What Is an ICO?

Do you remember the once popular way for new startups to raise funds that didn’t need venture capital — which was highly selective because of the return on investment? It was known as the initial coin offering (ICO). Initial coin offering offers investors with units of crypto-tokens in the forms of Ethereum and Bitcoin.

Some venture capitalist firms even believed that the ICO can disrupt the traditional IPO, or initial public offering, for a company who wants to list their company on the stock exchange to raise funds for their business like their offshoot crowdfunding platform Kickstarter and Indiegogo. However, the difference between ICO and crowdfunding is where ICO is set to fund blockchain based startups and blockchain based projects, normally, it is done in a presale and it has been very successful.

How does an ICO work?

I still remember listening to a podcast which a couple of people were talking about the potential of ICO for startups — especially blockchain based startups and decentralised apps startups. All of these startups became alternatives to the current startups that brought innovation and disrupted the current market like Airbnb that disrupted the traditional hotels’ business model — while Uber had disrupted the traditional cabbies in San Francisco business model, which had highly monopolised the market. These business models were known as the crowd based or marketplaces which were based on trust by both parties.

ICO is an offshoot of crowdfunding where a project or a startup founder decided to run a campaign to collect funds for its project from strangers. Even a Malaysian social enterprise startup that allows college or university students to launch their campaign like Kickstarter to finance their studies without student loans. However, the only difference here will be a token sale being offered to you and you can trade the token on cryptocurrency in a pre-sale. One of the easiest token sales will be the Ethereum token with its market capitalisation and it was done with the Ethereum smart contract app.

The most popular Ether will be the decentralised autonomous organisation (DAO), which is a distributed investment company that’s fuelled by Ethereum. An investor can receive some Ether DAO token with their market price and enable an investor to participate in the DAO governance. Since then, DAO is the blueprint for fundraising and crowdfunding for startups and projects. However, the risk of being hacked is higher compared to traditional fundraising through a venture capital firm or a crowdfunding platform because DAO is vulnerable to hacking and fraud.

Examples for successful Initial coin offering on Ethereum are:

Augur

Melonport

Golem

ICONOMI

Singular DTV

First Blood

Digix DAO.

They are many ICOs for them to explore new ways to connect the application with the token and to leverage smart contracts to keep an ICO secure and mitigate risks for investors to invest. The future of ICO is immense because it enables everyone and companies to easily trade tokens and raise funds freely. This will make the investment and stock trading more inclusive as social entrepreneurs, tech company founders, startup founders and Bill Gates had been envisioned by them. Here is when the global financial system will be disrupted.

Legality

ICO is still a grey matter, but the regulators are aware of them and start to regulate them while other jurisdictions are adopting a wait and see in the latest development of these new horizons.

Cryptoassets: Season 3: Episode 7 – The Birth of Altcoins

Guys! It’s been a long time since doing one of these, and it’s probably because I fell a bit out of the system.  However, I’m back and I’m giving you some information in terms of the other altcoins.  Lots of this information I came across was both interesting and head-scratching.

Within a couple of years of launching, it had become clear that bitcoin was the first fully decentralized cryptocurrency to gain significant adoption, but there were some aspects with which people were not fully satisfied.  For example, bitcoin’s 10-minute block time mean that, depending on when a consumer hit send, it could take up to ten minutes, sometimes more, for the transaction to be appended to Bitcoin’s blockchain.

The delays happened because of the merchant and consumers.  However, it got better as time progressed.

Bitcoin’s first darling…Namecoin

This was the first of its kind.  However, it was more about utilizing blockchain than being a cryptocurrency. There’s really nothing else to say about this coin.

Litecoin

Litecoin was released in 2011 and still remains the one that retains its significant value to this day.  It was developed by Charlie Lee, a graduate from MIT out there in Boston, Mass, who was a software engineer at Google.

He launched it in 2011 of October and was an immediate hit because it was much faster than blockchain’s transaction times.

Ripple

This was created in 2004.  I had no idea that Crypto was created that far back, but Ryan Fugger, a web developer in Canada, worked on this project before Satoshi and Bitcoin.  Ripple also didn’t have miners, but instead had its own algorithm that relied on subnetworkers.  Let’s just say these algorithms were part of a larger decentralized network.  That’s all.

