What Is Populous? Full Investment Review

What Is Populous? Full Investment Review

Populous Review – The first project of its kind to bring Invoice Trading (also known as Invoice Factoring) to Cryptocurrency.

Populous have the first mover advantage in an existing and gigantic industry worth $3 Trillion per year. With their truly disruptive business model, Populous have been gaining incredible traction recently as investors have woken up to the true potential of the project.

In this article, we’ll be giving our 100% honest review, to help you decide if this project is the right investment for you or not.

 

 YOU WILL LEARN:


What Is The Populous Project?

Will The Populous Token Increase In Price?

How To Buy And Store Your Populous Tokens

Our Opinion On The Populous Project

 

CONTENTS

  1. What Is Populous?
  2. How Does Populous Work?
  3. Are Populous Solving Real Market Problems?
  4. Will Populous Tokens Increase In Value?
  5.  Team & Roadmap
  6. Selling Points
  7. Barriers To Success
  8. Extra Points
  9. Where To Buy & Store Populous Tokens
  10. Is Now A Good Time To Buy Populous?
  11. Conclusion
  12. Follow Future Posts

1. WHAT IS POPULOUS?

In Their Words

“Populous is a global P2P (peer-to-peer) invoice discounting platform built on Blockchain technology. We combine the trust, transparency, security, and speed of Blockchain with our proprietary smart contracts to directly pair invoice sellers and lenders to transact directly and without third parties.”

In Our Words

Populous is a project that allows peer-to-peer invoice trading, hosted on the Ethereum blockchain. You’re probably wondering what invoice trading is and how it can be such a huge market at $3 Trillion per year; don’t worry, we’ve explained it below for you.

What is Invoice Trading/Factoring?

Imagine you’re running a small-medium sized business. Your company carries out a job for a bigger company and they give you an invoice – a document guaranteeing that they will pay you in the future.

The problem is that payments aren’t usually due immediately – you could be waiting months for it to arrive. In the meantime, you need cash to run your business – how else will you buy new stock or pay for operating costs?

In this situation, some businesses may go to the bank and ask for a loan. However, banks often don’t give loans to small-medium sized businesses and, even if they do, they will usually charge high interest rates.

Introducing Invoice Trading

Out of this problem, invoice trading was invented – what if you could sell your invoice to someone else for 90% of its value?

This way, you might lose 10% of your invoice value, but you can continue to buy stock, pay daily operating costs etc and keep your business running. Also, the bank would have charged much higher rates for a loan, so you’ve just saved by avoiding that route too.

Why Would Anyone Buy An Invoice?

Hopefully, it’s obvious to see why small-medium sized businesses would choose to sell their invoices for a discount – it’s often the only way for them to keep their business running, we’ll now describe why you would want to buy an invoice.

Let’s say your a business which has lots of reserve funds. You could either leave that money in a bank or you could buy invoices and make profits. For example, you buy an invoice for $9,000 which has a value of $10,000.

When the invoice date arrives, you will receive $10,000; you might have had to wait but you’ve now just gained $1,000.

Hopefully, you understand what invoice trading is and why it’s such a massive industry – $3 Trillion per year. If you’re confused by our explanation, check out the very brief video below:

(They use the term ‘Invoice Factoring’ where we say ‘Invoice Trading’ – don’t worry, they’re the same thing)



Populous’ Current Progress

Populous have just announced the planned release of their beta following a successful alpha release.

 

2. HOW DOES POPULOUS WORK?

The platform relies on two key categories of people: Invoice Buyers and Invoice Sellers. In its most simple way, invoice sellers list their invoices on the Populous platform for invoice buyers to bid on. The bidding process last for 24 hours and then the invoice seller makes their choice.

Think: ‘Ebay for Invoices’.

With Populous, there are 2 associated tokens which we’ll describe below and then we’ll talk about how they combine to form the overall process:

PPT Tokens

The PPT Tokens are the tokens available on the exchanges i.e. the one that you can buy if you choose.

PPT Tokens are ‘access tokens’. In other words, users must first buy them in order to be able to access the Populous platform.

Pokens

These are the ‘in platform currency’ and are used to transfer value between buyers and seller. They are pegged to a fiat currency and 1 Poken is equivalent to 1GBP. Pokens can be exchanged with fiat currencies as well as established cryptocurrencies such as Bitcoin.

The Process Explained: For Buyers

Let’s say you want to buy an invoice on the Populous platform. What’s the process?

  1. Buy PPT Tokens from the exchanges
  2. Convert your PPT Tokens for Pokens which you can use within the platform
  3. Bid on an invoice; the higher you bid, the more likely you’ll win the auction
  4. If you win, you’ll pay your Pokens to the invoice seller
  5. When the invoice is due for payment, you’ll receive the invoice pay


The process for sellers is pretty much identical; except that you’re the one listing the invoice and you choose the bid that you wish to accept.


3. ARE POPULOUS SOLVING REAL MARKET PROBLEMS?

Hopefully, by this point, you understand what Invoice Trading is so now we can explain the current system and how Populous aims to improve on it.

