A Q&A with CredoEx CEO, Stewart Dennis
I’d like to share with you the most thorough and comprehensive interview I’ve given on CredoEx and the current state of BitBounce. You can read it here on blocktribune, or scroll to read below!
Blockchain Emailer BitBounce Has A New Credo — CredoEx, A Token Exchange
Blockchain email solution Bitbounce claims more than 300,000 active users for its service, which allows users to charge a fee to people and businesses they don’t know in order to receive an email from them. Fees charged to reach inboxes and incentivize responses are paid in a token called Credo.
Starting next week, a new exchange platform called CredoEx launches, allowing BitBounce users to buy and sell Credo and trade it into other currencies, including ethereum. The platform will allow users to more easily purchase Credo for email marketing campaigns.
The BitBounce and CredoEx teams closed an ICO of $11.33 million in September 2017, backed by investors including Tim Draper. Cofounder Stewart Dennis talked with Block Tribune about CredoEx and plans going forward.
BLOCK TRIBUNE: Tell me about the origins of the concept of BitBounce and how CredoEx is going to be transforming it.
STEWART DENNIS: So the origin was actually that our main investor, Tim Draper, suggested the idea when he was making a seed investment at my company. Then I originally didn’t pursue the idea for a bit, then we hacked together a basic version. BitBounce is essentially a pay wall on your email inbox, so that people you don’t know have to pay a cryptocurrency fee in order for their email to go through to you. It relieves our users of spam and cold emails and compensates them for their attention, and that was the core idea. I hacked a version of that together and then it started gaining adoption and traction at a rate that far exceeded our other product efforts. So we decided to make that the focus and it’s gone fantastic since then. We now have over 314 thousand active users. We held the Credo ICO, which is our cryptographic token or cryptocurrency that’s used in BitBounce, and we’ve actually raised over $11.3 million dollars worth of ether. We’ve grown our team substantially since then and we’ve been improving it at a quick rate.
As we’ve moved along that trajectory, we started hearing from our users that it wasn’t enough just to earn their tokens. They kept asking how do they convert them into USD or bitcoin, or something that can be more easily used, because nobody wants a bunch of tokens that are completely illiquid. So we started trying to reach out to some of the existing providers, but we had a terrible time with dealing with these exchanges. One of them, which we integrated with, suddenly cut off our API access without warning. They wouldn’t answer any of our communications, they wouldn’t meet with us, and they froze our account. Another charged us a listing fee and never listed. Others tried to charge six or seven figure listing fees and then we also found a bunch of problems with them that our users weren’t satisfied with those options even when they were available.
The current exchanges are notorious for being unreliable, with a lot of downtime or periods where they shut off registration of new users, and with bugs being reported at a frequent rate, where people can’t withdraw or deposit. And with our engineering experience from building BitBounce, we felt we could architect and engineer a more reliable exchange platform. So that’s what we set out to do with CredoEx. We’d been looking to create a new cryptocurrency exchange that can both service our primary source of liquidity for BitBounce users so that when they earn Credos, or tokens through email marketing campaign and cold emails that are paid to be sent to them, they can easily realize that value by converting them into another currency that can be more easily used. And then secondly, we wanted to address a number of the deficiencies with the existing exchanges, and we try to do that through providing improved reliability at the software level. Also, an improved user experience, too.
BLOCK TRIBUNE: Do you want to name names on the exchanges you were using that didn’t provide the services?
STEWART DENNIS: Sure. We had initially integrated BitBounce heavily with Coinbase. They were an API partner for us and we actually had… our product relied on their API, and when they shut off our access, suddenly and without warning, they disabled and broke about 2/3 of the functionality of our product. They froze our account and were not communicating about this. I tried very hard to partner with them. We even had our main investor reach out and do an introduction to the CEO and they just rebuffed us, and it was a very negative experience.
And then others… we were looking at listing on Bittrex and they were providing an agreement that we’d have to sign which we were unhappy with. It basically said that if they got sued, then we would be 100% liable and they’d have 100% control of the settlement of any suit. So then our company essentially has an existential risk that’s in someone else’s hands if there’s any kind of lawsuit and they decide to settle for more money than they were worth. There were a number of other terms that were like that. And then there were other exchanges such as HitBTC, where they were asking for half a million dollars to list our token on there. I felt we could actually create our own exchange and put a decent marketing budget behind it for probably less than that.
BLOCK TRIBUNE: You’re backed by Tim Draper, who’s one of the more well-known VC’s out there. So why were they treating you so badly?
