Below is a transcript of the Q&A livestream with questions taken from this Reddit thread.
Welcome to our TenX Q&A on October 10th.
I wanted to the Q&As from now on bi-weekly. We’ve had a lot of feedback where people have said that “You can’t announce something new every week” so it would be good if you maybe do it every other week
Our team is now 33 people strong
1) Does TenX intend to sell their services as a whitelabel to other banks? Are we intending to allow banks to use our service and run it on top of us, to use both logos and work together?
We have already been looking into this. Paul was in Japan, he has been signing memorandum of understanding with some large corporations to pursue this. We have also signed something like this with a US company, and when I was in Austria, I met with one of the largest banks in Austria that services the entirety of Europe. They are also interested in this in South Africa.
We are only planning to go live with such things in Q2 2018, as our focus is on the scaling and the waitlist that we are currently tackling.
Paul is working on some deals in Thailand. If these co-branding, white labelling solutions are going as well as we are experiencing right now, the timelines and the numbers that we have in the whitepaper are understatements instead of overstatements.
This is something we are really aggressively pursuing from a biz-dev perspective.
1b) Would you consider crypto-backed loans as a service in a future?
You may, for example, take Bitcoin, Ethereum or tokens as a collateral and give fiat as a loan until I pay back my loan in fiat and take back control over my crypto.
We have been discussing such a feature, we do not want to give out too many details, as there are many challenges from a compliance and legal perspective. Timeline wise, it would only be something we pursue in a year.
2) What is the current situation and plan moving forward, with regards to dealing with the high demand for TenX cards?
We have been aggressively shipping cards to Europe. This is going to continue until we hit our goal of having no waiting list by the end of the year. Ideally, a week before Christmas, if you are in Europe, you will be able to order a card and receive it within a couple of days, taking into account shipping times.
We wanted to settle the waiting list by September, but we underestimated the number of new orders coming in. We originally did not expect this kind of volume, it is in the tens of thousands. Obviously we appreciate the show of support shown by the users, but it has just been really insane.
In the past 10 days, we have a new scaling challenge, because people started using the TenX wallet as an actual wallet instead of a payment system. Yes, our TenX wallet is a wallet, but it isn’t designed for that! The sudden influx of millions of dollars of new deposits puts a lot of stress on our risk and compliance team. Don’t use our wallet as a wallet, use it instead as a payment service. Please only put money in the wallet if you are intending to spend it, as it puts extra stress on our entire system and service. Apparently, people trust us more than they trust a decentralised wallet! I’m really honoured and appreciate the sentiment, but I hope that you understand our point of view as well, and you only put in money that you intend on spending.
We are in final works with integrating our new issuer. This will allow us to go live globally. They are going to issue a statement from their side, confirming that they are working with us and explaining the situation. This would give the users peace of mind. Everything is signed, everything is in the final stage. While token holders are not investors, I do value the token holders and understand that many of you are nervous when the price goes down. I do want to do things that continue to let you have confidence in us, in the team, but I do hope that the token price does not affect what we do at TenX. It should not be the main focus. I really want to have a comforting feeling being part of TenX while continuing to attract long term holders. I hope that makes sense, and I hope that you share that view as well.
Scaling, more card issuers that we need, we have been talking to many companies to ensure that we have access to different markets. This is of course complementary to the co-branding and white labelling.
One thing: I really ask you to be patient, there are some things that everything on the side of TenX has been done, but there are certain things that you have to undergo, such as KYC or money laundering regulations that you have to rely on other companies for. Not everything is under our control, and I hope that you understand this.
3) What happens to the PAY token if TenX is acquired or becomes a public company? Will the token remain the same or will the token be converted?
Token holders should always receive value, whether we receive a buyout or go public.
First of all, I think by the time this is relevant, from a traditional IPO perspective, let’s say 5 years, a lot of the law could have changed already, and the token may have become something different. Obviously this means an upgrade in value. I would definitely be open to such opportunities. If by then, it is not possible to upgrade the token into something more valuable, then obviously we will find a way to allow token holders to participate.
