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If Bitcoin Becomes Compliant Tomorrow
Wednesday, 14 October 2020
With cryptocurrency reaching a fever peak as to even get accepted for tax payments, Bitcoin and other digital currencies gain traction in both public and private spheres.
The accumulated BTC value has increased to $190 billion, especially under the pressure of the inevitable spread of coronavirus. All of that already led to increased demand for all sorts of cryptocurrency solutions – from exchanges to decentralized storage. And, as far as the matter goes, the security is named as the top priority.
The spread of the virus worldwide also caused the opposite effect on the crypto community – the number of online scams and phishing websites in 2020 has reached an all-time high.
Everyone from top-tier tech companies to small investors unintentionally became victims of it, which is mostly linked to the inability to constructively build preventive measures against cybercrime in crypto space. That’s why up to this day the crypto niche deservedly bears the name of a Wild West.
Even without the mention of such notorious cases as Mt. Gox that involved the largest-scale Bitcoin theft of all time that took place in late 2013, there are many of the exchange breakdowns that take place up to this day.
All of this is mostly linked to the inability to build a proper security protocol around the exchange operations, which makes experienced hackers to quickly spot out the breaches of the security system.
It goes without saying that even with all proper measures in place, crypto is constantly exposed to clone scams, Ponzi schemes, and all sorts of malware. This is why, now as never before it is important to double your vigilance and favor only verified and well-established platforms.
Right now, many organizations and countries are raising a flag to build a security wall around their own crypto territory. The raised number of scams already prompted many enhanced safeguard measures and trusted and officially approved exchanges are on-demand as never before.
One of such is CoinsPaid, a platform that throughout 5 years of its existence already made from scratch the whole ecosystem of services fastened by a high-end security seal.
At the core of CoinsPaid is a cloud-based crypto processing system, which was audited and approved by the best-in-class security expert and supervisor – 10guards. In 2019 CoinsPaid was one of the few entities to pass the audit of Kaspersky Lab, which certifies its commitment to the highest security standard.
Now, I’ve got a unique chance to talk to Max Krupyshev, the CEO of the project, and to discuss with him the current challenges of the crypto payments space, its regulatory shape and the potential timeline when crypto will reach the level of common adoption.
Andrey Sergeenkov: First of all, let me inquire about the idea of CoinsPaid – how did you come to that and what made you want to materialize it?
Max Krupyshev: My gut tells me that when there’s a need, the solution will always be found. That’s what happened with CoinsPaid. Our team of specialists identified a lack of reliable blockchain solutions on the current crypto market, increasingly flooded with scam and fakedom with each new year. We decided to fix it and introduced an ecosystem which is entirely guided by principles of trust, legitimacy and sovereignty. That’s how CoinsPaid came into life.
Andrey Sergeenkov: Thanks for the answer. Now, another thing I’m highly curious about - how did CoinsPaid earn its name on the local ground?
Max Krupyshev: We are a legal entity providing fully compliant operations to the global market. Being based in Tallinn, Estonia, we found it as a place with the most beneficial regulatory environment. This is also a soil that nurtures countless blockchain startups and gives them proper incentives to grow. All that is needed from our side is to make sure that our operations are honest, secure, transparent and auditable. The rest comes without question.
Andrey Sergeenkov: Looking at the Kaspersky and 10guards audits, it looks like the toughest ones we have on the market. What was the key to fetching their approval?
Max Krupyshev: We understand the importance of security, and we do not require guidance from the regulator to build our products with security in mind. All our apps, access levels and wallets are designed with the "what can we do to secure our funds even more?" philosophy.
Andrey Sergeenkov: I know that many people nowadays are hesitant to use crypto because of its, khm, unrefined reputation. Bitcoin is still viewed as a speculative instrument, and more conservatively-oriented investors store in mind the number of cases of cyber-attacks and their negative consequences. What can be done to purify crypto in the public eye and how long it would take to regain the public trust?
Max Krupyshev: For Bitcoin, there’s no way out. It’s either black or white. Certain people will always consider it tarnished, and there is no way to get it improved – there were too many dubious cases in the past. So the investor either accepts it or not. The past is the thing of the past, and the only thing that can be changed is the future. For example, if Bitcoin all of a sudden becomes a perfectly compliant public instrument, there will be no arguments against it. It’s just a question of time how long it will take for regulations to be enforced.
Andrey Sergeenkov: How do you see the development of the industry in the future? Will it become comparable to the banks’ security someday?
Max Krupyshev: It’s hard to say how long it will take, but definitely yes. There are already a number of highly secure solutions, and ours is not an exception. Security becomes the highest priority, and we are following this trend closely – as well as many ones who join after us. And BTW, are you sure that “Bank’s security” is really so good? I honestly hear a lot about carding, phishing, and scam attacks against bank employees and clients.
Andrey Sergeenkov: Nevertheless, the number of crypto misuses and malware attacks has unprecedentedly grown in the times of Covid-19. Is there any way to counter this on a massive scale?
Max Krupyshev: Some countries already did that by tightening up their regulation – sometimes even against cryptocurrency. That’s probably the only way to prevent it completely. *laughs* But to be on a more realistic note, I think as the blockchain and cryptocurrency ecosystem is developing, the more regulations will come into force, sooner or later. Euro-Parliament is near ready with pan-European regulation.
