EB66 – Levin Keller: Coyno, Bitcoin Bookkeeping, Filing Taxes, Building a Bitcoin Startup in Europe

Transcript

hello welcome to enter Bitcoin the show which talks about the technologies projects that startups driving decentralization and the global cryptocurrency revolution my name is Sebastian Kuchar and my name is Varun Dhawan crane we're here today we were live in keller I've known living for quite a while and I'm fairly well we've also had him on the show before that was quite a long time ago together with Asher of coin jar at the time user jumped in to talk about the be a key question they convey 80 question which was sort of a hot topic back then and but now we're back and we're gonna have more time today to dive into what he's been up to in particular the start of

his work mom called coin oh and and I've kind of you know witnessed the birth of this child from the very start so you know it's a great pleasure that we we can talk about it day and I think it's a very interesting product and sort of a product that's you know a little bit building for the future which I guess many of us are doing in the space but i think this exemplifies it you know better than most products oh thanks for coming on today leaving my pleasure my fellows very much a lot thanks for coming on and just yes so people understand you guys are in the same city of us both in berlin you're not working out of the same co-working space are you know currently not but we are for moving there and the two of us were also

members of the bitcoin center here in Berlin which now moved into the Atheneum office is very very interesting paisa v2 so you're working early etherium office now no not at the moment so we were before so we were working in the same office at the sort of previous location of the big con center but then leaving went to the accelerator and we can talk a little bit about that later and we moved over to the ATM offices now leaving is still at the accelerator and but maybe he's going to come back here and to the big con center cool awesome also i should i should mention is kind of funny when when Laban first came to

Berlin in he was just this little bearded guy and he was running around I warning everyone of this like dark dark scenario if to be 80 and nobody took him seriously everybody was like what what is this what is that what is up with him but but it did turn out to be quite quite visionary I think he was right there that there was a real problem where I you know realize that all a bit later but it was quite interesting yeah he was very obsessed with it stopping and I think probably knows more about this and I don't know maybe anyone else in Germany or well and i had to pay her to be right about stuff sometimes i usually

tend to do so but yeah this is unfortunate but yeah we all know that the ECG high toward a decision is very interesting will come up soon but yeah of course it's alone so we won't talk about this topic today but the basic issue is if you sell bitcoins to someone do you have to charge vhe on that and it's sort of for the Americans it's it's a little bit like sales tax of course that's it's quite a it's it would be absolutely terrible for Bitcoin if that actually came to pass and it's it's still in limbo we don't know which way it's going to go any idea of the one we're going to find out what the verdict is not know will take over sometime

liked by people tale like like one and a half or two years even we will see about that but this can take quite some time there news coming out of it going into it but it's no nothing nothing else we decided yet so and talking about going on can you tell us a bit why did you start going on so yeah of course as I was concerned with it with a vit issue I also dig dug into the question of how to actually takes your income how would you use Bitcoin as a professional and like a shop or so and accept bitcoins and spend them again and then you're pretty pretty soon learn that it's very difficult to keep track of all your bitcoins incoming outgoing so yeah this was the biggest

issue that I that I had and then I saw and I thought why is there no product that's automating all this and then is what we did we build a point of the Bitcoin bookkeeper what we want to do is we provide people tools to use the very same software they have been using all the time like election or become wallet or armory or whatever but just have it on the side a read-only bookkeeper that's keeping track of the payment so you would use the old software and then whenever payment comes in or goes out of your books we can just store the bookkeeping information that you need like what's what's the invoice number what is the amount that has been saying what is the value at the time and then you can do a text report very easy at the end of the year yeah I mean I must

safe so it's kind of you know we understand we know that you know we bought Bitcoin as a certain price right and now you spent a Bitcoin so the price has changed well this is the taxable event I mean I think this is pretty clear to everyone now in Germany I think you know if you if you wait longer than 12 months you know you wouldn't have to pay taxes on that but this becomes like it quite frankly scares me the idea that at some point I will have to actually account for like everything that has happened here it's it's it's quite a nightmarish scenario and very very very difficult to do and for us you know with

epson Vic when we we try but we are basically a beacon only company and we are not without the complicated company right like we don't have a lot of transactions but still it gets kind of messy very very quickly so it's I mean I think there is a there's a big need to have someone to like make this kind of smooth and easy because otherwise this is just not going to happen right i mean i think otherwise i think the only the only option for immersion is just that they say we're going to use spit pay are we going to get fiat currency and we won't ever hold bitcoins himself but as soon as you start holding bitcoins it

gets very very it's very hairy very quickly yeah and even more so you're a private person and and you have this like this this rule that after you can sell your bitcoins without paying any tax rate which is the case in Germany and other jurisdictions sometimes too the problem is to how do you prove that you had a bit contrived in here absolutely you made out of thousand years you made a million and buy a nice house you need to kind of like like prove that you actually had the bitcoins for more than a year so to be able to sell them tax-free and this becomes also nishat is something that we want to solve we also of course reading and working ourselves into the u.s.

