A few days ago, a startup called Bancor raised around $153 million in two hours and twenty-five minutes.
The ICO, short for initial coin offering, followed several similar, equally successful funding events, and the numbers are rising. Prediction market Augur raised around $5.2 million over two months in 2015; this year, its competitor Gnosis raised $12 million in just 15 minutes. And we could only be getting started. The initial coin offering (sometimes also called a token crowdsale) is, in certain ways, similar to an initial public offering. Instead of stock, in an ICO a company sells a number of cryptocurrency tokens. Every ICO is a little bit different, but typically there’s a time limit for the sale, and a set number of maximum tokens that will be sold. Once those limits are reached, the sale is done, and the owners can use their tokens as they please. Tokens are different from shares, though. They can be traded and they have a value, and after a successful ICO this value can easily double. Again, this is similar to an IPO; those who get in early usually benefit from the initial spike in value. But tokens don’t typically give their owners ownership over a part of the company that issued them. Each token is, in fact, a smart contract that can provide additional benefits down the road. For example, the tokens issued by Storj — a decentralized storage solution — can be exchanged for storage space on the platform. If you’re wondering, Storj’s ICO was also successful; the company easily raised $30 million in May 2017. So how do you get in on the action? First, you need to get some ETH, or Ethereum. Thanks to this, most ICOs these days are Ethereum-based, and to participate in the sale, you typically need to exchange your ETH for tokens. Buying ETH isn’t particularly complicated; you can do so on exchanges such as Kraken or Coinbase. If everything went OK, you will receive the new tokens soon, usually within a week. But that’s all theory. Actually participating in an ICO is next to impossible; trust me, I’ve tried. This means that transactions during an ICO will go through slowly, and similar to trying to buy a ticket for the Super Bowl online, your efforts might be in vain. There are also various tricks big players can employ to buy tokens before others; some companies are undertaking measures to make the playing field more even, with mixed success. Finally, ICOs aren’t regulated. A company that sets out to do an ICO will post some rules on a website, and that’s pretty much all you have in terms of regulations. This is me socially precommitting that I will not be an advisor for future ICO projects. — Vitalik Buterin (@VitalikButerin) June 13, 2017 5. Most existing projects that listed me as an advisor never paid me a cent for it. — Vitalik Buterin (@VitalikButerin) June 13, 2017 The result of these issues is that it will be hard for a small player to participate in an ICO. Again, this is similar to many IPOs, where the majority of available shares are pre-sold to banks and funds. The difference is that here, the barriers to entry are mostly technical, not political. Finally, disasters happen. To fix this, Ethereum forked into a new software version, restoring the funds, but the incident led to a big drop in Ethereum’s price. Despite the issues outlined above, the ICO craze currently looks and feels like a bubble. Tiny, unknown startups which barely have a functional product are raising tens of millions of dollars within hours. By amassing big amounts of ETH, which (typically) stays outside the market for a while, every ICO is driving the price of ETH upwards. And the price of ETH is already up some 3500% compared to last year. Here’s how this may look from one user’s perspective. Say you bought 10 ETH in 2016 for a meager hundred bucks. Today, your 10 ETH are worth around $3,500. But say that instead of doing nothing with your ETH, you invested half of it in the Gnosis ICO this April. The price of GNO tokens more than doubled within hours of trading. If you sold those for ETH right away, you’d have roughly 15 ETH, which today would be worth $5,250. This scenario, while theoretical, isn’t uncommon; in fact, with the growth Ethereum has experienced in the last year, gains such as these were easy to achieve. A little bit like building a Jenga tower? That’s because it is. There are currently few people who think this kind of growth is sustainable; and many point out that some sort of correction is necessary. There’s no “cure” for bubbles except to let them run their course and pop, unfortunately. For some, this will end badly. “The wealth of the space is being driven by greed which attracts more than its fair share of charlatan - but there is