I want to introduce you a new bitcoin Startup: Safello. Bitcoin is interesting because it can be used for crowdfunding, it is opening finance industry to the crowd and it is based on peer to peer protocol. On September 3rd , I was at the bitcoin event the BitStockholm meetup organised by Stockholm School of Economics and Safello . Event was sponsored by Stanford Alumni Club.
Before I talk about Safello, I want to show you the first physical bitcoins that I saw at this event.
I had a short talk with Frank Schuil ,- CEO of Safello and listened presentation of Gustav Röken- CFO of Safello. I can say both of them are passionate about their start up and I think they are the type of entrepreneurs that I would invest.
As I have said, Safello is a bitcoin startup. There are two main things you can use Safello services for. First, If you want to exchange your Euro and Swedish kronor to bitcoin, you can use Safello’s platform and can get your bitcoins in 10 minutes. It is good because not all exchange platforms are that fast. Second, If you have invested in a Bitcoin mining rig need and you need a host, you can co-locate your servers in our Safello’s data center. Interestinlgy fast but yes, Safello did convince Skatteverket (tax authority) and two banks to resell bitcoin. Handelsbanken was the first bank that Safello has created corporate account, and Nordea is coming soon. I expect, in the future, users will be able to buy bitcoin from the e-bank platform of several banks as they are able to buy mobile phone credits.
Safello follows Money Laundering act, as they state at their website:
“Under the Money Laundering Act, we must get to know you better, for example to understand the purpose of the business relationship and transactions. That’s why we include need to ask you about where your money comes from and the purpose of your transactions and business. If you are a business customer, we also need to know the company’s operations, sales and ownership.”
Safello requires their customers to prove their identity by providing copy of ID card. The more transaction you do, the more documents they ask.
What are advantages of using Safello:
- You can keep Safello’s invoice for bookkeeping.
- If you have developers working in different part of the world, you can transfer bitcoin, which has almost zero cost to transfer money. If you compare with western union, the difference is huge.
- It is a legal entity and since it is following finance regulations any transaction you do via Safello platform will not create a trouble for your company
- You can be sure that you will ask what you bought.There are discussions and issues with bitcoin sellers so you can trust Safello’s operations, at least more than regular people.
- No anonymity. Due to regulations that Safello follows, company keeps track of the buyers, as well as buyer’s bitcoin wallet id, transaction id and even write it down at the invoice that is auto generated at Safello’s platform. I raised my question during event, in order to understand how they deal with anonymity, it seems Safello prefers transparency that we have in banking system than anonymity. To me, one of the strengths of Bitcoin is its anonymity. If you take away anonymity of the customer, I think, it is a big sacrifice. You can meet many finance people who would claim that it is to prevent money laundering, drug sales and prevent to finance terrorism, but I don’t buy it. By saying so, you also accept that old bank system has NEVER been used for money laundering or financing terrorism, which is not the case. On the other hand, I understand the sacrifice that Safello had to do. I also think that, investors who invested in Safello might have requested Safello to follow existing banking rules and regulations.
- As a result, I can say that, Safello is a company that brings banking rules to Bitcoin. You can interpret it both as “good” and as “bad”. I think it is negative because I do not want bitcoin to be a currency to be used like euros dollars etc. Bitcoin should not be a currency that old bank industry members to expose their rules over it. Bitcoin like crypto protocols should exist to disrupt the financeindustry, not to support it. It is a protocol that is produced by community that should be used for community.
What should Safello do:
Explicitly show its advantage to use bitcoin for transaction if you outsource projects or purchase product online.
Decrease the percentage they get from bitcoin purchase, asap.
Would I suggest Safello:
Yes, if you have a company who does outsourcing, I would definitely suggest to use Safello to pay via bitcoin. One might argue that when you buy bitcoin from Safello, their service fee is high (Safello currently takes 9% fee on all Bitcoin purchases), but if Safello can lower it and if you consider the advantage you gain by using bitcoin to transfer money to other countries, and compare the price with current existing solutions, you would think that it is a reasonable price