Andrey Sergeenkov: Still, the rise of DeFi prompted by the spread of coronavirus has shown how many investors are eager to switch over and try out alternative payment solutions. Is this trend going to have a long-lasting effect in the post-pandemic future?
Max Krupyshev: I believe yes. Coronavirus was just the right moment for a DeFi transformation to start, but I insist it would begin either way. We will slowly be shifting to the digital realm, we - both as businesses and individuals. I’m sure in a year or two from now we will see significant change. Maybe even on the governmental level.
Andrey Sergeenkov: With many people still unfamiliar with crypto and its operations – especially SMEs – how is it possible to raise awareness and to make them switch from traditional payment means in favour of cryptocurrency?
Max Krupyshev: I think this transformation never meant to be fast, especially if we talk about the global scale. Rome was not built in one day.
Most certainly, at the beginning stages there will be a lot of resistance and reluctance to switch over to something new, may it even be better than the previous one.
This is human nature to save energy, managers have to understand what is cryptocurrency and find a way how this will help business, нou can imagine, they might have no motivation to do so.
This is why I’m rather confident that it will still be a long time until every one of the small businesses decides to fully change the course of their activities and adopt blockchain once and for all.
But one thing is clear at the moment - blockchain came and it will not fade away. Sooner or later, every business owner, be it small or big, will come to a realization that blockchain is so much more efficient, fast, and convenient for certain processes and solutions to some problems.
That already builds an important competitive edge. So, if the businesses will not be able to realize it on time, they simply will not be able to compete, and that already creates risk.
In my opinion, there’s no need to undertake extra efforts about rising awareness of blockchain. Those who need it already realized its advantages and capabilities.
Those who don’t will realize it later – until it becomes too late. We see this already happening in some industries and governments.
Andrey Sergeenkov: What are the major unsolved security pitfalls within crypto payment space?
Max Krupyshev: First of all, it is the problem of storage – not all of the exchanges provide a wallet safe enough for long-term holdings. This is why CoinsPaid came up with three versions of wallets – one is a hot one, aimed at business activities, second one is a personal wallet, which matches the needs of individual investors, and the 3rd one is a cold wallet where we move all unnecessary coins to offline wallet to secure client funds from an unlikely event of a successful cyber attack.
Another problem is the payment system itself, which is not always shielded by the layer of cryptography. This is something the crypto space has yet to be working on, but a thing that we already incorporated in our payment system.
Andrey Sergeenkov: There’s evidence of all biggest companies using blockchain or making their foothold in it, while global spending on blockchain continuously goes up. What implications this fact will make on a global scale?
Max Krupyshev: More businesses will be detached from the economic crisis unstoppably running down on us, thanks to the pandemic. This is the first thing. Second, it will become easier and less fussy to conduct business activities with both local and foreign parties.
There will no longer be a mess in the accounting department, all of the transactions will be public and verifiable. Invoices will get sent and approved instantly. No data breaches, no information leaks will be possible, causing fewer headaches to the governance of the organizations. Only positive sides, isn’t it?
If we talk about the global scale, the transformations will be there pretty soon – probably sooner than we thought before the pandemic. In the upcoming years, I personally expect all businesses and organizations, independent of their size, to have one or more operational activity transferred to the blockchain.
As for now, one outcome is pretty clear – there will be less mess in the ongoing non-core activities, what would make it possible for leaders and other employees to focus on the main purpose of the organization, develop a clear strategic vision and concentrate their efforts on long-term endeavours rather than on short-term passing targets.
All organizations will become more agile and efficient and will serve goals in a more purposeful manner. Isn’t it the main aim of every business?
Andrey Sergeenkov: And now, with a growing number of similar products on the market, how does CoinPaid manage to stay competitive among them?
Max Krupyshev: At first sight, it may seem that there are a lot of similar ones. However, if you look closer, you will find substantial differences. Such as hidden fees, exchange margins, most of the new business use open source or external wallets that adds to their self cost, so they can't compete with us in a fair-pricing game.
For example, we as a platform do not charge any commission fees for paying in cryptocurrency, while many platforms and wallets still use this outdated practice extensively. For us, it is important to stay competitive – and I think that’s what we can do pretty well. Our solution embraces both individual and business needs – apart from being an investor’s wallet, we are also handling B2B customer demands.
Needless to mention, our rewarding plan can attract even more customers, who, after realizing our advantages, will stay with our platform once and for all. There are still many tokens traded OTC that only later become listed on publicly acclaimed exchanges. Until it happens, our users will be able to make the next booming acquisition first-hand. It can also easily be swapped to fiat currency literally any time. All of that is topped up by an easy and functional user interface, which all at once makes our product to be visible in the eyes of consumers.
Andrey Sergeenkov: What would be your future prospects for the platform, let’s say on a span from 2 to 5 years?
Max Krupyshev: For now, we will focus on developing what we already have. It means, our main target is to take our platform on the international scale and make as many businesses, investors and entrepreneurs aware that CoinsPaid has something to offer.
We will also try to build long-term partnerships both with the existing clients and the ones who join us in the future. I’m quite confident that our product offering – White Label – will attract a lot of popularity, mostly because it is a ready product that can be used under the brand of any of our clients.
This way, it will be much more cost-efficient and time-saving. I want us to succeed in offering the product to as many clients as we can. We innovate a lot, market changes quick - making it hard to have clear long term plans. Most of our projects are 3-12 months, some of them pivot every 3 months while being developed.