Decred Infrastructure Interviews: Stephen, founder of crypto-only luxury goods marketplace CryptoEmporium
Hello and welcome to the second installment of Decred Infrastructure Interviews. In case you are unfamiliar with the premise and format, to sum up, here we sit down with some of the key players in the Decred ecosystem to have a conversation about, amongst other things, the role they play in it and in the larger cryptocurrency context. Should you be interested in checking out the previous issue, and I believe you should, you can find it here.
Our today’s guest is Stephen, founder of the luxury goods outlet Cryptoemporium.
Artikozel: First of all, let’s start with the obvious. What was it that attracted you to crypto in the first place? What were your personal crypto beginnings like?
Stephen: My introduction to cryptocurrency came in 2016. It was during this time that I was researching fintech for potential solutions on a proposed P2P lending marketplace I was looking to have built. This was my first introduction to cryptocurrencies and the blockchain technology behind it. It was the advantages of the distributed ledger that had the potential to disrupt so many industries that really caught my attention.
After deciding to take the plunge and purchase my first Bitcoin I used the coming months to familiarise myself with the market and with the technology. It wasn’t until 2017 that I decided that this was something I wanted to get much more heavily involved with and I saw the opening in the market for a more consumer based solution.
A: Why don’t we start by you telling those of our readers who are not all that familiar with you a little bit about your business. How did it happen that you decided to open a crypto-based business?
S: Crypto Emporium is a Worldwide Crypto-Only E-Commerce Website. Launched February 2018, we act as an intermediary service to source and supply a range of high-end goods and make them available for purchase using cryptocurrency. It’s our mission and belief to show the real-world uses of cryptocurrencies.
The idea to launch Crypto Emporium was a culmination of many factors. Through my own personal dealings in business I had amassed a strong network of contacts in many different industries, namely the luxury goods market. It was this coupled with my growing interest in cryptocurrencies and blockchain technology that the idea of Crypto Emporium arose. With so many holders of cryptocurrencies, all seemingly unable to spend their digital assets, it seemed only logical to set up an e-commerce website that only accepts cryptocurrency. The efficiencies gained through transacting using cryptocurrencies simply had to be applied to the e-commerce sector.
A: It appears that earlier on in the lifecycle of cryptocurrencies most people imagined they would mostly be used for everyday purchases and microtransactions, such as buying coffee and so on. What made you go completely against the grain and turn your attention to luxury goods?
S: I actually feel the benefits of cryptocurrency are keener felt when dealing with large amounts of money. My background in business had afforded me a number of contacts within the luxury goods market, both buyers and sellers. These are international business people who are familiar with the inadequacies of conducting cross border trade for high-ticket items. Moving large amounts of money across borders is notoriously fraught with problems, none more so than the extortionate costs of exchange. By using cryptocurrencies we’re able to avoid many of these challenges.
We also wanted to capture the attention of the masses and how better to do that than to show cryptocurrencies being used to purchase these extravagant and luxury products. By appealing to this aspirational nature we were able to appeal to not only those invested in cryptocurrencies, but those on the outside too.
A: One of your tweets mentions the necessity for cryptocurrency as a payment method to offer a cost advantage over traditional means, yet for now most products available at your store carry a price premium over fiat. How do you reconcile these two statements? Is this a necessary step in the bootstrapping phase of crypto e-commerce, or some part of a more grand design?
S: This is something that we’re working on. Unfortunately it’s a necessary step at this stage of our development. If you look at our prices compared to when we launched in February 2018, you will see we have already made great inroads. The number of variables linked to every order we receive (price volatility, product, product location, delivery address) mean that we have to cover ourselves financially for all eventualities. As we continue to grow and our processes become better refined, we’ll be able to continue to lower our prices.
Our grand design is, in fact, to offer significant savings compared to our high-street competitors. We believe this will truly capture the attention of the general public. If it makes economic sense for a person to exchange their currency for Bitcoin in order to purchase something on CryptoEmporium.eu then we are not only being a disruptive force ourselves, but we’re really forwarding real-world adoption.
Decred to me represents everything I love about cryptocurrency. The truly decentralised governance is setting a fine example to the rest of the cryptosphere.
A: Can you give us a breakdown of the most popular items or types of goods most often bought by your customers? What do your customers most often pay with?
S: Our best selling product on the website has undoubtedly been the famed Decred Jacket! It’s been an honour to serve the Decred community for so long and help market a project I truly believe in. Beyond that we’ve seen watches and mobiles phone sell particularly well. Early in 2018 we saw a number of orders for ASIC miners, that market has since dried up slightly.
As you may expect, most of our customers pay with Bitcoin. I think we come to expect that due to the current market dominance. However, we’ve seen an increasing number of Ripple and Decred payments as the months roll on. To our surprise one of the least used cryptocurrencies that we currently accept was Litecoin. It appeared to have a very engaged community who wanted to see their coin used as currency, however we are yet to experience this.