opportunity, too. Money for nothing will lead to dire straits for some,” Hayter said. On the other hand, the space and possibilities that Ethereum has opened are expanding rapidly. Take Bancor, for example; currently the top dog in terms of money raised via a token sale. The way it all works is complex stuff, and yet raising $153 million seemed easy. Bancor, however, is largely unfazed by the enormous success of their crowdfunding effort. “Bancor stands in the category of Ethereum as a landscape-shaping product,” Galia Benartzi, Chief Business Officer at Bancor, told Mashable in a phone interview. “When the product launches live, and anyone in the world has easy access to creating a smart token, this will change the face of cryptocurrency adoption. We’re very excited in unlocking the power of the long tail.” While extremely ambitious, Bancor is just one of hundreds of startups built on top of Ethereum, and you’ll hear similarly audacious words from others as well. And many of these upcoming startups have ICOs, or token crowdsale events, lined up in the near future. Long-term, the success or failure of this new breed of apps will likely determine the fate of Ethereum. But right now, despite the big numbers that often don’t make sense, the crypto crowd can’t wait for the next ICO to begin. Disclosure: The author of this text owns, or has recently owned, a number of cryptocurrencies, including BTC and ETH. These days, the ICO market is booming. Companies come up with more and more synonyms for this notion: crowdsale, token sale, contribution campaign, and so forth. Even those who have never been related to cryptocurrency, let alone invested therein, weigh on launching a token sale for different purposes. The market is still expanding, and most new ICO’s, whatever they are called, use Ethereum-based solutions to issue their tokens and roll out smart contracts. The hype around ICO’s has not subsided even after the notorious SEC decree that bans all such campaigns in case they don’t meet their requirements. Bitcoinist talked with Andrei Stehno, CTO and co-founder of Blockstarter, the company developing a comprehensive platform that enables anyone to create and hold an ICO. There is some scarcity of such solutions on the market right now, so they hope their solution would be of use. [embedded content] Bitcoinist:Is Blockstarter some sort of an ICO lego? How did you come up with this idea? AS: I wouldn’t say it’s really a lego, but it’s an erector set all right. Our solution doesn’t require some in-depth knowledge of crypto technologies or smart contracts to issue a token or generate a contract. It’s not that difficult to use a regular computer interface, and lots of people do that without knowing the internal workings of a machine. It doesn’t require them to have a profound knowledge of software engineering, or any knowledge at all for that matter. Our concept mainly seeks to do the same for token sale campaigns. If you analyze the entire process sequentially, you can understand how to make everything way simpler. You just need to create a comprehensible and manageable interface for an average computer user who knows the ideology but is not that tech-savvy. The need for such an interface doesn’t pertain solely to ICO’s. That’s the common problem of the entire cryptocurrency industry. That is one of the reasons why it still can’t reach the general public. Bitcoinist: So you think such a solution will be demanded? AS: We think it’s more than a demand, it’s actually needed. Take a look at announcements of ICO’s these days. Literally, thousands of new campaigns kick off every week. And it’s a truly rare occasion when they don’t use an ERC20 token or some other Ethereum-based solutions. Bitcoinist: So, in fact, you’ll enable anyone to hold a token sale? Aren’t you afraid your solution will become a dreamboat for scammers of all sorts? AS: We can argue a lot as to whether one needs to raise money in order to raise more money over a token sale later. What goes without any doubt is that none of those ‘raisers’ have a readily scalable solution. We’ve got the solution, but we’re not ready to roll it out straight away. We’ll hold a few token sales on our engine to create a proof of concept. When it goes far and wide, the solution will be as flexible as possible. Of course, there’s always a risk of a scam. But, what is good, most projects try to heed the risks of dishonest ICO’s flooding the market. The recent paper by the SEC and the halt of Chinese cryptocurrency exchanges make it clear that just one major scam can disrupt the entire progress. Lots of really good projects will become impossible again, in that case, everyone knows that. Bitcoinist: What do you think about