Problem #1 – The Pay

We discussed earlier how a regular invoice trading market will involve sellers offering their invoices to buyer for 90% of the value.

Populous’ Solution

In the current system, 90% seems to be the maximum amount companies could expect to receive on large invoices. With the Populous system, invoice sellers should benefit from the advantage of having a greater number of buyers that are competing through the auction bidding system.

If the number of buyers is high, then it is more likely favourable terms will be offered to the invoice seller, such as 95% of the invoice value or lower interest rates.

Problem #2 – Globalisation

Currently, the global invoice trading market is mostly limited to the boundaries of your own country, or at least your continent. What we mean by this is that the majority of invoice trading involves buyers and sellers from the same country.

Note: We stress the word mostly because some international invoice trading does currently occur

Populous’ Solution 

While Populous will begin in the UK, over the long-term, they will be creating a global marketplace to allow buyers and sellers from around the world to buy and sell their invoices. Therefore, if you live in a country with less economic certainty where companies regularly default and are unable to pay their invoice, you will instead be able to buy much safer invoices from more economically established countries.

Essentially, the globalisation of this market should allow for residents of less economically established countries to buy much safer assets. This is similar to stock markets where you can buy stocks with various ratings.

Problem #3 – Traceable Data

With large companies, it is not uncommon for clerical errors to occur, leading to the failure to forward an invoice or duplication. In other words, human error can cause big problems within the industry

Populous’ Solution – Traceable Data

Due to the visibility of the blockchain and the fact that smart contracts will automate the majority of the process, it is highly unlikely these errors will occur within the Populous platform.

Problem #4 – Accredited Investors Only

The majority of current peer-to-peer invoice trading platforms require invoice buyers to be accredited investors

Populous’ Solution – Everyone Is Allowed

Populous do not plan to implement restrictions such as this on investors. Whether government regulations in the future will force them to, however, is yet to be seen

 

4. WILL THE POPULOUS TOKEN PRICE INCREASE?

This is another incredibly important point that people often overlook when investing in Cryptocurrencies – is the token price truly linked to the platform usage?

Investing in Cryptos is not the same as traditional investing – when you buy shares in a company, you’re buying ownership. As the company makes increased profits, the share price will increase and your investment value will rise also.

With the majority of Cryptocurrencies, the tokens don’t represent shares.

Therefore, it’s possible for the company to be successful (i.e the CEO and employees get rich) and yet the token prices may actually fall if they aren’t correctly linked to platform usage.

The ONLY factor determining token price is supply and demand on exchanges.

Obviously, supply and demand are affected by many factors but the price all comes down to the combination of these two. Because of this, it is essential to ask yourself the following two questions

  1. Demand – Will there be token demand on the exchanges?
  2. Supply – Will there be excessive inflation hindering prices?

Let’s first look at demand:

What Are The Sources Of Demand?

The demand for the Populous token stems from the desire of companies or persons to sell their invoices. It should be noted that there are of course a number of established alternatives in the non-Crypto so there will not be a guaranteed demand.

When it comes to the Populous platform, the Populous token is the only way to gain access; since the token is used to bid on and purchase invoices. Therefore, as more people begin to use the Populous platform, the demand for the token should rise and so would the token price.

The Result?

The price of the Populous token has been sufficiently linked to the demand for the platform, meaning Populous have passed this test.

What Is The Likely Inflation Rate?

Populous created a fixed supply of tokens meaning a zero inflation rate but this does not mean that new tokens will not enter the market though. There were a total of 53,200,000 PPT created, 36,000,000 (67.67%) of which were distributed to investors. This means that there are still 17,200,000 PPT to potentially enter the market but how were they distributed?

  • 12,000,000 PPT (22.56%) Team – Populous state that these tokens are locked in for a period of one year, meaning that no inflationary pressure should be felt in the short term.
  • 4,600,000 PPT (8.64%) Business Development – This portion of tokens will be sold over time in order to fund operational costs etc. However, this is less than 1/10th of the total supply meaning any inflation would be beyond minimal.
  • 600,000 PPT (1.13%) Promotion – These were distributed to people involved in aspects such as bounty campaigns. The percentage is so small and these participants would have already received their tokens, so no inflationary pressure should be felt.


Overall, the inflation rate should be relatively low and token demand should be based entirely on the success of the Populous project. As such, we can simply analyse whether we believe this project will be a success – while factoring in price – in order to determine if this is a worthy investment.

 

5. THE POPULOUS TEAM & ROADMAP

As our regular readers will know, one of our mantras here at Crypto Gurus is to “invest in people, not ideas”. It’s based off the principle that an idea is only as good as the people who execute it. As investors, we strongly believe in this principle.

Populous Investor Review

A small section of the Populous team is shown above; their founder and CEO Stephen Williams can be seen in the centre. According to their website, the team consists of 11 members but little is written about them.

The first member to look at is the Populous founder and CEO Stephen Williams; his experience seems varied having spent 14 years at Tramp Magazine as a publisher, as well as founding commercial data analyst company Olympus Research.

