The Big Interview

Celsius Network wants you to ‘unbank yourself’ – Is that really possible?

Alex Mashinsky from Celsius Network wants you to 'unbank yourself'. But in today's early days of blockchain infrastructure, is that really possible?

As highly successful, high-net-worth serial entrepreneurs go, you don’t get much better examples than CEO and founder of Celsius Network Alex Mashinsky. You might not know his name, but his inventions have almost certainly had a big impact on your life already.

VOIP (Voice Over Internet Protocol) technology

As the inventor of VOIP (Voice Over Internet Protocol) technology, you can thank Mashinsky for those all-too-frequent calls from your mum on WhatsApp or Skype. And now he’s breaking new ground once again with what he calls MOIP (Money Over Internet Protocol). He says it’s simple, it’s a “no-brainer”, and a lot more things besides.

Coin Rivet spoke with Mashinsky at length to find out more about MOIP, how he plans to tackle the disparity between the ultra-rich and the rest of us, and how to make your money work for you for a change. He also bashes JP Morgan just a little bit. Check it out.

You invented VOIP and you brought free WIFI to the New York subway system among many, many other achievements. What’s your driving force?

“When the internet started, we were promised that everybody would have access to all this information and communication. But over the last 20 years, all we got basically are five monopolies, which are all effectively centralised companies.

“All these companies’ focus is just to squeeze as much profit out of the network as possible. They’re not necessarily here to help all the people on the planet have a better life; that’s almost like a side effect, they do that so they can extract the profit.

“What I’ve focused on my entire life was effectively trying to tilt the balance back to the end user and really bring the internet and the promise of this complete openness and independence to everybody on the planet.

“VOIP is probably one of the largest distributed apps on the internet today. No one really owns it and everyone’s using it. It’s not dominated by any one company or any one service provider, which is what the internet is all about.”

Big companies only care about profit

Celsius Network has already originated over $1 billion worth of loans since starting in June 2018. They’ve clearly demonstrated a huge demand for low-interest loans (9% using your crypto as collateral) and high-interest savings accounts (up to 7.5% per annum).

Can you tell us more about MOIP and what you’re doing with Celsius Network?

“Large companies are focused only on profit, we’re focused on community… All banks like JP Morgan are focused on is how to extract more profit, how to pay less, and how to get more profit for themselves out of your money and your financial situation. There has never been more disparity between the classes and there’s no need for it.

“I’m an immigrant. I came to this country with nothing but a plastic bag and less than $100 in my pocket. I went through months and months where I couldn’t pay my rent and I maxed out my credit cards. I lived that difficult life that I’m talking about.

“It’s not like I’m talking about it from afar about a situation I’ve never experienced myself. Luckily, I did very well and now I’m part of that one-tenth of the one percent that everybody hates and I can tell you, there’s no need to squeeze a bit more.

“90% of people in the United States have the same wealth as that one-tenth of one percent. But, if you’re good to the community, you will build the largest community and with that, you will do well. You don’t have to squeeze. So we’re showing a way to do well and do good at the same time.

“With Celsius Network, we’re building MOIP, which is the same thing as VOIP, just for money instead of free voice communication. We’re offering people the ability to control their own money and earn a return.”

High-interest accounts, low-interest loans

Mashinsky goes on to say that more than 50% of people in the US don’t have even $500 spare in their accounts. Clearly, the current system isn’t working for the majority. But it’s working extremely well for the people at the top. He says:

“You put your money in the bank and they pay you less than 1%. Then they immediately turn around and they lend me the money… It’s not their money, it’s your money, they just lend it to me. So they’re just a broker, a toll collector, and they charge me 25% on my credit card from the money they made from you, so they make 24% out of 25%.

“That just makes no sense whatsoever. Why are they charging me so much and why are they giving you so little?

“So we just switch the formula, we just said, look we’re going to charge people 9% and we’re going to give them 7%. Seven times more than the bank. So it’s a win-win; a win for the borrower and a win for the lender.

“JP Morgan can pay you 7% interest today and still make a profit, they just don’t want to, because they don’t have to. So, it’s about educating people that there’s another way, just like we did with VOIP.”

Unbanking yourself

Clearly, education is one of the barriers to mass adoption, but at the same time, do you think it’s scary for people to be their own bank?

“Of course, and banks created a tremendous amount of trust over the last 700 years to the point where we think there’s no alternative in our heads. By default, the only way to store money is to give it to the bank.

“Bitcoin is already 10 years old but we do not have more than maybe 12 or 13 million users – hundreds of millions of people should be using it and bypassing their banks.”

So your main competitor is banks?

“We ONLY compete with banks! One of the biggest reasons for disparity and lack of opportunity in the world is the banks. That’s what we have to disrupt.

“The rich people know how to have their money working for them instead of them working for their money, right?

“So we’re just going to teach you all these tricks. We’ve built all these tricks into our system, how to borrow against your assets and defer your taxes, how to get loans with low interest, how to earn a lot of interest on your money. All these things that slowly allow you to have financial independence.”

Withdrawing your funds at any time with no lock-up and no penalty is definitely appealing. But you still need a bank if you want to use that money anywhere in the real world right now. I ask Mashinsky what Celsius’ answer to that is. He says:

“When we use the term ‘unbank yourself’, we don’t ask you to close all your bank accounts. Rather, transfer some of the value to someone acting in your best interest.

“We don’t provide many services banks do, so one should continue using banks for checking, mortgages, and other services.

“We are definitely not telling everybody on the planet to take all their money out of the bank to go and buy Bitcoin or Ethereum. That’s not what we are saying.

“In our wallet, we support 18 different coins and tokens including five stablecoins, like USDC and TUSD that are pegged to the dollar. Meaning they don’t go up and down. But if you deposit them with Celsius, you earn 7.1% per year.

“Why? Because we lend out at 9%, and we give 80% of our earnings back to the depositor community.”

‘Unbanking yourself’ is still not realistic right now

There’s still a long way to go before this type of financial alternative becomes massive. Mashinsky freely admits that unless at least 100 million more people join in the movement, the technology will die off.

He may despise the banks and their “monopolistic” behaviour, but he’s under no illusion that we still need them to function in society – for now, at least.

“Blockchain can’t survive unless hundreds of millions of people join in. It will just die off and be replaced with something else. So how do we bring all these people? Not through speculating and HODLing like we’re doing now. We need a killer app that everyone on the planet needs.

“We don’t charge any fees at all, unlike our competitors who are no different from banks – they just charge a little less but they behave the same. You can do it for free and still do exceptionally well.”

Joining in the revolution

I ask Mashinsky if he has anything else to add on the topic. He pauses before saying:

“This is a call to action. It’s not just about Celsius. It’s about every one of your readers understanding that having coins or supporting a project isn’t enough. It’s about bringing 10 of their friends into the community.

“The only way to scale is if the community is big enough where it creates enough of a platform and support not just from a technical standpoint, but just from our ability to influence government and regulators and partners and technologists and to make this thing work.

“If we stick with the small community that we have now this technology will just die off and be eclipsed by something else – and something else may not be acting in the best interests of the community.

“The beauty of blockchain and decentralisation is that it really is the best promise for humanity. There’s nothing out there that promises more to you as an individual – part of that 90% at the bottom of the financial pyramid – than decentralisation and the blockchain.

“That’s really the message. It doesn’t matter if you use Celsius or not, the point is that they have to bring some of their friends to join this revolution.”

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