Q&A with Vertbase CEO Justin Seidl

Note: The Vertcoin team is not organizationally linked to Vertbase. However, we support the effort and are working in conjunction with Vertbase to shed light on the project.

Vertbase CEO Justin Seidl recently did a Q&A with the Vertcoin community.
We will start off with an introduction of Justin, followed by the Q&A section.

Justin’s road to Vertcoin & Vertbase

I’ve always kept an eye on Bitcoin, but in the early days I was skeptical. It wasn’t until mid 2016 that I really became intrigued. My first instinct was to become a miner, but the more I looked into it, the less excited I was when I realized how high the upfront costs of mining Bitcoin was and the low yield.

It wasn’t until I discovered Litecoin and started following Charlie Lee that my interest was renewed in cryptocurrency. This was when I bought my first cryptocurrency on Coinbase. I loved how easy it was on Coinbase but wanted to do more with the coin. I also wanted to find a way to be part of the community. Mining was an option but didn’t look much better than Bitcoin as far as the profits I could earn.

Then through a recommendation from a friend, I was introduced to Vertcoin and the ASIC resistant mining. I started digging into Reddit and now I follow the conversations daily. I transferred all of my Litecoin into Vertcoin after doing an incredible amount of reading on how to acquire Vertcoin first. I was sold on the vision and the team.

During the process I quickly realized the challenges even for someone with my technical background to acquire Vertcoin. It was either transfer my Litecoin into Bitcoin and transfer to Bittrex to buy Vertcoin or use Shape Shift. At the time Shape Shift didn’t have enough Vertcoin for what I wanted to transfer, so I ended up waiting 3 days before I could finally acquire the amount I wanted.

It was a crazy amount of time spent reading and making sure I was properly transferring everything, and if I was an average user I would’ve probably given up.

That got me thinking; what if I could provide an exchange for USD to VTC? Is it feasible? What are the development, legal and security hurdles I would need to overcome?

A lot of reddit posts are asking for an easier way to acquire VTC, which exchange to use, or if we can get listed on a new exchange. I love the community and wanted to do something where I could give back to it. That’s when I came up with the idea for Vertbase.

My goal with Vertbase is to create a simple exchange for US Dollar to Vertcoin transactions, increase the number of people using Vertcoin, and give back to the team behind Vertcoin. Vertbase is a large task but a necessary first step in bringing the people’s coin to the people. Simplifying the way people obtain Vertcoin will lead to new and innovative ways for utilizing Vertcoin and that is something I want to help facilitate.

Sincerely,

Justin


Q&A Section

Many people would like to see a public introduction from the team behind Vertbase. We are aware of names currently but it would be great to see some sort of team snapshot?

Vertbase was cofounded by myself (Justin Seidl) and Tyler Jauquet.

I will be leading the initial development of the exchange with a development team. The development team is based in France and has built four exchanges in the past year.

Previously, I was the CTO for Shift Savings and have experience developing ACH transfer, payment processing and financial regulated applications. I am currently in the process of interviewing multiple candidates to take over the lead development of Vertbase so I can focus on my role as Chief Executive Officer.

Justin Seidl — https://www.linkedin.com/in/aceeightofspades/

Tyler is one of my earliest and most trusted friends. Besides standing up in my wedding Tyler has worked as a financial analyst, invests in cryptocurrency, and owns/operates a real-estate investment business. As Chief Financial Officer Tyler’s role involves the financial and operational aspects of the exchange.

Tyler Jauquet — https://www.linkedin.com/in/tyler-jauquet-05496625/

Leading our team of six financial advisors is Ryan O’Halloran. Ryan has a strong financial analyst background and currently serves as the Managing Principal at Brennan Investment Group.

In addition to the current hiring of a new CTO. Vertbase is looking to hire an additional Developer and a Customer Success Manager.

Justin Seidl (left) — Tyler Jauquet (Right)

How long does it usually take to acquire the Money Transmitter licenses?

I can’t provide a time range for the licenses, it will vary from state to state and all depends on how fast each of their departments move.

