Events in recent days which seemed to compress decades into hours have made it necessary for me to share this note with you; our investors and partners, our customers, supporters from around the world, and my amazing teammates.
Events in recent days which seemed to compress decades into hours have made it necessary for me to share this note with you: our investors and partners, our customers, supporters from around the world, and my amazing teammates.
I have received a lot of calls and texts in the past few days asking about our exposure to FTX and if we are okay?
YES, WE ARE!
Through Alameda Research, SBF invested in Bitnob early this year. The extent of our relationship since then has been to source USDC liquidity which we always move to our wallets immediately after purchase.
We currently do not have customer assets sitting on FTX. We do not trade customer funds. We have never entered an agreement with any crypto company or exchange to trade for us or provide yield.
Yes, we did have conversations with large exchanges and services I can’t mention here promising yield, but we always decided against moving forward because:
- We have never agreed with or sought the permission of our customers to trade their funds.
- There was a lot of rehypothecation going on in the industry. Who would they give our Bitcoin to? How do we get it back if they go bust? 10% yield didn’t seem worth it. Most of the yield comes from 2-3 large players.
- It goes against our principles of long-term viability over short-term profits or “fast growth” at all costs.
This is despite the fact that one of the most sought-after services in our part of the world is “Yield on stablecoins", but the risks are just too excessive in crypto.
What do things look like for Bitnob?
At any given time, at least 90% of the Bitcoin under our care is held in multi-sig cold storage. Our Bitcoin and lightning infrastructure is built and maintained by us. We do not depend on any 3rd-party for custody or bitcoin/lightning payment processing. Constantly improving this infrastructure to remain secure and anti-fragile remains a priority for us.
We operate one of the world's most robust Lightning APIs, with a clear focus on making Bitcoin more usable in everyday payments, including remittances. The only yield we earn on Bitcoin today is from routing fees on our public routing node.
We might be small in the grand scheme of things but we take our work seriously. The work we do today will benefit billions of people worldwide. We do this in all humility and gratitude for the chance to contribute to building a better future for everyone.
We strongly believe that outside of speculation there are real problems Bitcoin solves for people in the Global South. At Bitnob, we are tirelessly working on figuring out ways to make it easier for people from our part of the world to engage in commerce easily, send cheap remittances that instantly settle and protect their wealth. For us, the fundamentals of Bitcoin remain the same regardless. It might take us a long time to get there, but we’re willing to play the long game.
The least interesting thing about Bitcoin should be the price.
While events like this negatively impact how people view cryptocurrencies, including Bitcoin, because to those outside of the industry, they’re all one and the same. For this reason, most Bitcoiners prefer to distinguish between the “Crypto Industry” and the “Bitcoin industry,” where the former seems to thrive on a lot of experimentation and get-rich-quick schemes, and the latter seeks to provide monetary freedom to billions of people around the world. To be clear, this is not me saying every actor in crypto is bad or everyone who is Bitcoin-focused has the best of intentions.
Bitcoin gets attacked for being boring, non-innovative, or too slow to release “features,” but that is the beauty - the boring predictability of the ticking blocks, the boring feeling that in times of crisis bitcoin still works, and the fact that money is too important to be a plaything. We shouldn’t just be able to create money with a few lines of code and under the control of a few people.
This is also a time for sober reflection. Regardless of how some of us might feel like this is an “I told you so” moment, it is important to remember that these things have real-life consequences.
People have lost their savings, some businesses have lost money, and some people will lose their jobs in an already difficult economy. Dreams shattered. I hope we remember to educate out of love and hope they get back on their feet someday. Bitnob extends a hand of comfort to everyone affected by this.
Experiments will go on, and people are attracted to different things, and that is fine. No one can stop that, but I encourage everyone in the crypto space or looking to join to look inwards. This technology holds a lot of potential for good. It changes the game for billions of people around the world, but this incredible power requires a very high level of responsibility and accountability. I encourage you to look into Bitcoin. I’ve been doing this since 2013 and have learned a lot of lessons along the way that got me to a place where Bitcoin is the focus.
To our customers - we will keep serving you to the best of our abilities by listening to your feedback and going above and beyond to serve you.
To my colleagues at Bitnob - I know everything is moving fast. Hold steady. I am super grateful for all the great work you do!
If you’ve lost money, I hope you find your feet again. The human spirit is incredible when it chooses to fight back.
To our investors and partners - We remain grateful to have you going on this journey with us. We make mistakes and might not agree on everything, but our commitment to building a solid company we're all proud of remains strong.
To our friends and supporters around the world - we see you, we are grateful for all you do for us.
Bernard “Berlin” Parah
CEO, Bitnob