We present a new chapter in our AMA series, today is with us Jorge Pereira, CTO — Founder, of Public Mint, answering all questions about this excellent project.
— Joel|Stakely: It’s very exciting for us to have you here Jorge, the Spanish community follows Public Mint very closely.
— Jorge|Public Mint: Hi everyone, good to be here!
— Joel|Stakely: The AMA starts just now.
— Jorge|Public Mint: Yes, go ahead!
@Pizotastico
Q1) My question is more focused on the little comment of “pragmatic approach”. Since any company or bank centralized institutions, which, as we know, is against the nature of the cryptographic ideal, if Public Mint maintains and uses the funds of these entities as the core of its finances. Wouldn’t this make Public Mint a mere puppet of these giants and open the doors to a fake adoption? I highly doubt that any of these institutional investors want to lose their advantage by dint of money.
[Jorge]
A1) The way this question set up leads to the typical discussion between “ideals” and “keeping it real”. I’d argue that what many people actually do with a technology is at least as important as what a few people initially thought the technology would enable. Taking Ethereum as an example, it’s a known and quantifiable fact that one of its main use cases has been to transact fiat-backed stablecoins. I don’t think we should spend much time judging other people for not meeting an “ideal” when they’re obviously doing something that is relevant to them.
That said, in my experience, when you make statements like “being a puppet of giants”, it’s an oversimplification. It makes it harder to actually understand the world as it is and the motivation of people, and if you don’t understand it, you can’t change it. Most people — even those who speak as such — still work a job and pay their expenses in traditional fiat. That’s normal, and the notion that “normal is bad” runs contrary to what I believe is the attitude needed to change the world: make “normal” better.
So, let’s take a step back for perspective. Millions of people in the US go to work every day, and get their paycheck from corporations, small businesses, government or directly from other people. All these people use Fiat, which is primarily held in banks. To access that Fiat, they not only go through their banks, but also go through intermediaries that process payments. They don’t really have the ability to send their money directly to a beneficiary, there’s a whole pyramid of intermediaries which cause friction or can deny service.
If you accept that people aren’t suddenly jumping to use crypto (which crypto btw?), then it’s not outlandish to conclude, like we did, that a useful step would be to allow people to use the money they already have, with the power and features of crypto, and reduce intermediaries. That allows people to keep the familiarity of using fiat — which is how the world around works — while enjoying everything else that crypto has to offer.
Public Mint allows anyone to use THEIR fiat to transact peer-to-peer, without the need to depend on their bank or intermediaries. I’d hope most people would recognize this as an improvement, and something that brings people further closer to the whole crypto ethos.
Q2) The governance token and DAO are always well-adopted propositions, as long as they are used properly. This can be promoted using some tax on the HOLD if liquidity not being provided, staking, or any utility that is not intended to improve the platform, thus avoiding speculation more than likely by the holders. Have you thought about this? And if it has been thought, why has it been decided that it was not viable?
[Jorge]
A2) The difference between our Governance token and other such tokens, is that our token pays in Fiat, from actual revenue-generating financial activity, and not by inflating the token supply. We believe this positive incentive, together with a UI that makes it easy to participate, will lead to increased participation and involvement by holders.
Q3) I raise this question more as a personal curiosity about the path you have traveled as a team to achieve FDIC regulation, added to the fact that without large institutions and great marketing your idea could not be carried out. Did it cost a lot of work to get the go-ahead from the FDIC? The fiat world (and we have clearly seen this in 2021) trying to screw up the crypto world. Are you dedicating many resources to exploit this new cryptographic technology and its advantages? So much as to hire third-party services before creating your own?
[Jorge]
A3) It was (and still is) a big challenge to navigate the regulatory landscape, and we are always looking for the optimal solution. In the case of FDIC insurance for funds, instead of doing custody ourselves we decided to partner with regulated entities that provide custody and built our unique fiat-native blockchain on top of it. This approach has worked well with USD, as we can currently access a network of 200+ FDIC-insured financial institutions through our partners.
As for the fiat world trying to screw the crypto world, I will suggest that the current “crypto world” would not exist without the ability to connect fiat to crypto, seeing as that is what allows value to flow from the fiat world to the crypto world.
That said, I do not subscribe to the notion that these worlds have to be at odds with each other, and I believe we’re on a (likely long) path to converge and integrate “crypto” into the mainstream, which obviously means there will be changes along the way, on both sides. That’s to be expected. A system that offers a path to migrate from previous systems is easier to adopt.