Something Toby and I have discussed, is that maybe by that time, IPOs may not be as important as now, as more and more has been shifted into the traditional tokens. Maybe in 5 years, companies may not be interested in doing IPOs, because ICOs or token sales have become that popular or powerful that they will focus on these instead. Maybe there will be a hybrid or something. This is something that is especially relevant when token sales are possible with equity. Where you sell equity and the token becomes equity and it becomes legally recognised. 5 years down the line, there is still a lot of things that can happen in 5 years. We are definitely open to that. But I promise, we will definitely not forget about our token holders should something happen to the company in a positive way, we want token holders to benefit from that as well.
A friend of mine was here today, and we were just discussing about ICOs. He asked me, “Julian, based on my calculations you guys could have raised around 250 million dollars. Why did you only raise 80million?”
“We could have, but it’s really more important that we receive a win-win situation. I want this win-win situation, where people think of me, when they think of TenX, or any employee, any team member of TenX, they have this positive feeling like “you know, whenever these guys do something, they have a win-win in mind. They do not take and take and take, it’s a win-win.” In the event that something wonderful happens to TenX in the future as a company, then obviously we want our token holders to benefit as well.”
I can’t give you the exact details right now, because nobody knows what the legal landscape looks like in 5 years, much less the specifics like what will happen to the tokens.
4) COMIT is important for the future of TenX, and to stay ahead of competition. Please provide us a detailed roadmap with the most important milestones of the COMIT project and let us know how many developers are working on this. It helps the confidence of the project, and related investment.
If you want a very detailed layout to things, you can read the COMIT whitepaper that I co-authored with Toby last year. Second, I did a Q&A on COMIT where I talked about it in great detail. At the end, I laid out a bit of the milestones and who is working on it right now. Quick summary here,
At the moment, we have talked about the protocol, we have talked about how it all looks. We will finalise the protocol and release it this year. Currently, we have 1.5 people working on it. We are focussed on hiring more developers and now, in Q4, we are hiring aggressively for COMIT. In total, we want to add 8–10 people to focus solely on COMIT. Q1 next year, we will have a decentralised exchange. All our users through our app can exchange these tokens in a decentralised manner.
Q2, we want to have single hops, or basic multi-hops where one user can be in between. At the end of next year, we want to have complicated multi-hops possible. Understand this- COMIT is very experimental. Nobody has done something like this before. Hence, delays may happen due to unforeseen developments. I hope you understand that a roadmap is a reflection of what we believe is achievable and our plan to accomplish it. There is a very real possibility it being delayed, as well as it being expedited
By the end of next year, we are also going to have a lot of libraries ready, developer tools ready. We want other smart, intelligent people to have the resources available to improve COMIT, be it on their own or with us.
5) When can we see Americans using TenX
The plan has always been Q4, which includes the entire global expansion. If the entire world goes live, when we get our new card issuer, then the US will definitely will be part of that.
We are going to have a pop-up in the app, in around 7–10 days, for people who want to order the card, that we are going to give them a timeline. For example, “Before you order the card, please understand that you will only receive the card in for example January” due to the massive waitlist.
European cards, I am 100% confident that we will be able to clear the waitlist by the end of the year. We just have to wait for a number of regulations to be clarified. This is all confirmed, the only thing left is timeline, whether it is going to happen next week or in two weeks. In the event of an unforeseen delay, we will have the card issuer release a statement.
6)What’s the progress on Ethereum, DASH and Litecoin?