Dogecoin

It’s arrival was in 2013, and being that it was just a joke, Jackson Palmer bought the domain named dogecoin.com and then he got the attention of a lot of people.   After it’s launch, it’s network grew to 70 million in only seven weeks.  Shortly after, it dipped below 20 million.

Dash

Dash, and it’s developer, Evan Duffield, got off to a rocky start.  The coins went on a significant surplus and the reliability had become bleak because the developer not focusing 100% of his attention on dash.

Zcash

Zcash was another cryptocurrency that had a lot of promise.  It reached $1k per coin rather quickly.  At one point, the value peaked at 1 zcash for 3,299 bitcoin, or 2$ million dollars at the time.  You can only imagine what WOULD’VE happened.

After the hysteria, Zcash calmed down and traded between a cool $40-50 bucks per share.

By the end of 2016, the price of bitcoin had reached a level just below $1,000 USD, and there were over 800 cryptoassets in a market that totaled over $17 billion.  At the time, the top assets in order of network value were: Bitcoin, Ethereum, Ripple, Litecoin, Monero, Ethereum, Classic, and Dash

The innovative investor may note from the list that Ethereum follows Bitcoin.

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Cryptoassets: Season 3: Episode 6 – Digicash & The Miracle of Bitcoin

Why Crypto

Sometimes the word crypto makes people shudder, perhaps because they associate it with illicit activity, but that’s a mental bias that is important to overcome.  Crypto is simply a tip of the hat and a shortening of the key technology underlying these systems: cryptography.  As discussed, it’s the science of securely transmitting data so that only intended recipients can make use of it.  Cryptography is used to ensure that cryptoassets are transferred to the intended recipients securely.  Given our digital world and the increasing prevalence of hacks, the secure transmission of resources is paramount, and cryptoassets have such security in spades.

As I’ve said before, there are lots of things that need to happen before crypto, in general, goes to the next level.  Hackers are going to have to be neutralized at some point in order for this to really work.

The Story of David Chaum

Does anyone remember DigiCash’s ecash? Well, basically in the mid-90’s, David Chaum founded a digital payment system called Digicash.  He was a technical genius, but lacked all other skills in terms of personal development (thus why I tell everyone that they better start learning ASAP). Bill Gates, who I’m not particularly fond of, came to him with a 100 million dollar offer — he turned it down.  Netscape also wanted to know about it, but they didn’t like Chaum’s attitude at all.  In 1996, Visa wanted to invest $40 million into the company but Chaum wanted 75 million.

This was the fall of Digicash and they went bankrupt in 1998.  If not, ecash would have been integrated into all browsers and we wouldn’t have to make online payments with credit cards.

Amazing what happens when greed, selfishness, and a rotten personality (and romanticism over an idea) can do to your business and potentiality.

The Miracle of Bitcoin

So, the miracle of bitcoin is remarkable.  We know that.  We know that we can’t see it, touch it, or smell it, which is interesting because I’m still trying to figure out how miners actually work (and will in the later chapters). Paper currency has its value because it’s literally agreed upon.  Every member in society has agreed that this sheet of paper means money.  That’s why it’s famous.

When bitcoin launched, however, it had zero value.  The supporters valued bitcoin, though, and then it became big.

What does this mean? The power of it all lies in the hands of the people, and I truly think it’s unbelievably remarkable!

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Cryptoassets: Season 3: Episode 5 – The Taxonomy of Cryptoassets

As I was saying in the last blog, bitcoin had a hell of a spike in November of 2013, capturing the attention of the People’s Bank of China, which then slapped restrictions on bitcoin’s use. Shortly after, FBI captured the creator of the Silk Road, Ross Ulbricht,  and then the collapse of the biggest exchange happened.

Bitcoin’s price declined over the next two years; meanwhile, developers were building different gadgets to atop it.  When this happened, developers didn’t really want bitcoin; and instead, they would much rather want to use blockchain. Of course blockchain was underlying Bitcoin, and then there was the explosion in the blockchain technology space, catapulting other coins into the sphere.