How far along are the money transmitter licenses for each state?

Vertbase has started submitting applications for the money transmitter licensing. Acquiring the licensing is one of the biggest hurdles in launching the exchange. Vertbase will share and update the status of each license on our licenses page (https://www.vertbase.com/legal/licenses).

In the case of New York State, will you be obtaining the Bitlicense necessary to operate a crypto-exchange in NY?

Yes, Vertbase will need to acquire both the money transmitter license and Bitlicense for the state of New York.

How realistic is the 3 month timeframe for the launch of Vertbase at the end of Q1 2018?

I don’t imagine we will be able to acquire all 50 states at launch. That’s why we are focusing on higher population states first. New York will be challenging to start.

What is the maximum number of concurrent users your system will handle at launch?

Vertbase’s goal at launch is to open the exchange to 5,000 users and quickly scale to 10,000, and then 20,000 users. The maximum number of users at launch will be capped at 20,000 users. Monitoring and then scaling the application once Vertbase has full confidence that the exchange is in a stable state.

Will there be different account types, if so, will the daily deposit/withdrawal limit be different?

Deposit and withdrawal limits are established to provide additional levels of security. Based on the amount of identity provided Vertbase will increase your limits. Credit/debit card purchases are limited to amount a user can purchase compared to bank account or Vertbase wallet purchases.

What are the chances of markets outside of the US being added in the future, such as Europe?

I want to focus on the US first, then depending on how that goes, focus on the next market, based on demand. Europe will be much easier than Canada or Australia as they have easier banking and financial regulations.

Will you support Segwit?

To be determined.

Are you looking into LN support?

James Lovejoy brought the idea to my attention and expressed his interest in getting Vertbase to integrate Lightning Network (LN). LN integration will be a unique offering for Vertbase. More important LN will be a catalyst to Vertcoin buys for users performing atomic swaps.

Will there be an iOS/Android app ready for Vertbase?

Initially, Vertbase will be launched as a web application that is mobile responsive. The design & development of both iOS and Android apps for Vertbase will immediately follow.

Do you plan on starting any partnerships with crypto debit card issuers? Shift card, for example, works with Coinbase and would likely be willing to work with Vertbase as well.

It is a possibility but not something Vertbase is focusing on at the moment. Vertbase has one major goal and that is launching the exchange!

Are the financial resources involved in Vertbase sufficient to secure necessary FIAT conversion VTC/USD at the initial launch? (ex. Do you expect having enough fund to support X% of the weekly/monthly bittrex volume BTC/VTC or LTC/VTC)?

Vertbase is finalizing a seed round of investment that will give Vertbase the ability to launch the exchange with VTC and USD reserves to help facilitate initial trading

Will you include the same levels of authentication that Coinbase uses before you can purchase Vertcoin?

Vertbase users will have to authenticate their accounts via the following processes:

  • 2-factor authentication upon registry and login.
  • Know Your Customer (KYC) processes to identify and verify users based on age, location, bank account, and proof of identification.
  • Connecting and verifying a bank account.

What security measures are you implementing to ensure our data is kept safe?

Security protocols on the application will consist of:

  • 2-factor authentication on registry and login.
  • 128-bit SSL encryption of the website and exchange.
  • Email notifications and confirmations for buys, sells, transfers, and logins.
  • Bank account information will be stored on industry leading partner, Dwolla.
  • Debit/credit card processing by Braintree.
  • Storing the majority of Vertcoin in cold storage.
  • Rate limiting the number of failed login and forgot password requests.
  • Know Your Customer (KYC) processes to identify and verify users based on age, location, bank account and proof of identification.

Will there be funds set aside to fight overbroad information requests from government institutions, similar to what Coinbase did with the overbroad records request from the IRS?

Vertbase does not have funds set aside at launch to fight overbroad information requests from the US government. Vertbase will do everything to protect our users’ privacy while also complying with FinCen regulations.

Do you plan to insure your exchange against losses by things such as potential future hacks?