diction concerning these texts issues but on the other hand if you want to do all these bookkeeping events it's pretty easy to do it automatically if you have a nice soft ritual to do it to do it by hand is of course a nightmare but if you have running a shop like they'd say you have an online shop and you put like people are purchasing stuff for Bitcoin on your side and you're buying stuff from your Chinese subcontractor over your Chinese supplier and pay him in bitcoins to then actually all these events can be tracked rather easily and you just need you to check the pH values to match them and so on and today the solution for that for when people is to use some kind of centralized service like coinbase or so we're actually also the keys are stored for the Bitcoin wallets that the user is handling and

using we just want to solve this or move this headache as of security concern I want to leave the user with the private case but just use the public keys to to track the payments and to make all the necessary bookkeeping point i want to say when you said something that's very important there is saying from centralized services so why i think what this allows people to do which was really valuable about it is if anybody wants to not use one solution or perhaps you know they're satisfied with one component of coin base but they're not satisfied with their invoicing and their bookkeeping services which I'm not particularly fond the way they're doing voicing for instance you can use a

solution like this that's really specialized at doing one thing and you know that thing is record-keeping and you guys certainly have like jurisdiction specific stuff as well in there which coinbase might not right and also we're building like we want see the whole picture I mean people they they don't just use coinbase but karma is kind of assumes it so you can get if you're using coinbase you can get we just talked to someone who did this you can get some kind of tech support for them but the fun part is that they actually consider every withdrawal of bitcoins from your account as a cell so they all mark it as a cell in the text as a text event but it's actually not the case because you just move the

bitcoins which is your right to the secure location like you condone it and then some time later you put it back on there and sold it or so so you need to kind of like separate transfers that actually went out of your kind of like system of all that the wallets that you control and and these transfers went inside of it because if it was inside then it's not a taxable event and this is where coinbase currently likes a feature and also we want to provide tools to import all deposits like the electron for example you didn't start using vicar and thought maybe this will become the business that I at some point want to do a peg support for so you need to import all the historical data and this is this currently as far as we know no service out there that does this

which supports as many wallets as we do for this kind of like broad picture that is given and we also want to support coinbase in the idea of getting like everything that's open to us Gomez has an API so we can get the data of our users to now I'm curious for a company like us that has been keeping our books if I mean we've been using multiple wallets as since since we first started you know billing and getting getting revenue we've used multiple wallets we're not really sure where the transactions are we have we have Excel sheets and other ways of keeping our books do you plan on integrating some features that would allow people that

don't necessarily have all the wall transactions like on the blockchain to show for to import those into a system like this and you know from there start like a clean wallet seed and then go from there yes yes of course you can you can put pick a time and then you just give us like an amount that you had at the time being and later I mean this is not yet implemented we are still Peter and evolving our prototype but on the other hand usually if you track all these kind of payments you should be able to go back you should be able to say there's a payment coming into one of my wallets from this other address and then you say like okay I've matching I'd like a magic event my excellent she'd which shows that this amount was actually coming from another wallet of

mine then you can do like a forensic and put also this edges into your wallet and say okay this is also an internal transfer and then we'll work on from that so whenever you said wallet in another scenario then we also show this one of your wallets and an internal transfer if money left is wanted to another of your wallet if you start mixing your private rollers interprofessional wallets then you might have some issues of course then it gets rather complicated and then also we need to think of a better way out you can like highlight certain transactions as being private and the others as professional but it's actually also an unprofessional way to use a professional come mix to the private one yeah of course um ya know and of course a core a core sort of design aspect and I guess

philosophy aspect of Kona as well I think is that you guys don't hold private keys right that you only do public keys and your watch only so yes this is a very important fact we want to be a watch only solution um for several reasons I i want to sleep tight over the night and i couldn't if i was like like putting the devolve of the well-being of a lot of my customers at risk because i have a centralized service i could be hacked like any other and then lose bitcoins even coinbase is not completely secure to these kind of attacks as we have seen so yeah this is something that we that we definitely never want to do hold our customers soul private keys we might be looking into some part of stuff

like co-signing ourselves so that we only hold part of the private keys that that are needed you to release funds for the customers and yeah we also think that that this this idea of just watching the blockchain i'm just being layered on top and not being the sole service that you rely on so you might might use one service way security and the other one for bookkeeping this is kind of what bitcoin is about to keep the stuff separated and not having everything in one point so that also all the data is gathered at some point in the leak so yeah this is why we chose to do only to watch anything and so a planning on also do offering for example invoicing in the future and things like that so what people are doing this day

arm they store are there public routes each data with us I'm with that following like this upload we can track all the payments that are coming into this wallet and going out of this woman and we can also generate new keys and in the future we will provide a feature that you can just have a link or the profile page where people can come to you we deliver a new freshly generated public key for this payment and the payment goes not to us but directly to your wallet for that of course still we need to up the security because we might get attacked and people might replace the public keys which which people think are yours but with others so that the payment gets redirected so there's a little like like still a gap security wise but it's a it's more convenient and

