Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Rodolfo Novak: Coinkite and the Feature Factory

Episode Date: May 18, 2015

Started in May 2013, Coinkite has by now almost advanced to senior citizen status in the short-lived Bitcoin startup space. CEO Rodolfo Novak joined us for a discussion about what drove their initial interest in Bitcoin, why they initially focused on providing ‘bank-like’ services and how they’ve transitioned to powering the infrastructure of countless Bitcoin startups with their API. We also discussed multi-sig and the business strategy they pursued that allowed them to be profitable and not require venture funding. Topics covered in this episode: How Coinkite started Why they have come away from calling themselves a Bitcoin bank Why they have been putting so much emphasis on multi-sig How they’ve ended up building an insane amount of features The transition of their business model to providing a powerful API for startups What the Bitcoin ecosystem in Toronto is like Episode links: Coinkite Coinkite-Ledger Partnership How to use Ledger Nano with Coinkite p2sh.info This episode is hosted by Brian Fabian Crain and Sébastien Couture. Show notes and listening options: epicenter.tv/079

This episode of Epicenter Bitcoin is brought to by Ledger, makers of the Ledger Nano Hardware Wallet. Have peace of mind and knowing your private keys are protected by industry standard physical security. Go to ledger wallet.com to learn more and use the offer code EB-09 at checkout to get 10% off your first order. And by ShapeShift, with no account or sign-up required, it's the easiest way to buy and sell counterparty, gems, swarm, dogecoin, and other leading cryptocurrencies. Go to Shapeshift.io at instant link in virtual all points and to discover the future of cryptocurrency exchanges. Hi, welcome to Epicenter Bitcoin, the show it talks about the technologies, projects, and startups driving decentralization and the global cryptocurrency revolution.

My name is Sebastian Kutu. And my name is Brian Fabian Crane. We're here today with Rodolfo Nova. Many of you probably heard of his startup. He's a CEO and founder. CEO and co-founder of Konkite, their Canadian company. And as we were talking before and looking at the website, one thing became very apparent to us. They are probably the Bitcoin company with the most features of anyone. So it's quite insane in all the things that they've done. So Rudolfo, thanks so much for joining us today.

Hello, thanks for having me. So for those who don't know about Konkites, or perhaps let's take a step back before that even. Can you tell us a little bit about how you got involved in Bitcoin originally? Sure. So I think it was mid or late 2011. My current co-founder and CTO came across the paper and he shared it with me and we sort of found this thing amazing. And we started a project called BTC Look. It was a visualization of the blockchain. You know, that was a fun project and then sort of kind of like, okay, great. So now let's get people on it.

Let's do the project to get the Bitcoin going. And that kind of got us into the terminals and coincite.com, the wallet. So when we first met, actually, we met in Amsterdam at the Bitcoin 2014 conference, I think. Yeah. So our listeners will probably remember your interview. that we did back then and at that time you were doing this really interesting

and somewhat out of place I found payment terminal I mean out of place within sort of the Bitcoin space because it looked a lot like a credit card payment terminal and I just pulled out of my like wall here like this coin kite card that you that you gave me

the business has changed since then as Brian mentioned correct Yeah, so the terminal was a little bit of ahead of its time. And what we realized was that the terminal was a much better exchange machine. And that's sort of like where all the sales of terminals have been. This is like people use this terminal because it's so secure and reliant that you can just operate a brick and mortar exchange to buy and sell Bitcoin. and that's sort of like where we focus that part of the business.

It's resellers or bigger companies come to us and they say, hey, I want 50 terminals and I want to put my brand on it and I want to use it to do remittance in Asia, for example. And that's how they use those terminals. I think that's definitely probably where you're... I mean, when I talk about coin kite to people, they definitely mention the terminal, but we're learning that you guys have a bunch of,

bunch of other features that we can talk about. We can talk about the terminal as well a bit later on the show. So yeah, tell us about the enormous amount of features that you seem to have on CoinKai. So we've always taken this approach of not spending money on marketing and putting all the money in R&D because we really believe that it's so early in the Bitcoin space that we need to build infrastructure. right and so so what we did is we started with a wallet right a quality wallet we we invented a bitcoin hsm so that you could do transactions securely on server side and what's an hsm it's a hardware security module right so this is kind of for example tails or all this sort of security companies make

these machines but when we started out there weren't any that could do the bitcoin currency so they couldn't sign Bitcoin transactions natively. And that's the only secure way of doing Bitcoin server side. Can you explain a bit more about that? Sure. How exactly does that work? And why is that more secure than doing it some other way? So, okay, so it depends on your needs and track levels, right?

