// THE ICO IS DEAD, LONG LIVE THE IPO
It’s happening before our eyes. 80% of capital raised to date this year - which is already more than the cumulative lifetime sum of capital ever invested into ICOs - has been raised privately. The promise of public access and the decentralised funding of future waves of technology startups is over.
Regulation is coming from all sides, and regulation means rules and restrictions around the way ICOs can raise capital from the public. Even if regulation from central authorities doesn’t come, others are self-regulating: twitter, facebook & google are cracking down on ICO advertising, whilst MailChimp won’t even let you send emails.
This is good. Investors (not, ‘community’ as the sector likes to pretend to itself) need protection.
But it isn’t just the regulatory risk driving the change. ICOs are 10-30 person projects, requiring $500k-$2M, before even considering post-ICO costs like exchange listings. Budget another million+ for that.
It means the future is actually the past. Private books of business built ahead of public listing on exchanges. No ICO. But an IPO. Far less risk, far less time, far less cost. The exchanges need to step up - they all know it - and become regulated themselves; a safe place for the public to participate. Whilst some are jurisdiction hopping (Binance’s move to Malta looks premature as new legislation is due this month from the MFSB - they will hop jurisdiction again), others (like Coinbase), are biting the bullet with the SEC and other regulators.
As mentioned in my last (admittedly distance) note to you all, we just need to bring the cost of this IPO down. Otherwise, the ICO is truly dead.
// MUST READS
Why the ICO is dead (video)
How cryptocurrencies might affect Central Banks.
Japan becomes officially the world’s largest bitcoin trading market.
// DISASTER OF THE WEEK
Ethereum and Ripple are probably going to be declared unauthorised security issuances by the Securities and Exchange Commission - on what timeline and with what repercussions remains to be seen.
Telegram raised $1.7 billion in its two pre-sales (both private) and according to some leaked information, the messenger platform will not move forward with its public sale.
The development of the first commercial blockchain proof of insurance solution has been confirmed by Marsh and IBM.
Huawei has revealed its new service which is a blockchain technology platform for enterprises and developers.
Nasdaq might be considering to become a crypto exchange.
Sony filed a patent to store Digital Rights on a Blockchain.
IBM is pursuing a patent of proof-of-work for Blockchain IoT.
// ROAD TO REGULATION
Telegram was banned for a day by a Russian Court because the platform didn’t want to provide encryption keys to Russian security agencies.
Riot Blockchain changed its name and offered securities to investors without providing adequate disclosures and now the SEC is prosecuting it.
France is planning to make their country an ICO hub and issue ICO-friendly regulation.
Understanding India’s regulation around cryptocurrencies and what this means for crypto investors.
EU Parliament voted to implement measures to prevent the use of cryptocurrencies in money laundering and terrorism financing.
Christine Lagarde makes another call to regulate cryptocurrencies.
Last week highlights:
YGGDRAH raised $40m for a system of trust-based multidimensional blockchains.
CLN raised $20m for a decentralized payment network powered by communities.
Dock.io raised $20m for decentralized data exchange powered by ethereum.
Verv - May 28, 2018 - A live energy and data trading protocol.
Neoplay - May 5, 2018- A cross-network dicing platform built on the NEO blockchain.
Cryptics - May 7, 2018 - AI Crypto Forecast and Trading Platform.
Swedish bankers make a call to the Central bank to carefully consider the launch of its own digital coin that could end up with digital bank runs. Mt. Gox CEO, who has spent in jail 1 year after 850,000 bitcoins were disappeared, is now on trial for manipulating electronic data. Coinbase recently announced its acquisition of earn.com for $120 million.
World Digital Assets Summit 2018 - Singapore - May 1-3, 2018
Chainges - Amsterdam, Netherlands - May 4-5, 2018
ICO Expo - Zug, Switzerland - May 5-7, 2018
Consensus - NYC - May 14-16, 2018
Token Summit III - NYC - May 16-17 2018
d10e Malta - Malta - May 19-22, 2018
d10e Tel Aviv - Tel Aviv, Israel - June 9-12, 2018
// EOS - DEEP DIVE
Brief: EOS Blockchain is a decentralized operating system which can support industrial-scale decentralized applications. Think of a MacOs/Windows with cryptoeconomic incentive.
TPS: EOS claims to be able to compute millions of transactions per second, but has not publicly proven even 1 TPS. .
Theory: Delegated Proof of Stake (DPOS) is used as a base theory. With DPoS, coin holders use their balances to elect a list of nodes that will have the opportunity to stake blocks of new transactions and add them to the blockchain. In this way a user will be given permission to produce blocks in proportion to the votes that he accumulates - this is how the mining of the currency works.
Consensus mechanism: DPOS leverages the power of stakeholder approval voting to resolve consensus issues in a fair and democratic way. All network parameters, from fee schedules to block intervals and transaction sizes, can be tuned via elected delegates. Deterministic selection of block producers allows transactions to be confirmed in an average of just 1 second. The consensus protocol is also designed to protect all participants against unwanted regulatory interference.
Scalability: EOS will leverage horizontal scalability: While in vertical scalability scaling up is done by adding more processing power, horizontal scalability means scaling up by adding more systems and computers to the resource pool.
Status: The final version to be released in summer, 2018. So far the team has been delivering on time and Dawn 2.0 (2nd version of the software) was delivered in December, 2017.
Advantages: Faster than Facebook or Google; user-friendly (supports distributed applications that have the same look and feel of their centralized counterparts, including eliminating the requirement for the user to pay for every transaction); universal and flexible (any type of application can be built, run, and governed by EOS's operating system, creating a new level of transparency for business).
Issues: EOS is still under development and although there is a strong team behind the promised dream, the functionality is yet to be tested and proven. In addition, EOS is a software and even if the final version has all the promised features, the quality of applications will depend solely on the users (i.e. developers of applications).