Those of you that travel financial circles on Wall Street, or in the mainstream media, are familiar with Reggie Middleton. You’ll see him frequently on CNBC, or “The Keiser Report”, for his economic market expertise. His “BoomBust” blog , financial prognostication, and innovative Veritaseum digital program have all made a significant impact on the market over the last decade. Veritaseum’s “Disruptor-in-Chief” also has the ear of Wall Street, talking to bankers and execs constantly about Bitcoin, blockchains, and all manner of Fintech advancements.
Recently, I caught up with Reggie Middleton to go over where the digital currency market is now, where Wall Street is going with its underlying capabilities, and the latest updates within Veritaseum. If you don’t know Veritaseum and how it can help you, grab some popcorn, and pull up a chair, because it does more for you than your bank ever did.
Read the full story below.
For those who may not have followed your financial career, can you tell us about your background before your forays into digital currency, and what caused you to take the plunge.
I invested in distressed New York real estate, to this day, and bought out of the money put options on industries like banking, mortgage, real estate, and insurance after that.
Before 2009, I was known as the financial Nostradamus for publicly calling the fall of Bear Stearns, Lehman Brothers, WaMu, Countrywide, the European sovereign debt crisis, etc. Also, my name was built foreseeing future tech trends like mobile computing, the fall of Blackberry, etc.
Bitcoin is the perfect FinTech (Financial Technology) platform, literally a hand-picked opportunity for somebody with my background and skill set. My clients had asked me for two years to give my opinion on Bitcoin, but I didn’t get around to it until 2013. After reading the Bitcoin Wiki, particularly the section on smart contracts, my jaw simply dropped! I’ve been a convert ever since.
What is Veritaseum and how does it meet the needs of the market at this time? What is its market niche? How do you measure its success in the market since inception?
Veritaseum is a fully autonomous (the user maintains full possession, ownership & control of their assets), fully distributed (beyond centralized vs. decentralized) bitcoin wallet that can write, read and maintain smart contracts between disparate parties using the bitcoin blockchain (and only the bitcoin blockchain). It was, and still is, the first of its kind.
Veritaseum meets several needs of the market, including being the only fully distributed, fully autonomous wallet that we know of that facilitates peer-to-peer financial transactions other than simple remittances. Veritaseum allows individuals to exchange the value of virtually anything that has an active ticker, ex. Stocks, bonds, commodities, forex, indices, precious metals, etc. No brokerage or bank account is required. You create your accounts in Veritaseum in a matter of seconds with no ID or verification needed, ever.
Veritaseum offers the benefits of a hosted, centralized wallet service, ex. Citibank, JP Morgan, Circle or Coinbase as well as offering the safety and control of a standalone wallet (ex, Bitcoin-QT, etc.). As a web-based wallet, it's available anywhere you have a browser and an internet connection, so all platforms, all OSs, and all locales.
Our market niche is one of customized value transfer. Instead of sending 20 BTC to your friend, you can send 20 BTC of gold price exposure to you friend without buying gold, or having access to that market.
I understand you now have a new client format that could change things in the industry. How does that work and how does it help?
The initial Vertiaseum (previously UltraCoin) client was written in Java and was a proof-of-concept. The newest version of the product features a client that is HTML5. We decided to pour our resources into a single, well-written client that can be run anywhere. In addition to its ubiquity (it will run on all modern iOS and Android devices as well as any desktop device, whether PC or Mac, that runs Chrome, Safari, IE10 or Firefox browsers), allowing for complete autonomy. That means all your private keys (assets) are always in your possession and control.
Contrast this to the heteronomy of a bank or venture such as Coinbase. Despite the client’s full autonomy (we never have possession of your keys, even on an encrypted basis) you can log in and move from client-to-client as if the wallet was centrally hosted. For instance, you can start a trading or remittance at 8 am on your desktop before you go to work. You can add to the trade at 1 pm lunch from your cell phone, and you check trade results from any internet connection on the way home from work. This is done while maintaining full control over your assets in a fully encrypted manner.
