8 minute read
Icon Capital Reserve - ICO’s and the Bitcoin Bubble: What hapens Next? Asset management
ICO’S AND THE BITCOIN BUBBLE:
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WHAT HAPPENS NEXT?
Opposite page: J Bradley Hall, CEO of Icon Capital Reserve and three gold bars from AUREALS™.
©iStockphoto
successful companies and enjoys a reputati on as a focused, energeti c entrepreneur with 31 years of fi nance, M&A, gold trading and fund management experience. Servanne Sohier sat down for a Q&A with him to talk about his new product AUREALS™.
SS: “Brad, it seems that everyone is talking about USD$8000 Bitcoin and wondering if this is a Bubble?” Brad: “I hear that questi on quite frequently. Bitcoin (BTC) is clearly in Bubble territory and as Voltaire noted all fi at currencies revert to the mean, which is zero. BTC will follow the trend as it remains a ‘claim check with nothing to claim’, however it may go to $20k fi rst, so if you are trader, enjoy, otherwise I would advise cauti on.”
SS: “ICO’s or Initi al Coin Off erings ~ Are they a fad or something we need to pay att enti on to?” Brad: “Well, in a sense they are both. In the former, you have someone publishing a bunch of future promises in the form of a whitepaper and raising tens or hundreds of millions of USD$ with very limited prospects of creati ng any future value and in the latt er you have some very clever people creati ng things that will change the world. As an asset class now worth more than USD$200 billion, it does merit serious considerati on.” SS: “You are no doubt from the latt er.” Brad: “We certainly like to think so. (Laughing) I have been working in fi ntech for 3 decades, in 35 countries at last count, and the ICON team is proven and extremely deep in terms of knowledge, experience and global relati onships.”
experienced team and, of course, luck and ti ming and it seems that the stars have aligned.” SS: “It sounds exciti ng” Brad: “Indeed, and perhaps I can off er some helpful context. I was investi ng in soft ware in San Francisco during the original dot com days when the Internet liberated informati on in a manner reminiscent of the impact Gutenberg had 530 years earlier. The HTTP at the backbone is a thin protocol where the cost was largely embedded. Andreessen and Netscape created the on-ramps and exited with a USD$12bn valuati on. Google was also created at the applicati on level and indexed the Internet of informati on, today enjoying a USD$720bn valuati on.”
SS: Will the next Google be launched on the Blockchain? Brad: “Absolutely. The Blockchain represents a new protocol that instead of being ‘free’ like HTTP, uses paid tokens like BTC that are protocols for allocati ng scarce resources. You don’t really need BTC tokens to exchange value and instead ICON was launched like Google to index assets, with AUREALS™ acti ng as a gold based value protocol.”
SS: “Have USD$200bn of these tokens been issued through ICO’s to investors hoping they have part of a new value protocol for the Blockchain?” Brad: “Yes! Exactly. Bets are being placed on what future “A growing number of sophisti cated investors are coming to a similar conclusion. For us this journey began almost a decade ago when we discovered how gold underpins the worlds’ fi nancial system and why Sovereigns, Dynasti es and Successful Families use gold to protect inter-generati onal wealth. We researched back to Babylon to understand how ledgers and money were fi rst created and why gold is always re-asserted as the numeraire over ti me. We carefully studied the work of monetary expert Dr Viera from Harvard who established that the average lifespan for currencies is 27 years and that complex fi nancial systems start with gold, adding debt unti l they apex and implode, typically every 30-40 years. If you are wondering where we are in the cycle, the Petro dollar was launched in 1973.
SS: “If 1971 was the end of the last gold standard, would it be fair to say that ICON is
off ering AUREALS™ now as a
new Gold Standard on the Blockchain?” Brad: “I like your assessment. We began trading
physical gold in a company that was ranked as the top new start-up in Hong Kong. We discovered the Blockchain in 2013 and it was an epiphany that led to the creation of ICON CAPITAL RESERVE. We created a minimally viable product to demonstrate AUREALS™ to our UHNW and Family Office private clients. I travelled the globe key-noting Family Office Events and explaining how the convergence of gold and the Blockchain would change everything.”
