It can be said that cryptocurrencies are popular for computer programming enthusiasts, speculative investors, libertarians and perhaps criminals as well. However, for many other people, they are just an expensive virtual asset on the internet. Less than one percent of the world population is active in using the blockchain technology, either as means of value transfer or as an asset for financial growth and security.
The average Joe has been deterred from learning more about and becoming a cryptocurrency fan, due to a number of factors, including a lack of technological understanding, the difficulty of downloading and configuring a wallet, the fear of having his savings hacked, the rather extreme volatility of digital cash, as well as the generalizations that digital currencies are just for money launderers. That being said, cryptocurrencies are apparently yet to take over the world.
This is where Metal comes and aims to change people’s perception of crypto.
What is Metal?
Metal is the name of a mobile-based platform that wants to encourage users to adopt cryptocurrencies as well as give them the comfort of seamless inter-operability between fiat and crypto world in a fair manner. Metal’s cryptocurrency token is built upon the Ethereum blockchain, as an ERC 20 token.
Metal allows both banked and unbanked individuals to send and receive money on their mobile devices. Moreover, the Metal app will support both fiat and cryptocurrencies.
As explained in Metal’s whitepaper, without an incentive to purchase, cryptocurrency may never reach mass adoption. That is why the company incentivizes people to transact through the Metal app via a reward mechanism called PoPP (aka Proof of Processed Payments). For every user who converts fiat currency into crypto through the Metal platform, both the sender and the receiver earn 5% of the gross amount transacted in the form of Metal tokens, once the payment is completely settled and the bank transfer or crypto issued.
For instance, if one sends someone $100 in MTL, both he and the receiver will get 5 MTL each.
Merchants will benefit as well. They may purchase platform credit with MTL which will entitle them to a discount on all associated payment processing fees and a discount on merchant services. According to the project’s whitepaper, merchants may also receive an additional 5% off payment processing fees for offering a discount when paying with MTL.
The idea is that many merchants may find it advantageous to offer the MTL discount to save on traditional credit and debit card processing fees. Due to the ability to save merchants on processing fees, consumers utilizing the platform will receive significant discounts when making purchases.
Top of Form The 5% reward is a tactic the Metal team is using to add vitality to the platform. In order to avoid gaming the system (eg. People sending money back and forth to gain the 5% reward), the Metal team stated that there will be built in algorithms to detect this type of behavior and disable PoPP for those accounts. Also, there will be a cap on the amount of MTL that can be earned every month. In addition, there is a hard cap on MTL tokens. It is important to note that at some point, all of the MTL will be distributed. However, the platform is expected to have gained popularity by then.
It is important to note that there is a limit to the amount of MTL one can generate through PoPP. The limit is $1,000 per individual per month and $5,000 per business per month.
How is Metal different?
Besides the 5% reward scheme, Metal manages to differentiate itself from other cryptosystems, by being a full-featured banking and payment platform with crypto integrated. It is also a wallet for all cryptos and it provides its users with the following:
- Banking access
- Debit card with FDIC insurance
- A checking account
- Routing number
- Peer-to-peer payments
- Merchant processing
- ACH/wire capability.
Metal will come first as a Web Wallet. Then iOS/Android apps will be offered.
Metal app will allow users to buy a wide range of cryptocurrencies with their external bank account. What's more, the bank account inside Metal can be used instead of using the normal/external bank account. In other words, Metal offers a fully featured banking service.
In terms of the target market, Metal is essentially targeting mainstream consumers, digital currency enthusiasts and small businesses in high-risk industries that services such as PayPal and Square tend to ignore.
Examples of these industries include nutraceuticals, eSports, adult and cannabis industries. Some other markets are also being explored by Metal like that of the 'sharing' economy, as well as small businesses like restaurants and bars. However, Metal seems to be aggressively focused on providing solutions for high-risk merchants. That segment of the market is often neglected and could potentially be very lucrative for Metal if the company finds initial success serving the needs of those merchants, within the first year of the company launching.