Yes, Vertbase will be insured against possible attacks. When the US Dollar wallets are available, Vertbase will also have FDIC insurance for our users fiat currency.

On the heels of the NiceHash debacle, do you have any comments you’re willing to share with your potential customers regarding steps you’re taking to prevent an incident of that scale from happening to you?

Security will be the top priority of the Vertbase team to minimize as much risk as possible from being subject to an attack at the scale NiceHash was victim too. Background checks on Vertbase employees and partners, extremely detailed legal agreements and development processes, two factor authentication, encryption and identity verification are all necessary and meticulous barriers.

Fiat currency will be securely handled by Vertbase’s trusted partner, Dwolla, and banking information will not be stored on Vertbase’s servers.

Vertbase will store the majority of Vertbase’s cryptocurrency in cold storage.

What are the difficult steps that are involved in creating a VTC/fiat exchange?

Creating an exchange, more importantly an exchange based in the United States has many difficulties, the major challenges being:

  • Acquiring the money transmitter licensing for each state, allowing Vertbase to provide the service of exchanging value between two currencies.
  • Successfully implementing a Know Your Customer (KYC) process to properly identify and verify each user and their qualifications for buying and selling on the exchange.
  • Developing the ability to transfer money through the application with bank account transfers, wallets, and payment processing.
  • Building a secure application with multiple authentication, the ability to monitor & detect suspicious/malicious behavior, and storing the majority of cryptocurrency in cold storage.

What countries will be available at launch, and will other countries & currency pairings be supported in the future?

At launch, Vertbase will be available for US residents with a valid bank account. These users will have the ability to make transactions between Vertcoin and the US Dollar. Following the initial launch, Vertbase will look to expand their services internationally. Additional fiat currencies will then be considered based on demand.

How will you market Vertbase to raise awareness?

Vertbase’s strategy is to utilize the community for organic growth within the Reddit and Twitter channels. After launch, we will increase Vertbase’s marketing focus by releasing a blog, writing guest posts, and a budgeted ad spend.

Will Vertbase only centre around Vertcoin, or will there be more coin pairings (in the future)?

Vertbase’s primary focus at the beginning will be exchanging USD to Vertcoin. Depending on user demand for other coins, Vertbase will explore Vertcoin to those cryptocurrencies as well. In an effort to keep the primary entry into Vertbase through Vertcoin we will not provide fiat to other coin pairings. This will help keep the focus on growing the community and the use of Vertcoin.

Another feature Vertbase is exploring was brought to our attention by James Lovejoy. James’ idea was the integration of the Lightning Network (LN) into Vertbase. These discussions are in their infancy. As such, there are no official plans for this feature to be implemented at launch. A LN integration would allow for the transaction of VTC to other LN enabled coins (BTC, LTC, etc…).

What can you tell us about purchasing/depositing options?

  • Bank Account — connecting a bank account will allow users to buy and sell Vertcoin on Vertbase. ACH transfers will be locked upon purchase/sale and will take between 3–5 days depending on the users bank.
  • Debit/Credit — limited purchases will be available with major credit cards (Visa, Mastercard, Discover and American Express). To sell Vertcoin a bank account must be connected to your Vertbase account.
  • PayPal — likely will not be available at launch. When ready, it will allow users the ability to instantly withdraw funds from Vertbase. Purchases are not permitted with PayPal.
  • Deposits — this option with not be available at launch but is a high priority. Users will be able to deposit dollars into a Vertbase wallet that allows for instant buys. When implemented user funds will be stored securely and will be FDIC insured through a third party solution (I have prior knowledge of building out this solution).

Will we be able to perform an ‘instant buy’ with debit/credit, what about bank deposits and wire transfers?

As mentioned above, instant buys will be available with debit/credit cards, but the amount a user can purchase would be limited to the amount a user can purchase with a bank account. Once deposits and the Vertbase dollar wallet is enabled, larger instant buys will be available when a user deposits funds into their Vertbase dollar wallet.

