That's the all point of the entire flywheel of the Celsius model. I don't think anyone else has this model."
Finally, as we explained in our previous article, Mashinsky confirmed that "93% of the (members) don't withdraw in CEL (...). They hold it, which creates demand only. There is no supply being thrown at the market. So that's why the CEL token is outperforming Bitcoin, because there is more demand for CEL token than there is for Bitcoin – not in absolute dollars but in relative terms."
Based on circulating supply and not max supply, the number of CEL tokens stored into the app, percentage-wise, is even higher, to a staggering 65.88% as of yesterday. At this rate, the inflection point will take place around November 2020. Every new data point increases the level of maturity of the calculation. And while this is only a theory, time will tell if the community was right in its assumption.
Some members are even speculating about the future possible price increase of the CEL token, to such an extent that they might become "celionaires". It is not clear if this means owning a million dollars worth of CEL or owning a million CEL tokens.
One member asked Mashinsky if he could offer him a drink when he reaches that objective. "You can offer me a beer without being a celionaire. But yes, guaranteed, if you are a celionaire, you get to buy the beer to the Mashinsky."
Beyond the joke, this shows how Celsius Network is an opened, friendly and transparent organization, which differs to some of the competition in the crypto lending space. Mr. Mashinsky explained earlier that some crypto lending firms might not even be present at the address they are supposed to be based.
Asked about why the CEL token is not properly listed on CoinMarketCap – the reference in the field, Mashinsky mentioned that it will come "any day!"
At current market cap ($23.385M), CEL would simply jump from rank 2,113 to... 118. Quite a sharp difference, which will surely bring mainstream awareness of the token in the crypto space, which ultimately should lead to a higher adoption of the Celsius Network platform.
Ironically, when confronted with the extremely high earning rates from Celsius Network, the first reaction from most people is usually negative, thinking that something shady must take place behind the scenes. Mr. Mashinsky eloquently explained something that many people do not know.
"Let me explain one thing that I think is very important (and that) most people don't understand. Banks use fractional reserve, what does that mean? They take a deposit from you and then can leave only 10% of the money in the bank, they can lend everything out. And then, they can do it again, and again, and again, which creates tremendous leverage in the system. That's how banks earn money. You hear banks will leverage 10 to 1, 20 to 1 or 50 to 1, that means that for every dollar in deposit, they have 50 dollars in loans. So, what most people don't understand, and it's the most important thing to understand about 'unbanking yourself', when you withdraw a dollar from Deutsche Bank, (...) they have to withdraw, collect or cancel 50 dollars worth of loans. The fractional reserve system works both ways, meaning you, the depositor, have the power (...) We can eliminate the banks by withdrawing our assets from them and giving them to someone who is acting in your best interest."
Mr. Mashinsky explained that Celsius Network doesn't do fractional reserve, but actually earns real money, in a much more secure and healthy financial process.
Finally, Mr. Mashinsky explained "I don't have an off switch!" There are big chances that 2020 will be a very successful year for his company and its community. "Every week, we socialize profits to our community. Try that!"
Ironically, at the same time as Mr. Mashinsky was doing his AMA, the US Federal Reserve experienced network issues, which caused massive problems and delayed direct deposits across the US. Was Alex Mashinsky right all along?
5:41 Recap 2019
14:24 Q1. How to convince someone to put his/her savings in stablecoins on Celsius?
17:00 Q2. Having different accounts within the app?
17:32 Q3. Compound interests?
18:50 Q4. How to get a loan?
20:20 Q5. What are you most excited about for Celsius in 2020?
21:54 Q6. When withdraw interests first?
23:14 Q7. Celsius shareholders versus holders?
25:04 Q8. What is the CEL treasury used for?
26:46 Q9. US users earning in-CEL?
28:18 Q10. In-app buy?
29:08 Q11. Do you employ remote?
9:59 Q12. No VC money. We earn it.
32:22 Q13. How to declare taxes?
34:14 Q14. Any plans for eBank transfers?
34:48 Q15. Visiting Estonia anytime soon?
35:20 Q16. You travel so much, where do you find the energy?
37:29 Q17. Any views on a fairer distribution system?
39:41 Q18. Borrow against stocks in the future?
41:32 Q19. Any comments on the competition?
43:34 Q20. How to go to 100M users?
47:21 Q21. Any breach on the platform?
47:59 Q22. Can you explain lower rates for depositors?
51:12 Q23. What do you think of the inflection point?
54:21 Q24. If I become a celionaire, can I offer you a beer?
54:49 Q25. When will CEL be properly listed on CMC?
55:26 Q26. You've got 6 children. Any advice for a new father?
56:27: Q27. How are you protecting the crypto keys?
1:03:11 Q28. Favorite spot to recharge?
1:05:07 Q29. Ubiq integration? CEL tokens hardware wallets?
1:06:27 Q30. Are you really the inventory of VoIP?
1:10:57 Q31. New year resolution?
Here is the video of the AMA:
(This article does not endorse Celsius Network nor represents any type of financial advice.)
By Gruic on 2019-12-19 15:49:47 ET
Had a good moment. It was fun. 0
By Gruic on 2019-12-19 15:50:00 ET
And very nice work on the article. 0