so-called boxed ICO solutions? AS: It just means that some agency completely covers literally all needs of a project, including development and marketing. Frankly, it’s a really weird idea, and it has something to do with your previous question. A good honest project wouldn’t want a boxed solution. They are interested in raising funds, and that’s it. This approach has no future. Bitcoinist: What’s a good project then? AS: It’s a group of devoted enthusiasts. Their primary goal is to deliver a product that can actually work and change the world for the better. They raise money to deliver it, and in best case scenario they will make money out of a working solution, not some unhealthy and artificially induced hype. A good project seeks to tackle a problem that lies on the surface, and everyone is aware of. What makes it good is that no-one before them could come up with a working solution. Of course, it’s not just about that. A circumspect economy is also a good project’s feature. A great blockchain project is, first of all, a great economic system. It has to work like clockwork. It has to be described in the clearest possible terms. Everyone should see where’s demand and where’s supply. Lots of projects we know of can’t stand up to this test, and it’s a shame. Lots of people want to invest, lots of people want to develop, but only a few want to understand. That’s why there’s such a great demand for expert opinions. That’s why the institution of advisers is blooming now. Bitcoinist: So, you claim that your project is a good one? AS: Who would think that they work on a bad project after all? It all comes to the motivation of the team. I like our motivation: we’re creating a solution that could help others. Motivation is an important thing when it comes to the matters of survival. It’s rational, after all: if you want just to raise money, it’s much easier to go and buy an island once your campaign is over. A working solution won’t buy you an island, it will buy you a future. And to me, it’s way better. Bitcoinist: Are you going to introduce some rules and frameworks? It all sounds great, but I can’t help thinking about some bad guys fooling everyone. AS: Of course, some rules are required. If you take a look at some notable ICO’s of the past, you’ll see that most of those companies were self-regulated. Some projects pay salaries with their tokens. Waves, for example, couldn’t access their funds until they rolled out their testnet. So, it is a matter of trust after all. Nobody forced them to impose such restrictions on themselves, but they still did. And look at them now! The industry tends to rely on crowd wisdom as well. But it has certain challenges: Bitcointalk, for instance, is obsolete, it’s inconvenient and mobile-hostile. Reddit isn’t focused on the crypto community whatsoever. Ethereum should be more scalable and include some incentive for projects to be completely honest. Bitcoinist: So, are you still waiting for some technological advancements to occur in this area? AS: Of course, there are numerous issues that the general public doesn’t know or doesn’t want to know about. If a major project holds a token sale these days, the Ethereum network goes down. But we still believe that Ethereum is the best technology for scalable solutions there is. So, frankly, I admire their devotion. Bitcoinist: What does the industry’s future look like for you? AS: The future is reserved for services that can effectively harness the power of smart contracts and create infrastructures that reinforce Ethereum capabilities and other platforms for token issuance. Some of them, like Waves or BitShares, are yet to be fully appreciated, so I think we’ll see more projects putting their options to a good use. It will provide for long-term growth of the entire cryptoeconomy, not just Ethereum. It will allow projects to focus on their product, not their crowdsale, and it’s actually one of the best things that could happen to them. People will start looking deeper into the problem. With the important opinions and information in place, it will be really great. The future is no bed of roses, of course, but I’m confident it’s mature, reasonable, and transparent. For more information about BlockStarter and the services they offer, please visit their company website at blockstarter.co. Do you think that the increasing number of ICOs being launched is helping or hurting cryptocurrency adoption? Let us know in the comments below. Images courtesy of Shutterstock, BlockStarter Andrei StehnoBlockStarterICOsinterviews‘);”>
Buy Lots ICO Whitelist
- Give the user back his/her Ether in exchange of their DAO tokens.
- Register the transaction in the ledger and update the internal token balance.