In other words, if Veritaseum was somehow hacked, a government acts to confiscate servers, or your bank is attacked, your keys and funds are still yours! So with Veritaseum, there are no capital controls, border controls, account sign-ups or credit checks.
Heading into 2016, what changes or improvements would you like to see in the digital currency market as a whole?
I’d like to see more education and a deeper understanding as to what these new opportunities truly are and what they can bring to the table. Due to sloppy and sensationalist reporting in the media, the absolute paradigm-shifting potential of Bitcoin (and related tech) is being pushed to the wayside. A perfect example of this is the use of the term “Blockchain” by banks and bank services vendors. Yes, blockchain tech is going to be transformative for the banking industry, but unless they get a clue, it is not going to be transformative in the ways they desire.
What makes the bitcoin blockchain so desirable is its zero-trust attributes. These attributes are powered not only by the breakthrough in technology that created the bitcoin blockchain but by the very thing that made said breakthrough extraordinary in everyday practice, which is “The Network Effect.” Bitcoin’s blockchain is already 10,000x stronger than the strongest corporate network known (Google). Thus, if you were to convince 1,000 said networks to pool all of their network resources and cooperate fully (yep!), it would still pale (and fail) as compared to the Bitcoin blockchain.
Discussing blockchains without Bitcoin’s zero-trust attributes is like discussing which racing cars are the fastest without their engines installed.
You are commonly featured on television for your economic expertise. What was your favorite TV appearance?
My favorite TV appearance was when Mandy and Brian on CNBC “Street Signs” came to the conclusion (all on their own, BTW) that I was out to put JP Morgan out of business and the “banks are going to hate you” reference:
Of course, it’s not true that I’m out to put them out of business, but those entities that don’t adapt and evolve with the changing trends and tech will die, just as economic evolution would have it. It has absolutely nothing to do with me.
Many are forecasting a global recession or U.S. Dollar collapse in the years to come. Do you foresee such economic turmoil? What is in your crystal ball, say in the year 2020 for the mainstream economic market?
You don’t need a crystal ball. All you need is a calculator and a little objectivity. A recession is defined as two consecutive quarters of shrinking GDP. Japan is in outright recession, its 3rd or 4th since the 2008 market collapse, and after 32 years of QE. Many of the developed world’s bonds are going out as far as ten years in maturity are yielding negative rates. Most of the EU area bonds up to 5 years are negative yields. It's preposterous.
At the same time, banks are undergoing extreme restrictions due to capital constraints placed upon them to prevent too big to fail. This is a horrible time to sell Fintech to global banks. They already started letting go over a quarter million employees and counting.
You talk to many mainstream bankers and economists about digital currencies and their potential. Are you starting to see trends and shifts in their thinking over the last couple of years? Are they more open, or educated, than they were in 2013?
There is definitely a shift in acceptance of this new technology, but there is not yet a shift in thinking that is significant enough to embrace what is to come. While most are aware of the tech, they are not looking at the fundamental, or macro-environmental shifting because of it.
Everybody is still thinking of centralized financial services and banks as the grand arbiter of monetary value, while I see banks as the heavily regulated pipes that guide fiat according to government mandates and at fixed fees (think electric and water utilities). The ability of banking customers to be able to deal with each other directly and even more safely will be a real wake-up call.
Are you a believer in Bitcoin as a currency? The establishment seems to agree, reluctantly, that the blockchain tech is a legitimate breakthrough in Fintech, but not Bitcoin. Will Bitcoin become a legit mainstream currency? “Digital Gold?” A better Paypal?
I’m a believer in Bitcoin as a programmable asset, and as such a unit of account that can take on the value of any other asset whose value can be recorded and encapsulated in machine language. I’m a believer in Bitcoin as an unbreakable contract between two distrustful parties, where it’s the rails through which these parties contract. Looking at, or even discussing bitcoin as a mere currency limits the potential of Bitcoin as an app platform or ecosystem.
Let me rephrase your question to somewhat better articulate my positions. “Do you believe in the Internet as IP packets?”