STEWART DENNIS: Well, right now exchanges have all the leverage. There are a lot of different projects and all of these projects would like to be listed on their exchanges. It’s very much what the community of token holders want for the reasons that I mentioned previously, where they’re interested in liquidity. If they do earn tokens, they wanna be able to trade them for another asset if they’d like. Also, making it easy to buy them.
All of these token projects, which there’s been a proliferation of, are interested in listing on the exchanges. So they’ve got a lot of demand and they kind of hold the keys to which ones are going to be listed. It’s their decision. It’s a centralized decision made on behalf of the exchanges and I believe that they feel they can get away with treating the projects poorly because they feel that the projects still have to list on them, no matter how they’re treated. We’re one of the ones that said no. We’re actually going to create a competing service and that will both serve for our projects and Credo but also, in time, help other founders and projects that have been experiencing similar problems.
BLOCK TRIBUNE: What are you doing to ensure that the treatment that you received isn’t repeated by your company? Do you have extra customer service or whatever?
STEWART DENNIS: Well, we’ve been hiring dedicated personnel for those areas on the customer success side, and that’s on the part that’s manual. But I think where we’re… I’ve delved into three areas. One is where there’s human support required, such as for customer service. We’re hiring dedicated personnel and we’re looking to take on best practices of other industries and companies where they provide first-rate customer success. Secondly, there’s how we’re approaching it legally. We’re looking to create a more project and token-friendly set of terms for listing on our exchange. So we’ll not be nearly as one-sided. Thirdly, and this is really the main area, is on the technical side. That’s where we architected this from the ground up to be a highly reliable and available service. That’s where I think we’re really going to stand out, on the software side, with people being able to trust the reliability of our service. Put it another way, where you can’t rely on cryptocurrency prices, but you should be able to rely on the platforms for trading them. And I don’t think that is the case right now and we’re fixing that.
BLOCK TRIBUNE: Where’s your attention mostly these days? Two separate business, BitBounce and the exchange platform. How are you dividing your time?
STEWART DENNIS: So CredoEx has been a big project and it’s been a focus to get that market-ready. Yet, I would say that we actually see them as part of a comprehensive solution, so we’re releasing an updated version of our white paper, which was the original white paper for our ICO or token sale that includes a description of how CredoEx fits into the solution.
So the way that I see it is we have the consumer version of BitBounce, which is a paywall on email inboxes which has been adopted by over 300 thousand active users now. We’ve had over 1.2 million signups, but that’s over 300 thousand active currently running that paywall. Our goal there is to grow that to a larger portion of those. Then there’s the enterprise side of BitBounce, which has an initial version, but we’re looking to ship the first major version down at the end of Q2. That will facilitate email marketing campaigns to those BitBounce users, so the people with paywall will allow companies, enterprises and marketers to communicate with that population or their own list and pay the paywall, and then CredoEx will facilitate liquidity in that market. So when BitBounce consumers earn tokens, they’ll be able to easily convert those into other forms of value through CredoEx. When businesses wanna run marketing campaigns, they can purchase the incentives or the cryptocurrency needed to be attached at incentives to their marketing campaigns via CredoEx.
So right now, in the short term, CredoEx has been a big focus. But we’re still, I’d say that, after this project, BitBounce Enterprise is going to take up a lot of our time and will be the most important thing to get to market. But broadly, we’re looking at structuring our team so that all three are progressing.
BLOCK TRIBUNE: Seems like you’re fighting a war on multiple fronts. Who do you see as the competitors that you’re trying to take down through these?
STEWART DENNIS: Well, on the paid email front, I see that as more of a green field opportunity where there is… we’ve actually filed three patents on BitBounce with incentivized and paid emails and our solution. It’s an additive one, so the existing incumbents such as Gmail or Google with Gmail, Microsoft with Outlook, or Yahoo with Yahoo Mail. BitBounce works in tandem with those, it doesn’t replace them. So there, it’s more of a land grab, where we’re trying to acquire as much of the potential market that we’re creating as possible. We’ve got 300 thousand to 314 thousand of those right now, trying to acquire as many as possible. With exchanges, it’s ones that I mentioned previously where the incumbent exchanges that we had a terrible experience dealing with are the ones where we’re looking to provide a better alternative too.
BLOCK TRIBUNE: To this day, have you gotten an answer on what happened and why?
STEWART DENNIS: No.
BLOCK TRIBUNE: So what is a realistic revenue projection for a user who uses BitBounce?