So, you know, your phone is more secure to you for small amounts, right? but your phone also has some vulnerabilities, right? And it's okay to keep spending money on your phone wallet. It's also, you know, you also don't want to trust us with all your money unless you're using multi-sig where we cannot take your money, right? And, but the thing is, when you're processing signing transactions, server side, you need a machine that can do that securely, right? You can't just use any kind of like playing computer or anything.

thing because those things are not meant to handle sort of like side channel attacks, cold boots, or hackers trying to get in, right? These machines are specially made to do cryptography on server side, right? Banks have been using these machines for like over 30 years to do their key signing for their domains or for, you know, all their kinds of security things. It's just that they were not able to do Bitcoin specifically, right? So we had to create one so that we could build Bitcoin the scale that we do. So is that how, so those machines are online or are they offline?

They are online. But they're kind of like black boxes, right? And keys never leave them or never really see the light of day. So what happens is the keys are generated inside them, inside a secure element, right? and then when you make a call to them saying, hey, can you please sign this transaction? Here's my authentication. The machine knows it's you,

and then it signs the transactions. But the keys themselves never leave those machines. Okay, so it's somewhat similar to the secure elements that we now see appearing in mobile phones, like in the iPhone. Exactly, exactly. And now some Android phones, yeah, which is really interesting. Or like the treasure.

Yeah, like a treasure, yeah. Yeah. So, but this is done secure, sort of like a server sort of level of transaction amounts, right? You know, when you have, you know, a lot of users and, you know, a lot of bitcoins moving through per minute, you need sort of like a server-grade thing that can do that securely. Okay, that's really interesting. So it seems like there's another thing that I wasn't totally aware of that you guys are doing. Today's magic word is API.

Head over to let's talk bitcoin.com to sign in, enter the magic word, and claim you're part of the listener reward. It definitely seems you guys have evolved a bit because originally with the payment terminal that I think maybe most people know you for also because you can take pictures of it and put it on websites, no. So people like to do that. And it seems, my impression was of you guys that you have this really strong bet on mass adoption happening of Bitcoin like soon, right? And people start using it to pay their coffee because then obviously it makes a lot of sense.

And also the debit card you guys created. I don't know if we've mentioned that yet. So how is the company evolved from there? And why did you choose to focus on that area initially? So initially, you know, what is the immediate reaction? It's kind of like, okay, great. So brick and mortar won't accept Bitcoin. What is the safest and easiest way of doing that?

It's a payment terminal, right? I mean, it really is what most... That's why Visa and MasterCard chose those machines. It's because they... What a lot of people fail to realize is that when you were a business owner, you can't just give an app to your staff. It needs to be something truly thought out. And that's why it took so long for payment terminals now to be tablets and those things, right?

And it's still taking time. But the machine is truly sort of resilient for a business, right? It can be dropped. You can hack it. There's all sorts of reasons for that. And it's a similar UI. to what people are used to using with payment terminals. Exactly.

But we realize that those machines work much better, especially because of your price point, for exchanges, right? So people buy and selling Bitcoin in person on brick and mortar, they love those machines because you can print paper wallets, you can scan people's wallets. It's secure. They don't have to trust their staff. You know, it's GSM, so it works anywhere in the world.

You can't get robbed. there's a lot of reasons for that. But as you were mentioning, we've noticed that because we had to build infrastructure for that, a lot of people wanted to take advantage of that infrastructure for themselves. So, you know, our customers keep a lot of funds in our system because they know they were using the same system to handle a payment network. So it was very natural for us to create a wallet that's for consumers

and for advanced users too. And now, I mean, startups are using that galore. And then what we did is for all those functions for the wallet, we enable that as an API, right? And that's being an enormous success. So early on, you were sort of taking this bet of, I mean, when we met in Amsterdam, you specifically told us if you were trying to become a Bitcoin bank.

Right. I think it was a mischoice of words. I mean, you know, because see, we like to see ourselves as sort of like, you know, an old school place where you can have your gold, you know, and it's on your name on it. We never had IOUs, right? So, coin kite is fully blockchain. Everything that goes through coin kind of is on the blockchain. Yeah, which is why the term Bitcoin Bank has seemed at the time to be a little off-putting because, I mean, even though the sort of services that you were trying to provide then, perhaps were resembling

those of a bank in reality, like everything is on blockchain and even more so now that you do to multi-sig, you're not holding any customer funds. Can you talk about how the vision has evolved from there? Sure. So I think that the misuse of the term bank came from the fact that we wanted to create something. Because see, like banks have, you know, a history of solving problems for people financially. You know, doing that well or not, that's a different conversation, right? But people have a certain familiarity

with the understanding that banks are secure and that, you know, they're online banking. They understand all those things, right? All those metaphors. So when we build Quinkai, we try to bring some of that in. So it's not just like this new thing that's shiny, right? But he also has some of that inherent, like, security value to it

that it looks like, you know, he does what he says it does. That's why our interface, it's, you know, it's not so shiny and, you know, full of, like, cute little things around. You know, we are a security company at heart. So with the debit card that you guys have issued, I thought that was sort of an interesting thing, too, right? Because you could use the card and, you know, you can pay for a terminal, like one of the terminals and, you know, be super convenient because it's like directly deducted from your wallet and stuff.

