Dear colleagues,

I strongly believe that current situation within blockchain and crypto based companies’ ecosystem provides a

unique chance to get stable position within the market due to universal infrastructure projects launch. Single

service/products companies must have significant as service/product experience, as user experience and

powerful client database. Ecosystem is just about 3-5 years old and there are several strong market leaders in

each direction (exchange, wallet, merchant solution, p2p lending etc.) already. Definitely these market leaders

will keep their positions but a new player will face significant competition. There could be some hidden unique

features in each direction which could make your start-up unique for some time, but it is nothing in long term

period. Everything can be copied. Of course, you can follow some examples of patent fixing, but personally – it is

a bull shit, which will not work for 5-10 years.

Please find my vision regarding providing the market with “Swiss knife” platform (just by yourself or through a

third party solution). Bringing infrastructure parts together within one community will become strong

competitive advantage which gives a great chance to land on the planet of new fin tech opportunities.

Community – is the key! One point of service (read “sale”) – is the key! Just turn it.

The concept of financial supermarket will:

1. multiply revenue due to “ready to use” clients, which already use (or are going to) one of services AND

ARE FAMILIAR with BTC (or any other blockchain based product or service) – great opportunity for cross

selling;

2. reduce clients inconvenience because of several times entering personal data according to KYC/AML;

just do it once and use it anywhere you need (see list of products/services below);

3. let to collect income and spending data to provide clients with appropriate service/product (e.g. surplus

funds – invest into p2p-landing service or any other investment tool, lack of funds – borrow money

through the same loans program);

4. let to build internal reputational system within the platform;

5. provide client with easy and comfy “one window” dashboard, centralizing all the info from all

services/products and use it for cross-selling.

Social component is a separate theme, but it will open lots of possibilities due to grouping people according to

interests, companies, positions etc. The result – e.g. borrowing from your company’s colleagues or friends will

become more approachable and cheaper, faster. Fraud becomes harder within a certain community. BTC and

altcoins in general tend to be “no face” money. The person who is deep in tech of blockchain can see “the face”

(hard to do but still possible), but most people still will see only wallet number and will not waste their time to

understand who is behind a digital curtain. It is bad when we speak about landing/borrowing.

To provide your clients with a financial face inside one universal financial platform – to make it possible to

use advantages of traditional system with identification feature inside blockchain tech. BUT visible part of

identification should be flexible and the question of client’s preferences and choice. The platform can

advise and make propositions, based on statistics and other users’ experience (if disclose this – will get

that etc.).

Incognito part of coins has its own market, but open economy is dramatically bigger for the moment and I prefer

to have dialog in this direction. That is not because of my bank politeness – I just insist that we have a bank as a

long term partner, which we must take into consideration for the nearest 15-20 years as soon as digital

currencies will cover the majority of planet’s transactions. There are going to be lots of unbanked ways of

financial interaction, but these ways will be more expansive (thus less competitive).

Platform services and products:

exchange:

The community passed through tough MtGox case too easy, because the model of keeping clients’ funds on the

board of exchange is still dominating. Cold storages, hardware security modules and geographical

diversification, insurance partners and multisig model – all this provides enough power to ensure the client that

funds are totally secured, but

the platform should give the choice to the client and provide him with ability to choose between keeping

funds by himself or work on the basis of trust to an exchange.

There are only two types of clients: who trust third parties and ready to trust their funds to professionals and

those who do not trust and know (or they think they do) all security cobwebs and ready keep responsibility in

their own hands like professionals – so let them both be satisfied.

Layer approach in passing registration procedures is crucially important. For sure, it is a balance between banks’

whims, rules, restrictions and developing the base of clients. I do not have any statistics on cutting off clients

ration depending on the amount of the information and documents they need to provide to become a client of

BTC-exchange, but I am sure that this curve is very sharp and vertically oriented. Thus

there should be a proposition which could provide entry-level clients with possibility to cut the way of

registration to try out exchange services within one or two entry-levels OR

there is a new service – no authentication account – for traders/PAMM users (see below) both providers

and subscribers with no need to proceed with full registration; there should be a piece of trust as soon as

fiat will be kept inside exchange account only and client will have a possibility to withdraw only crypto

(definitely with a platform fee).

It will attract additional clients and will let use this feature as a marketing tool – we are open to cooperate and

we do trust our clients.

To make clients trust increasingly to our team the company should

keep auditing with an international company (preferably well known, the best one – big four

representative) and do on the regular basis.

The best way to collect data from customers – to motivate them to provide such data:

1. provide higher limits,

2. open new types of orders,

3. launch promotional programs within the platform: e.g. zero platform fee for getting the first 88BTC

loans, zero platform fee PAMM-account usage etc.,

4. launch promotional programs with partners: e.g. get the top id-level – receive x-% discount for purchase

of security device like Yubikey (which I’ve mentioned in my intro letter) or any other product/service;

special attention should be concentrated on partners who start using BTC in their business – some of

them could be ready to provide discounts just for using BTC-payment channel (e.g. Lionsgate’s 25%) or

will launch joint marketing companies with us: as with an exchange, as with a merchant BTC-payment

provider (see below).