The Taxonomy of Cryptoassets

As of March 2017, there were over 800 cryptoassets with a fascinating family tree, accruing to a total network value of over $24 billion.  At the time, bitcoin was the largest and most widely transacted of these assets by a wide margin, with a network value of $17 billion, accounting for nearly 70 percent of the total network value.  The next largest cryptoasset by network value was Ethereum’s ether at over 4 billion. – Author

You can see how fast crypto moves.  Potential investment opportunities are identified quickly by investors when they look into the digital siblings….and that’s why it’s time to dive into specifics.

Cryptocurrencies, commodities, and tokens

Cryptassets are either cryptocommodities or cryptotokens, which are finished digital goods and services.  Lots of this can become confusing, so my goal is to explain in simple English and how it relates to you.

If we look at money, which is in your wallet or bank, it’s made on paper that has no value; however, it has the illusion of value. If we look at what commodities are, they’re essentially oil, wheat, copper, steel — those are common commodities.

Digital commodities, on the other hand, are compute power, storage capacity, and network bandwidth.

These digital commodities, when provisioned via the blockchain network, become just as important and turn into cryptocommodities.

Cryptokens are in the beginning stage of it all.  Because they require currency and commodities, it will take longer to gain traction.

This is essentially what these are, and in the next podcast, I will be talking about the cryptocurrencies today.

Listen to “Cryptoassets: Season 3: Episode 5 – The Taxonomy of Cryptoassets” on Spreaker.

 

 

Season 3: New Book Series! Cryptoassets!

It’s been an absolute long time coming!  I was thinking about it while walking up and down the aisles of the bookstore at the shopping plaza where I work.  I asked people and my content writer some questions about what book should I dissect next.  Over the past few years, I’ve gone over a lot of things in terms of personal development: Lewis Howes, Dale Carnegie, Lisa nichols, Stephen Covey….you name it.  However, Tim Ferriss, which has had a lot of plays on my podcast, and Tony Robbins, which has also had a fair amount of plays, are the only books I’ve gone over in terms of money and time-management.

So, I think it’s time.  Yes, for those returning, I was dissecting the Tony Robbins: Unshakeable book for some time, but I do believe that the historical investing will become obsolete.  When the markets crash within a three year period, the American public will have had enough with how corrupted the system is.  I think now that we can control our own assets, and with the emerging blockchain, it’s time!

Testimonials

Newcomers often try to wiggle their way into the world of accepted financial tools.  Most fail miserably.  But cryptocurrency and its accompanying blockchain technology have made their mark and will likely have an ongoing impact on how we all do business.  Burniske and Tatar (authors of this book) have written an increidble comprehensive book that explains what you need to know about this new asset class. – Douglas Goldstein

Cyptoassets provides a one-stop shop for learning about this new asset class.  You’ll learn about their colorful histories, how to apply fundamental valuation techniques, and practical tips to navigate the at-times turbulent markets. – Matthew Goetz

This book is a must-read for an financial advisor who wants to stay on top of the shifting asset and technological landscape.  Advisors would be wise to familiarize themselves with cryptoassets before their innovative clients approach them for an intelligent cryptoasset discussion! – Fred Pye

Chapters

  • Bitcoin and the Financial Crisis of 2008
  • The Basics of Bitcoin and Blockchain Technology
  • “Blockchain, Not Bitcoin?”
  • The Taxonomy of Cryptoassets
  • Cryptocommodities and Cryptotokens
  • The Importance of Portfolio Management & Alternative Assets
  • The Most Compelling Alternative Asset of the 21st Century
  • Defining Cryptoassets as a New Asset Class
  • The Evolution of Cryptoasset Market Behavior
  • The Speculation of Crowds and “This Time Is Different” Thinking
  • “It’s just a Ponzi Scheme, Isn’t It?”
  • Fundamental Analysis and Valuation Framework for Cryptoassets
  • Operating Health of Cryptoasset Networks & Technical Analysis
  • Investing Directly in Cryptoassets: Mining, Exchanging & Wallets
  • “Where’s the Bitcoin ETF?”
  • The Wild World of ICOs
  • Preparing Current Portfolios for Blockchain Disruption
  • The Future of Investing Is Here!

With so much information out there with people talking about Crypto from online blogs, this is really going to be the best breakdown because I got the book of the ages on my hand.  Stay tuned for the introduction Friday!

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