As many of you are aware, I’ve been active in endorsing a group of marketers’ endeavors in the Dallas startup community that has become active specifically in the cryptocurrency space. The key members of the group (which has grown and evolved since the beginning of my involvement) were Bruce Bise and Sam Mendez, both interesting and complex individuals that I’ve enjoyed getting to know over the last year. Unfortunately, as of last week, the relationship with their companies has been severed in all forms: the spokesperson relationship I have for their endeavors, them as clients of Roger Wilco, as well as tenants and partner companies of Barista Ventures.
This whole blog post is basically a giant disclaimer, but a couple of pre-disclaimers:
- For the entirety of 2017 through last week, I was paid by Bruce Bise and Sam Mendez to technically vet their cryptocurrency efforts and endorse them where I could, and advise them on a path I could endorse them where I found them to be lacking.
- Most of this blog post won’t be of general interest to anyone but those who were involved with Bruce Bise, Sam Mendez, and bitqyck, inc in part or in whole because of my recommendation. My feelings would not be hurt if you stopped reading now or if you become bored at any point during the next thousand words or so.
- Usually, I’m an “if you can’t say something nice, don’t say anything” kind of guy when it comes to former clients and employers, but due to my very public endorsement of the efforts and work of Bruce, Sam and their affiliated organizations, I felt it necessary to speak directly to what I can and cannot currently endorse.
They originally approached me around a year ago in search of bitcoin. I had previously sold small amounts to friends and family, but due primarily to their large volume needs, we created a legally compliant division of Roger Wilco specifically devoted to catering to the needs of large-volume cryptocurrency buyers. As part of the due diligence we needed to do around selling large volumes of cryptocurrency, we learned about what they were specifically involved in, which was the promotion of what was, at the time, a Scrypt-based cryptocurrency called YoCoin.
As we worked together sourcing cryptocurrency for them, they became aware of my history writing the “Doctor Bitcoin” column, and my generally being known as a guy who really loves and is geeky about cryptocurrency. As a result, they sought and negotiated for me to enter into a paid relationship where I vetted and endorsed their endeavors in cryptocurrency.
I agreed to this for a few particular reasons:
- Bruce and Sam represented what appeared to be a very successful and growing network marketing segment.
- The underlying technology of their cryptocurrency, while not technologically groundbreaking, was fundamentally sound.
- Bruce and Sam both appeared to be genuinely open to understanding and integrating themselves into the culture and ethos of cryptocurrency enthusiasts.
- Bruce and Sam both expressed interest in reinvesting their gains into creating useful tools for cryptocurrency and blockchain.
This was a handshake agreement throughout the time I worked with Bruce and Sam. At several points along the way, we tried to enter into a formalized, contractual relationship with them or one of their shell companies, but no documents we sent over were ever countersigned.
YoCoin Switches to an Ethereum Token
At some point very shortly into my relationship as a sponsored technical spokesperson for Bruce and Sam, YoCoin made the decision to switch to an Ethereum token, primarily to avoid issues they were having around avoiding 51% attacks on the Scrypt-based crypto. I was given some amount of time to review the stated fundamentals of the token (but not the source code). From everything I read, it met the criteria I had for a fundamentally sound cryptocurrency at a technological level, as well as maintaining what I found to be the differentiating factor for most cryptocurrencies: a solid sales team. This differs from other network marketing-led cryptocurrency efforts like:
- OneCoin, where there is apparently a great network marketing effort, but no fundamentally open cryptocurrency beneath it.
- Bitcoin Funding Club, which has no underlying token or openly reviewable software, or product, making it perhaps profitable for some in the short term but vulnerable to regulatory scrutiny in the long term.
In general, my duties of being a spokesperson for Bruce and Sam (operating under the entities GoYoCoin, Inc and FirstMovers, Inc) entailed speaking at various YoCoin network marketing meetings purely about the underlying technology as well as posting online being a general evangelist for cryptocurrency, Bitcoin, and Ethereum. Secondary duties included leveraging my relationships with IBM and its associated partners to keep YoCoin, Ethereum, cryptocurrency, and blockchain in the discussion. In general, I found this arrangement to be very natural due to the fact that many of these things I’d be doing without being paid for it, as well as my fundamental belief in the broader technologies and, given my more intense paid scrutiny on it, YoCoin in specific.
Bruce and Sam switch focus from YoCoin to bitqyck / bitqy
Towards the end of 2016, Bruce and Sam began quietly shifting their focus and emphasis away from YoCoin, and more towards the idea of creating their own cryptocurrency. They were turned on to the idea by a business acquaintance in California who wanted to create a Scrypt-coin that was privately mined. The developer they were being counseled by had the contention that the biggest failing of cryptocurrency was that you cannot cancel out a transaction and that there exists no central authority to arbitrate disputes. I obviously disagreed and told them that I supported the idea of creating a cryptocurrency, but not one that was centrally controlled. I warned them that I would not be able to publicly support an idea like that.
Eventually Sam, then Bruce asked for my ideas on what would make a groundbreaking cryptocurrency launch. After much discussion back and forth, we collaboratively landed on the idea they’ve been broadly pitching as bitqy.
For those who haven’t heard the description:
- bitqy is an Ethereum token that has a dual function: it serves as a digital currency for use in bitqyck, inc. owned digital properties …
- … and it also serves as a conduit to stock ownership in their ventures.
- There were to be 10 billion coins minted, and 1 billion coins initially released.
- The remaining 9 billion coins would be held in wallets owned by Bruce and Sam.
- The default state when the currency was launched would be that no blockchain transactions would be allowed until a master switch was flipped.