A: From your Twitter, which appears to be the main platform you use for communications purposes, you have been telling people about your expansion plans, so speaking of, how big of an operation are you running right now, in terms of personnel and chain of supply, and what are some of your expansion plans in as much detail as you can afford to reveal?
S:The operation we’re running at the moment is relatively small, just 4–6 employees who we can call our own. We outsource a lot of our work to freelancers so our network of employees does extend far beyond this, we’re able to call on a talented pool of talent as and when we need to. Our key personnel are headed by myself, I like to keep a hands-on approach to any new business and ensure all processes are followed correctly. As a company, Crypto Emporium has launched, existed and grown on a relatively modest budget. As compared to some other projects in the cryptocurrency space, those that have conducted ICO’s for instance, we have survived on a pittance.
We have some truly ambitious plans for growth. Towards the end of 2018 we started to research and design our proposed flag-ship store in London. In what would become the World’s First Physical Crypto-Only store, it would serve as a retail outlet, coffee shop and education centre. This is still something very much on our radar. We have also been researching and developing our own Point-of-Sale payment terminal and application.
Elsewhere on CryptoEmporium.eu we’re looking to improve our website in terms of speed, visibility and capability. Also, providing we’re able to find the right investment, it’s our idea to employ teams for each of the given categories on the website. This will likely begin with the Property as we have seen a large amount of interest in both buying and selling properties through the website, without a dedicated real-estate team/manager, we’re unable to give it the attention that it deserves.
A: Your website mentions new upcoming crypto integrations. What criteria do you look for in a blockchain asset before you choose to accept it at your store?
S: We look at many different considerations when adding new cryptocurrencies. As of right now we have only integrated 6 cryptocurrencies despite having been approached by numerous other projects. The main considerations we look at are of course security, market penetration, ease of acquisition, community and usability within our store and the real-world in general.
A: On a related note, what attracted you to Decred, how many DCR users are you seeing, and what is your general opinion of the project?
S: Since our launched we’ve processed well over 50+ orders from DCR users, many of these have been for the eye-catching Decred jacket but we also processed many orders for ASIC miners and even a watch! We’re just waiting for the next bull-run and we expect to see these numbers soar.
In all honesty, I love the Decred Project. Decred to me represents everything I love about cryptocurrency. The truly decentralised governance is setting a fine example to the rest of the cryptosphere. Having stakeholders make decisions within Decred is brilliant. The development team are second to none. It’s refreshing to see a project that is self-funded rather than running a ‘hype driven’ ICO. Decred is one of the few projects in the blockchain space that is consistently transparent, innovative, productive and committed to building a better currency for the future.
The team around Decred is super friendly and willing to help, we’ve thoroughly enjoyed our interactions with them along the way. From the very beginning there was an understanding that both projects could benefit mutually from working together.
A: Our community is very interested in the mechanics of accepting/integrating crypto payments in a business. Could you walk us through the process of fulfilling an order at Crypto Emporium and tell us what the pain points of only accepting crypto as payment are? Do you see them changing at some point in the future, or is this something that could be mitigated right now. If so, how?
S: The integration of cryptocurrency payments is actually really simple. We use the payment processor CoinPayments which makes it incredibly easy to accept over 50+ different crypto assets. As an order comes through we’ll receive a notification, we usually have to wait no longer than 5 minutes for the full balance to be deposited into our account (depending on which cryptocurrency). It’s at this stage we will refer to our supply chain. If our supplier accepts cryptocurrency then we will immediately place the order and transfer the funds. If our supplier is settled in fiat, then we will sell a percentage of the cryptocurrency and transfer the fiat currency.
One of the main challenges that we’ve have encountered so far is the volatility in price. It’s very important that all orders are processed quickly in order to protect from the changing prices. One solution we’ve found for this is an automated system that cashes out cryptocurrencies immediately upon clearance. However, this system would need a fairly considerable investment to ensure it’s secure and reliable. Another solution to this is to have more of our suppliers accept cryptocurrencies. As of right now around 35% of our suppliers are settled in cryptocurrency, it’s our goal to up this figure in the coming months and years by building new relationships with suppliers. We want to educate the uneducated as to the benefits of accepting cryptocurrency and we carry this with us in all business dealings.
A: Being the world’s first crypto-only retail store you are surely an expert on the matter. How big, would you say, is crypto shopping today, what is the trend, and where do you see it going in the future based on past data?