I just had a call with our lead developer for Ethereum, Michael. First of all I wanted to understand why there was such a delay. It is not his fault, it is not anyone’s fault. It is just a byproduct of our massive growth. Solutions that work for 5000 people are different from solutions that work for 20,000 people and currently we need solutions for 100,000 people. We expected to only need the solution for 100,000 people around Q1 next year, but we need it now. We don’t want to have a multiple stage rollout, hence the delays. Michael is working really really hard on this, and I want Ethereum to be live. DASH will be released quickly after Ethereum goes live. Regarding Litecoin, I have not spoken to the developers about the timeline. From a technical standpoint Litecoin is not difficult, because it is a Bitcoin fork, but I just want to have a concrete timeline to share with you. All of the coins will be live by the end of the year. Our focus is currently on Ethereum, it has been challenging with regards to scaling, due to the massive influx of users. Other coins and estimated times of arrival, we do not want to roll out all the coins at once, we will do this in stages.
7)When will NFC been available for the mobile app?
This depends on the availability of the cards, so once the new issuer is live, it should be available quickly after that.
8) When are cards ordered early September outside of Europe expected to be shipped?
According to Warren, we will have no more waiting list in Europe. We have some major television appearances in Europe in the next couple of weeks. I do not know what will happen if for example, 2 million people watch a show and let’s say 100,000 people order the card. If that happens, we may have to revise our timeline and expectations. At the current rate of growth, we are confident of having no wait list for Europe by the end of the year. We do have some awesome, fun stuff coming up, shows that you all know, and that’s going to be really really great. Thank you guys for being patient and forgiving.
I am not going to give you the country, and once the surprise is there, you all are going to love it.
8) Have you considered any form of cooperation with the OmiseGo team? If Yes, what kind of cooperation?
We have been reaching out, we have been talking. The team does not comment on rumours. We are very friendly to any company out there with a great team and vision. As long as they are willing to work with us and not out to scam others, we are willing to work with them. We are especially interested in working with companies who have a live product.
9) COMIT will be open source, how will you generate revenue for TenX because in the long run, developing and operating COMIT will cost a lot.
I do address this in the COMIT webinar. First of all, there might be the opportunity where we keep certain parts of COMIT exclusive to TenX, to ensure that we have first mover advantage. Next, while it does cost TenX to develop COMIT, there is little to no operating cost to COMIT because COMIT leverages off the existing blockchain infrastructure. The reason the PAY token is called PAY, is because it benefits from payments through our TenX system. If a payment happens to TenX, PAY token holders benefit from that.
10) When are the rewards going to be distributed?
It is important to TenX that our entire system, not just the card or the company, but the entire system is 100% legitimate, 100% legal. To be honest, we had expected Metropolis, not just Byzantium, but also Constantinople, to happen in October. Our original plan was to distribute it in October, but due to legal considerations, we want Casper to be live first.
This will allow us to mimic that, and use a similar structure to distribute the rewards. In the event that Constantinople and Casper is delayed, we will explore other options to integrate and distribute the rewards. It is of the highest importance to us that our token is 100% secure, legal and safe. I just had a call with MAS on Monday regarding this. By the way, for those planning to do an ICO in Germany, I met BAFIN, the German regulatory body, and they are starting to become open to the idea of token sales.
11) Are you sure the PAY token will not be considered a security?
100% sure. I guarantee you that we are never going to do something that endangers the token, the company or token holders. We have sought many different legal opinions in the various jurisdictions to ensure that this is the case. Furthermore, I want to make it clear that even if we waited a year, we will pay the rewards that have been accumulated for the entire year. Obviously, we do not want exchanges or the company to receive our own PAY, we want the users to receive the PAY.
12) If TenX finally gets a banking license, is it possible to get a bank account where I can transfer, pay my bills but in crypto instead of Fiat.
This might be possible, not 100% sure how open or motivated I am to such things. This is because I am not yet sure of what that would involve specifically. We are actually making good progress with regard to our banking license. I have a meeting with two authorities in Europe this month.
13) What are the current short term goals that the TenX team is working on?
What is the strategy of the team regarding mass adoption. In my opinion, the pay tokens are only as useful as the number of people using the card so I would like to know the steps you are taking for marketing and scalability issues.