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In this guide you will learn why most ICO’s Will Fail.. On June 12, 2017, an Ethereum based called Bancor held its ICO. It raised $153 million in 3 hours. No, you are not reading it wrong, 153 million…..in 3 hours!!! If that doesn’t get your brain melting, then how about this? The BAT ICO $35 million in 30 seconds!!! That’s near $1.2 million per second! And if that still doesn’t get your jaw dropping, then how about this? Have you heard of UET? UET had an ICO which raised $40,000 in just 3 days. Admirable if not particularly mind-blowing. Why do we bring it up after talking about Bancor and BAT? Here is the sales pitch that they used, “UET is a standard ERC20 token, so you can hold it and transfer it. Other than that… nothing. Absolutely nothing.” And they raised $40,000 in 3 days! Welcome to the crazy world of ICOs! There is no doubt that ICOs have changes the financial landscape over the past 2 years. In the first half of 2017 alone they raised over $1 billion! However, all these insane success stories tend to make us look at facts with rose-tinted glasses. The fact is, that around 99% of all ICOs out there will fail. And that’s not exaggerated doom and gloom, over the last few years, thousands of cryptocurrencies have been created and over 90% of them have failed. We don’t “hate” on ICOs. (Well, we hope more than just a whitepaper) That’s truly brilliant. 🙂 With that being said, let’s start. Firstly, the developer issues a limited amount of tokens. By keeping a limited amount of tokens they are ensuring that the tokens itself have a value and the ICO has a goal to aim for. The tokens can either have a static pre-determined price or it may increase or decrease depending on how the crowd sale is going. The transaction is a pretty simple one. If someone wants to buy the tokens they send a particular amount of ether to the crowd-sale address. When the contract acknowledges that this transaction is done, they receive their corresponding amount of tokens. So, that’s a general idea on how ICOs works. But then why do most ICOs fail. There are two words that makeup cryptoeconomics: “cryptography” and “economics”. While most developers pay attention to the cryptography part, they hardly pay any attention to the “economics” part. As a result of which, it is very rare to find a token whose economic skeleton has been properly and thoroughly mapped out. What is seen is unsustainable token inflation which largely happens because of flawed economic models and the greater fool theory (more on that in a bit). Before we go into all that, however, we need to understand where the fundamental problem of most ICO economic model lies. One of the biggest advantages of ICOs is that anyone can come and raise money for their concept…not a finished product, a concept. There is still a long way to go before that concept can become a product and as with anything, there is a 90-95% chance that it will be a failure. However, many of the early adopters of ICOs have made a killing because of the low entry and the high profit. Look at this, for instance, ICOs made nearly $800 million in the second quarter of 2017 alone! Seeing this trend, the developers shifted their focus. Instead of making Dapps/currencies which added something new and unique to the ecosystem, they started making products for the ICO. Their end goal became: “Build a flashy enough whitepaper to get good money in ICOs”. Because of this rampant speculation and very little due diligence, the “Greater Fool Theory” came into play. Art is a great example of the greater fool theory. So let’s apply the same to ICOs. You have a bunch of dapps and currencies coming up which are bringing in nothing new to the ecosystem. However, because they have been hyped up so much and there so many ignorant investors around, their value increases anyway, and as a result, the tokens face an inflation. The whole ICO situation is scarily reminiscent of another wave that swept us in the late 90’s. They say that those who are not aware of history are bound to repeat it. So let’s do a quick history lesson and turn back the clocks. Around 1997, the internet became big and tech companies began to emerge everywhere. Investors started putting in their money and flipping their investments into huge sums. Common sense went out of the window and every random internet business was making a killing in the IPOs. Too often, an IPO, not profits, was the primary goal of a company’s promoters.” BOOM! He hit the nail right on the head, most of the companies that got millions from their investors failed and some turned out to be nothing more than scams. Eventually, the bubble burst in 2002. Companies crashed and lost millions within a year. One of the most infamous examples of this is Pets.Com which lost $300 million in just 268 days! The parallels between the ICO bubble and the dot-com bubble are a bit frightening. Much like dot-coms, the ICOs have attracted a lot of investors who don’t want to miss out on the gold rush. Much like the dot-coms ALL the investing is done purely from speculation. You have to realize that most of the companies that you are investing in, in ICOs barely have anything ready. Most of them don’t have the alpha version of their end result, it is all based on speculation and the potential of the project. As with anything, most of these projects will fail to get the end results. The parallels are very apparent and it can get real scary thinking about it. But we are not market experts. All we can do is speculate. What is the definition of Utility? Utility means the total satisfaction that is received by the consumption of the goods or services. Most of the ICOs do not maximize their token utility. The tokens should be absolutely integral to the ICO and must increase the overall value of your final product. If you are an ICO developer, then ask yourself this question: If you take away your token does your business fall apart? If the answer is no, then you don’t need a token. There are only a few cases that make sense to tokenize. Most people get tokens only so they can “HODL” it and buy more bitcoin and ethereum in the future! Is that all that your tokens are worth? If you do use tokens for your business, then you need to completely understand its role and maximize its utility. You have to understand that tokens can be multi-purpose tools which can bring in a lot of “oomph” to your business. Your business model should be such that you are exploiting your tokens to the maximum possible limit. (Before we continue, we would like to give shoutouts to the inimitable William Mougayar and Kyle Samani for their brilliant work and research.) by having DAO coins in your possession, you could have had voting rights inside the DAO to