But of course, one of the problems with that product that, you know, sort of immediately apparent, you can only use the card, you know, with a coin-type terminal. And, you know, if you guys have maybe a few hundred now, you know, for most people, it's not a particularly useful product unless you're lucky enough to be surrounded by people and merchants who have that, which, you know, there aren't. So one of the things that I was thinking about, and I don't know if you guys have thought about that as well, would it be possible to create kind of an open standard that, you know, anybody could create a terminal, you know, a big conversion terminal that then, you know, one could use any Concord card with or also that the Concord channel could accept these sort of debit cards from other issuers? Yeah, I mean, we've always been very open to that. But there is a larger barrier of entry for hardware sort of products.

And, you know, a lot of the startups don't get into hardware, right? Especially smart cards. But yeah, I mean, we've always been open to that. What's really interesting is that, yes, it's not as available as, you know, like visa is. But what happens is a lot of people doing remittance with our terminals. actually issue cards to the people who use their terminals, right? And we actually make those cards customize brand-wise for them. So, for example, there is this guy in Asia.

He has one terminal in pretty much like every island of South Asia. And he has cards with his brand on it. And he's literally offering the whole service to people by leveraging coin kite on the backhand. So his customers, when they go send money to their family in the other place, they already have money in that card. So this guy is using, well, he's offering this kind of room in service in different islands and different countries in South Asia. Yes. And so does that mean, how does that exactly work? People pay him in the yachts to buy Bitcoins and then they get to.

sent around. So, I mean, I presume you can only offer this kind of service if there's a Bitcoin exchange in each of those countries. Yes, and that's happening, right? Yeah. And that's happening. I mean, I've been in talks with Uno Coin as well. Sunny is a friend of ours.

You know, they're looking into dispersing Quankai terminals in India. There are terminals, you know, a bunch of them in Ireland. There's a bunch of them in Holland. You know, it's happening. But, you know, they're tracking the Bitcoin adoption. as well. You know, Bitcoin adoption, you know, have peaks when it's all over the media because the price goes up. But, you know, it's going to take time. I mean, it took credit cards 30 years to happen the way it is now. You know, it started as a dining club. And, you know, it's people, people need to understand that things take time. But what is fascinating is the amount of startups coming up with way more novel ideas. And, you know, it's people, people need to understand the things take time. But what is fascinating is the amount of startups coming up with way more novel ideas. And, you know, and I'm, you know, happy to know that they're using our system to do that. It seems to make more sense than to white label, especially in the exchange scenario,

to white label the machine. And it also seems to make more sense to be issuing these cards in that sort of remittance model where you're going to have repeat business anyway. You're going to have the same people coming using the same terminal all the time. And if they can have their card in which they just keep their bitcoins, then, Yeah, they're not going just to any store to buy anything. They're always coming back to the same terminal. You nailed it.

That's exactly how they're using it. Let's take a short break to talk about our sponsor's ledger makers of the nano hardware wallet. They offer the easiest way to keep your Bitcoin secure. It's basically a small device that you plug into the USB slot of any computer and it allows you to send Bitcoin's. and because the private keys stay on the device. This is secure even if the computer is malware and fastid or even if your IT guy is a certain not so trustworthy,

Pepuccino-loving Frenchman. So the nano comes with a beautiful Chrome app wallet. I feel this is probably one of the best wallet experiences I've seen so far. It all just works together, especially with the two-factor app for iOS and Android. It makes you feel like your bitcoins are in some bulletproof system. It looks great and it feels safe. And since we're talking about coin guy today, It's a good time to mention, as we mentioned with Rodolfo, that the ledger now works with coin kite.

So you could use the ledger as one of the signing keys in your multi-signature setup. So it goes to show how Ledger is working hard to give you even more options to use their technology. So to get started, we have a special offer for you. If you head over the LedgerWallor.com and use the offer code EB-09 at checkout, you get 10% off. So this offer code is valid until September 30th, 2015. They also just released a new low-cost version of their bulletproof bubble, Nano, and that's obviously the same security and features, but at half the price. So Ledger Nano, SmartCard security for your Bitcoins, give it a try.

We would like to thank Ledger for their support of Repsendor Bitcoin. Let's talk about the API. So I mean, it sounds a little bit like that this sort of happened by accident, know that you guys have just built so many features and then you decided to open them up to other companies and somehow there's been a really strong demand for those. Can you tell a little bit about what kind of startups are using this and in what ways? Sure. So what's funny is that before we actually wanted to get into terminals, we thought about offering Bitcoin as an API to companies, but then we kind of like, okay, this is too early. There's nobody using this yet.

We kind of gone to fall circle. So what happens is startups and businesses wanting to do Bitcoin have had this inherent problem, which is keeping Bitcoin secure and making it easy for the whole organization to handle it. And so what we did is we got all the features that CoinKite offer, right? So, you know, the multi-sig stuff, the sent by SMS, the email, funds forwarding, dims, everything, right? And we made an API that lets you access all those functions. So what happens is startups now don't have to build all that infrastructure that we already have, right, to do those things. And startups are using this completely different.