also for use for your privacy much better if you use a new key for every payment instead of pasting it on your website or so and we're definitely looking into this is definitely a feature that we plan on doing and also automate all this so that you can use it in your web store for example if you're accepting Bitcoin payments and just saw one public key with us and then we notified you when the payment is texting settled and then you can ship the product that you sold for example so how would that work in the case if you're if you're generating a new public key every time and you know the wallet might also be generating public key how do you make sure that those like you're not generating the same key for perhaps two payments so this is actually done through sub chains so we didn't really

decide on which sub chain to use but usually you so you get this note it's starting out for the for the for the public see tater and then you use one chain that those from that this chain 0 is for the external addresses so errors is that you would give out to third parties and so on this is what what what it usually does then there is the the chain number one like the second one but of course you start counting at zero and then I you you would generate addresses there that are only used for internal reasons for example change so whenever you send some bitcoins off the rest that has been on the address goes to another address and this is one of the intro we could have use for example chain number two and then we would you would just follow another chain as the wallet

itself so we need to check out the standards for that and we're currently working on so this is still work in progress also Bitcoin wise but but you could just use other like other paths that that come from the same source as so that you don't collide in any circumstances I wasn't even know where you could do multiple ya sub sub change from an HD wallet you can arbitrarily the arbitrary amount of them if you want yeah this is the oil you like it's like it's a tree that it's branching out indefinitely if you want but usually only two of these chains are used and and you can use as many as you want to to provide additional services so right now right Dave if merchants accept

Bitcoin I think for the most part especially if the larger merchants say work with a payment processors like a conveyor bitpay and for the most part they convert to fiat this obviously is the sort of solution that will be for those who keep holding bitcoins now what kind of timeline do you see do you see this happening anytime soon because one one topic we can talk about a lot is is the volatility issue obviously that is it a huge barrier when it comes to two companies starting to hold bitcoins on your book but how do you see that playing out so they're the true two possible scenarios yeah i mean like okay

big con can become can become stable this is my personal my dear probable but maybe he also will go up quite a while before that happens so right now bitcoin is rather stable but not really reliable nobody thinks that the kds like john years two hundred thirty dollars will hold indefinitely or so but right now I would feel rather comfortable as immersion to accept bitcoins and we also see merchants to accept bitcoins I mean like you're in Berlin know if this bar room 77 they're accepting bitcoins and holding on to them you're over start like they also keeping portion of the bid points and there was a bit pay a like a BPA repair representative who recently said that I think more than fifty percent of the

Bitcoin users a bit pay users are holding on to at least a portion of the Bitcoin so I mean like like a lot of people who especially in YouTube Bitcoin are afraid of the volatility but they'd like to model like a big part of other Bitcoin users also keeping at least part of it as bitcoins and also on the whole thing so of course all the traders they also keep on with the vehicle and I think like in a year or so we will see whether people consider Bitcoin to becoming stable or whether people understand that this is finally a flawed the become protocol that we need to do something about it to change the the like maybe the money supply or something you like and then we need to find some kind of mechanism that is actually stabilizing price and I'm not talking about a central bank you but more about

a self adopting algorithm like the difficulty that gets adjusted to the amount of pit concert or at least over time and I don't know yet how this can be implemented maybe this is something that aphelion will do so like monitor multiple exchanges and finding like like rapid movements in the price and then doing automated automatic counter measurements but I think if this becomes a problem then it stays a problem the volatility of Bitcoin then this is just some issue that we need to solve in the new version of Bitcoin or maybe not for yeah I mean to those who are interested in this topic we had a whole episode with Robert sams who's written a proposal for currency that works exactly that way well it's a proposal right so there's no working implementation and

it's pretty complex from a technical perspective and and you know we're talking about this I with Adam back as well and and those guys and I think that's a good point we're sort of skeptical even though they weren't familiar with the proposal in detail they were very skeptical that it would actually be possible to do this in a secure way but yeah I think we will see where it plays out personally i am i'm very skeptical that I don't believe because it's going to become stable or the value of P consequently become stable anytime soon not in the next ten years or so yeah we'll see I mean I think I guess you guys will have

flexibility as well to implement other solutions implement other currencies maybe maybe integrins create some sort of hedging tools so yeah I think I don't I don't know about but I of course will will support other cryptocurrencies the big thing with bitcoin is that there are a lot of good libraries out there already like a lot of open source stuff was contributing to it but we're lying also on a lot of open source library especially in JavaScript node libraries and they are not there for any outcome or already lighting the same quality as they are for Bitcoin so this is why bitcoin was really easy or very easy for us to to to implement in the first place

we don't have to build everything from scratch but doesn't hold as much for let's say dogecoin or like something like more exotic like Mineiro so there you would have to build a lot of the tools yourself and this doesn't make really sense for us right now but I mean as the currency grows like it as an Archon gross i think also the ecosystem goes the technology grows and the libraries grow around it and then we will be very happy to integrate it too so what what has your experience been with with building a product that you know feels quite far for the future like how do people respond to that in the Bitcoin space and and maybe out of also

outside the Bitcoin space their calling and you like on a weekly basis and ask when it's done so it's actually not far in the future so a lot of people have a need for this maybe not maybe not the the hundreds of thousands users that we need to this is it we need to do like a to push this product and to get like like the huge attraction that we're looking for but they're already out there so people are in need of the tax reports today and this is these are people that are using it as a tool as soon as we will release it and then they're on it and say like I need this service to be added and that one and then I can I'm can I can I can use it but I see also with the growth of Bitcoin I see more and more users

