Alex Mashinsky: Peer To Peer Lending

Hi everybody, I'm Alex Mashinsky from Celsius and we're from New York. Anyone here from New York? All right, New York is in the house. How many people here are from overseas? Oh, not too many, all right, just a few. A few guys I know. Actually, who here holds ether? Who has ether? All right, we need a few more. What about all these guys not raising their hands? How about Bitcoin? All right, very good. So guess what, Santa Monica, we have a problem. We have a serious problem. We are talking to ourselves. I just finished about 12 different conferences and guess what? The guys from Zurich, from London, from New York, all the same guys, right? Isn't it so? Well, if we want our ether and our Bitcoin to be more valuable, guess what we need to do? We need to do more than eight million accounts. We need to figure out how to bring in the next 100 million people, not the next two million people. And the next 100 million people or the next 1 billion people are not going to come because they just want to trade coins or they're speculators on their honor or the libertarians. They want a real product. They want something that they can use every day. Just like back in the beginning of the internet, we gave them email, we gave them porn, we gave them a bunch of other stuff and they were happy. So how are we going to do that? Anyone has ideas? You can come on stage and take my place. Anyone? The billion people? Well, before I'm going to tell you how, and spoiler, I'm going to tell you a little bit about myself. That's what I used to look like before I got all the makeup in the back room. So back in 1994, when I was two years old, I wrote some of the original protocols for VoIP back with the founders of the internet. You do a search, anyone here go to Google right now, do a search, put that name down, see if you see anything. I built seven different companies, VC-backed, raised over a billion dollars, 1 billion with a B, and had exits of over 3 billion. That's still a record. That's more than all the ICOs put together. Now I'm bragging here because all I'm trying to tell you guys is that I did figure out how to bring a billion people to the internet. Not all by myself, obviously we had millions of people doing it, millions of people building it. But every one of you, when you use your phone, it's using a voice protocol that was built back in '94, '95 by a group of very capable engineers who thought about how to bring the next billion people onto the platform. So our team got together and we thought to ourselves, how do we, what is that protocol? What is the next level of evolution that can bring the billion other billion people to the blockchain? What can we do? How do we build that community? And we centered on consumer credit. Now, anyone here does not have a credit card in their pocket? Anyone who wants another credit card in their pocket? So we all love credit. We all have access to credit. And what Celsius built is a new credit protocol. It's a new way of enabling access to credit that completely revolutionizes how who gives it to you, how do you get access to it, and what do you pay for it. So let's talk about the banks then. You want to hear, familiar with banks? Anyone here love banks? Who here works for a bank? Take them out security. So we give deposit to the bank. You'll serve, what's your name? John. John gives $1,000 to his bank. I'm not going to name names. What do they give you? How much do they pay you? Do you get 1% on your bank deposits? Almost you, it's very hard to get 1% these days. Yet when your neighbor right there is asking for credit, not to name names, but it goes up to 28, 29, 30, 35%. Some people here in this room pay 35% and they paid $100 for the application fee because they either don't have credit, they're immigrants, or they have bad credit. So all that profit you see here, all of this, translates into 15 billion a quarter, 60 billion a year, just for JP Morgan in profit, not in revenues, in profit. So all we're going to do, it's very simple. We're going to take all of this blue here, cut it in half, give half of it to the borrower, give half of it to the lender. Who would like to have that? Who wants to be a lender here and get that half of this profit? Well, that's all we did. We basically took a little bit of reserves for bad debt and we basically split the rest of it between the borrower and the lender, and we enabled pure real peer-to-peer lending on the blockchain. You've heard peer-to-peer, I'm sure you've seen it. Some of you even went online and applied for stuff, right? Guess what? That's not peer-to-peer. That's a centralized system that decides who gets what when, and most of the profit goes to them. Here there is no profit. We're a foundation. This is for the people, by the people. Anyone could be a lender and the next day could be a borrower, or could be a lender and borrower ten times during the month. You got your paycheck, you're a lender. You need to buy a car, you're a borrower. The next month, you're a lender again. So while you're lending, you're earning interest, seven, eight percent interest. And when you're borrowing, you're paying 10, 12, 13, depending on your credit. And guess what? What you're paying is just the difference. So what is our MVP? We're creating a new digital credit score. We are ensuring transactions for the lenders. So we're basically saying we raised this ICO. We're going to raise a lot of money. We're going to use that to insure the transaction so when you lend, you have almost zero chance of not getting your money back. Because we decided how much credit to give someone, how much to charge them, and based on that we will take some of the responsibility for any losses or lack of payment. And it's a true peer-to-peer marketplace that runs the new protocol that runs on top of Ethereum that accepts both Bitcoin and ether. So how does it work? It's a complicated formula. We simplified it for you, but basically it's a very simple process. This is my contract. The lenders come from one side, they attach their