SS: “What was that like 4 years ago?” Brad: (Laughing) “Well, to be honest for the first couple of years many thought I had just beamed down from another planet but over the last year that has shifted rather dramatically.”
SS: “Can you offer a simple explanation of how AUREALS™ work?” Brad: I would be delighted to. We have relationships with insured vaults in free zones in places like Shanghai, Hong Kong, Singapore, Dubai and Switzerland where our partners operate a former military facility inside a mountain complete with a private airstrip. ICON is not a bank, so the gold we store is fully compliant and exempt from declaration under FATCA and similar schemes in 109 countries. We store 1-kilo bars and receive safe keeping
Family Office Investor based on 99.99% of spot gold and they are issued into the wallet.”
SS: “So now I have my AUREALS™ what can I do with them?” Brad: “You can use them as a compliant and exempt store of value that sits outside the banking system. You can exchange them with any other wallet holder and we use the Blockchain to clear, settle and irrevocably register those transfers in 15 seconds. You can literally send USD$100m in AUREALS™ phone to phone, in 15 seconds without going through a bank. AUREALS™ will be bought and sold on various digital exchanges and, of course, at a minimum threshold of USD$1m you can exchange for the underlying physical gold.”
receipts (SKR’s), which do not involve a change in title. Each receipt details all of the 1-kilo gold bars specifications. SS: “The gold is secure, discreet and private.” Brad: “Exactly! We use these SKR’s to create a smart contract called a CINTAMANI™, which in Sanskrit means converting thought energy into gold. Each of these contracts entitles the holder to the physical gold and we register and reserve these on the Blockchain. They are encrypted and can’t be double spent or stolen. We convert physical gold assets to financial gold assets that can be verified on demand.”
SS: “You use the Blockchain as a de-centralized ledger to register and exchange these assets?” Brad: “That is correct and so it follows that each CINTAMANI™ allows us to create 1000 AUREALS™, which are also smart contracts registered on the Blockchain, as 1 gram financial gold liabilities.”
SS: “How does a private client get AUREALS™?” Brad: “In seconds they can set up a digital wallet that looks very much like an on-line banking dashboard but acts like a virtual safety deposit box. We use AI to create an encrypted key to the box and the address is registered on the Blockchain. All of the T’s & C’s & subscription agreements are in the wallet. A software licence is executed and then funds are sent our bank pursuant to a commercial invoice.”
SS: “Clever, so now the private client is simply paying a commercial invoice and then presumably keeps the contract as evidence of source of funds when they liquidate?” Brad: “Yes that is an important observation and it allows banking compliance to tick the box on inbound and outbound transfers. We price the AUREALS™
SS: “I can see how UHNW and Family Offices might love AUREALS™.” Brad: “That is true. We also offer a no limit ICON VISA card that can be linked to your wallet. Perhaps you are in Monaco and are provisioning your super yacht. You can use the no limit card to pay for the provisioning and even retire the bill at the end of the month by selling your AUREALS™. Larger families can issue the cards with various limits for principals, children, and staff all under control of the Family Office. The AUREALS™ can be subscribed for anywhere in the world, transferred anywhere in seconds and then used to effect payments on the VISA. It really is an elegant solution and we are negotiating some interesting strategic joint branding partnerships as we speak.”
SS: “I want to sincerely thank you for your time. Can you share some of the other things you are working on? Brad: “We expect to launch a scanner that can create a fingerprint for gold bars and also establish the provenance of Fine Art and Wine registered and traded on the Blockchain. Our team is evaluating opportunities that may see us price assets including oil and real estate in AUREALS™ and I invite anyone who would like to learn more to contact me directly at brad@icon.gold. Thanks again, this has been an absolute pleasure.”
www.icon.gold