Their only listed advisor is Shadi Paterson, he operates on behalf of a Pre and Post-ICO marketing company and has also worked as an advisor for Crypto20, a tokenized index fund.

The fact that we haven’t been able to garner too much information about the team could be seen as a red flag. To counter this, they already at the beta stage with their product so we don’t find it as concerning as we might in other situations

Populous Roadmap

The Populous website and whitepaper do not provide a roadmap for the project but Populous are a lot further along their journey than many of the projects we review. Founded in November 2016, they have just announced the planned release of their beta platform, following a successful alpha release. As such we have no worries about this aspect of the project.

 

6. SELLING POINTS

First Mover Advantage

Invoice trading is clearly an established market but Populous are the first to venture into it from the Cryptosphere.

They should benefit from the first mover advantage as a result. When this is combined with the cost benefits mentioned above, we believe the platform should witness a reasonable level of demand from the offset, even if only out of consumer intrigue.

$1 billion deal

A further huge positive was announced by Populous in September 2017, a $1 billion partnership with global rewards platform, Luxure Global Citizens. This should ensure that PPT investors have regular access to a supply of blue-chip invoices from which they are able to earn regular returns.

Currently $1 billion worth of deals are completed yearly through Luxure and this is forecasted to rise following their own partnership with a Chinese company called Alipay.

$3 TRILLION Existing Industry

Many Cryptocurrencies are considered ‘pioneers’ in the sense that they are aiming to create entirely new industries; similar to the early days of the internet.

While this could be extremely profitable for many, it is also a much greater risk. Populous, on the other hand, are entering into an existing and extremely profitable business. If they’re able to take a decent cut of the business sector, they could have a very successful future


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7. BARRIERS TO SUCCESS

Overall, we are big fans of the Populous project but, as investors, we always aim to be as critical as possible when review a Crypto. It is for this reason that we have searched for some potential barriers to Populous’ success and highlighted them below.

Trust/Adoption

The main problem we potentially see with the Populous project is one that arises with many we review and that concerns slow adoption rates; cryptocurrencies are still in the early adopter stages and face unfair negative connotations from some.

When this is combined with the number of valid alternatives in invoice factoring then Populous may find adoption of their project slower than they would like.

Readers should also be aware that there is a similar Crypto project to Populous known as Hive Project. While we believe that Populous are more likely to succeed in their plans, smart investors should consider the threat from Hive before investing.


8. EXTRA POINTS TO CONSIDER

Beta Release

As mentioned throughout, last month Populous announced plans for the beta release of their project. This is a huge step and signifies that the Populous project is at a great stage of development and if the beta is also a success, the sky is potentially the limit for Populous.

User Interface

Early screenshots and the alpha release show the Populous platform to look incredibly sleek and simple.


9. WHERE TO BUY & STORE POPULOUS

Where To Buy Populous Tokens

Populous tokens are available for purchase on the following exchanges:

  1. Binance
  2. HitBTC
  3. Kucoin

Where To Store Populous Tokens

Populous is an Ethereum-based token which means it can be safely stored on any ERC-20 compatible wallets. Our favourite option is MyEtherWallet which you can download via the link below:

Download Populous Wallet HERE (MyEtherWallet)

For instructions on how to download and install MyEtherWallet, check out the video below (not produced by us).


10. IS NOW A GOOD TIME TO BUY POPULOUS?

There has been some internal confliction for us on whether to include this section or not; this is a static webpage so this section is really only applicable at the time of writing (hence we don’t usually include it) but, with Populous having increased so much in value recently, we thought it would be unwise not to include a warning for investors.

To quote some old yet wise investor advice “buy when there is blood on the streets”. In other words, smart investors usually move against the market and buy when everyone else is selling.

With the Crypto market as a whole, this attitude can sometimes lead to investors missing unbelievable profits. However, we like to apply this principle to Cryptocurrencies which have outstripped their competitors in recent times.

In other words, if a Crypto beats the market average so significantly over a period of time, there is a good chance that they will pull back slightly and move roughly with the market average.

In the case of Populous, it has increased nearly 3x over the past 2 weeks (December 6th – December 20th) compared to the market increasing around 2x.

We might not be expert traders (until we introduce qualified traders to the team!) but we would probably avoid buying Populous at this particular time. Instead, we are waiting for a cheap buying opportunity to present itself in the future e.g. if Populous falls outside the top 25-27 again.

The important point to note here though is that Populous is an interesting project and is on our radar.

 

11. THE CRYPTOGURUS CONCLUSION

We will finish with a brief conclusion to round out this article. Overall, we believe the Populous project to be a solid one; they are operating in an already established market worth more than $3 billion per year and are doing so while offering some clear improvements on the current system.

Success will of course depend on the level of adoption the platform witnesses but early signs have shown a solid level of support for the project. The fact that all tokens sold out in the pre-ICO shows investor support and the $1 billion deal signed with Luxure Global Citizens shows clear supply should be readily available for invoice buyers.

The upcoming beta release means that the Populous project is a lot further on than most of the projects we have reviewed here at CryptoGurus. However, investors should be wary of the recent surge in prices that the project has experienced.