Some use just a wallet. some use just the API, some use the API with the wallet. So, for example, let's say Coinapult. Coinapult uses our COLine API. So what they do is they have two keys that they generate it, and it's on their servers, and we have one key. And then they access our system where the funds are stored to transact out. So if we cease to exist, they still have their money.

We can't do anything about it. For example, BitRefew. BitRefew uses our API to transact the Bitcoins in smaller quantities because they let people pay for their cell phone bill minutes with Bitcoin. And they have a lot of transactions, right? So they use the API for that. There are exchanges, BitMex, Taurus Exchange, There's guys doing other marketing agent stuff like a block trust where they do crowdfunding.

Oh, there's purse.io. They use our wallet. They don't use our API. I mean, it's like every day I hear of a new one using our API in a different way. I think being able to offer all of our services and not constrain people to two out of three, or three out of five for multisig, for example, we let you do any out of 15 really sort of empowered people to come up with creative solutions. For example, Bitcoin are not bombs.

What those guys did is very clever. They have, I think, like eight to ten people in their organization. So they created eight keys in a multi-sig wallet. And then what they do is they do two out of eight. So anytime a person wants to take money, out of the account, they need the second person of anybody in the group to alterize it as well. So it creates a lot of accountability for a non-profit. That's sort of some of the users that

people have. So going forward, do you guys anticipate that you'll focus more on that API business and scale that, or do you think you will continue to do offer like a really broad range of services, you know, ranging from terminals, the wallets to debit, to the API to... And we have more coming. Yeah. We have lots more coming. I think that we always had this sort of idea of, you know, build it.

We are not so much as the Ling mentality internally, right? We do it slightly different. We say, okay, great. We need this before. You just do everything. No, it's more like that. We think that, you know, if I need this, internally, other people are going to likely need it for their businesses as well.

So we build it well so that it doesn't break, and then we put it out there, right? Because half of the problem when you're trying to do too many things is just kind of like handling bugs, right? So we try to like spend enough time building the feature and testing it so that we don't have to revisit it so much later. And that supports us. Right. I mean, I think it's pretty amazing in installing. you know because because you guys really seems to be like anything you're building it from scratch and and open offering it as products or API and stuff and you know if you compare that to let's say

company like bid pay that is I think about a hundred people and you know they are you know they have some other things like the co-pay multi-sic stuff but you know it's pretty much one thing right and so that's quite amazing to contrast that and it seems you guys that and I've definitely taken a very different approach to a lot of companies to try to focus on a niche and do a good job there. You guys are doing a really wide range of things. Yeah. I mean, we love that. We just, you know, to me, there is no right answer yet.

We were kind of like, you know, see, some people think we're like, you know, in the sort of like 95 of the web. I think we're still in the BBS days for Bitcoin. I think it's so early, but so early that there is no right answer. So we just want to build whatever people need. You know, like when people hit our support asking, hey, you know, I need this extra feature for, you know, my API or I'm trying to do this. You know, we normally just have a meeting and say like, hey, you know, somebody needs it. Can we build it in a, you know, in a decent amount of time? Then sure, let's make it.

we want to empower everybody to be able to build what they want to build with Bitcoin and not get robbed, right? Because that's the biggest problem. Right. And so another thing that's special, I think, about you guys, besides doing a really wide range of things, is that you haven't raised any investment. And as you know, we were chatting before the show a little bit,

that, you know, also means maybe you haven't been as much in the headlines because the number one thing that, you know, is always on CoinDisc. if a company is raising money, you know, that's a great story. Why did you not choose to do that? And how has that been for you? So I think it's two things, right? We were fortunate enough to be fairly early movers in the space.

So we have a significant amount of traction in our services, right? I mean, we have like over 1,000 startups using our APIs. We have, you know, like I think 160,000 active wallet. We have paying customers. We believe in three things. It's like security, privacy, and a sound business model. So I know it sounds insane in this market to have those very sort of, you know. Yeah, we've never heard of that before in the Bitcoin space.

You know, we have a free wallet. and it's great, and if you use multi-sig, you can keep any amount of money in it. But we really believe that in order to offer real privacy, like real privacy, like the privacy that I don't need to know who you are using my system, we had to do two things. We couldn't do Fiat, right?

So we could not be a money service business. I could not touch money, because then I'd have to, you know, ID everybody. That's just a law, right? and I didn't want to sell customer information. I don't want ads, right? And there is something nice about just sort of like the craft of making a good product that people are willing to pay for, right?