So, as long as there is an interest for people to work with fiat, we’ll be working with institutions that make fiat relevant — there simply is no other way. And we’re not alone, every other institution that sits at the edge of fiat and crypto (exchanges, brokers, loans, etc) does so.
Ultimately, however, we’re allowing people to use the fiat they already have, without having to depend on their bank. And that — I believe — is a step in the right direction, for everyone.
@OriolCampos
Q4) Is the creation of the new digital official currencies a threat for the current cryptos?
[Jorge]
A4) One thing most people don’t realize is that fiat as issued by central banks is not the same as the kind of retail fiat that most people handle.
For instance, if a bank has $1M USD deposited at the central bank, and yet they issue loans with a fractional reserve of 20%, the customers of that bank actually can have $5M in total. This means the USD we normally use encumbered by banking risk, it’s not “pure”. If central banks issue their currency, they’ll still have to come to terms with this issue, and it’s not as simple as just letting banks print their money because if you know who issued money and the relative strength of that institution, then money is no longer fungible. In other words, there are lots of issues to be figured out there.
So, to answer your question, CBDCs don’t — on their own — necessarily represent a threat to cryptocurrencies, although they might represent a challenge for stablecoins. Meanwhile, we believe that the way forward is by integrating the crypto and the fiat economies in a way that is easy for the regular person to use. And not just people, but also businesses — that’s a giant piece of the puzzle. This path begins by bridging the two worlds — onboarding everyone into the blockchain space by using the familiar money, but with the best properties of a crypto. And, of course, building this bridge from within the existing regulatory system.
@Ds_3D
Q5) Good evening, first I want to congratulate you on the PUBLIC MINT project and your team for their great work. My question is the following, does the profitable savings system have a possible default rate that the insurance can’t cover? If so, in an annual percentage proportion of what would be the possible default?
[Jorge]
A5) Great question — I’m guessing that you mean the EARN program. The value allocation and the insurance parameters will be decided alongside MINT holders via voting system. We’re managing these parameters for the launch and the early days, but the community will be able to vote in proposals, and we’ll take these votes into account. As we’re still onboarding both earnings and insurance partners, we still don’t have the exact figures. That said, security of funds and transparency are main priorities, so rest assured we will be upfront about the terms once we have these numbers.
@Louiss_1976
Q6) What are the main technological differences between your fiduciary system and others already established such as SALT, INLOCK or YouHolder?
[Jorge]
A6) The main difference between Public Mint EARN and CeFi lenders is that the EARN program does not rely on any single party to drive earnings and spreads the risk between multiple lenders, both CeFi and DeFi.
So for example, if you have your savings deposited into SALT and the company goes under (as for instance was the case with Cred), you have no recourse and your funds tied to a single point of failure. EARN makes sure your funds spread across multiple CeFi partners/DeFi protocols to reach the best possible balance between earning rates and safety at any one time. Another key difference, of course, is that EARN is effortless to access to fiat users — it’s one bank transfer away, in and out — which eventually will help drive adoption.
@henkreative30
Q7) Using CeFi + DeFi bridges is how you envision the crypto ecosystem in the future? I mean, do you believe in decentralization as a philosophy or do you think that a certain centralization is necessary?
[Jorge]
A7) We believe that centralization/decentralization is a spectrum, not an absolute, and that the best systems combine the best of each approach. While it’s clear that the fiat economy could benefit from decentralization, it’s also clear that centralized systems aren’t going anywhere soon. And we’re ultimately pragmatic: we need to work within the constraints of the fiat economy if we want to drive more serious adoption. This means keeping some centralized elements to fit with the existing system, and using the familiar fiat as a stepping stone. Any solution is only as useful to the extent that it can actually be used.
Q8) Do you think we will do without fiat one day, or will we always need a bridge like the one in Public Mint?
[Jorge]
A8) As long as there are countries and governments, there will be Fiat, particularly because most economic theories rely on that, including the increasingly relevant Modern Money Theory — the ability for a government to issue their own money is too much of an advantage for it to willingly let go. This is not to say some societies cannot evolve towards non-fiat money, particularly once government loses control of the economy, as is the case with Venezuela.
It follows that as long as there is fiat and crypto, there will be the need for a bridge like Public Mint. But Public Mint is far more than a bridge, it offers a layer of simplification that stands to offer a series of crypto-based financial services to the masses, that would otherwise never leave the crypto space.