STEWART DENNIS: I’d say it’s still too early to make projections that we can have a high confidence in. What we’re looking at is having a lot of businesses do email marketing, and the default fee is $0.05. Users can set the fee that they would like, but once we have higher enterprise usage, I’d say it could at least be in the dollars or maybe even tens of dollars for average users per month. It’s hard to say exactly, but based on the amount of email volume people receive and projecting how many of those companies we can get to do a micro-payment for every email, I think that’s reasonable.
One thing I’d like to say here is, one of the interesting ideas with BitBounce is that as certain types of jobs become more automated, such as the whole trucking industry is at risk now, I believe it will be important for people to have additional source of passive income. And one of the ways they can do that is to monetize their attention, which is a value that everyone has. Once the vision for BitBounce and CredoEx is more fully realized, I believe we can provide an additional source of passive income for people to monetize their attention, which just gives a little bit more security to the average person when there jobs might be at risk through growing automation.
BLOCK TRIBUNE: Well, that leads to my next question, which is how much of an engagement does a user have to have? They are going to create a profile about what they’re interested in and what they’re going to be opting into? Is that how it works?
STEWART DENNIS: Yes. And we’re looking to provide marketers with options. The most basic option is that they can just pay for their emails to go through the paywall. That’s equivalent to an impression in traditional or online marketing, where you’re getting that impression by landing that email that wouldn’t have otherwise been delivered to the inbox. Then we also have functionality for incentivizing a response. For instance, if you have a set of leads that you’d like to do a campaign to and you’re interested in having them respond about their interests in a particular service, you can have that payment be delivered or the incentive released when the response is reached. And we are exploring other things, such as taking a specific action. But what we’re envisioning is that there will be a basic, passive form in which people are paid just for receiving, which is the current implementation of the paywall, and then we have the incentivized response functionality that incentivizes responses, and then potentially other actions, too.
BLOCK TRIBUNE: Right now, the atmosphere that was created with Cambridge Analytica’s mining of the data from Facebook makes privacy a huge issue. And this almost seems the flip side of that, because while people are controlling their response, they’re still putting out a lot of data on themselves. How do you square the current atmosphere with what you’re attempting to do?
STEWART DENNIS: Well, I’d say that in the current atmosphere, people have been entrusting their data with the large tech companies such as Facebook, and what they’ve been concerned about is how that data is being used. Clearly, with Cambridge Analytica, it has been misused and abused in certain instances. But there’s a second flip side of that, where one of the responses in the recent congressional hearings that Mark Zuckerburg made, was that to point out that Facebook users own their own data. But when you think about ownership, that should really imply that the owner receives value traditionally. But Facebook users are not receiving any value for their data.
All of that, apart from the free services that they’re provided, all that data is going to Facebook, all the value is. And so what we’re doing is we’re allowing people to actually monetize from ownership of their own email data and email accounts. The second that I’d say is that, in relation to privacy, that’s something we take very seriously at an implementation level, and we take a number of precautions around that where we only store the minimum amount of metadata on emails that’s required to efficiently operate our service. So what you saw with some of these other companies is that they were actually collecting huge amounts of data that weren’t necessarily about you. They weren’t directly relevant to operating their service. We don’t do that. We store the minimum amount that’s required on us and we take varied security measures to make sure that it’s secure.
BLOCK TRIBUNE: Okay. So when this kicks off, you’re going to be able to trade your tokens into ether, and there will be others coming down the road?
STEWART DENNIS: Yes. Marty is our business development lead. He’s working on acquiring a banking partner so we have fiat support. The vision that we’d like to have there is that someone can say they earned tokens, they can immediately convert those into the currency of their choice, whether that be a crypto or a fiat currency.
BLOCK TRIBUNE: So you’re going to have to maintain a wallet on your side, I take it?
STEWART DENNIS: Yes. So we maintain wallets at the CredoEx side and that’s where we do the KYC of knowing your customer and anti- money laundering checks. And one thing to add there is that CredoEx is a far more regulated product than BitBounce. We worked extensively with our lawyers on bank secrecy, the COPPA Act, GLBA, general AML provisions, KYC, other form privacy laws in order to ensure full compliance. Because that business is dealing with the transfer of money. But yes, we have posted wallets which people can easily deposit or withdraw from.
BLOCK TRIBUNE: Have you talked to the SEC?
STEWART DENNIS: We haven’t talked directly with them. But one of our main lawyers that we work with is a former SEC enforcer and she drafted a memo about Credo being a commodity and not a security. So we’ve been operating on the basis that Credo, our main token, is a commodity, which has some provisions attached to it, but far lighter regulation than securities do. We haven’t yet talked with the SEC about CredoEx and our own exchange. But that is a dialogue we would welcome.