- The master kill switch could only be flipped once, and could only be flipped to on, never back off.
- The token would have corporate governance and dividend features, but they wouldn’t be inherent to the token itself, only to subsequent tools and wallets to be developed to decrease complexity and failure points.
The requirements for the token and the overall architecture was worked out primarily by Sam and me; and then vetted by Bruce. After the fact, blockchain consulting group and Roger Wilco strategic partner Caudicum was brought in to vet the architecture decisions for feasibility and implement the code.
Roger Wilco and Caudicum implement the vision for the code.
During this time, I continued to endorse the vision for Bruce and Sam since I had a key role in architecting and implementing the code. The first version of the code was made available on Caudicum’s GitHub account in late December, with minor updates to the code ongoing throughout January and February. Because you only ever get one chance to launch a token correctly, we vetted the code through multiple coding teams with no financial ties to the project, as well as through several paid legal advisors with a similar lack of fiduciary relationship to bitqyck, Inc or Caudicum.
Except for minor updates to the legal disclosure (recently re-published as the “coin constitution“), no new lines of code were added to the token, and it was ready for launch by the end of February. Concurrent to this, Roger Wilco was retained to maintain the code for bitqy.org (an online ledger that would allow early investors to have a record of their investment prior to token launch), and bitqyck.com (a daily deals site where one can be awarded the tokens).
During the fundraising period, Bruce and Sam were exceedingly difficult to connect with. This was a problem for myself, my team, and the team at Caudicum. There were key decisions that needed to be made, including:
- When to launch the token.
- How bitqy.org would integrate with the affiliate management system.
- How bitqyck.com would integrate with the affiliate management system.
- When the various properties would launch.
- When funding would commence to the team tasked with creating the wallet and corporate governance systems and apps.
At some point during this period of time between February and April, Bruce and Sam decided to resume contact with the Californian individual who initially came up with the flawed plan for the centralized cryptocurrency, but this time for Ethereum token development. I was informed that they were severing the relationship with Caudicum moving forward because he “delivered no code.” This, of course, was blatantly incorrect. At the time this statement was made, there was a blog post on bitqy.org with a video of me standing next to Bruce, talking through the token development process that also contained a hyperlink to the GitHub repository.
Rather than argue the point, however, I told them I’d still be happy to endorse the code and the project publicly if they put me in contact with the new developer, and he submitted his code to the same level of public scrutiny the Caudicum-created code was subjected to. This conversation occurred both in writing (via email) as well as verbally in the Barista Ventures offices in Dallas, Texas. They promised to make that contact occur within a matter of days.
As it turns out, either from the time of this conversation or due to a subsequent change of heart, Bruce and Sam were intentionally avoiding contact with myself and my team (something they admitted to in our final meeting). From the time they promised to let me vet the new technology, they showed no good-faith effort to follow through on that promise. Last week, mere hours after fundraising deadlines ended and fundraising goals were met, Bruce and Sam informed me they wanted to cut all ties with myself and my organization. Several baseless accusations were made of me and my team, and because it was clear during the course of the conversation they had made at some time long prior to cut me out of their organization when they no longer needed my endorsement, I saw no reward in arguing the point. They were, in fact, heavily relying on my endorsement and my company’s services until the day before they stated my services would no longer be needed.
I’m a believer in the stated principles of bitqyck, Inc., but cannot vouch for their implementation.
However, due to the deception of my team and the refusal of the new technology organization inside bitqyck, Inc., I have no choice but to publicly state that I cannot in good conscious endorse the current technology platform for bitqy, the Ethereum token for bitqyck, Inc. Since they’ve chosen to obfuscate the source code for the token deployment, we can only trust the word of Bruce Bise and Sam Mendez that their tech team has done what they claim to have done.
The beauty and magic of blockchain technology is that it doesn’t require trust – code can be publicly vetted and smart contract terms can be publicly reviewed. Despite this fact, bitqyck has opted to tread in the footsteps of opaque digital currency organizations like PayPal and OneCoin, who obfuscate their operations and technology behind a cloud of legitimate-sounding terminology. Even sadder still, they didn’t have to go this route, since they paid for and were delivered solutions that would put them on a vetted path to an Ethereum token that would have broken new ground in the world of blockchain and open corporate governance.
On a personal note (this is my personal blog, after all), this whole de-coupling has been disappointing and saddening. I enjoyed my time working with their team, and it was gratifying to craft a sellable story around a once-taboo topic of cryptocurrency and see it readily accepted and promoted by large groups of people. I’ve been along for the ride with Bitcoin since the very early days (when it was supposedly only for hackers and criminals). To see the vision come so close to being realized on the principles of a digital autonomous organization and not cross the finish line is a disappointment that will stick with me for a long time. Only can only hope and trust that the new technology team successfully and correctly implemented the architecture plan for bitqy – something you never want to hear when it comes to cryptocurrency.
I heavily debated the wisdom in making this blog post, and even sat on the idea of posting this publicly for over a week. I don’t want to be seen as the guy who badmouths former clients and employers. Despite quibbles with prior employers upon parting, I’ve refrained from publicly airing dirty laundry. That said, given the volume of money raised using my endorsement, if there’s even a slight chance that bitqyck, Inc. could go the way of OneCoin, I (and my legal advice) felt that it was safer to be publicly on the record as to what I endorsed and when.
If you wish to review the current smart contract the new technical team put together for bitqy, it is available here.
If you wish to review the solidity code architected and executed by Roger Wilco, Inc and Caudicum, it has been removed from GitHub and archived here.