To finish, we would say that we are big fans of the project but we would potentially wait a little bit of time for perhaps a small retracement in prices before buying

That’s the end of the article! Thanks for stopping by and don’t forget to check out our other articles for regular Crypto/ICO reviews and market updates.

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What Is Quantstamp? Full Investment Review

What Is Quantstamp? Full QSP Review

Quantstamp Review – The smart contract auditing platform designed to fix many of the flaws seen with Ethereum smart contracts. 

Smart contracts are a potentially revolutionary advancement in technology. However, one simple flaw can cause the contract to fail, leading to disastrous consequences for users.

As a result, the demand for smart contracts is growing exponentially. With Quantstamp’s ability to audit smart contracts in a scalable manner, the potential of this project could be huge.

In this extensive review, we’ll be analysing the project to see whether it is a worthy investment, we’ll discuss which Quantstamp wallet is best to safely store your coins and we’ll touch on a company concept known as proof-of-caring.

YOU WILL LEARN:


What Is The Quantstamp Project?

Will The Quantstamp Token Increase In Price?

How To Buy And Store Your Quantstamp Tokens

Why Do We Believe Quantstamp Is An Excellent Investment?

 

CONTENTS

    1. What Is Quantstamp?
    2. How Does Quantstamp Work?
    3. Are Quantstamp Solving Real Problems?
    4. Will Quantstamp Token Prices Increase?
    5. Team & Roadmap
    6. Selling Points
    7. Barriers To Success
    8. Extra Points
    9. Where To Buy & Store Quantstamp Tokens
    10. Conclusion
    11. Follow Future Posts

 

1. WHAT IS QUANTSTAMP?

In Their Own Words:

“A security verification protocol for smart contracts that improves the security of Ethereum. The advantages of the security protocol include automation, trust, governance and ability to compute hard problems over a distributed network.”

In Our Words:

The Quantstamp project is aiming to improve the security of Ethereum smart contracts by fixing fatal flaws in their code such as those which led the the DAO failure in 2016 or recent parity wallet hacks.

Current Progress

Quantstamp have already demonstrated the demand for their platform with their recent smart contract audit of the Request Network ICO.

 

2. HOW DOES QUANTSTAMP WORK?

The Quantstamp protocol will consist of two parts;

  1. Automated Software – The automated software checks the smart contract contract code for flaw
  2. Manual Checks –  In the long-term, Quantstamp aims to allow for fully automated smart contract checks via their software. However, until this becomes a reality, Quantstamp will be semi-automated i.e. they will use a combination of automated software combined with human participants that manually check the contracts and receive tokens as a reward.

In this section we will focus on the auditing process; as it is the main focus of the Quantstamp project. We will cover a few other processes later as we discuss the uses of the Quantstamp token (QSP).

The Auditing Process

If a developer wants to deploy a smart contract, they can submit their code to the Quantstamp project.

Depending on the security needs of the programme, the developer can choose how much bounty to send i.e. how much financial reward they will pay for the auditing. The more that they offer, the more likely it is that many developers will manually study the code.

A report is then produced which classifies the smart contract issues based on their severity,  ranging from 1 for a minor warning, up to 10 for major vulnerability.

Private Or Public

When requesting an audit, the developer can choose to have a private report which is encrypted and only accessible by the developer, or the developer could choose to have a public report meaning anyone would be able to view it.

Foolproof?

While Quantstamp cannot 100% guarantee flawless source code, it does provide a much higher degree of assurance that the code is secure by using both automated and crowdsourced methods.

In order to understand exactly how the automated and manual checks of smart contracts will occur, let’s look at the different categories of individuals that will help the network to improve over time:

Software Contributors (Automated) – In order to move towards a fully automated system, Quantstamp will need to upgrade their software. Not only will Quantstamp hire developers with the use of their ICO funds, they will also encourage the community to contribute by offering financial rewards in the form of QSP tokens to software developers who provide software. This software will be open-source, meaning that other members of the community will also be able to verify its validity

Validators (Automated) – These individuals simply run a node on the network. In other words, they contribute computer processing power but no technical expertise. In return, they receive QSP Tokens.

Bug Finders (Manual) – As mentioned before, the initial stages of Quantstamp will involve manual smart contract checks which will be carried out by bug finders. As a result, they are paid in QSP Tokens

 

3. ARE QUANTSTAMP SOLVING REAL MARKET PROBLEMS?

Problem – Smart Contracts Can Have Flaws

To quote Quantstamp’s whitepaper: “Blockchain networks are secure but smart contracts are not”; there have been a number of events over the last few years that have proved this to be the case; For example, a hacker famously stole $55 million in Ether from the DAO in June 2016, leading to its collapse.

Technically though, he didn’t steal anything because he actually followed the rules outlined by the smart contract. In other words, due to an avoidable mistake in the smart contract, a huge amount was taken from investors. This contentious time in Ethereum’s history  is what ultimately split the community and led to the creation of Ethereum Classic.

Issues like this raise serious trust issues around Ethereum smart contracts and will most likely result in distrust from the public, leading to slower adoption.