So what's nice is that when people start using our system, you know, they start with a little bit of money. And then we have customers that have been with us with like over a year and a half. You know, and they've been paying us, you know, $10, $30 a month for a year. year and a half because they really want to support what we're doing and they know the path we're taking right and you know this support that we have from our customers and consumers and the community is what you know make sure that we don't screw up privacy now brian i'm not sure i agree with with you on coin kite not being in the headlines because every time i i often see

new features coming out like coin kites not doing this or coin kites partnered with uh ledger for instance, which we could talk about a little bit later. Or coin guides doing these, what do you call the NIM pages? I always see some sort of coin guide headline, and it just keeps framing back to when we first met. So I was curious, I mean, this is something I've been thinking about as as, as in last year and a half, we've seen that the use case for multisig really become really prevalent for a lot of Bitcoin startups and simply from a security perspective and also the idea that people should control their keys, etc. However, there are other companies that have a different approach and they do

hosted wallets, you know, like there's obviously Coinbase and others like Circle for example. Where do you see that going? Do you think that was considered to have that dichotomy or I think one of the most beautiful things about Bitcoin is the fact that we can have everything, right? And it's a true free market. It's something that there is, you know, we need to educate people as to what they're getting into when they use a certain service or type of system. Right? It's very important they make an informed decision as to what to use. But the nice thing is, you know, if people want to use a service that offers IOUs

where you don't own the Bitcoin that, you know, you have, by all means, use it. And, you know, some of those companies do offer sort of like other great things to Bitcoin, which is, you know, bring more users into Bitcoin or quickly sell them Bitcoin. Now, what I find fascinating is that we actually end up getting, a lot of those users after a few months. So a lot of people, when they get into Bitcoin, they go like, great, there's this company that offers them Bitcoin super easy to buy, and then they get into it.

And then as everybody that gets into Bitcoin buys a tiny little bit, and then they get addicted to Bitcoin. And then they want to know everything about Bitcoin. And then the obvious thing that comes to mind is, okay, great, now I need to move my Bitcoin to a wallet in which I own the keys. right and there is this very clear path of adoption where they go from the easy where i buy to then they go to hey great i'm going to go to this multi-sig solution or i'm going to go to this phone app where i own the bitcoin right yeah i think that is that is an extremely interesting point

you're making and i'm really curious and totally unsure whether that's going to continue to be the case right so because right now we still have people using bitcoin who are you know, technologically very savvy, who are well-educated, et cetera. So I think it would be one of the most interesting things and perhaps important things to see whether as cryptocurrencies get more adopted and as the people who start using cryptocurrencies are more just the sort of average person versus this, you know, very specific type of people, you know, whether they're actually going to have that same pull towards services where they control the private key or whether they're going to stay with the services that can offer a

better user experience because, you know, they control the private keys and they can just make it as easy as, you know, using Gmail. Well, I mean, that's one of the reasons why we still offer the custodian type of account as well, like the HSM only where we, you know, we can do stuff for people. And we're very clear to them that we will charge your money if you want to keep too much Bitcoin in this account type that we control so that we force people to use multi-sig via market forces so that they use multi-sig in our system and we don't control the coins. We want people to move on to multi-sig. But it takes time, right? But also you do, but most don't, right? Like Coinbase is not trying to do that.

CERC was not trying to do that, right? want people to save if they're hosted wallets. It's a motivation problem, right? I mean, most people, you know, they don't want to have to handle understanding their money, right? I mean, that's why banks exist the way they exist. But there is an awful lot of people in the world. You know, there's 7 billion people. And I think there's room for everything.

And what's nice is that when people get burned because of, losing money with a service that maybe has control over their keys, they often don't do that again. And another thing too is that, I mean, in all fairness, the services that do offer what Coinbase and Circle do, they will be legislated to death, right? I mean, those guys are going to have to assume, I cannot see we're going to,

going too far without having to start offering FDICs and, you know, insurance over their stuff and, you know, having more government oversight. So I think what's going to happen is you're going to have two choices, right? You can own your own money and bear some responsibility for it, right, where you have the multi-sig and we're going to help you make that as easy as possible, right, including with, like, the ledger or something like that. Or you're going to let somebody else handle your money and rely on the government to keep them in check.

And which kind of really happens, right? With like, you know, you can keep your money in your savings account or you can keep gold on your basement. No, I think you're totally right. And I think that's going to be very interesting, especially as sort of the spit license thing is coming up, right? Are there repercussions going to be for the companies, you know, like Coinbase that just can't avoid it?

And so for you and Congress, Point Guide, because of the thing we just talked about, do you think you're going to have to shut down the custodian accounts at some point because otherwise you'll fall into the same regulatory categories? I don't think that at least for the foreseeable feature, we're going to have to, just because the way it's set up is in a way that's auditable by the user. And it's not an IOU system, right? There's a very big difference there. and the user has notification systems and everything. Like, we can't just move that money around, right? It's only you can move that money, right? We still need your password.