using it and they're like big companies to say let's use Bitcoin and then they asked that their their bookkeeping Department what should we do about it and book-keeping says like please don't do it there's no true for it as soon as we have these tools we are also enabling the ecosystem into space to just adopt Bitcoin also the big companies and so on this is what I see as a future for this so so who are you targeting are you targeting small companies like small merchants or or local restaurants in the local businesses or are you targeting more like larger at a price or both like what's your target market we're doing both at the same time to a certain degree so we have this front end user faced on product that is on our website

each other corner calm everybody can use it already with limited functionality as its veto but what what we also we are also in talks with with banks with the larger companies who want to use Bitcoin on scale are and think about shipping white level solutions to them and not them having them rely on our web service but building something on the side maybe a little adjusted to their personal needs but this is what we would be looking into so we want you to tackle the small and medium businesses make it easy for them to use a a kind of like ready product and which is the out of the box and then we have these these more specialized adopted versions for for larger companies so are you planning

on integrating with bookkeeping software like I don't know QuickBooks sage or others yes so QuickBooks is definitely the first one that we want to do and Germany we're doing data fit which is a German version of like also for small medium companies very widely used we're just picking the the ones of the biggest market penetration and then going to the next one and and we're also we hope that they have that they all have some kind of API that we can actually use and put our data in we won't rely on them building final into their their their apps that's for sure but usually they have some kind of API or some kind of standard format where we can just give a report and then it can be imported

easily okay well I mean there's lots more to talk about you know we want to cover some issues regarding security and also talk about like the the the the Bitcoin steen I guess in Europe you've got lots to say about that before I do that let talk about response or shape-shift of course you know shape-shift is the fast and easy way to buy and sell old coins will exchange all coins for one another and well we've been doing this new thing for since last last up so we got to be interesting to use shape-shift to tip someone or some service of our choice and live and you said that you wanted to tip and British tilt back yeah so we depend heavily explain what yeah people

need to to be able to send us the data the the public key data and before it was very difficult and andreas was actually the first one to implement it in a very easy convenient way so you can just dip it button and then you say like export my public key and then you send it to yourself and put it into corner so when we when we open our project is the beta he immediately released this new feature too and now people are very easily able to connect it and mycelium is also coming to the market and and so this is why i would love to contribute to this completely open source free time project of andreas Rita and I really like the the android app become wallet and this why I think that we should keep

some yes and some love enough yes okay well i just sent them some dogecoin using using shape-shift so he had to be a bitcoin address on his website i used the douche point that i had my wallet to send him about a dollar and a half and so that's taking about a couple of taking a few seconds to do that and so the next thing about shape-shift is that they support about a dozen cryptocurrencies as of now there are adding new coins all the time and if they don't require that you create an account to use it so you basically go to the website ship ship that I Oh they've got their currency conversion tool there which looks a lot like google translate for cryptocurrencies and you select the

currency you want to convert and the concurrency you want to convert to and just as you see here on the screen you send the currency that you have to the QR code the display and then in just a few seconds they exchange that and send it to the address so it doesn't have to be your address as demonstrated here it can also be you know someone else's tip address it could be a merchant for example you could be spending dogecoin to buy something with Bitcoin for example so you know there was lots of different possibilities for this and Brian us will mentioned perhaps using it for hedging in some cases yeah I mean so I cannot really vet these currencies but there are two that are meant to be

pegged to the u.s. dollar one is new bits and one is with us d so you know in principle right like we've talked about thank you really lost right so yeah what if you're saying there's that basically what you can do is you know if you're using like currency like new bits or or pick USD you could use one of those stable currencies to to hedge essentially sending bitcoins to that using shape sets so shape shift the fast and easy way to buy and sell all points

go to ship ship that I oh give it a try tell us what you think and we like to thank them for their support of episode of Bitcoin so coming back to koi no so tell us about some of the different like there seems to be some issues with this regarding privacy because you do have to hand over all of your public keys it is very secure on from this perspective that you don't hold private keys but you do have to handle rear public keys and that means that you guys have access essentially to a company's entire transaction history and their financial information why should people trust you

with that so they're right now they need to trust us like they they trust the bang I mean they would just assume that we kind of like protected later in every possible means of course as a bit corner this is not really like the satisfying answer that one would expect so and in the long run we were currently working on on more ideas like encrypting the data Tyneside it's difficult right now to do it and there are others trying in and also not succeeding until now because of the issue with you or the feature that we want to provide the user with usage of HD seeds come on the other end a a company usually doesn't care as much about the privacy of their

financial data as maybe someone who is a private person and I mean to a certain degree they also might at some point provide transparency so they could do that very easy with an HTC then stay you don't look at all the transaction that went through the seed and see our balance sheet or something so it depends always on the case doesn't mean that we should lose the data we need to protect it as good as we can and take care that a for example if somebody requires a deletion of his account that we really delete all the data and don't keep copies on track that's something that we we want to provide in a very profound way on our end but on the other hand side a lot of people use services such as coinbase and there I have to say they're yours like first of all you need