wallets to the smart contract. I say I want to lend high-risk, medium risk, or low risk. On the other side, borrowers come in and they say what they want. They get, we score their credit, and the system automatically matches the borrowers to the lenders. Anytime the borrower makes a payment, automatically a smart contract distributes the proceeds to the people who gave those loans. The loans are fragmented so there may be a hundred people lending to one individual, so your risk is 1/100 of the loan. How big is this market? Nothing big, nothing serious. Where anytime a slide uses T, okay, you know you don't have to talk about it anymore. It's big enough. So this market is just for China, 33 trillion. Anyone wants to go into China? All right, we need partners. We're here to recruit partners. So we tried to come up with a really simple formula that explains what we're actually doing. Are you guys familiar? It's very simple. Anyone here, is there anyone here who understands physics? High school physics? No, here we go. You theoretical physicist, Russian, where are the Russians with physicist? Where are they? So it's actually not that difficult. E equals M C squared. E stands for Ethereum, M stands for members, and C is credit, Celsius credit. You put all that together, what happens to the E? What happens to the ether? Goes up or down? Up, exactly. So I have a lot of ether, you have a lot of ether. You want to make your ether valuable? Let's bring some new members into this platform. So what do we want? Oh look at that, they screwed up our slide. You can see banking is the biggest one. We definitely don't want banking. What we're looking for is partners who can help us build the ecosystem. We do certain things. We do the protocol, we do the credit calculations, we do the algorithms that calculate credit risk and so on. Everything else we partner with people. We partner with the credit cards, with the credit score guys, with guys that do new new type of blockchain-based banking. If you have a piece that can work in our puzzle, come and talk to us because we definitely want to build this as part of the Ethereum ecosystem. We don't want to do this all by ourselves. So who else is on the team? So we have great guys up, sorry they disappear. I guess they quit. They're already working somewhere else. I can't go back. All right, there we go. Sorry about this. All right, here we go. All the animation we worked on this for weeks. All right, so Daniel is right here. Anyone you see in this shirt, these are an imposter or are you actually the Celsius guy? We actually sold some shirts in our booth. So if you want shirts, you wear them, you get them. You don't wear them, you don't get them. It's that simple. Daniel built a bunch of startups. David, oh my god, David. David got the original licenses for Gemini. Gemini, the only exchange in New York State. He survived that, the Winklevoss twins. Still can't talk about it. So let's conclude what we have. We extend peer-to-peer credit to the middle class and Millennials both. We're going to start by focusing on the European and US markets because we think that's the lowest risk for our membership and then expand from there. We empower and strengthen the ether. So if you own ether, guess what? We're going to make your ether more valuable. But we need your help to get there. And we want to grow the Ethereum community to the next 100 million users because the only way for this to be a sustainable model is if we bring new members. Now there's a lot of new members. First time guys in the crowd, who's here first time in the show, in the conference? All right, so we got like a hundred people or so. All right, we need a hundred million, not a hundred. And everybody wins. Why? Because ether is growing in value. Everybody gets more. So come see us. We have a booth in the back. I'm here only today, unfortunately. My son has his acceptance in New York tomorrow morning. I have to fly red-eye and go and sit in front of a bunch of teachers who will decide his future. And believe me, they have no clue what ether is or what blockchain is or anything like that. But the rest of our team is going to be here. This is how you can contact us. Take a picture or stop by the booth, pick up a credit. Yes, there's a question. I see yes. Barely.

That's right, I agree with you. So I wasn't supposed to say that. I wasn't supposed to say that. My lawyers are right there, my PR guys are sweating right there. But we're actually going to give a coin for free to everybody. Everybody at this conference, you got your free Celsius coin. Go on Celsius.network, register, and you'll get your free coin when we issue. So even if you don't participate in the ICO, as long as we have all the information, we want you to be part of the community. All right, that sound good? Did anyone ever give you anything for free? But I'm serious. The point is to bring as many people in, and prior to the ICO, we're going to issue coins to people just because they have interest in Ethereum and the blockchain and they want to be educated about that. Obviously some people are going to come and buy a million of those, but at least we want people to learn how to hold a wallet, what does it mean to have a coin, what can you do with it, and so on. Because these things are extremely important to educate people. Look, I was a skeptic. I was on the fence for three years and I have 50 patents. So I'm a very technical guy. I can take it with anyone here. Any guy here who thinks he's technical, come talk to me. And I found everything that was wrong with the blockchain for three years. And seeing just like the previous speaker told you, every time you sell, the price crashes. It came back bigger and better. It's like the Hydra, you know, the Greek mythology. You cut a head, two heads grow up. That's what this is. And eventually I just said enough is enough. I'm bowing to the blockchain. I'm bowing to the blockchain. Come see us at the booth. Thanks for coming. And we'll see you. We have a conference in New York October 23rd. Love to see you there.