decide which projects get funding and which don’t. The tokens create an internal economic system within the confines of the project itself. The tokens can help the buyers and sellers trade value within the ecosystem. This helps people gain rewards upon completion of particular tasks. This creation and maintenance of individual, internal economies is one of the most important tasks of Tokens. It can also act as a toll gateway in order for you to use certain functionalities of a particular system. in Golem, you need to have GNT (golem tokens) to gain access to the benefits of the Golem supercomputer. The token can also enable the holders to enrich the user experience inside the confines of the particular environment. Can be used as a store of value which can be used to conduct transactions both inside and outside the given ecosystem. Helps in an equitable distribution of profits or other related financial benefits among investors in a particular project. If you want to maximize the amount of utility that your token can provide then you need to tick off more than one of these properties. The more properties you can tick off, the more utility and value your token brings into your ecosystem. Now, let’s move onto another interesting concept called “Token Velocity”. Token velocity in simple terms means: Are people going to hold on to the tokens for long-term gain or sell it off immediately? This is a problem with most ICO and token structures because they are being treated more as a vehicle for liquidation than as a store of long-term value. In fact, regarding this, Willy Woo did an interesting case study. He plotted the performances of 118 coins, from the first day of their inception to the day he made the graph. His only qualification was this; the coin should have reached a market cap of at least $250,000 in any one year of its existence. Let’s see what he came up with: Image courtesy: WooBull See that red line soaring triumphantly over everyone else? That is bitcoin. It is the only crypto that has performed consistently and grown from strength to strength. (The blue line above the bitcoin line is a statistical aberration according to Woo). In fact, Woo’s research becomes more interesting when you break it down even further. Here he has grouped the coins together according to the year of their inception. Let’s see how well the coins from each year group performed: Image courtesy: WooBull Yikes! That does not look good at all! What this shows is that every year the coins are performing worse and worse. And the reason for that is simple. More and more scam ICOs are coming in and developers are not making valuable enough projects. People realize their potential as a proper long-term store of values. This is exactly why developers need to pay attention to token velocity. The reason why Bitcoin and Ethereum have such high values is because, they are low-velocity coins. Let’s quantify token velocity (TV): Let’s quantify token velocity (TV): TV = Total Trading Volume / Average Network Value. So, more the trading volume aka more that coin is traded more the velocity. Consequently, less the network value, more the velocity. Now if you examine this from the perspective of bitcoin, then you will know exactly why its velocity is less. So, what should developers do to ensure that they have less token velocity? They need to work and re-examine their tokens. They need to understand whether a token is being fully utilized or not. If you haven’t paid attention to your security, hackers will attack you and they will rob you. That is staggering. The crimes that happen largely fall into three categories: Perhaps the most infamous example of this is the DAO attack. The DAO aka the Decentralized Autonomous Organization was a complex smart contract which was going to revolutionize Ethereum forever. It was a decentralized venture capital fund which was going to fund all future DAPPS made in the eco-system. The way it worked was pretty straightforward. The DAO tokens were indicators that you are now officially part of the DAO system and gave you voting rights. If in case, you and a group of other people were not happy with the DAO then you could split from it by using the “Split Function”. Using this function, you would get back the ether you have invested and, if you so desired, you could even create your own “Child DAO”. In fact, you could split off with multiple DAO token holders and create your own Child DAO and start accepting proposals. And this was where the loophole was created. People saw this in advance and brought it up but the DAO creators assured that this was not going to be a big issue. They couldn’t have been more wrong. On 17th June 2016, someone exploited this very loophole in the DAO and siphoned away one-third of the DAO’s funds. That’s around $50 million dollars. The loophole that the hacker(s) discovered was pretty straightforward in the hindsight. If one wished to exit the DAO, then they can do so by sending in a request. The price of Ether dropped from $20 to $13 overnight. This still remains the worst ICO hack ever. The aftermath of the hack was so extreme that it split Ethereum into two different currencies: Ethereum and Ethereum Classic. Here is something truly scary for you to wrap your head around. Phishing scams have stolen up to $225 million in Ethereum related cybercrimes. In fact, as we have mentioned before, more than 30,000 people have fallen prey to ethereum-related cyber crime, losing an average of $7,500 each. So, before we continue, what is phishing? Phishing is the process by which scammers get your sensitive information (like credit card details) by impersonating someone trustworthy and of notable repute. The scammers usually use email and in some cases, they use social media. In fact, someone has been trying to phish ICO developers by impersonating our very own Ameer Rosic! As a developer, you need to be very very very careful of this. Imagine giving away your card details or, more importantly, your key details just before your ICO! Obviously, the investors get scammed more than the developers. Which is a very valid question. The way that you can allay these fears is by using a multi-signature wallet. The easiest way of understanding how a multi-signature (multi-sig) wallet works like is by thinking of a safe which needs multiple keys to operate. A multi-signature wallet is great for 2 purposes: How does multi-signature wallet save you from human error? Let’s take the example of BitGo, one of the premier multi-sig wallet service providers in the world. They issue 3 private keys. To do any sort of transaction in a BitGo wallet you will need at least 2⁄3 keys to operate. So even if you have a hacker behind you, it will super difficult for them to get their hands on 2 private keys.