How strong is your technical support team?

My cofounder Tyler and I are handling the technical support. You may have already noticed this on the website! Vertbase will be starting the hiring process for a dedicated Customer Success Manager located in Chicago, IL to join the team before launch.

How will you handle support requests?

The Vertbase website and exchange will utilize the service Intercom to handle support requests via chat (currently on the website). Hiring a Customer Success Manager, who will be responsible for answering support requests, act as a bridge between users and the development team, and will be tasked with the continued creation and updating of the support documents for the Vertbase knowledge base.

What is your crisis planning like?

In the event of a crisis, services and the exchange maybe temporarily shut down to prevent and stop malicious activity. Bringing the services and exchange back online is contingent upon a thorough review that is being developed by the Vertbase development team, insurance providers, and legal team.

There will invariably be technical difficulties so how will you scale your service as needed?

Vertbase is building the exchange on top of Google Cloud Platforms Kubernetes Engine. This allows Vertbase the ability to quickly scale up the amount of clusters needed to handle a quick spike in traffic and transactions.

Do you anticipate running out of VTC at some point and if that happens, what steps will you take to preserve the market value while replenishing your market while simultaneously continuing to provide a good service to your clients?

Vertbase has Vertcoin reserves to help with the initial launch of the exchange. The market value will be determined by the supply and demand on the exchange.

Will this be a buy and sell exchange? If so, how much cash will you keep on hand and how will you handle bull and bear markets?

Vertbase will have a dedicated amount of Vertcoin and US Dollars in reserve to help facilitate the buying and selling of Vertcoin on the exchange.

What scale of adoption are you anticipating at launch and what is your plan if adoption exceeds expectations?

Vertbase is expecting a launch of 5,000 users with the ability to quickly scale to 10,000 and then 20,000 users. If Vertbase exceeds expectations we will briefly jump for joy followed by an all hands on deck to maintain scalability and monitor the stability of the application.

What threats to your business model do you anticipate and how do you plan to address them?

Threats can range from a lack of interest in the service, an increase in exchange competition, or malicious activity. Vertbase plans to address these potential threats by working diligent and fast in the services and security we offer. Most importantly remaining true to the roots of the community and Vertbase’s promise to support the people’s coin.

Do you plan to keep your fees competitive and favorable to clients allowing VTC to continue its positioning as the people’s coin?

Yes, fees will be competitive at the initial scale in comparison to other exchanges. A portion of the proceeds from the fees are also going back to the Vertcoin development team to help fund the people’s coin.

How strong is your cryptocurrency economic analysis team?

Vertbase doesn’t have a defined cryptocurrency economic analysis team. The economic analysis and strategy will be based on past/present investment and the cryptocurrency trading experience of the Vertbase team and advisors.

What lessons have you learned from single coin exchanges such as those that offered BTC early on? / What information have you gathered from single coin exchanges such as those that offered BTC early on?

Running a single coin exchange needs to be unique from the competition in order to survive. Vertcoin to USD as of right now is unique, adding Lightning Network integration would be unique, and giving back to the Vertcoin development team is unique. Vertbase will continue to research and develop ideas to stay ahead of direct competition.

Will you be creating a point of sale system at some point so VTC holders can use their iOS wallet to convert VTC to fiat on demand, reliably, at the point of commercial transactions?

Vertbase has not planned or is planning a point of sale system.

Are you including the value of your VTC holdings in your financial reporting as a company asset?

Vertcoin held by Vertbase at the time of reporting will be listed as a current asset and reported in USD.

Are you looking for marketing/media opportunities? Should the VTC community be on the lookout for those?

Vertbase will always be open to opportunities that will help expand the reach of Vertbase to new users. At launch our marketing will be focused on organic growth through the VTC community. Once established Vertbase will expand marketing resources to reach new users outside of the VTC community.

What forms of marketing do you plan to use?

Leading up to launch we plan on marketing Vertbase organically via the community, guest blog posts, and interviews. After launch, Vertbase will begin utilizing the affiliate program, paid search and increased community contributions.