At the moment, we are doing 0 proactive marketing. Every PR request, Television, Podcast or newspaper request, is inbound. We have a head of communications, Veronica, who is in charge with event requests and the press in general. She is doing a fantastic job, and currently she has been instructed not to do any outbound. We do not need any extra attention at the moment. We are aware of the need to scale.
Mass adoption, we view it in 3 stages. Stage 1 is making cryptocurrencies spendable. Stage 2 is connecting these cryptocurrencies in the background with COMIT, allowing for a very easy entry point. The banking license is definitely going to facilitate that, as it allows people to convert fiat into crypto at just the click of a button. The cool part is, if we have certain systems with COMIT, they do not even have to think about which cryptocurrency to choose. They could just decentralise it automatically and say, you know what, I want to put in $100, and I want the top 50 cryptocurrencies, $2 each. This is definitely going to be possible Q1 next year, and by Q2, we want to offer additional features.
There are talented companies out there that we have been talking to, that offer services such as hedging and insurance, to reduce the volatility of cryptocurrencies. Our current target audience are existing cryptocurrency owners. People who own a lot of crypto or are big believers in crypto.
Next, we will start to approach people who have heard of cryptocurrencies, but are hesitant to get involved. We are going to start in November, we are going to focus on these individuals. If it’s convenient, and fast, and kind of secure, they will have every reason to become involved. In around a year’s time, we really want to have the option for anyone to get into cryptocurrencies. If it is quite stable, go down, 1–2%, but also go up only 1–2%, then they will have some form or certainty, and that is what this 3 step plan is.
We need to prepare for that. I’m not sure how many of you guys know us from the start of 2017. We prepared for the token sale 6 months in advance. That is one of the reasons our marketing budget was $0. We are doing the same thing right now. We are preparing for the next 6 months, the next 12 months. We know that our tech, our product is going to catch up. We know the scalability issues will be solved. But if we wait for this to happen before we start with marketing, it will be really expensive because then we have to do user acquisition. If we can do this organically, it would be fantastic.
14) It is widely believed that the current economic system will collapse at any moment. Is TenX prepared for what could be a huge influx of new cryptocurrencies holders and spenders?
Personally I do not believe that the current economic system is on the verge of a breakdown. The last quarter and the first quarter of a year are generally not the times of the year that the crisis occurs. If that happens right now, it would take some time for these people to get into crypto. If this happens in half a year, we would definitely be more ready than we are now. A lot of the things that we are doing right now, is definitely us anticipating a potential crypto winter. One of the reasons we take a very risk averse approach is that we believe that within the next 5 years, there is going to be a period of time that is not as fun to be in crypto.
15) Internals: Employee Growth, Working Space, Admin Management, Working Hours, Workload, is the scalability of TenX in a healthy condition?
I think we are all working a bit over. I definitely get up at 6am every day, and work until 9–10 pm. My co founders work similar hours, the team members also work long hours. I do work at least 6 hours a day, 6 days a week. I try to take one day off, which works most of the time. The others are really hardworking as well, we are getting our new office any time now. As soon as it is ready, the next youtube live should be in the new office. We are hiring a lot of senior people right now, having engaged two really senior employment agencies. One in Singapore and one out of Singapore, to get us 4 or 5 senior executives to bring with them a lot of experience and knowledge to TenX. In particular, experience and knowledge in areas such as finance, risk, logistics, etc. It’s really important to have people who have experience, but also people who are flexible to be able to adapt to a different environment, ecosystem.
I try to meet with every team member once a week, although that may not be possible as the team continues to grow. At least have a call about the culture of the TenX, any suggestions, any improvements. Anything that the person could be doing better, the company could be doing better, how can we be productive, how can we hit our timelines, how can we have more fun, .etc.
16) When Ethereum forks, if both chains, exists, what will happen to PAY on both chains? Will it only be used on the new chain?
In case there is a living fork, then we will focus on the large fork. We will drop the irrelevant fork. I think there is a very minuscule possibility of this. This fork is not like the ETH and ETC fork. This is not a contentious fork, and I personally have not met someone that the upgrade to Byzantium is a bad idea. Im sure that there are people out there who may disagree with the fork, but I believe that they are in the minority and negligible.