all to do all the KYC in AML stuff you provide them with all your details and then you also connect all your Bitcoin transactions to it and we can't be as good as you using your own ball in and only doing face-to-face transactions we get your bitcoins of course there is a risk that at some point some data is leaked but it's still much better than some central service such as for example coinbase or another exchange if we if you use it as a wallet because then they see all your transactions have access to your keys and also you need to connect your complete identity with us you can give us a fake email if you want we don't care about all about them and so tell us a bit about what has your

experience been like starting a bitcoin bitcoin startup in berlin so coincidentally as we suddenly went pretty well because um we found this accelerator program axel springer plug and play it's a joint venture from access winger which is a very big media publisher and plug and play the us-based incubator accelerator program and they were actively looking for Bitcoin companies when we thought about joining in and then we applied and they took us in so we got a little cash for some shares and we were supervised by them we got like like hands-on workshops and also we got a lot of exposure to people influential people as well as investors

and so on so this has been very good a very good experience accelerator wise but after that it kind of like like start start dragging a little because I'm to our experience in Germany the investor scene is not as Bitcoin eager as it is maybe in the US or in the UK so this would be where we see a little gap between this accelerator and now the additional investment and also there are very few bitcoin-related investments in startups in Germany over all you can account in them on one hand I think especially the ones that go be beyond 50 200 k which we're just I mean like the the real business just begins to start so the Bitcoin seen in Germany

as far as I can tell is rather timid and people like investors also very hesitant to put money on to the table so have you have you also try to get in touch with investors from us so from other places that may be more open yeah we're just currently expanding the unfortunate situations of course with German company that we are too small yet to attract the interest of a very large be seen and the question is so so the question is whether or not we can make them actually hand the money over the ocean so usually in a very large investor wants to only

invest if you either like invested in small company if it has a tight grip on the company and can see the teeth at the founders actually using the funds in the best way that they can that they should do it or if the company becomes larger and a lot of other investors already in there you can just leverage these other investors to make sure that the company is like keeping the right back roads and everything so um we were thinking about moving maybe to the u.s. to get an additional funding there at the current situation but actually we still hope for finding some angels in Germany and then move on maybe and get the attraction of an us investor for a bigger round after that so you would actually try to move the company as a as a legal entity or actually also operationally to us it's

more about the operational part than about the legal ha we might also move to legal 4n but the operational part sometimes is more importance of the investor wants you to stay off early or so in the u.s. we will see about that this is just an option actually we will like Berlin but it's a very good place for a start-up because it's really cheap to live and also for a bit coin sorter like data protection wise and so on is what much better than in the u.s. so I would rather have my customer later here than in the US where the NSA could just knocked on the door and I would be able to tell everyone about it now before we before we started the show we were talking about of course we all live in Europe and mute we've seen the investment the investor numbers and

latest coindesk city Bitcoin report regarding the amount of investment money VC money that has gone into European stars vs Americans to startups and you know the gap there is actually quite staggering I believe it's something about ninety-five percent now well no I think it was it's not that high at least according to Kanye's report but it's it's a bit tricky right because I think some companies like watching on in for other companies are counted as your PS where it's not so clear but there is there is quite a large gap in you know between the investment money that come those going into US companies amoeba European companies i guess that's proud

you that could also be said for other sectors as well could be set for the tech sector as well what what are your thoughts on that why do you think that is and what do you think needs to happen in order for that to change I mean they're certainly good this is of course connected to the usual difference between the u.s. and then euro euro iron riscos are not as as tective noses adventurous usually as they are in in the US on the other hand I mean like Europe has a track record especially dreaming or building up very large very uses and very successful companies such as all the car companies in Germany but these are more businesses that the investor can understand they usually do bootstrapping and they kind of like

importing the very idea of building startups and then pushing them and then just like fast tracking them to something as x1 newark in essex will knock in here is an example for that that had actually like a real but wheel funding wrong again but but besides from these some examples usually this in Germany or in Europe especially on me on the France and Germany I'd say the business is done in another way than in the US um but bit porn this of course adds up to net next there because you usually can provide enough stretch you today enough revenue today 22 I mean I do to you to make to satisfy any kind of request from the from the

investor for these investment i mean like i have a look at change tip they got like when they got the investment i don't know if three and a half million i think they had like 70,000 US dollar total revenue ever over their service so i mean this is not something that you usually would base such an investment but its projection and this is what US investors have they have vision they think bitcoins next big thing and in Germany people just ask me yeah I read about this Bitcoin I thought it's bankrupt now what's the point about them and this is the usual conversation I have with an investor unfortunately I mean to certain degree politicians make the the economy here too in Europe and also in Germany so they kind of decide what is good technology what not and then they they like they pay all the

stuff for that for example like all the green energy that we have over here it's not only for text reductions but also like really serious money getting into it being pushed into it which leads to a lot of like like a lot of crops and so on Germany just built to be burned or turn into into into gas or so which becomes a problem somewhere so I mean like we have graph this kind of like more maybe the government has a stronger hand here in planning the economy than it has in the US and this of course leads to only secure ideas or or or conventional ideas because I don't think that a politician will risk his next election on the basis that he kind of like pushed a bit coin sorter to to to build up something that then in the end