S: Being the world’s first crypto-only retail store is something that we’re immensely proud of. I knew when we launched Crypto Emporium the massive potential that crypto-commerce had. As I mentioned earlier, the benefits to transacting using cryptocurrency are numerous, none more than the ability to attract a global audience, something that even Amazon struggled to do for many years. I believe our project is unique in the fact that we are actively looking for a way to consumerise cryptocurrencies, I believe this to be the next step in forwarding real-world adoption.
Despite 2018 proving to be a remarkably difficult year for cryptocurrencies. We’re still just at at the very beginning. The global e-commerce market is growing exponentially. In 2017, retail e-commerce sales worldwide amounted to approximately $2.3 trillion, and e-commerce revenues are projected to grow to $4.88 trillion by 2021. If we’re able to tap into just a small percent of that as we continue our expansion, then we’ll be in a very healthy position. Our business is evolving and constantly trying to meet the needs of the market. It’s hugely important for Crypto Emporium to be able to become a cost effective solution. As the visionary in the field of crypto-commerce, it’s not our responsibility to compare ourselves with other crypto-commerce websites, it’s our responsibility to target the greater e-commerce market. That is what we hope to achieve over the coming years.
A: Are there any crypto developments you are particularly optimistic about or looking forward to? How do you see the potential of, let’s say Lightning Network, or maybe even Decred’s very own Politeia proposal system influencing the nature of your venture?
S: The Lightning Network is one of the most important developments in terms of cryptocurrency scalability. The addition of what is essentially a payment channel layer which operates as a second layer on top of the network really opens up a lot of doors and makes cryptocurrency a more attractive proposition, with thousands of transactions per second and zero to minimal fees.
From an outside perspective, Politeia is just as important and a significant step in the right direction for Decred. The much anticipated decision-making system increases community autonomy and forwards the goal of decentralised sovereignty, though I’m without the technical expertise to explain the architecture behind it. It’s really very exciting.
A: Crypto adoption, particularly in commerce, is inextricably linked with security and safety of use. There are phishing attempts, malicious payment address substitutions, and hot wallets being compromised, just to name a few. Have you experienced any mission critical security breaches or scares since launch in 2018?
S: The only critical security breach the we experienced came towards the end of 2018. This was thankfully spotted very early on and we were able to limit the amount of damage done. In our case it was an inside job, a phishing attack orchestrated by a freelancer we had previously worked with. They had gained control of all our major accounts and demanded a ransom for us to regain control. When you consider some of the catastrophic attacks that have happened on other platforms, I feel like we got off fortunately. It’s taught us all a lesson to be much more careful. We were able to take back control with not too much fuss and all of our client/suppliers data was secure. The individual was also unable to get into our payment systems.
We intend to be much more careful about who and how we freelance work in future. We also intend to build a brand new website. This is really the next step in our growth and expansion and will certainly help with both security and usability.
A: Recently you have put out a statement regarding your comm channels sadly being compromised. How do you see this affecting the relationship between you and your customers? In commerce, an industry heavily reliant on trust, one can’t afford excessive damage to one’s image.
S: You’re completely right, trust is very important and I guess time will tell. I feel that our reputation was built and established very consistently throughout 2018. Our community has been very supportive and we can only thank them enough. When you experience the rapid growth that we encountered in 2018, we were forced to outsource work to a number of freelancers, unfortunately it took just one bad apple to hit us severely. They understand that we’re trying to do good for the cryptosphere and appreciate that things like this can happen.
A: While most people could rather easily grasp the concept of selling a luxury watch for crypto, the same is not necessarily true for real estate. How complicated would the process of buying a house, a flat, or, let’s say, a private island be if you paid with crypto?
S: Real estate has actually been one of the categories that has gained the most attention, particularly with those looking to sell. The benefits of paying with cryptocurrencies are actually most realised with this sort of products. The process for purchasing a property actually looks very similar to the regular process. Now as everyone knows, the time it takes for these processes can vary and they’re particularly fraught with delays and problems. By using cryptocurrency we’re able to vastly streamline the payment process. However, with houses having to be paid-in-full before even viewing or signing the paperwork, this obviously limits our potential market.
Our real-estate category is something that we’re actually really optimistic with for the future. Our first step will be to employ an experienced full-time realtor manager for the category. We’re looking to have a deposit feature implemented onto the new website that will allow prospect buyers to place a deposit and negotiate the terms of the deal. This actually happens with cars & motorbikes fairly often, when we have motivated buyers we’re naturally able to negotiate discounts with our suppliers and pass the savings onto our clients. This works particularly well when dealing with realtors. Just recently we were able to negotiate a discount of €100,000 off a stunning property in Portugal, this represented a 30% discount on the list price.
Each sale is different and it’s our job to ensure a seamless process for both seller and buyer. It’s something that we have great experience of within our team. I myself have come from an extensive sales and negotiating background. This is essentially what Crypto Emporium is, we have to marry the sellers wants to the buyers needs. We’re able to find solutions in any case. Though we haven’t sold that private island just yet!