Buy Lots ICO Allocation
- No other crypto has as much network value as bitcoin.
- No one wants to trade off bitcoin because they know that there is value in holding it.
And on top of that, even if you lose your private key for whatever reason, you still have that backup key that you had given to your friend.
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- How are they going to use the money that they raise from their ICO?
These come from tech companies selling their future services.
In my stock portfolio, I’m happy to find anything that can give me 10 percent return over the course of a year. These days you can measure a crypto portfolio in 2x, 3x, or even 10x (as in, 1,000 percent). But lately, all this good news has been bothering me. The financial magic works like this: imagine if someone builds a casino in your neighborhood and they fund the entire operation by selling their poker chips ahead of time. With that money, they will pay for every slot machine, every bottle of liquor, every plate in the dining room, and the salaries of every manager and construction worker involved. Would you go for it? Most of us would say no, and even most gamblers would just rather buy some chips when they actually go to the casino. Now imagine that casino is being built by Terry Benedict, the fictional casino owner from Ocean’s 11. Benedict offers you a deal: they’re selling the chips now, but they are only ever going to have 1 million of them total. In the future, the casino’s customers will have to buy chips from you. Benedict has created an artificial supply problem. They even look at Benedict’s past success (he got robbed and got his money back with interest—that’s security!) and his team on this project and they go all in. Even non-gamblers (“investors”) are buying chips and holding on to them. They’re placing bets before the casino is ever built. Heck, why go to a casino when you could stay home and watch your chips go up in value? That’s one of the many problems facing tech companies that do an initial coin offering before they even build their businesses. And just like casinos, these token-operated tech companies have no hope of ever getting any money from businesses, governments, or banks. To unravel this $353 billion problem facing the blockchain tech world, I caught up with Brendan Taylor and Patrick Manasse at MonetaGo. They run an “enterprise focused” (read: businesses, governments, and banks) blockchain solutions company down the street from Modern Consensus’ decentralized office in New York. Modern Consensus: No matter how exciting a blockchain solution is, every ICO seems to suffer from the same flaw. BT: “ICOs attract speculators. The price of the service is then driven by speculation instead of the fundamental value of the underlying service itself. That is a critical disconnect between what the ICO is intended to achieve and what every single ICO actually achieves.” MC: What determines a successful ICO? BT: “A successfully ICO only mean the raise is successful, not that the company is successful. It’s the opposite of what a startup is supposed to do. Patrick Manasse Patrick Manasse: “In a lot of cases, they’re not even building out a prototype. It’s normal in the startup space to conceive a product, work toward a ‘minimum viable product,’ and then work toward the desired product. Even then, you improve it with everything you learn. Google, Amazon, Facebook—they get better every day. A change in a regulation can change how your product functions. PM: “An ICO is primarily a way of raising funds. Putting aside the legality about it, they’re using it to raise money for companies. BT: “The driver for doing an ICO is never in line with the service they’re offering. They are a regulatory grey area. You don’t have to comply with getting accredited investors. It’s an easy and quick way of accessing money in a space where there is plenty of spare cash. People who made a lot of money in bitcoin and ethereum are looking for places to store that cash. On the other side of the coin, the people trying to raise cash see ICOs as a way of getting their funds. To stay in that regulatory grey area, you have to issue utility tokens. That token equals the right to use whatever service that company is offering in a tokenized system. BT: “The only current legal path is by utility token. You are selling the right to use the future service. Ultimately, the tokens will have to be used in a network. When you’re talking about an enterprise solution, none of our clients are authorized to use any tokenized system. So right from the getgo, our clients cannot use a system that uses a token.” PM: “You really can’t take this approach. If you’re trying to do anything in enterprise, you cannot use this type of architecture. So businesses, schools, governments, banks, etc. BT: “Ninety-nine percent of all companies doing an ICO will never be in an enterprise space. They’re trying really hard to make that model work.” MC: Your team never did an ICO, but you are currently running a blockchain in the enterprise space? BT: “The network we launched in India is to