@Carlos105v
Q9) What are the competitive advantages of Mint?
[Jorge]
A9) Public Mint is the first blockchain to run natively on fiat (USD for now, with other currencies to come), in a fully compliant manner. A simple bank transfer is all it takes to get funds into and out of the blockchain.
Fees fixed, low, and paid directly in fiat. You always know ahead of time how much you’re paying, and for those new to crypto it does away with the complexity and cost of having to go through exchanges to buy multiple currencies.
Q10) Can you tell us the long-term motivation and benefits for Mint token investors?
[Jorge]
A10) For now, the main benefit is to participate in the governance of the EARN program, and reap its rewards, which are paid in USD. In other words, with MINT you can stake MINT and participate in Governance, get paid for it, and the more money on the network, the more you get paid on the same amount of MINT tokens.
We’re also constantly studying new ways to add utility to the MINT token and to incentivize investors to not just hold it, but also actively use it. MINT will be at the heart of whatever new features we build on the network.
Q11) Where do you and the Mint team see the world of blockchain being in years to come, and how will change the landscape of the cryptocurrency space in years to come?
[Jorge]
A11) That’s a great question, and I wish I knew! What I can answer is where we hope to achieve: for Public Mint will become a key driver of mainstream adoption, and for the entire blockchain space to have fulfilled its potential to democratize finance across the world.
@pedroi
Q12) Public Mint is defined as the platform for building applications that handle money, without having to deal with the complexities of banks. But the industry is already full of these kinds of platforms, for example: Paypal, Stripe, Skrill, Wise, Fintech Aggregators, etc. Why do you think another platform like Public Mint and also including blockchain can beat the rest of them that are already established in the market?
[Jorge]
A12) Unlike these platforms, anyone can build and run services on top of the Public Mint blockchain. You can’t really build a service or application (like an exchange, for example) on top of PayPal or Stripe (or any other financial institution for that matter) unless they let you. You don’t need our permission to build or move money around on the network, or to build a DApp for example. Here’s an overview of other features against some of our main competitors:
Q13) The crypto believers expect and pray to have FIAT money replaced by blockchain tokens or coins and Public Mint brings back to the blockchain the FIAT concept, isn’t that a contradiction? How do you explain to people that keeping the FIAT concept is a good thing for blockchain and the progress of the world?
[Jorge]
A13) I’d argue that there’s no inherent “purity” in a technology, that is a social construct for the whole community to participate in. I tend to compare this to the whole “open source” discussion that was common 15 years ago, the difference between GPL, LGPL, Apache2, Open Source, etc. Ultimately, people realized there was not ONE way to license open-source code.
A bit in jest, I tend to think that for crypto purists to get their wish, someone needs to actually make efforts to migrate people and generate adoption. It won’t happen out of desire or righteous chest-pounding. See the first question above.
Q14) What partners or sponsors Public Mint has to boost the progress and become the reference tech in the market?
[Jorge]
A14) There’s a list of partners on our website, and we’ve been announcing new partnerships to our community for the past few weeks. Some of our key partners include PrimeTrust, Circle and Bridge Mutual. We don’t like to announce for the sake of just announcing, so we’ll continue to try and announce once we have the right bits in place.
Q15) What if more than one partner is getting insolvent and the 10% of funds of the insurance are not enough to cover the debt? (Point 4.2.2 of the Whitepaper)
[Jorge]
A15) One answer is to quickly move towards a point where no partner has more than 10%, but you could then argue that there can be failure of multiple partners. So, this is complex, and it’s a mix of insurance bonds and keeping a surplus of funds. We expect to write a blog post about this in the months to come.
Q16) One of the properties of blockchains is security because once a block is released, it can’t be changed. But Public Mint is keeping the fiat in custodial partners, those partners need to implement security at a really high level to equal blockchain. What if one of those partners is compromised and the funds are stolen? Is there any insurance like the FDIS in the US or the DGS in Europe covering the lost funds?
[Jorge]
A16) As an aside, with traditional blockchains, a block can, in fact, be changed after being released, which is why there’s usually a number of confirmations required — its probabilistic finality. With Public Mint, each block is effectively final, so there’s no need for multiple confirmations.
As for security of fiat funds, funds on Public Mint are held on deposit with FDIC-insured institutions via our custodial network in the US. We don’t yet support Euros, but we’re prospecting for fully DGS-compliant partners in Europe.