And, you know, accounts. Quankai takes a whole different approach. So when you do the custodian account, is it a little bit like blockchain or the info that it's encrypted? It's not as far as that. And that's why, you know, we have the multi-sig stuff where we truly have no access to your funds. But our system is built in a very,

sort of like security focus way and privacy focus way, where even each role of our database is encrypted. Right. So we can't even check your account name. Like it's a whole sort of like new way of doing things, right? Which, you know, cut through our, our sort of metrics and profits in a big way, right? We can't do queries in our system to know things about the users or we can't sort of like we don't run analytics inside the site.

right there is literally no analytics within the logged-in area that's interesting yeah no that's that's super fascinating and i wonder if that's gonna you know if the if the pull of analytics won't be too strong for a lot of startups it makes a huge difference right because when you're trying to to grow your startup you know one of the bigger ways you do that is by checking your numbers and say, hey, this works, this doesn't, and sort of optimizing it, right? Yeah, how do you, then how do you, how does that work for you? I mean, if you can't even, if you don't even know how people are using your service, you have to have, you have to ask them, I suppose, right?

Exactly. And, you know, we're one of the fairly few companies that, I mean, we have a substantial user base now, and we still only get like 10 tickets of support a day kind of thing. it's very little because we are actively talking to the users. People send us an email saying that there is an issue here or something that we immediately stop what we're doing. We go fix it so that we do not ever get an issue about the same thing. And then we also pool the users asking, like, you know, a lot of the users are our friends and we are part of the community. I mean, a lot of people know I'm on Reddit, like pretty much live there.

And I mean, I read what people want and I want to have this conversation with them and, you know, people complain about something or they want something to go and we build it and people use it and then some of them pay for it. It's pretty simple. So coming back, just I was curious about multi-sig. I mean, it's, I guess I say, so I mean, I, we've talked about this earlier. I use another multi-sig wallet, and I've been personally wanting to use my ledger with some other wallet solution. That's not a single signature, and so you guys do that now. Okay, so I'm going to go and try to get that set up. But it seems like the U.S. around getting your multi-sig setup is really complicated.

I mean, and it shows when you go on CoinCite, although you guys do a really good job at, like, doing everything step by step, if you want to do a 15, like an N to 15 multi-sig and have different types of, say, you want like a hardware wallet on one key and you want to have like a custodian account on another, and then perhaps you want to have like a key that somebody else holds on another one of those keys. the the the the the the ux to get that set up is going to be quite complex like how do you guys plan to make that easier where do you see that going so he i don't know when was the last time it checked but it got substantially easier right i mean so what we do is it's actually uh of course there is some complexity to to multi-sig right and the only way of making it's complex exactly right and and the the only way of making it truly easy is is by making it less powerful, right? I mean, it's always a trade-off between powerful and easy, right? We're letting, you know, some of other companies kind of do the ultra-easy, less secure, right? That's not our business, right? Our business is private, secure, and sort of like quality, right?

It got substantially easier. Now, yes, it is step-by-step. So, I mean, all you have to do is, you know, create an account, you choose Bitcoin, you give it a name, and then it's going to ask you how many keys and how many of these keys you need to sign. And then on the next page, you literally pick what kind of key do you want for each key. So if you want to be super quick, you know, you just press simple, simple, simple, and you're done. Right. And we could have made it a little easier, but they would have made it.

we would have had to hide some education. We want to educate users, right? We want people to know what they're buying into. And that's why when you choose a key, beside each key option, there is a little explanation. And it says what kind of risk it entails. Because the nice thing is, for multi-sig, you only have to set up once.

Right? So I think that, you know, like a lot of our users hold a lot of funds. when you're going to put your, you know, a few thousand Bitcoin in a wallet, like, you know, I think it's worth taking five minutes to read through the options before you commit to it. And that's sort of the approach we have taken. You know, if you want to keep a few cents, great.

Go use somebody else's wallet that, you know, has a cute app. And, you know, it's free and they, you know, know who you are and all the good stuff, right? Now, with us is different. If you want to know what's happening and you want to make sure it's secure, you know, it takes five minutes. Cool. No, I mean, I think multisic, there's no question. I mean, before the show, we were just people looking at this site, which, by the way, I highly recommend people check out.

There's a nice graph on there. It's called P2SH.info, which is paid the script hash. infrastructure which stands for the type of transaction you do multi-sig and they show this chart of how many bitcoins are held in multi-sig addresses and it's just crazy how that has gone up from a year ago it was literally almost zero and now it's at 1.2 million so 8% of all the bitcoins are held a multi-sig and it's just it's obvious that this is this is going to be the future because it's just so easy to have a high level of security.

I mean, from a UX perspective, maybe not so easy. But it's fairly easy to have a very high level of security, even if people's computers are compromised. And it seems like, so Brian, it seems like the UX seems to be getting better all the time because, like, what, two months ago, we went through this whole setup, the setup Electrum to manage our funds of, like, printing these paperwallis that I had to mail to you and everything. And I mean, now, you know, using, we could be using Coin Kite and, like, these ledger hardware wallets.

And, like, that whole thing just goes out the window. It seems like every time we set something up, I mean, we, I mean, people, you know, using Bitcoin, there's always something, like, much easier. It's just coming up right around. I mean, I think the electrum setup was actually pretty easy. But, I mean, if you think back to when I first used multi-sigues with armory, they're, lockboxes. And there you actually have to, you know, like mail the transaction to someone as an attachment.