QUANTSTAMP’S SOLUTION

We’ve pretty much covered this in the previous section but we’ll recap also – Quantstamp will provide a scalable method to audit smart contracts. To begin with, this will be carried out manually but, in the long term, the process will be completed automatically with the use of software developed by Quantstamp themselves and the community.

The result of this should be to avoid smart contract bugs, allowing them to function correctly. In turn, this should increase public adoption by avoiding PR disasters such as those seen in the past with the famous collapse of the DAO.

With the rapid increase in the number of platforms being hosted on the Ethereum network, it would be an understatement to say that there could be a huge demand for this project.


4. WILL THE QUANTSTAMP TOKEN PRICE INCREASE?

This is another incredibly important point that people often overlook when investing in Cryptocurrencies – is the token price truly linked to the platform usage?

Investing in Cryptos is not the same as traditional investing – when you buy shares in a company, you’re buying ownership. As the company makes increased profits, the share price will increase and your investment value will rise also.

With the majority of Cryptocurrencies, the tokens don’t represent shares.

Therefore, it’s possible for the company to be successful (i.e the CEO and employees get rich) and yet the token prices may actually fall if they aren’t correctly linked to platform usage.

The ONLY factor determining token price is supply and demand on exchanges.

Obviously, supply and demand are affected by many factors but the price all comes down to the combination of these two. Because of this, it is essential to ask yourself the following two questions:

  1. Demand – Will there be token demand on the exchanges?
  2. Supply – Will there be excessive inflation hindering prices?

Let’s first look at demand:

What Are The Sources of Demand?

The demand for the Quantstamp platform stems from projects requiring their smart contracts to not contain fatal flaws. The demand for this is growing at a rapid rate as more and more projects are being hosted on Ethereum. However, this doesn’t automatically create demand for the token.

In the case of Quantstamp, projects can only make use of Quantstamp’s services through the purchase of tokens via the exchange. As more projects wish to use Quantstamp’s services, the demand for the token will rise and the price should also.

The Result?

The price of the Quantstamp token is sufficiently linked to the demand for the platform. Quantstamp has passed this test.

What Is The Likely Inflation Rate?

Quantstamp created a fixed supply of tokens meaning a zero inflation rate but this doesn’t mean that new tokens won’t enter the market though. A total of 65% of the tokens were sold during the ICO, meaning 35% of the tokens will enter the market at some point so how will they be distributed?

  • 20% Team and Advisors – Quantstamp state that these tokens are locked in for a minimum holding period but no time-scale is given, this should still mean that no inflationary pressure is felt.
  • 10% Core Activities Reserve – This pool will be sold over time in order to assist with operating costs. This is less than 1/6 of the quantity sold in the token sale, meaning inflation won’t be excessive.
  • 5% Community Development – These will also most likely be released over a long period of time but, even if they were all listed at once, the small percentage means little effect would be had.


Overall, the inflation rate should be relatively low and token demand will be based entirely on the success of the Quantstamp project. As such, we can simply analyse whether we believe this project will be a success – while factoring in price – in order to determine if this is a worthy investment.


5. THE QUANTSTAMP TEAM & ROADMAP

Quantstamp Team

As our regular readers will know, one of our mantras here at Crypto Gurus is to “invest in people, not ideas”. It’s based off the principle that an idea is only as good as the people who execute it. As investors, we strongly believe in this principle.

Above is a small subsection of the Quantstamp team; a team consisting of eleven members (soon to be thirteen with the arrival of two new Senior Engineers) and eight additional advisors. The first names to look at are the Co-founders: Richard Ma and Steven Stewart.

Ma has experience as an algorithmic trading fund manager but it is Stewart that really stands out. Hired by the Canadian Department of National Defence as a computer systems analyst, before he had even completed his undergraduate degree, he is clearly a stand out individual. Another member with stand out credentials is Vajih Montaghami; a man with experience as a software engineer at both Amazon and Google.

Moving on to their advisors, the first name on their list, Evan Cheng, has spent seven years as a senior manager at Apple before moving on to his current position as a director of engineering at Facebook. He is also becoming somewhat well know in the Cryptoverse; having served as an advisor for both Cindicator and Chainlink recently.

Other impressive advisors include Chris Miess; the former CFO of TenX, Min Kim; who has worked with Tim Draper, a man we have previously profiled in our Datawallet review and Dr Vijay Ganesh; a professor at the University of Waterloo who is very highly regarded by his peers.

Quantstamp Roadmap

Quantstamp were founded in June 2017 and have achieved significant progress in a short amount of time; just four months later they completed their first successful, semi-automated audit of Request Network.

Notable milestones for the company’s future include:

  • February 2018 – Complete an audit using version 1 of the analysis software
  • April 2018 – Deployment of the test network
  • August 2018 – Release mainnet version 1


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 6. SELLING POINTS

First Mover Advantage

Despite the vast need for smart contract auditing, Quantstamp are the only project we are aware of that are offering it at this time

Coinbase Networking

Recently, Quantstamp pitched to Coinbase, one of the largest projects in the Crypto-space. While the report about the pitch was rather vague, it’s certainly a positive sign that the team are networking with such a huge name.

