I have a friend who has a negative attitude to life and finds it hard to start new projects because he can only focus on the reasons why it wouldn’t work, rather than why it would.
Are those problems or rather opportunities?
As an entrepreneur, seeing the problems ahead, but also seeing the opportunities these problems will bring are the norm of building a new business. And it’s far more entrepreneurial to see the problems as a barrier to entry for the competition, rather than as as a barrier for oneself. As the old saying goes, if it were easy, then everyone would be doing it.
Mt. Gox collapse
In late 2014 the oldest and largest Bitcoin exchange Mt. Gox collapsed in its own fractional reserve Ponzi nightmare. Along with many others, I lost a considerable amount of money. Apart from the sadness of my own financial losses, it was frustrating to hear that Bitcoin, the protocol itself, was being blamed by an uneducated mainstream media.
For me, Bitcoin was one of the most promising technologies of our lifetime to create real change by disrupting the federal reserve systems around the world and the notion that money has to be debt-based to work in modern society could be proven incorrect.
Transparent Bitcoin exchanges
This frustration gave me the impetus to demonstrate how transparent Bitcoin exchanges can be. Spurred on by Greg Maxwell and Peter Todd’s great work on their proof of reserves concept, I began researching how cryptographic proof of reserves could work. I really liked Greg and Peter’s solution but, for me, it had problems. Their solution required a good technical knowledge to both understand and trust it, and also verify its results.
I wanted to build a Bitcoin/gold exchange that my grandmother could check and verify, and I drew inspiration from the pseudonymous nature of Bitcoin as the solution.
It looks like this:
Every Vaultoro client receives an anonymous ID that only they know.
We then publish all anonymous ID's and their Bitcoin and gold holdings on a public ledger.
The client can log out of Vaultoro, look up their anonymous ID and see that their holdings are published correctly. Because they are logged out, we don't know when a person is checking the ledger so cannot risk changing any holdings.
The only thing we could change is to add more clients that don't exist but that would just mean we have to hold more Bitcoin and gold not less.
The ‘ultimate truth machine’
When the client has checked their holdings are correct they can then scroll down and see the sum of all Bitcoin and gold holdings held by all Vaultoro traders and compare the cold and warm wallets we publish publicly. This means that they know how much Vaultoro should have on reserve and check that against the ‘ultimate truth machine,’ the Bitcoin blockchain.
We also publish the vault operators weekly statements, the gold vault auditing statements from BDO international (one of the 3 largest auditing firms in the world) and the insurance certificates.
This very simple solution to a massive pain point in the Bitcoin space has seen Vaultoro becoming the biggest and most trusted Bitcoin gold trading market place in the world.
Vaultoro has now become the ‘go-to’ exchange for people who want easy to verify transparency.
By Joshua Scigala