I mean, of course, the reason why they would do it like that is so that, you know, they literally have no involvement whatsoever, whereas Electrum, there's alectrum server that you use. See, I love this model of sort of having different trust parties in anything. so that you don't have to trust one solution, right? So for, you know, for the multi-sick, you can have a ledger, you can have multiple users. We're actually looking into supporting Electrum as well. We're actually big fans.

My first wallet was Electrum. I mean, right, of course, it was Bitcoin, you know, wallet. But when an Electrum came out, I was like, yes, this is so much better. And I always loved Electrum. And I really want to support it as part of the multi-sig and also a way for people to sort of redeem their funds in case, you know, coin kite-guides explodes. Because people do have a way of redeeming the funds, just, you know, paying the ass. So then what you mean? So basically then an electron seed could also, so like you could have another wallet on Coin Kite essentially.

So one of the other keys of CoinCay. Yeah, that's interesting. And vice versa, too, right? So we would build the P2SH, like the MultiSig wallet. Because you already export, right? So when you create a CoinKi multi-sig, you get an email with a backup, right? And, you know, if you created your keys offline, then you're already supposed to have those. But, you know, it's a way for you to reload sort of the reconstitute the wallet and

send the funds out. We would love to make it work with them, like we made it work with Ledger. So taking a step back a little bit from talking about features and multi-sik and stuff, what's your vision for Bitcoin? Where do you see this thing going in the next five years? So I'm still that kind of person who gets sort of like,

like, giggity, like every time I make a Bitcoin transaction and I do those a lot of times a day. It always just puts a smile on my face. See, it's fascinating because I can pay my factory in China. I converted them to Bitcoin. We convert everybody to Bitcoin. I've been earning Bitcoin for the last two years now. You know, I have very little Fiat.

And so Bitcoin adoption is happening. It's just that it's not on, you know, on this sort of like, famous wallets or on exchanges. It's happening, but it's really through organic peer-to-peer. You can look at the transaction volume. It's growing so much. Every time there is a price movement, we see our system kind of like, you know, like the amount of coins going in and out, just kind of like balloons too. So it is happening, right? I mean, I am able to sell my terminals to somebody in a country where there is a lot of credit card fraud because, you know, they pay me in Bitcoin. And this is happening more and more and more. I think the major thing that's

happening now is remittance is actually starting to happen. We're finally figuring out proper remittance channels between countries because, see, before you had sort of like a centralized entity like Western Union, right, where they have all the expensive business end too. They have the machines, they have the licenses in each country, you know, and the liquidity to move the funds around. What happened with Bitcoin is you have different companies doing each part of the bits, right? So when companies where you buy the Bitcoin,

another company is where you sell the Bitcoin, other companies the one that handles the remittance, you know. So, you know, another couple years, you're going to see an insane amount of remittance happening on Bitcoin. It's just that these dots are still getting sort of like traced together. right? I mean, what the guys, sorry. Yeah, and so I think it also that kind of means, do you see Bitcoin also being used widely as a payment system

and as a currency to have, you know, like our parents to keep Bitcoin? See, I think that there is this fallacy that, you know, like, you know, people who live in Silicon Valley have, which is, you know, everything is easy and everybody is just going to use the easy stuff. And that's not the reality of the world, right? I mean, people use different things in different places. And, I mean, you know, you look in some countries, you know, some merchants have literally five terminals on their counter.

People outside of very technologically developed areas understand that, you know, you will have different solutions simultaneously happen. I think, I really think that people will use Bitcoin as Bitcoin is, as well as using sort of like fake Bitcoin, right? Like an IOU system or just dollars that use Bitcoin on the background. Today's show is brought to you by Shapeshift, the fast and easy way to trade all coins. Tell you what, go to Shapeshift.com.

right now and check out the coins they just added. Gems, storage coin, swarm, and master coin, which brings the total number of coins they support now up to 32. So you want to trade some old coins? You want to use the exchange to do that? What, do you still use hotmail too? No, forget about it. Go to shapeshift.

com. Go to shape,f.com, and get it done in less than one minute with no account or sign up required. Here's how this works. You head over to shape,hape. You choose the currency you want to sell and which currency you want to buy. Let's say you wouldn't have sell some light coin to get some Bitcoin. And then what Shapeshift does is it provides you a Lykoan address. You simply send your lightcoins there, Shapesh conversion for you,

and puts the Bitcoins directly into your wallet. Super easy, super smooth. And if you like your altcoins, you will love your lens extension for Firefox and Chrome. What the lens extension does is a browser plugin, and it allows you to spend altcoins wherever Bitcoin is accepted. So let's say you want to pay somewhere a Bitcoin Adders comes up. lens detects it pops up a window, you then choose which altcoin you want to pay with.

