Who controls the monetary system
"Bitcoin is a currency system that is not controlled by third parties"
The 30-year-old ran his startup Tradehill, an exchange platform for this very type of money, in a sober ground floor office a few months ago. The Bitcoin millionaire's company has recently moved to the Financial District of San Francisco. Kenna is sitting on the couch in a small office with a clear sleep deficit in her eyes with a view of the Bay Bridge. The city is currently the capital of digital currencies, which, according to the entrepreneur, are still at the beginning of a revolution.
FORMAT : How do you explain to your parents what you do for a living?
Jered Kenna : I tell you we offer a service to buy and sell virtual currency. I describe Bitcoin as a public account.
Is Bitcoin an investment currency for you or a new way of paying? And how did Tradehill come about?
Kenna : Many people use it as an investment and for risky speculation. I myself have always been interested in Bitcoin as a way of transferring value worldwide and almost free of charge. I came across Bitcoin when it was brand new. I saw the technology behind it and was very impressed with that aspect. It solves a lot of problems. Before that, no one had figured out how to develop a decentralized monetary system that was not controlled by third parties.
I started Tradehill because there was only one exchange platform at the time and I noticed a real need for a larger eco-system. I also wanted to help Bitcoin continue to grow. That's how I launched Tradehill to make it easier for people to exchange bitcoins.
What makes Tradehill different from other exchange portals in this area? There are now many providers.
Kenna : Tradehill is aimed at commercial traders and high net worth individuals. We look after a few clients, but with a highly personalized service. Every customer has their own account manager. This is possible with a smaller customer base; with larger platforms, the individual goes under.
Does that mean you prefer to operate an exclusive platform and deliberately keep your customer base small?
Kenna : We don't necessarily try to keep the customer base small, but we control our growth so that we can continue to provide the appropriate service. We currently have a few hundred clients.
Who is the typical Tradehill customer?
Kenna : Right now we have a lot of Silicon Valley venture capitalists who are used to trading high risk, high return. We also have many professional traders and early bitcoin adopters, as well as wealthy individuals who hedge against inflation in other currencies such as the euro. On average, TradeHill clients invest around US $ 200,000 with us. The minimum is $ 10,000.
So are you very selective when choosing your users?
Kenna : We are still making selections. In addition to the US $ 10,000 minimum, we have other requirements. We ask potential traders specific questions in order to find recognized investors. If it's a company, let's look at what their business is. We also do a due diligence. The background check is done pretty quickly, sometimes it only takes a few minutes. We also work with the identity verification service miiCard, which makes our work a lot easier.
What advice do you have for investors and traders looking to get into Bitcoin trading?
Kenna : Bitcoin is known to be highly volatile and will continue to be so in the future. If you can't handle it or have no experience with it, keep your hands off it. You could lose everything if things go bad. You should definitely be aware of this.
As mentioned earlier, Bitcoin is also a currency that can also be used as a payment method. Where exactly do you see the potential here?
Kenna : Bitcoin can mainly be used where you still make a money transfer today. But even with small purchases, exponential growth can be seen. There are also services such as Gyft, a gift card app that now also accepts Bitcoin. This enables Bitcoin payments with a wide variety of merchants. If this continues, the currency will spread quickly.
But actually Bitcoin is not yet an official currency?
Kenna : No, it shouldn't be called a currency yet. It is currently classified as "Money Transmission" by the government and the Financial Crimes Enforcement Network. It is similar with PayPal, which is not considered a currency, but a transfer system that uses currencies. But the last word has not yet been spoken on whether Bitcoin can be called a currency.
How would you like to call it?
Kenna : It is not important to me what Bitcoin is called. It is important that a decision is made and clarity is provided. Otherwise it is difficult to adhere to the compliances. At the moment we are guided by the government's ultimate state of affairs that it is a service. How long will it be before the next classification comes? I have no idea, but the Financial Crimes Enforcement Network will be quick to react because Bitcoin is growing so fast.
Where do you see Bitcoin and the virtual currency market in five years?
Kenna : This company is built on the idea that virtual currencies will still exist five years from now. Many of us support Bitcoin even though TradeHill is not a Bitcoin company but is open to other Virtual Currencies as well. Bitcoin is so dominant because it was one of the earliest currencies and did best to create a decentralized system. In the near future, however, you will certainly hear more from other providers. Bitcoin is just the beginning and while it is currently in the lead, the race has not even started.
What is your mission at TradeHill for the next few years?
Kenna : We are independent of Bitcoin, but of course we want it to be successful. But if Bitcoin does not prevail, TradeHill will still exist. The general tenor is that virtual currencies are on the rise and becoming increasingly important. We will continue to offer all of these currencies for trading. TradeHill is said to be the most important exchange platform for this market. In the next few months we will also align our interface more with traditional broker platforms. And we're launching an API that developers can use to integrate our service on other websites. We don't want to change the trading world, but rather adapt TradeHill to the existing trading world.
The Bitcoin community is most firmly anchored here in the Bay Area. Will San Francisco be the new Wall Street?
Kenna : We will soon open a location in New York and continue to expand. All developments and innovations will continue to happen here in the Bay Area. But once the services are established, they will move to the east coast. New York is simply the financial hub. The nerds will stay here, the guys in suits will be pushing the money on Wall Street.
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