Growing Demand

It seems like there is a new ICO launched on the Ethereum network virtually ever day. With the rapid growth of the prevalence of smart contracts, and particularly those hosted on Ethereum, we would expect huge demand for Quantstamp’s services over the next few years.


7. BARRIERS TO SUCCESS

Overall, we are huge fans of Quantstamp and believe they are potentially one of the most undervalued projects in the market (currently positioned at 120th).

However, as investors, we always aim to be as critical as possible and search for barriers to success which is why we’ve highlighted a few potential hurdles below:

Trust/Adoption

Quantstamp say that current smart contract security efforts rely on users trusting that no bad actors exist within in a company. However, their project involves trusting a system that has gone through limited testing. However, they have completed a successful audit of the Request ICO so they soon should witness an increased demand for the project.

Competition

While Quantstamp should not face any direct competition, a number of companies are focusing on smart contract creation and the lowering of costs involve, including Etherparty and Blockcat. If as mentioned before, people are slow to trust the Quantstamp system then these competitors will begin to come into play.

8. EXTRA POINTS TO CONSIDER

Full automation

Many people argue that smart contract audits could never be fully automated; human judgement is required to understand the logic and intent of a smart contract. For example, software can spot bugs which may cause the contract to malfunction but they may not be able to detect errors that cause coins to be sent to the wrong person, or detect that the wrong formula is being used to calculate the payoff of a smart contract.

Tier 1 Investors

A final positive point that jumped out to us here at CryptoGurus was that a number of their tier 1 investors agreed to a lock in period for their investments. While the time period was unspecified, the investment totalled more than $1 million and we view that kind of long term commitment to a project as a huge positive.

Proof-of-Caring

Quantstamp also announced plans for version 2 of their proof-of-caring concept. This is a way of rewarding loyal members of their community and was originally established before the presale offering incentives such as early access. It has not yet been announced what will be involved with version 2 but will run along the same lines.

For us, this is little more than a nice marketing scheme but it does show a commitment from Quantstamp and that they recognize the importance of their community.

 

9. WHERE TO BUY & STORE QUANTSTAMP

Where To Buy Quantstamp Tokens

Quantstamp tokens are available for purchase on the following exchanges:

  1. Binance
  2. Kucoin
  3. Huobi

Where To Store Quantstamp Tokens

Quantstamp is an Ethereum-based token which means it can be safely stored on any ERC-20 compatible wallets. Our favourite option is MyEtherWallet which you can download via the link below:

Download Quantstamp Wallet HERE (MyEtherWallet)

For instructions on how to download and install MyEtherWallet, check out the video below (not produced by us).

 

10. THE CRYPTOGURUS CONCLUSION

To close out this review, we will finish with our conclusion; it is clear there is a need for securing smart contracts and Quantstamp are providing a very reasonable solution. The success of this project will depend on the level of adoption witnessed and the fact that Quantstamp have already successfully completed a semi-automated audit offers a lot of hope.

Not only do the team seem in this for the long haul but the fact that a number of big investors agreed to a lock in period for their investments, shows how many important players see the long term potential of this project.

Considering that Quantstamp is currently placed at 120th (not even in the top 100!) in the market at the time of writing, we believe that this project could be undervalued and we are personally considering an investment.

That’s the end of the article! Thanks for stopping by and don’t forget to check out our other articles for regular Crypto/ICO reviews and market updates.

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Disclaimer: None of the above is financial advice. Always do your own research.

 

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This article has been provided by the CEO; Tom Heavey and Business Analyst; Aaron Laver.

3 Reasons Why Hdac Is The Worst ICO of 2017

What Is Hdac Coin? ICO Review

 

Hdac, also known as Hyundai DAC, is an Internet of Things (IoT) platform supported by the huge name of car manufacturer Hyundai.

The Hdac ICO is creating a real buzz in Korea; while little has been mentioned of the project outside of Eastern Asia, could that all be about to change?

Originally, Hdac actually approached us to create a sponsored article for them. However, after reading more about them, we had to turn them down as we simply couldn’t endorse the project. Read more to find out why in this 100% honest Hdac review.


YOU WILL LEARN:


What Is Hdac?

Why Hyundai Are Creating A Coin For The Internet Of Things

Is Hdac Better Than IOTA?

Why The Hdac ICO Is A Terrible Investment

 

CONTENTS

 

In this article, we’ll begin by outlining the idea behind Hdac and how they will attempt to build their project. After that, we will move onto our opinions of the ICO.


1. WHAT IS HDAC?

Standing for Hyundai Digital Asset Currency, the Hdac team describe their project as “an Internet of Things (IoT) contract platform based on the blockchain”.

In Our Words

A blockchain based platform that allows IoT (Internet of Things) devices to communicate with one another, while handling payments, data storage and identity authentication.

A Little Bit of Background

The Hdac project, with its native Hdac coin, is a collaboration between Hyundai BS&C, DEXKO (A Korean Exchange that will launch in February 2017, this is also where Hdac will initially be listed), Double Chain and Hyundai Pay. As such, the Hdac project doesn’t fall under the same bracket as Hyundai Motors.