didn't really work out the way that he tended to do you know so i think that the lack of private investors and then that that it's not so common that you solely rely on on a private investor I mean a lot of people tell us yeah there's this state program and the other one you can get a very cheap loan here and it's where you build up your company you should do some contracting first and so on there's a general different approach to this kind of investment and building up the company and then the government you write about Brian I'm curious what your thoughts on this yeah I mean I I think i agree with flaming and it's pretty obvious you know there is that discrepancy I mean I think if

you look at tech investment general Oh like the u.s. is something like 10 times a sorry I think it's like the start of space than Europe now if you look at that point as before there is some outliers you know like some mining companies but for the most part you know it is very nascent right like it is just not that much going on and I think another thing besides the the investor side is that this kind of attitude also carries over to actual your entrepreneurs and people in the sort of space so i think it's it's not just them but it's also people people try to start savings right to try to start things

that are sort of like true and tested and bitcoin isn't like really one of them and and i think in Germany they may also be a certain like like almost emotional resistance to award something like bitcoin that's like all this is like speculative or like somehow another good thing right i do think there's a people are you know aren't as open to it said and you know this is one thing that I fear from noticed you know running the meetup here and i would love to change a bit is that just have more starter people like the interest in bitcoin like look at sorry maker companies and I think it's changing a little bit like I

mean I have gotten like quite a few requests for example to give talks at regular tech events not pick on focus events about Bitcoin like in the next month so I think it's maybe slowly changing but you know that being said it's it's it's definitely it's definitely a big problem and of course you know Berlin especially is is well known for for companies like like rocket internet or so if people haven't heard of it you know they kind of became famous by just copying a successful American start of models that usually like oh it works right like obviously this is a model that works just do the same thing in Germany and build it up as

fast as possible and then try to sell it you know so not very original approach like an approach like a hundred percent focused on exit you should not own ideas not on being innovative necessarily and that's very very popular here there are a lot of people doing that there's like rocket internet who spun up hundreds of companies by now there are people again copying dad and so I think it's yeah it's not the best environment for Bitcoin become startups that's for sure and I guess a lot of it will also sort of depend on how the regulatory situation is going in the future and then that that one is very hard to predict so I you know it's hard to

predict that this bit license thing turns out so that could change things again and maybe that would make your more attractive place than us but hard to tell and also I'm have to say that from the experience that I have from the accelerator I mean really people are who are not really really involved with such small companies and they're like decision maker lobbyists and so on like bankers where they are frequently even some tech ministers from some countries and India's or whatever and and so we talked to these people and a lot of them they can't like a lot of them heard we'd come for the first time and said like arcade is very interesting but also some others they really listen into it and they're really filled about it so so we had all kinds of reactions like people

saying okay now I finally understand pick all we need to do something against it and we had people like yeah this is really the next big thing like like people coming from banks and something really thrilled about it and you want to do something with it because they understand that this has potential so I mean this is of course what the Bitcoin ecosystem needs to do education education education and of course also helpful to have all these examples from the US like they there has been huge investment into it I mean we always tell people list because then they see okay this must be something about the whole Bitcoin thing it's not just these two wheelers you're talking about it but there's actually real serious money for injured so of course you can leverage us power and in Europe also people are awakening and are seeing the potentials

of the technology and one thing to take into account here as well is that you know a start-up is always a speculative thing right like you're always taking big risks and there's always a high rate of failure but now of course we're big on its it feels definitely to someone who isn't convinced pecans going to be the thing and you know maybe this is slightly different for us but it definitely feels like like you stacking the risk here like first of all there's the big con risk like so that may work or that may fail and if it fails is pretty clear your startup's gonna fail and then if it works then distilled your startup is right so yeah you kind of have you have more risk i think that there's no question that if you do something like bitcoin then if you do

like pizza delivery sort of something yeah the potential outcome is also like like like much much higher reticle and I mean like this question is also like maybe like ask for every Bitcoin so that and the other thing is that I think a lot of people especially large hedge funds and so on they need to start risk hedging the risk I mean if become becomes like like the thing that we all envision it becoming then maybe some other stocks that they have with large banks and so on they will go to dust so just for this risk if they like measure like one percent chance the big con taste-off they should put one percent of their money into Bitcoin related stuff which is usually a Bitcoin startup or become company so I'm a kind of tell ya but can itself I don't know actually I

don't think that this is a very valuable investment for a 44 port for a organization that it's investing money because right now this is a huge risk with one is taking that Bitcoin as a few all that it will be found at some point and then be replaced by an altcoin so if you invest in some company that's building up on the technology you're just betting on technology and or in itself so I mean these people I think maybe that Bitcoin at some points might be out all blood or band or so and then some kind of like the euro coin issued by the central bank will take its place but use the same technology but have some kind of control mechanisms or so this is the way I think that some institutional investors think and and