Reality is that fiat is only as strong as the underlying fiat system, so we can’t cure the system of its endemic woes, but we can surely improve on top of it, and that’s where our focus is.
Q17) Why 20 months to reward stakers and early adopters of Mint? With the progress and evolution of blockchain technologies just a couple of weeks looks like a year of progress, 20 months is really a lot of time, what was the criteria to choose that number?
[Jorge]
A17) A fixed maximum amount of rewards will be released throughout that period of time, but reward distribution is non-linear, with higher TVL leading to lower rewards (as is usual with staking-like mechanisms). This is another topic where we expect to make matters clear by writing a blog post in the months to come.
@alprieto
Q18) Will we be able to create native fiat-based applications with Public Mint, and will these applications be compatible with credit cards and bank transfers?
[Jorge]
A18) Anyone can create fiat-based DApps on top of the Public Mint network today. With a simple bank transfer, anyone can deposit funds to a Public Mint address and use DApps with fiat. We are currently working on stablecoins and credit/debit card integration to offer those funding options.
@josef_s
Q19) The mobile wallet is self-custodial or centralized? Is there a token burn program? How is the progress on the Google Drive integration?
[Jorge]
A19) The Public Mint wallet is non-custodial, once you make a fiat deposit, funds are sent to your address and remain under your custody.
The web wallet is fully integrated with Google Drive for safe key management. You can use your Google account to keep your keys safe and encrypted in the cloud; neither us nor Google will have access to them. This is offered as a convenience, but you can just as well merely download your keys and hold them yourself.
@cmnt18
Q20) It’s Public Mint a decentralized version of PayPal?
[Jorge]
A20) There are many similarities between USING Public Mint and PayPal, but some key differences. Like PayPal, you can send, receive and store fiat instantly through a friendly interface.
Unlike PayPal, we never touch your funds — all fiat deposits are kept at our custodial partners’ accounts. Also unlike PayPal, once your funds are in the blockchain, you’re free to transact globally at very little cost, without fear of a reverted transaction. This gives a lot more reassurance where instant finality is needed. Finally, unlike Paypal, we are an open platform, anyone can use us and transact, without having to obtain an API key from a centralized entity.
Q21) What key advantages Public Mint compare with Ethereum?
[Jorge]
A21) Public Mint is fiat-native and has fixed transaction fees, so there’s no need to buy different tokens for fees and no fluctuation in price. It’s faster and more scalable than Ethereum. Also, you don’t need to go through an exchange to move your fiat onto the blockchain; just a bank transfer.
That said, Public Mint is not looking to compete with Ethereum, and we’re part of a large community that benefits and makes use of the evolutions in blockchain technology.
Q22) How fast is the confirmation time of Public Mint?
[Jorge]
A22) Between 3–5 seconds. Transactions are final on the 1st confirmation.
Q23) What is the TX fee of Public Mint? Will the fee increase during peak traffic like Ethereum?
[Jorge]
A23) A transfer of funds in Public Mint costs $0.05 per transaction, and fees do not increase with peak traffic.
@ilde98
Q24) What is the difference with any CeFi or DeFi aggregator?
[Jorge]
A24) That’s a really broad question, you can’t really compare “one thing” to “all other things”. Anyway, that still applies only to the EARN program, and Public Mint is far more, it’s a whole money system that you could compare to Paypal, Venmo, take your pick.
Q25) Why are the fees not paid with MINT and if with fiat?
[Jorge]
A25) The whole point of a fiat-native blockchain is to make sure people don’t need to go to an exchange to acquire a token in order to use the blockchain. If we did accept MINT as an alternative currency for payment of fees, that’d be just the equivalent of selling MINT for USD and then using the USD to pay for fees. That’s not what MINT is for.
MINT has a specific purpose, which is Governance, and to generate revenue for those who stake and participate in Governance.
— Joel|Stakely: Great Jorge, thanks for this questions round!
— Jorge|Public Mint: Wow! On the clock! Which is good because I have to jump into a meeting. I really appreciate well-thought-out questions. Lots of fantastic questions, sorry if I strayed a bit on some, this is really a topic I love to talk about. Thanks, everyone!
— Joel|Stakely: Thanks, Jorge for your time. And congrats with this wonderful project. The AMA is closed!
The winners of this AMA are:
- @Pizotastico
- @pedroi
- @OriolCampos
Congratulations guys, thanks to all!
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