BUT the key marketing message and fundamental incentive must be – go through identification process once

and get multiple benefits within the platform forever, showing all the list of these benefits correlating with

levels of person’s authentication.

Let me pass the topic of orders’ types and limits as soon as it is a specific one – it needs concrete digits which

depend on a certain country the company is going to be represented in and depend on the company’s policy

regarding limits which are the result of negotiations with certain partner banks. The only thing I would stress on

is a definite need

to provide clients with a variety of orders avoiding building just simple “buy and sell” exchange.

There is no doubt that the majority of clients need only converting function, but (a) the crypto ecosystem is still

very young and there are a lot of BTC users – our clients – that prefer speculative nature of this currency (rather

than payment or collecting) and they should have appropriate tools (e.g. order types like Fill or Kill, Immediate

or Cancel, Post Only, Good 'Til Canceled) (b) keeping traders within the platform will let provide it with

additional liquidity and (c) propose to clients additional investment product like PAMM-accounts or liquidity

provider programs. Crucially important thing is

to design UI in such a manner that will not push the client into a precipice of overloaded choice: if I want

just to exchange – show me just simple “buy and sell” field, if I was identified as a day trader – I want to

see the entire trading panel with all possible adjustments.

As it is easy to deposit and withdraw resources as many clients we get. Thus there should be maximum payment

options (see below) in each market the company is represent on. There should be mentioned that we can work

as with direct methods by ourselves, as with third party solutions (e.g. “Coinbase” partner for SG – “Xfers”,

Canada – “Vogogo”, “Interac”).

One of key importance issue is the fee policy which can be applied in three major models based on:

1. deposit/withdrawal method:

bank wire,

SEPA,

ACH,

credit/debit card:

regular,

3D sec.;

credit/debit card:

regular,

3D sec.;

alternative payment provider (PayPal, Dwolla, Stripe, Ucach, Paymentwall, Webmoney etc.) –

depends on market

2. currency exchange operations,

3. type of account:

authentication completed,

no authentication (only crypto in and out);

4. trading:

market maker/taker,

single fee.

Balance between these models should be found according to the company’s strategy, current market situation

and development stage for the moment. The client knows his needs thus

the client should has a choice from the whole list mentioning core features of each method basing on

such transaction characteristics as (characteristics should be described in eye friendly manner – table

situated, readable, color differentiated):

speed,

cost,

security,

verification process.

prepaid card:

Additional exchange channel I would suggest to use more as a marketing tool, which could attract attention of

new clients and involve them into other services usage. I am sure that operating costs are high enough and this

scheme of creating new customers base is more about image (which is also important) but not profit. Revenue

can be collected from countries where clients can use prepaid cards as a remittance instrument – to send BTC

to their relatives having no possibility to use official routes (have no official papers thus no bank account). Let’s

bypass this topic for the moment as soon as it does not make critical influence in terms of turnover and platform

development. But the channel exists and should be worked out.

prepaid card can be provided in a form of:

gift card,

physical coin.

PAMM-account (high risky):

As it was mentioned previously, providing platform users with a possibility to use the exchange not just as a

converter but a trading instrument, we can propose to our customers high-risky and risk-free investment

products and a tool to start their business:

1. product for clients to invest through the platform with a purpose of getting additional profits;

2. service to provide traders with a business solution plus a ready to use customers’ base of the platform.

Trade objects include:

1. fiat-crypto pair,

2. crypto-crypto pair:

currency,

assets.

As soon as market is almost new born and clients will definitely look for specific information regarding the

crypto ecosystem which can influence their profit rate thus

consulting component and professional content support – reviews, forecasts, news, announcements,

professional data channels, strategies etc. – will become (a) an attracting factor for new comers, (b)

community basis or/and (c) a separate product on a fee basis (more to create value added service for

platform users providing them with free of charge access rather than to get a profit from new comers).

liquidity provider program:

The safest product for investment purposes via alternative financial channels. Liquidity is “Achilles' heel” of our

crypto-ecosystem, but this weak point, of course, is a business opportunity which already attracts some market

players like “AlphaPoint”. Liquidity means tight spread and high turnover – turnover means profit. It can be

provided and raised via (a) liquidity provider program for non-institutional clients, (b) fee policy which motivates

market players to be market makers vs. takers and (c) incentive programs for institutional partners like e.g.

“Coinsetter” did.

Key importance thing is to make accent on risk-free nature of the product, providing full comprehensive

information in human language but not with a technical or financial slang.

To be continued with:

1. merchant solution,

2. crowdfunding,

3. p2p-lending,

4. debit card,

and the all services and products dashboard

5. WALLET – which is THE BASIS for all the rest.

Dear all, will appreciate your thoughts and feedback. Please feel free to contact me any convenient time and

channel:

skype: pi.crew,

phone: +380 67 218 81 89,

mail: gnosteek@protonmail.ch