mitigate fraud. First of all, our network is not public. It is private permissioned. All participants that are permissioned do see everyone else’s data. The information we are sharing on this network needs to be known by all participants. We are trying to stop duplicate financing. The only way to do that is to share that financing to the rest of the industry. But nobody wants to share who their clients are, what their volume is. How do you get around sharing information without sharing information? Traditionally, you trust a third party. The alternative is to obscure that information or create a digital fingerprint of it. We use the same SHA-256 hashing algorithm. That fingerprint identifies an invoice that is not on our network. Someone would have to find the invoice itself to give you the details. And they will see the same fingerprint registered by the financier. So the real information of the invoice is only held by the customer and the financier.” MC: Should people who have already bought into ICOs be worried? PM: “The SEC has been busting people for straight up fraud. They recently sent out a swooping set of letters to many of the companies that touted as premiere ICOs, mainly because they are very clearly doing something illegal. What we’ve learned in the last few years is that there is a reason why they don’t want any type of tokenization. There are data issues with having any kind of open network. If you’re a bank, you don’t want to publish every single one of your transactions. Really you don’t want to broadcast that information. From an enterprise side, who is going to be actually using an open network?” MC: So an ICO could put a good idea in a bad spot? PM: “There are really only a handful of companies trying to think long term. The arc that we’ve seen is that three years ago, it was just early adopters, a few budding companies. Last year, it was a lot of financial institutions. This year, it was a 500-to-1 ratio of startup companies trying to sell ICOs to a real enterprise company. People have come up with this notion that this is the way to raise a bunch of money very quickly. The long-term prospects of that company are not looking good. Now they are locked into an infrastructure and processes that have a number of issues. It does make for a very crowded marketplace. It makes for a lot of noise. So, we’ll see who’s around in the next few years.” MC: I still do think that blockchain is the future. I just think people are on the wrong wave to the future with most ICOs. Startups need to make mistakes to grow. BT: “We have never tried to be a blockchain. We rely on hyperledger and we provide applications that live on these networks. BT: “The problem we initially had was we tried to ‘boil the ocean’ we took on an impossible task and made everything along the way more complicated. That was never very successful because they were too untargeted. Now we start with the problem and solution and tell them how we use blockchain on the back end.” PM: “Our clients were having a problem with fraud. They wanted to find a solution to make it possible to prevent that. The technology that makes that possible is interesting, but it’s in the background. We’re solutions first.” MC: So yours worked the second you plugged in your servers? PM: “From Day One, our clients were able to see if they had their invoicing right. Nobody will know the details of the financing—the name of the company or anything. ou know the receipt of the finances. And no single party has control over this network. It’s not our company, it’s not one client. If you’re permissioned,you can join the network. You can derisk your entire portfolio and provide lending rates and financing rates. We’re not trying to reinvent the wheel. PM: “Yep. There are companies that get a lot of visibility. Overfunding can impact the trajectory of future financing. That is a tightrope you need to walk. or every company that is funded, there are lots of companies that are not. But most people never hear of the companies that starve.” MC: Is there some portfolio theory here? Getting involved in a lot of ICOs means you cast a wide net. PM: “In a lot of cases, an investor is really looking for that one success. They invest in 10 startups a year or 100 a year. They’re hoping that one or two are ultra-successful. But your traditional business training comes into play: Team, company, and structure. Market and solution. All the way you would judge a company.” MC: What about these venture capitalists who are leaving their funds and going all crypto? BT: “Sometimes you hear of some high-flying investor who has spun off his own crypto fund, but their success is still only driven by the frenzy. A lot of the actual successes are based on speculative valuations. So the fact that someone does create a new coin and the valuation goes up and they cash out—that’s a success for them. Speculation, not real results. You’ll see that die out as these companies fold.” MC: If you advised a project today would you talk them out of doing an ICO? PM: “There’s temptation to raise that easy money. But if you understand