You simply send out there, Shapeshift converts them for you and pays directly. I mean, it's super great if you like your altcoins allows you to pay anywhere with altcoins. And you can get that in the Chrome Web Store and Firefox add-ons. So go to Shapeshift.io and put even more of your altcoins to use. We'd like to thank Shapeshift for those support

of Epicenter Bitcoin. Just before we wrap up here, So you're in Canada and I haven't been there in a few years, but I hear there's quite a few things happening there in the Bitcoin space. Can you talk a bit about the scene in Canada? This is something we always try to come back to when we talk to people from different places around the world. Like what's going on in your local area and your country? So Toronto is an interesting place because we have a history of FinTech here. You know, lots of payment processors for different industries.

more non-traditional industries. And Ontario is a great place to start a business because of the tax here is super low for businesses. And legislation is a lot more favorable. Stock, like when you have a private equity firm, like a private equity company, it's a lot easier to handle all that stuff in Ontario. So we sort of like have,

a lot of this pieces needed to start a Bitcoin company, like done well, right? It's not too hard anymore to get a bank account for a Bitcoin business. There's, you know, there's always been exchanges here. What banks are most favorable? I'm curious to Bitcoin businesses. It depends, right? So if you are an exchange is a whole different problem, right? Because, you know, they're concerned about cash flow problems and exchange problems.

Now, if you're just a business that does Bitcoin, I have not heard of a bank closing a bank account because you are a Bitcoin startup. It's only if you're trying to buy and sell Bitcoin. But that's normal, right? That's like if you are even an advanced cash business, banks will have, will take a closer look at your books because they don't want to be exposed to it. Yeah, I mean, there's Ming 4 banks here, BMO, TD, Scotia Bank and CIB, and they all, they're fine. I heard from Mars. Mars is sort of like a startup incubator,

kind of half-government-led initiative here. They're working on having some cool announcements around the banking situation too. And what's the Bitcoin startup scene in Toronto? Can you talk about some of the other startups that you see that? Sure. So there is a quick BT and spend BT. Those guys are really cool.

So you can pay your credit card of Bitcoin without creating an account, right? And you can buy Bitcoin of your debit card up to a certain amount, of course, but without having any account. So it's kind of like shape shift, but for literal Fiat services, right? Jamie, very cool guy. Then there is Quadriga. It's an exchange here. as well. Yeah, I used them.

Yeah, you can buy and sell gold on the exchange on top of US dollar and Canadian dollar. I heard yesterday of Big Gold being launched. There's the guys from Pekays looking at remittance. There are some connections with India through Sunny and Unokoy. I don't want to forget anybody, but there is a law going on here.

I mean, the conference, we had a conference here, like, I think, like, last year. And, you know, it was fairly packed. Even we only have, you know, six million people in Toronto, things are happening. And we are, you know, like, one flight away from New York, you know, for 40 minutes, for an hour. And is most of the startup activity happening in Toronto,

or do you hear of any other, like, Montreal, Vancouver? Like, what's happening there? So Vancouver has a lot of Bitcoin adoption, actually, which is kind of nice. like in the city itself, right? You can go to a lot of establishments and pay in Bitcoin.

Really? They do a great job there. The Bitcoin Co-op and CoinFest, they do a great job with adoption. I wish we did as much of a good job as they do here. But there is quite a few startups there too. There is even one guy there who buys and sells bullion, like real bullion with one of our terminals in person.

So he's been a bullion house for ages. So now you can actually go there with a quinkai cart and buy a bar and goat. Cool. Okay. And any clue is what's happening in Quebec in Montreal or in the maritime provinces? Just because I'm from New Brunswick, so... Right.

To be honest, I'm sure there are startups. I'm just not super familiar with them. And then there is the guys. So in Montreal, there's the Bitcoin embassy there, right? And those guys are a great job of adoption. They just made that funny video with a guy in the pilot outfit of the Bitcoin symbol doing the eardrop for McGill students.

That was really cool. And they have other things going on there too. Cool. Well, Rodolfo, thanks so much for joining us today. It was a great pleasure talking with you. Oh, thank you for having me. I mean, it's nice to get to talk to you guys. You guys do some awesome work.

Thanks. And it's nice to talk to you because you're so passionate about it. I mean, when you're talking about your startup and just Bitcoin, it's like, you know, you see that it's something that you're really passionate about. And I think that's really great. Listen, it's Bitcoin is, you know, it's a society-changing technology, right? And we don't get to have many of those come by often. No, that's very true.

Yeah, well, thanks so much, Rodolfo. want to check out a coin kite you can go you can do that on coin kite.com so that's c o i nkite dot com and of course we'll have to link in the show note and yeah to our listeners thanks much for joining us today so we release episodes every monday and you know you can subscribe to the show on iTunes on sound cloud or in your favorite podcast app for android or ios or if you prefer our video, you can get our videos on our YouTube page, which is YouTube.com slash epicenter BPC. And of course, if you'd like to show, then, you know, we would certainly appreciate a tip, and you can find the address in the show notes. So thanks so much, and we'll be back next week.