When considering competition, it is important to consider both traditional players and new, emerging ones, the later coming from the crypto world.
Traditional players include banks, payment networks, traditional payment processors, debit cards and credit cards. They all seem to be at a disadvantage compared to Metal because of the associated banking costs (for transferring money, as well as administering fees).
Other players from the traditional payments ecosystem, such as Venmo/Paypal are peer to peer transfer apps which link one bank’s account and allow transfer of money between individuals. However, the disadvantage compared to Metal is that they don’t bring the 5% of the transaction to the sender and receiver through, PoPP.
When considering other competing crypto projects, such as Monaco, OmiseGo or TenX, we can notice that their main product offering is simply a prepaid debit card. Such companies allow consumers to link their debit/credit cards to their platform in order to send money. However, Metal goes much further by providing its users and merchants with a fully featured crypto and fiat banking platform (checking, routing number, wiring, etc.) that is FDIC insured (for the US) and currently able to store BTC, LTC, ETH, and ERC20 tokens.
Timing and Trends
Considering the market cap of gold of 8.2 trillion as well as the total market cap of all modern stock markets ($80 trillion), the combined value of all cryptocurrencies ($500 billion) seems minuscule.
However, the trend is an ascending one. Yes, the digital cash market is extremely volatile, but still, it increased from $5.5 billion in January 2015, to $7 billion in the same period of 2016, up to $19 billion in early 2017 and up to its current value (20th of February, 2018) of $500 billion. The crypto market increased more than 26 times, from early 2017 until the day of writing this report.
That being said, being in the crypto market now and trying to bridge the two worlds, crypto and fiat seems to be just right. It is still early enough to make a dent, but not too early to increase one’s chances of failure.
Is Metal Secure?
On the security front, Metal uses a centralized form of Know-Your-Customer (KYC) identification and payments platform to distribute cryptocurrency fairly, via Proof-of-Payment (PoPP). PoPP is important for two main reasons. Firstly, it acts a provable way to identify users and distributing new currency into the Metal platform. For identification purposes, the system will require the user’s social security number or passport ID and a photograph.
It should be mentioned that in July 2017, hackers exploited a flaw in the Parity Ethereum wallet and stole over 153,000 Ether worth over $30 million. However, this multi-sig wallet hack did not affect Metal, thanks to Metal's proprietary anti-money-laundering (AML) and anti-fraud technology.
The Metal cryptocurrency has a fixed supply of 66,588,888 MTL tokens issued over the Ethereum blockchain, out of which 19,300,994 MTL coins are in circulation. According to CoinMarketCap, the current price (20th of February, 2018) of each unit is $4.67. That values its market cap at approximately $90 million. Other interesting data:
- Metal’s operational pool, to be used at the company’s discretion is of 13,378,888 MTL (locked for one year)
- Founders, employees, and advisors will receive each 3,780,000 MTL (vested per person)
- Metal Foundation gets allocated 2,000,000 MTL (To assist projects, partners, and companies for on-boarding)
In the spring of 2018, Metal plans to start integrating the Metal bank account with prepaid debit cards. Users will be able to pay with Metal anywhere credit cards are accepted.
In the winter of 2018, Shopify-style integrations, plugins for online businesses, integrated NFC hardware tap-to-pay terminal, and other features will be integrated.
Metal project has a team with a wealth of knowledge and expertise in the digital currency and e-commerce space. Professionals from Bitpay, American Express, Apple, Dogecoin, VentureMe and Swipe Labs, as well as advisors from BitTorrent, Civic, Alphabit and Purse are all working towards Metal’s success.
1. Marshall Hayner is the CEO and co-founder of Metal. Before Metal, Marshall founded Quick Coin in 2014, a peer-to-peer digital currency with a distributed, decentralized public ledger. Marshall also brought to life a bitcoin event called the “Bitcoin Fair”. Its purpose was to bring bitcoin enthusiasts together and play a part in bringing bitcoin to the masses.