the space and understand the systems, you don’t want to go for an ICO. We wouldn’t do one because it’s the wrong choice.” A. The Easy Homes token is a peer-to-peer, quantity committed, secure, private and robust digital medium of exchange for trading and investing. Purchase of Tokens will be available on https://easyhomes.io in the Crowdfunding Dashboard. During the ICO you will be able to purchase Easy Homes Tokens (EHT) using multiple payment methods: BTC & ETH. Account registration will be available once the ICO officially begins. A. EHT will be available on secondary market after the ICO ends. Follow our further announcements to learn more about it. Easy Homes is conducting a preliminary sale of its tokens for existing investors. Each investor will be granted access to an exclusive offer to convert its investment into EHT token at an additional discount. Successful ICOs require a multi-faceted approach to marketing. High profile advertising bans from Google, Facebook, Twitter, LinkedIn, and MailChimp are squeezing the ICO marketing channels available. However, what the bans mean is that other methods of marketing an ICO will need to get more attention. If there was just one platform in the world for people to exchange information about upcoming ICOs and cryptocurrency news, it would make marketers’ lives a breeze. However, that isn’t the case, and marketers’ lives are not a breeze. It is the responsibility of the ICO community manager to engage and optimize the community through the mediums favored by the cryptocurrency community. The channels that fall under the responsibility of the ICO Manager vary, dependent on the company size, its budget, its overall marketing strategy and the ICO manager itself. However, an ICO community manager should be looking to establish a presence and the transparency and trust needed for a successful ICO across as many channels as possible. Channels vary in popularity from country to country, but the main channels favored by the crypto community are: Telegram – Warmly embraced by the cryptocurrency community from its very outset. This platform, in the process of its own ICO, has a “secret chat” facility which allows conversations with end-to-end encryption and other security options. Reddit – The Reddit crypto community is a hard to win over crowd making Reddit management one of the more challenging aspects of the Community Manager role. Generally, the Reddit community is a knowledgeable and unforgiving group, but gain their trust with transparency and regular engagement, and you have the ability to make an ICO. Quora – This content-based channel requires the management of good quality content and keeping on top of updated threads. Again, a knowledgeable community and a community that should be catered to. Facebook – Although ICO advertising was banned from Facebook in January, community building and maintenance through pages and groups are still allowed and popular. Posting and commentating in other crypto groups also gains exposure. Facebook has over 2.2 billion active users and is too big for a community manager to ignore. Twitter – ICO advertising bans came into effect in March, but Twitter is very popular among the cryptocurrency community. By using hashtags and tweeting three times a day, it is possible to draw attention and convey your ICO message. LinkedIn – Another of the social media platforms that implemented a ban on ICO advertising this year, but still popular within the crypto community. There are knowledgeable, professional people in crypto and blockchain groups that have tens of thousands of members, all of which can be accessed and engaged with for free. Steemit – A Reddit style content sharing platform that is becoming more and more popular with the cryptocurrency community. An ICO manager will need to post quality content and engage with other users. BitcoinTalk – Probably the biggest and most important of all the specialized crypto forums. A community manager will need to engage with the forums to promote their ICO project. Regularly updated, it is one of the more labour intensive community channels to optimize, but an excellent channel for coverage. Medium – Similar to Quora in that it is used for publishing important content that conveys the information and message you want to get across. There is some definite blurring in the roles of an ICO community manager.
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Well, a lot depends on ICO management strategy and its intended presence in particular channels, and a lot depends on the actual person.
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You need to keep your community updated, treat them with respect and ensure that your project can do what it says it will do.
Always make sure you can deliver your project on time, and never tell lies. So, that’s my guide on ICOs — thanks for reading! Now that you know what is an ICO, what do you think about this new way to raise money for ideas? Do you want to invest in an ICO? Do you want to create an ICO? Let me know! Also, if you have any questions, I will gladly answer them!