What Is The Internet of Things?

In the simplest of terms; the Internet of Things is the connecting of any device over the internet. This can include: Mobile Phones, Fridge/Freezers, Cars and even Kettles. It is predicted to become one of the most important technological upgrades to occur over the next few decades. You can find a brief explainer video below:

 

What Is An IoT Contract?

An IoT contract is a ‘Machine to Machine’ (M2M) service that controls all the devices. An expansion of a regular smart contract, where the programmer shares the address of the device which will be controlled on the blockchain through Hdac.


2. HOW WILL HDAC WORK?

We never like to mislead our readers by pretending to understand things that we don’t fully grasp which is why we have to be 100% honest here and say that the highly technical nature of the whitepaper presented us some challenges.

Therefore, we strongly recommend that you check out the Hdac whitepaper for yourself to clarify any of the points mentioned below.

Having said that, we’ll still do our best to explain how the Hdac project will work.

The Platform

The Hdac platform will allow digital assets to be built upon it with the ability for custom tokens to be created (similar to Ethereum). Built on Multichain technology, it will feature a number of both private and public blockchains which will attempt to allow for any necessary scalability in the future.

The big plan for platform implementation surrounds SMART homes; Hyundai BS&C are planning a series of luxury apartments that will showcase the Hdac blockchain and its uses. Other potential uses include SMART Cars which will use facial recognition to create a secure car sharing app.

The Token

Users will either be able to purchase the Hdac token on the exchanges or mine them, 12 billion Hdac tokens will be created for this purpose over 170 years with the block reward halving every 6 years (Starting at 5000 Hdac).

Hdac will be opening a number of ‘Cafés de Block’, the first of which will open in Seoul in December, where payment in Bitcoin and Hdac will be accepted. Other potential uses Hdac list include: Car Rentals, Toll Roads, Car Parking Fees etc.


3. THE HDAC TEAM

Later on, we will cover the 3 reasons why we believe this project is potentially the worst high-profile ICO from an investor’s perspective. First though, we’re going to discuss the team as this is perhaps the single redeeming quality for the project. 

 

What is Hdac? Full ICO Review

 

Pictured are just a small number of Hdac’s overall team; with 18 members and 7 advisors the Hdac team looks pretty stacked. Starting from the top; Dae-Sun Chung (Founder) is the CEO of Hyundai BS&C, while his aunt and uncle are the CEOs of Hyundai Group and Hyundai Motors respectively. Chung’s accolades stand on their own and his close connections can potentially benefit the project also.

Taking a look at the project’s advisors, a number of names stand out; Eddy Travia, CEO of Coinsilium, Caitlin Connors, CEO of TheFoxTheory, Larry Kim, CEO of HyundaiPay, Patrick Storchenegger, Manager at PST Legal and consulting. We have to admit that, despite our opinion of Hdac, the team does appear to be a strong one.


4. THE HDAC ROADMAP

2017: Hdac Token Sale

  • Hdac consensus algorithm (Launched), Hdac operating environment field test (Completed), Hardware Wallet (To launch), Advanced Security Module (To launch), Hdac apps API To launch).

2018:

  • Hdac operating environment (To launch), Hdac IoT Contract PoC, IoT authentication and device control, Private Blockchain PoC, Smart IoT diffusion PoC

2019:

  • Practical application of Hdac IoT Contract & Smart Home (To launch), Practical application of Hdac IoT Contract & Smart Factory  (To launch), Hdac Hybrid Blockchain (Development).

2020:

  • IoT High Speed ​​Transaction Distributed Processing Blockchain (Development), Private Blockchain Security Enhancements, Advanced Security Module Ver 2.0 (To launch), Hdac Hybrid Blockchain Network Live Operation


5. WILL THE HDAC COIN PRICE INCREASE? 

This is another incredibly important point that people often overlook when investing in Cryptocurrencies – is the token price truly linked to the platform usage?

Investing in Cryptos is not the same as traditional investing – when you buy shares in a company, you’re buying ownership. As the company makes increased profits, the share price will increase and your investment value will rise also.

With The Majority Of Cryptocurrencies, The Tokens Don’t Represent Shares.

Therefore, it’s possible for the company to be successful (i.e the CEO and employees get rich) and yet the token prices may actually fall if they aren’t correctly linked to platform usage.

The ONLY Factor Determining Token Price Is Supply And Demand On Exchanges.

Obviously, supply and demand are affected by many factors but the price all comes down to the combination of these two. Because of this, it is essential to ask yourself the following two questions:

Demand – Will there be token demand on the exchanges?

Supply – Will there be excessive inflation hindering prices?

Let’s first look at demand:

What Are The Sources of Demand?

The Hdac coin is used to make payments throughout the system. As a fundamentally important element of the platform, the Hdac coin will increase in price IF the platform usage increases over time.

What Is The Likely Inflation rate?

The total supply will be 12 Billion.

  • 7% will be sold in the ICO
  • 7% will be retained by the company
  • The remaining 86% will be gradually mined over time – only 7% of which which will be sold in the ICO.