For 6 months, Marshall was the Chief Marketing Officer for Block.io, a firm building blockchain related API calls.
2. Glenn Mariën is Metal’s co-founder and CTO. Glenn has experience in crypto, as he founded Dogechain.info, an online service for the virtual currency called Dogecoin. He also co-founded BitBetween, a payment service provider for virtual currencies.
3. Oscar Munoz is the Chief Compliance Officer for Metal. He has a solid background in risk management and compliance. He worked as an Authorizations Team Leader and Centurion Card Manager for American Express, for eight years. Afterwards, he was part of Visa for almost 7 years.
4. Sid Parihar is Metal’s Chief Designer. Before joining Metal, he spent 8 years at Apple, as a Senior UX Designer. Since Metal’s whitepaper makes references towards Metal’s user-friendly platform, Sid’s experience should prove useful to the team.
The company is also backed by a team of experienced advisors, such as Bram Cohen, the founder and CEO of BitTorrent, one of the world’s leading peer-based technology companies. Bram also founded and managed Chia Network, a company focused on improving crypto-currency infrastructure. Another Metal advisor is Vinny Lingham, a South African entrepreneur, founder and CEO of Civic Technologies, a blockchain based identity management company. He is also General Partner at Multicoin Capital, a venture style fund investing in liquid crypto-assets and a Board Member at The Bitcoin Foundation.
Juan Llanos, a certified Anti-Money laundering specialist since 2003 is also advising the Metal team. He was a Chief Compliance Officer for Bitreserve (now Uphold), a digital payments platform that addresses bitcoin volatility and provides real-time transparency, transaction traceability and proof of solvency.
Metal also has an impressive array of investors backing it up. Erik Voorhees is one such investor. He worked as Head of Marketing at BitInstant, a platform for buying Bitcoin with cash. Moreover, he co-founded and managed Coinapult, a Bitcoin company, providing liquidity and secure wallet services for both businesses and consumers.
Mario Pazos is also a Metal investor. He has over 14 years of experience in varied projects. He worked as a Senior Vice President for Citi and afterward switched to MasterCard, where he was Vice President – Regional Prepaid & Personal Payments Head.
Where can Metal be bought from?
Below are listed some of the exchanges where MTL tokens can be bought.
- Binance: Supported pairs are MTL/BTC, MTL/ETH;
- Cryptopia: Supported pairs are MTL/BTC;
- Livecoin: Supported pairs are MTL/BTC, MTL/USD, MTL/ETH;
- EtherDelta: Supported pairs are MTL/ETH.
One should keep in mind though, that buying MTL in fiat currencies such as USD, EUR, or GBP is currently difficult. It can be achieved first by buying other cryptocurrencies through other exchanges such as Bitfinex, Coinbase or Poloniex.
Moreover, since Metal is an ERC20 token, there are plenty of options for storing Metal tokens safely. Some of these options are listed below:
- Mobile Wallets: Coinomi (Android), Jaxx (Android, iOS)
- Browser/Web Wallets: Jaxx (Chrome Extension)
- Desktop Wallets: Jaxx (Windows, Linux, Mac), MyEtherWallet
- Hardware Wallet: Ledger Nano S, Ledger Blue, Trezor
Aiming to create a bridge between cryptocurrencies and fiat is part of the future. Metal is not the first player in the market to try to do so. Monaco and TenX are two competitors who have a head start, however, neither one of them offers a fully-fledged banking system.
Moreover, Metal’s rewards for using its platforms are really motivating. I believe there is real potential in Metal’s offer, however, there is still a rather long way to go until market launch.
Currently, there is a lack of publicly available products. While the team is accessible on Facebook and Twitter, there is no proof that their product will work as advertised and that it will be able to penetrate the market. At this point in time, Metal Pay could be a risky investment.