for that they still can use the same company that has been doing stuff with Bitcoin for this Neutron as long as it's also using blockchain technology so guys I'm curious we talked about this before you know the sort of seeming gap between the text startup scene in Berlin and the Bitcoin startup scene in Berlin which may arguably in Europe is probably one of the one of the most I mean one of the cities where are the most startups say from London perhaps in terms of your Bitcoin startups have you noticed that those two scenes are starting to come together and synergies happening there yes I personally I feel for the most part that hasn't happened yet I don't know how you should have at to think

about that living we're currently exploring 232 you the to London we were going there as soon in two weeks or so and there was another Bitcoin solid and satoshi pay in the very same accelerator as us and even in the same batch I'm so we could share experiences with them and my not from this company you went to the UK he was very well received their talked about this product everybody's that you thought about Bitcoin so I think that London is far ahead and you also had some visitors here as you can remember maybe from the econometrics guys they stayed a couple of weeks or days at least in the beacon Centurion boolean and they're on some occasions people came over here but it has a little slow down and I think all this is also due to the price of course right

now I think the whole big currency is a little hibernating might also be easier to raise funds when when the bitcoin is going through to the moon and let has just crashed another thirty percent over the last two weeks so I think that that people will like right now I see everywhere people like like laying low a little bit about Bitcoin but last last year are the the scenes were connected to a certain degree in that think this will go on further we should do more about friends actually man I think I think you know the fact that people are laying low is definitely also true here the Bitcoin Association here is not really doing much I mean we haven't had

any board meetings or anything like that and uh I mean since like since I came on the association so I mean there's not much happening in terms of activity at the association of all I think the price probably has a lot to do with that no not enough Bitcoin subbaiah at dinner at the board meeting you mean perhaps and now you know some of the equites that I've been hearing from Paris of course I'm not impaired so I'm not like right in the middle of it but uh you know I i heard things that lemons on gb coin was not attracting as many startups as they want to so they're now like for rethinking their strategy and the like they dare dare idea to have

some sort of accelerator finger yeah yeah yeah so I think they've sort of rearranged that space to now work on their own projects one of which is the ledger wallet it's a smart card wallet that was released not too long ago and that they're now selling so i guess like that's one one project that has come out of there and that you know has some potential other projects that came out of there sort of disappeared then there's pay miam of course that has announced that ingenico the credit card terminal company is going to be integrating bitcoin payments in all of their terminals starting next year so that's like really interesting really good news I guess alright it's focused

around one or two companies and you know other than that there's not a whole lot of activity that that I am aware of and also one shouldn't forget that just because bitcoin you you don't build as easy a successful company this is still ah it's still a hard job to do you work a lot you have your ops you after downs and in the end it's yeah what you say it's on the spoon is a marathon and I think people a lot of people in bitcoins for you they they made some money on the Bitcoin investment and the thing that it being an entrepreneur and building company is as easy as that and it's actually not so I think that this is all something that we should keep in mind

for example this accelerator I'm talking about i have a little insight about the application that they get right now and i mean they they they they had to bitcoin suburbs in their last batch they got some exposure for that so it should be i think people should apply the internationally you everybody can apply for this accelerator and they got like two or three bitcoin applications which we are really like you used to a certain degree of these one of them that I thought so so um my point is that that there's also lack of good business ideas in the Bitcoin scene so it's not so easy so I like to come back just before we wrap up to to koi no tell us about your team yeah so we're

currently are three people so Jim Berlin did say that's most my co-founder and Annie and we have a very very good engineering in Brazil who did a lot of the room stuff the plumbing in the background build up the descaling and node.js application with us and that's the Apollo and yeah so so this is what we are we have three people and want to expand the team as soon as possible would you mind walking us through a demo no no look let me I pleasure so how do I do that but it's doing it I'll set up the screen share here and you can just walk me through it okay yeah so um so this is actually already with some data

in there so I'm this is a cast test account of mind as you can see in the upper right corner at leaving at corner calm and you can go to the on the left type you have a navigation bar and you could click on the wallet symbol maybe first and this is actually where you end up and you start using the service and usually you start with zero wallets so you would need to add one so you can click on the button to add a wallet and there you see that there are the bullets that we support we're currently still working on the little yeah like fun and stuff you know like it's not really beautiful but i will polishing this right now and i can only see it in the small window right now okay thank you um so yeah bitcoin wallet this is yet sir

walter's we support currently we're planning on supporting also the other ones that are telling the block as soon as possible some of them we are in negotiations to a certain degree also to make them share the public seat data that for example the the bread wallet on iphone i would really love the availability of the feature to as soon as possible because a lot of wallets don't don't actually share that data with their users yes you can't export it as easily from the wallet it's not something that that people are envisioned to be shared in the first place but you find that it's a very good idea to do so but some people think that that this is data you shouldn't share and then they want to prevent you from it it's kind of like

only your device on your app and people should ask for these kind of features as they want so when I when I first came in here and add my way up HD seed like what he wants my seat I thought you said you didn't have didn't use the the private keys then I realize that that's actually the the ex pub or the public key seed which allows you to just have to see the public sees so yeah so this is exactly it so we have guides for all the wallets how you get out of data it's usually rather easy we walk you through it and especially I just keep attention that you always only share your public key with us I mean if you would put in your private key I'm not really sure about the former but usually we shouldn't even accept it so you would be just show and

