Interview with Reggie Middleton. Founder of Veritaseum (english)

15. Mai 2017 | Kategorie: Kommentare, RottMeyer

by Bankhaus Rott

Talks regarding the dynamic developments around blockchains often just circle around cryptocurrencies. Although bitcoin or Ether and all the other tokens are interesting for speculators and monetary theorists alike, they are but one small chunk of the possibilities blockchains bring along. What does a funder of a blockchain-based company think about the current situation and the near future? We asked Reggie Middleton, founder of Veritaseum.

Reggie Middleton is heading an independent research team offering non-mainstream financial analysis via his platform boombustblog.com (founded 2007). His track record encompasses the prediction of almost every major bank collapse during the recent financial crisis, among them Lehman Brothers and Bear Sterns and many precisely accurate forecasts regarding tech companies like Apple or Google, long and short.

In 2014 Reggie Middleton founded Veritaseum, a company deploying smart contracts-based, peer-to-peer software based on blockchain technology. Veritaseum could be regaded as an early mover in this space having patents pending in countries across the globe. The company combines new technology with deep knowledge of financial markets and – perhaps even more important – the inner workings of the financial sector. One of the ambitious goals of the founder is to facilitate the disintermediation of the financial markets.

Reggie, could you please shortly introduce yourself and your work to our readers.

RM: I’m a serial financial entrepreneur, who spent a total of 9 months as a W2 employee. I sold insurance, created risk management programs for municipalities, had dot com, bought real estate portfolios, traded options, sold proprietary research and started a smart contract-driven blockchain startup. My claims to fame was mostly accurately predicting a wide swath of fundamental and macro moves, ie. Bear Stearns collapse, Lehman Brothers collapse, housing crash and homebuilder collapse, GGP and commercial real estate crash, Blackberry, Google & Apple (I’ve one the first two CNBC Stock Draft investment challenges – back to back), EU sovereign debt crisis, and…. Bitcoin and blockchain technology.

How do you assess the numerous ICOs coming to the market currently. What is the best way to evaluate which story makes sense and which does not?

RM: Honestly, most are trash from an investment perspective. The have no stated business models, very little of their own defensible IP, no competitive analysis, and justification for valuations. At the same time, there are several very unique solutions being funded and heralded by some very talented individuals (Ethereum is a perfect example).

New business models are being created that are literally guaranteed to disrupt the status quo, but at the same time, a lot of people will get fleeced in the process. Much of that is the fault of the investors, though. They place more cache on website design than actual working product. They have told me they prefer to see a theoretical white paper in lieu of an actual functional product. These people will soon be separated from their capital – alas to many this capital came relatively easy as fruits of investing in other token projects such as Bitcoin, Dash and Ethereum.

We are positioning ourselves as the S&P or Moody’s of the token, ICO and blockchain-based company space. The major difference is that our research will actually be dynamic, interactive, autonomous robots (smart contracts) that literally act on their own research findings.

Of course, the only way to access this research or to participate in the dynamic digital exposure financial machines is to own Veritas – our own token.

Many people new to the matter seem to be mistaken and think of an ICO to resemble an IPO, something they know from the stock market. Could you offer a concise distinction of these two very different processes?

RM: IPOs (initial public offerings) are the first offerings of stock to the public. ICOs are the first offering of platform tokens to the public. In general, that’s where the similarities end. People attempt to value token issuers by extrapolating the price of tokens sold by the total amount of coins available. That’s simply ridiculous. You can’t sell those tokens, so assuming you can gives you the wrong answer – period!

Comparing tokens to stocks makes no sense because unlike most common and preferred stocks, tokens don’t:

  • Offer you equity or ownership in a for profit concern
  • Dividend income participation or participation in any company cash flows at all
  • Voting rights, or rights to choose board members.

Some issues do allow dividends or profit sharing, but they also don’t give projections, complete budgets or competitive analysis, so your guess is about as good as theirs as to what said dividends will be. In essence, they are using real business and finance terms, but there is no real business or finance there.

Readers interested in an example of the valuation of digital tokens are recommended to have a look at the current forensic analysis of the Gnosis token (GNO) that has been published on our website.

Let‘s talk about your company Veritaseum. You have started advocating the central idea of disintermediation of the financial world and worked on a solution from very early on. Years ago you developed the software client „Ultracoin“. What has changed since these beginnings, what is the actual state of affairs and what can users of Veritaseum expect in the future?

RM: When we first came up with counterparty risk-free P2P trading, we were before our time. We were first, but we were also early. The market wasn’t ready to absorb the future we were delivering. During that time, we came up with strong business models that cost shift, models where the business entity is totally autonomous. We also built a small portfolio of global patents pending.

Fast forward two years, and the markets are really starting to embrace what we thought of 4 years ago, hence we’ve redoubled our efforts, but this time on the Ethereum platform. Following our mantra of disintermediation, we’ve created smart contract platforms that disintermediate entire swaths of banking, finance and brokerage – not just the big investment banks. Even hedge funds and secondary buy side entities are at risk if they don’t add value in the transaction.

We’ve also found a way to tokenize our own knowledge, leverage it with the power of smart contracts on the blockchain, and eventually breathing life into it with AI and machine learning.

Papers published by big financial institutions treating possible use cases of blockchains in the sector seem to suffer from linear thinking. What do you think, how long will it take blockchain based technologies to disintermediate financial markets in a way that the big institutions feel the pain?

RM: If our financial machines pass their early beta security tests, this reckoning will be visible by year end, as I show buyside clients that smart contracts combined with true human analysis can offer asset management-like exposures for 90% less than what they are used to paying for the same or better exposures.

Links:

Article published by bitconnect: Veritaseum Makes Hedge Fund Trades P2P Via Blockchain; No Banks or Brokers Required

The following links were provided by Reggie Middleton:
Sizzle reel 

Reggie Middleton. Wikipedia
About Veritaseum – an interactive presentation
Pathogenic Finance Research Report (contains patent application research)

Pathogenic Finance Video (synopsis of the above)

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