Decred is one of the few projects in the blockchain space that is consistently transparent, innovative, productive and committed to building a better currency for the future.
A: Some of the items listed at your store just seem much larger than life, so we have got to ask this one: what was the biggest single transaction you have facilitated to date? Also, what was the largest DCR purchase at Crypto Emporium?
S: The largest transaction we have processed to date was for a red 2017 Ferrari 488 Spider that we had delivered from Italy to Germany. That buyer wished to remain anonymous and we respect his wishes. Such a large sale would no doubt create a lot of media noise that he really wanted to avoid.
Our largest Decred order was actually a bulk order of 10 x ASIC miners. We were able to offer a huge saving compared to our competition at the time.
We’ve had a number of smaller orders spread across all other cryptocurrencies, with Rolex, Patek Phillipe and Audemars Piguet watches making up a lot of our business.
A: The Crypto Emporium has been a very vocal advocate for cryptocurrency adoption. Are there any initiatives that you are actively engaged in to spread the adoption of crypto beyond being one of the lead practitioners of crypto commerce in the space?
S: I respect our position within the crypto-commerce space and feel it is our responsibility to spread the correct message about cryptocurrency adoption. We want to open up the world of cryptocurrencies to the wider market. We’re only able to do this by attracting and educating the uninitiated. These represent the 90%+ of people who still think that cryptocurrencies hold no use and therefore no value. It’s our mission to change this perception.
The mass adoption of cryptocurrencies is by no means an easy feat, we’re challenging existing multi-billion dollar institutions on a fraction of their budget, however the thing we have on our side, is the technology. These institutions’ reluctance to embrace change, will be their downfall. Forwarding real-world adoption is something I feel truly passionate about.
Our plan to open the World’s First Crypto-Only High-Street store is the main initiative that we’re focusing on. We’re also exploring the possibilities of a P2P crypto-only marketplace, similar to eBay & Craigslist. By doing this we’re able to show that there is real intrinsic value in these digital assets and they can be used in day to day trade.
A: Your launch in 2018 coincided with the beginning of the bear market, yet you have remained active through most of it, spreading the crypto gospel. How was your business affected by the general negative price movement of most crypto assets and the space in general during this time?
S: This really comes from my own personal beliefs, I am naturally a very positive person and believe that your thoughts and manner decide your reality. Plus, when you believe in the technology behind crypto so wholeheartedly, it’s impossible not to be optimistic. The previous 3 months have been tough on everyone and expectedly we’ve seen a decrease in orders.
I couldn’t sit here and tell you that if the previous 12 months was a bull market, we wouldn’t be in a far better position. However, we play the cards that are dealt. By launching during such a difficult time we’ve managed to show resilience and establish ourselves in the space. We should be primed and ready for the next major upswing.
A: Personally, I have to admit there are some things, like the work ethos and willingness to keep your nose to the grindstone through tough times and market conditions that both you and Decred share. What is your secret to staying positive and active despite various hardships?
S: As above, this comes from my own personal beliefs that I have tried to instill into the company. It’s important to show resilience and unwavering positivity even in the toughest times. There’s a lesson in every hardship and this ongoing bear market is no different. As I am sure Decred have also experienced, it’s actually times like this that you learn the most about your business. It’s about using the experience positively. We know that the blockchain revolution is a train that will not be stopped in the long-run, this certainly helps our optimistic outlook.
A: You have recently announced that you were going to put the brands, whose products you offer, and customers directly in touch. Some would see this as trying to put oneself out of business through a clear conflict of interest, since you are the liaison between customer and brand. Is there a piece of the puzzle not immediately obvious to the eye?
S: I feel this one may have been taken out of context slightly. I believe you’re referring to our idea to create a P2P marketplace. This would link brands/sellers/suppliers to buyers. This is a necessary step in our development and would run alongside the current CryptoEmporium.eu model. Just like eBay can exist alongside Amazon. It’s something we’re actually really excited about launching, however the costs associated with such a development are proving small stumbling block at the moment.
A: Let’s say this interview is read by a potential business owner whose product they would be interested in listing with you. Is there a product too big, or too small, and the same goes for the manufacturer in terms of brand awareness and recognition, to be listed?
S: We’re always open to listing new products on Crypto Emporium. We’re always looking for strategic partnerships. Business owners or even personal sellers, we treat everyone the same and judge each case on its own merits. We’ll support the sale of your products to our network of clients and on our social media channels. We welcome all business owners to contact us and see if we can’t work together.
A: Stephen, it has been a genuine pleasure having you on. I’m keeping my fingers crossed for your success, and I hope the rest of the Decred community does too. Thanks for talking to us.
Thanks to @bee for the review.