Will you offer a affiliate (referral) program like other exchanges?

I’ll admit that I did not think of that until a reddit user suggested the idea. Affiliate programs are great tools for growth. Vertbase has plans to integrate a referral program. If given the option to take the referral bonus or donate your referral bonus to the development team what would you choose? Maybe Vertbase provides both options and you decide? Or even split the bonuses?

Do you have the same or similar resources to that of Coinbase?

Vertbase does not. Coinbase was started in 2012 and has raised $217M+ through multiple rounds of investment and has over 10M customers. Vertbase has secured a seed round of investment in proportion to the size of the Vertcoin community and the amount of users Vertbase plans to support in the first year. A main reason for supporting a Vertcoin exchange is because of the size and dedication of the community that will allow Vertbase to safely scale.

What percentage of the proceeds will you send back to the Dev Foundation (if any)?

Tyler and I have spoken about the amount we want to give back to the Vertcoin development team. We have not defined the amount, how we determine the designation for the funds, but we do know we want to contribute monthly. Total amount of donations will also be made visible on our website.

Have you donated to the exchange listing?

No we have not.

When is the next update and event?

This Q&A is the next update as of writing this… Vertbase plans to share the closing of the seed round, new hires, and the acquisition of each state license. A launch party in Chicago is a possibility but we have bigger things to worry about at the moment!

Going through all this trouble for a rank 100 coin seems suspect. Have your investors commented on this?

Myself and the investors agree that the Vertcoin community is a special and strong community that will help Vertbase grow organically. An attribute most crypto communities wouldn’t be able to match. In our opinion the integrity of the development team and the dedicated vision make Vertcoin extremely undervalued. In the short term it is easy to quickly dismiss Vertcoin in favor of a trending coin in the top 100. Long term I see Vertcoin as a stable currency empowered by the people and not by the interests of centralized groups.

Will you give the Vertcoin community an opportunity to invest in your platform?

No, Vertbase’s first round of investment will not be raised from the Vertcoin community nor will Vertbase accept donations. Vertbase urges you to be part of a bigger solution, working on news ways to use Vertcoin and spread the growth. Want to donate? Please donate to the Vertcoin development fund and show your support for their amazing team.

Is using the *base pattern as a name for this project going to cause issues in the long run? Coinbase is a very well capitalized multi-pronged business entity — wouldn’t it be prudent to select a truly unique name to the project and its present and future functions?

I chose the name Vertbase. I wanted to tie into the Vertcoin community and convey the ease of use Coinbase has set as the gold standard. A unique name focused on supporting a wide range of cryptocurrencies is not Vertbase’s mission. Providing an easy and dedicated way to purchase Vertcoin if the main focus. Other cryptocurrencies might be available in the future but only through the purchase of Vertcoin first. The team strongly believes in the community and the longevity of the people’s coin.

Do you appreciate that in this early stage of Vertcoin’s life, you have the power to potentially make or break this coin of ours? AKA, the success (or failure) of your venture will greatly influence Vertcoin’s reputation going forward.

Absolutely, I have an enormous amount of respect for the entire Vertcoin team, the community supporting the Vertcoin team, and the progression of the people’s coin.

I saw Reddit filled with questions by interested new Vertans looking for an easy way to buy Vertcoin. Now I see multiple posts daily asking for votes to get listed on a new exchange. Vertans need an easier way to buy and sell Vertcoin directly with a fiat currency. I want to do everything in my power to make a positive difference for the community and I believe creating an exchange is the first step in doing so.

When Vertbase reaches the goal of launching and maintaining a successful Vertcoin exchange the community will start to see a renewed focus on innovative solutions… Solutions by the community that will push the envelope and be the real catalyst for growth. I want to be part of Vertcoin’s growth.


We want to give a special thank you to Justin Seidl and the Vertcoin Marketing Team for making this Q&A happen.

Links and Resources

Credits: Sjoerd Weigergangs — Author; KingZen — Graphics

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