17) If we get rid of cards, will PAY holders still get the reward?
We cannot guarantee the 0.5% on any payment system, because on some payment systems we may not have 0.5% With any new payment systems that we are adding, we may be subject to different conditions. If we only get 0.25% from someone, we cannot forward you 0.5%. That said, we are not intending to remove the 0.5% from the debit card, because the commissions are there.
18) Financials: Are you going to release any financial information like balance sheets?
We are going to release everything we have to release by law. We are based in Singapore so we have to file a report, that report is public in the ACRA system. We will file financial reports, which we will release as well. Also, equity investors will get the report, but we are not planning on releasing any information beyond that. Singapore is very strict and rigid about the filing of such reports.
19) New Exchanges
I was supposed to meet Kraken for final talks in San Francisco, but instead I chose to talk at the European Parliament. This is because the European Parliament will give us a big push with regards to regulations. I will have a phone call instead with Kraken.
I know we are going to be listed on two smaller exchanges this month. I understand that exchanges are hesitant to list new tokens, but if there is any major news with regards to exchanges, I will let you know.
20) Where do you see the main value of TenX, if tokens are not the value?
The value of the token. TenX is a loyalty program, and since we cannot print more of these tokens, the more transactions happen through TenX, the greater the value of the loyalty program.
21) If PAY is ever bought out in the future, will token holders have any rights at all?
I would love that. If it was up to me, I would love to structure a token in such a way that it is a mix between a security and a token. However, we are not allowed to do that right now due to regulations and legislations. Lets see how this progresses in the years to come.
22) Are we getting notifications when our cards are shipped?
Most of the time, yes. Sometimes we do manual shipments, so if some of you have received them from me personally from an Austrian address, that was just part of the manual shipments. We really just wanted to get the cards out. Sometimes you do, sometimes you don’t but most of the time we do send you a notification.
23)How can I be sure that the TenX exchange is good?
My tip, just compare it. Go to Kraken or another exchange and just compare it. If you’re unhappy, let us know. I am sure that we are spot on, and have not heard anything different. For those who get great exchange rates through TenX, please be vocal as well!
24) I’d like to use the cards, but taxes have to be paid. What are our options?
Currently, the only option is to do it manually. However, we have been talking to companies who may be able to automate the process. From a compliance and liability perspective, because if we show you the taxes that you have to pay, the question becomes if TenX is liable if there is information that we display is incorrect. Not that we don’t tell you the right amount, but maybe something in the your jurisdiction is considered a deductible. There are things that we hope to work out in 2018, but for now the best and only option is to do it manually. That is also one of the things that I plan to bring up at the European Parliament, which is when a cryptocurrency used as a currency and when is it used as an investment. This is important because if it is considered a currency, then you do not have to pay taxes on it. Many countries, such as Australia has exemptions where certain amounts do not have to be taxed.
25) Final versions of the iOS and the web app, what about Android
There are updates being pushed to the stores all the time, so I’m not sure what you mean by final versions. If you find any bugs, please let us know.
26) Decentralised exchange of TenX having an API?
Yes, we definitely have certain solutions in mind for that.
Lastly, please give us an upvote, share this video, subscribe to our channel. If you see any FUD, we really rely on the community to correct the people. We are also shifting our slack to a new platform, Mike, aka blitzio will give you all more updates on that. It’s been a pleasure, we will start doing Q&As on a biweekly basis. Please understand that we do want to protect some of our competitive advantage, and one thing that they cannot copy is the community. Thank you so much for all the motivation and support, and continue to let us know the ways in which we can improve.
See you at meetups, see you in videos, and see you at our next Q&A. Thank you very much, have a great week!
TenX Q&A Livestream and transcript — 10th Oct, 2017 was originally published in TenX on Medium, where people are continuing the conversation by highlighting and responding to this story.