now there is some added like some already added wallets there are three of them here these are just demo accounts there's an electron wallet which I could be an electron cold storage a wallet where you keep some funds secure then there's on the right side this vid con wallet this is my mobile phone but I use on the mobile phone and then I have another wallet I mycelium f also on the same phone but it's for business are for business affairs and currently if you click on the arm yeah if you now go do transfers panel this is where it is interesting this is where let me see here lets those goodness up a bit more so people can see ya though also we're working on the responsiveness of that

but the but this is where what corner does for the users so you we start making sense out of the transactions so beforehand you would you couldn't separate a transaction that went from your phone out of there whether it went to another of your wallets or to an external party whether you pay for the pizza with it or whether you just transferred money to your cold so chicon I mean you could just match the Bitcoin address from one world to the other but this of course makes it very painful for you to do by hand so we can connect this we can see that the money actually went from your phone to the coast origin okay so just let's just so we understand here so this green part here this is my coming into the wallet and then this is an extra this is a transaction coming

out of the wallet yeah okay so but but when you say out of the wall this is a this is something coming into your professional of what this is coming into your possession right so it's not really the wallet it's what you own it's your your your work net worth so your network is increasing by point when bitcoins here and it's decreasing by point 01 bitcoins over here and so these are the transfers within the system exactly and for example if you wanted to do a tax report not right now these weren't textable events the others where like you get bitcoins in you kind of buy them for whatever you did and then when you sent a bit cuz you sell them for the service that you receiving so both of them in taxable events but this one's in the middle the internal transfers are

not and so what's interesting also is to just to look at these values on the side so you get the dollar value at the moment where what the transfer happen when the transfer happened yeah so this is a very this is the crucial information I mean a lot of wallets show or for example external info shows the devaluation today but what uses is if you see a transfer over here though so this is what we think it's more valuable to the users show the the the value of the bitcoins at the time that were transferred we pull this data from command s currently from their API and we want to provide some kind of like average pricing method there but in the end people should also be able to just

change the amount if they know that they pay for something that costs eight dollar or head like this transferred eight dollars with a big crown but we actually think it's like seven dollars 95 then they should be able to adjust this amount to for the tax report so some of the features that you mention your be adding to this is the ability to label transactions yet to level transactions to label recipients and Sanders so you say like okay this is an external right now but actually I know it's coming from my mother these were like like payments for my mother or from my employer or something and then on the other side you'd say like this is the this is the the burger joint where I just had this great night so I mean then you can also track like we want to do a

little bit like mint.com for Bitcoin too so that you can you can see like what budget was I on what where did I spent my bitcoins this is what we want to provide for our users awesome what are what are they have features can we expect than the actual release when when you betta periods over so the beta is more forgiving is stable and adding more features to it we want to support as many wallets as we can and also online services such as coinbase block general info all the major exchanges so so people can also track the bitcoins when they're on there we're currently looking also into ripple so some people use people transfer money from one exchange to the other this is more difficult than just adding the exchanges

also some exchanges have the problem that when you when we call the api and ask for the users transactions they tell us that bitcoins have been withdrawn but they don't tell us where they went to so we need to kind of like find out ourselves where the recipient address was was one of the wallet we need to like connect these these transfers and this is the what we're working on to ease and automate the process as much as possible and once we're done with that we should be out of pizza and then we should be able to provide tax reports which is the main first feature that we think that people will use or get all your data from all these exchanges from your wallets in and then just yeah get the reporter and once the beta period over yeah for the like one or two months

I think this is something that but people should not expect the beater to change completely with with the final release once the bitter is kind of done then we just switch it to you through final release so everybody's happy to use it already today and if you find any issues if you have any recommendations just keep in touch send us a message on prettier way ever cool well I can move it to users for own bookkeeping and tax tax is coming up yeah I know I think that's definitely product I will have to look at that time so one thing I think that that would be valuable in here as

well as the influencing part is that that's that's something that I think few payment processors and merch processors do right now is like actual invoicing like proper invoicing where you can add items line proline and with price and stuff I mean coinbase just horrible like I think bitpay does something like there's quite simple also that seems to be okay but they're missing some components there so I think that's one thing that you guys could also probably get right yes they will definitely work on that cool well lemme thanks so much for joining us today to talk about kona will have links to kono in the show notes or people can can

check out the service can download it give you guys feedback you know i hope you guys are going to be successful like raising well i guess also like you because they are fundraising at the moment so if any investors are listening to that I think it's definitely an interesting interesting startup and I think I guess it's one that has as a lot of potential at least in my view so yeah thanks so much for joining us today I'm very welcome we appreciate you coming on and thanks to a listener for listening to the show this week if you have any questions comments just get in touch you can tweet at us with XNA of BGC you can also follow us on or subscribe to

youtube channel so you can you can get the latest videos or you know give us a tip you can't do that to an episode of a condo come / tips and you can use shape-shift to tip us with your whatever coin so thanks so much and we look forward to being back next week