Due to the very low number of coins being sold – just 7% – the inflation rate of Hdac could be very high thus devaluing an investment year-on-year

 

6. HDAC vs COMPETITION

Hdac describe their plans to be a currency related to the Internet of Things. Therefore, you would think that Hdac would make reference to the ways in which they are better than their main competitor; IOTA, right?

Wrong.

Instead, in Hdac’s whitepaper, they draw entirely irrelevant comparisons between themselves and Bitcoin & Ethereum.

Why Are These Irrelevant?

Bitcoin – Bitcoin is attempting to become the digital gold or digital currency of the future, not related to the Internet of Things.

Ethereum – Ethereum are working to become a platform to allow for the creation of smart contracts. While this could relate to the Internet of Things, it certainly isn’t direct competition.

Why Compare Hdac To Bitcoin & Ethereum?

 

We can’t be certain but we believe the reason is simply to convince investors to participate in the ICO.

Think about it like this:

Bitcoin and Ethereum are the two biggest Cryptocurrencies around by some distance, so many average investors may be convinced that Hdac is a great investment simply because it has some advantages over the two biggest Cryptos

Are Hdac Scared Of IOTA?

With Hdac, we believe that they are scared of the real competition; IOTA. Most likely, this is because they didn’t like how they matched up on paper.

Hdac quote a transaction time of 160 transaction per second on public chains, 500 tx/sec on private chains and the future target of 1000 tx/sec.

While this might be scalable enough for some platforms, we’re talking about the Internet of Things, which will require a huge number of micro-transactions to be processed every seconds – 1000 is unlikely to be anywhere near enough to allow for true scalability. 

IOTA, on the other hand, is based on a technology called the ‘Tangle Technology’ instead of the blockchain. As a result, it is infinitely scalable so that transaction speeds won’t be an issue.

The tangle technology also allows IOTA to boast other advantages including; higher security and zero fees.

That’s why we’ve concluded that Hdac holds very little competition to IOTA

It should be noted that IOTA is not flawless and has suffered its own issues in the past. However, in comparison to Hdac, it’s light years ahead.

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3 REASONS WHY HDAC IS THE WORST ICO OF 2017

Let’s begin this with one very clear point – we think that the Hdac ICO is awful for any investors out there. However, we are specifically talking about investing in the ICO – not investing into the Hdac after the ICO, once tokens have hit the exchanges. In all honesty, we’re not a fan of the project anyway so we wouldn’t invest then either.

 

Reason #1 – Presale Token Price

Over the past few months, we’ve seen a trend whereby token prices have fallen after the ICO, once tokens hit exchanges. 

Why does this happen?

There are many possible reasons but the most common one is due to the difference between pre-sale token prices and main token sale prices.

We’ll Explain With An Example

For our example, we’ll use the coin; CryptoGurus coin; CG coin for short.

  • Let’s say that pre-sale investors are able to buy CG coins for $1 while main token sale investors must pay $5
  • After the ICO, the coin hits exchanges for a price of $5 i.e. the same as the main token sale price
  • Pre-sale investors will look at the price and see a 5x return on investment (ROI)
  • Satisfied with this very high return, many pre-sale investors will quickly sell their CG coins
  • The CG coin price then crashes to far below the main token sale price

In other words; when the pre-sale token price is much cheaper than the main token sale, token prices usually fall after the ICO.

The bigger the difference in prices, the greater the fall.

How Does This Apply To Hdac?

Let’s compare the figures at each stage of the presale and ICO:

April 1st 2017: 1BTC
1BTC = $1000 = 35000 DAC = Approx $0.03/DAC

May 1st 2017
1BTC = $1400 = 32000 DAC = Approx $0.04/DAC

July 1st 2017
1BTC = $2500 = 28000 DAC = Approx $0.09/DAC

November 27th 2017
1BTC = $10000 = 22000 DAC = Approx $0.45/DAC

December 1st 2017
1 BTC = $11000 = 22000 DAC = Approx $0.50/DAC

This means that if you were to participate in the ICO, you would be paying around 15x the USD price paid by initial investors.

As a result, we are convinced that this will play out in one of two ways:

1. Token Prices Begin At $0.50/DAC On Exchanges

  • Pre-sale investors will see the ridiculously good returns they’ve achieved and immediately cash out.
  • Token prices will then crash to well below the main ICO price
  • Result: An investment into the ICO will be a very poor one

2. Token Prices Begin Well Below $0.50/DAC On Exchanges

  • Result: Token sale investors have already lost out. No need to go through extra steps here

On top of this, the team has confirmed (via Telegram) that there is no lockup period for any of the early investors so there will be nothing in place to stop this from occurring either.


Reason #2 – IOTA competition

We’ve already highlighted this point above but we know that many readers have probably skimmed through this article to this section so we’re including it again for those readers. Feel free to skip ahead if you’ve already read this.

Hdac give meaningless comparisons with Bitcoin and Ethereum in their whitepaper.

Why Are These Comparisons Meaningless?

These comparisons are meaningless because neither Bitcoin nor Ethereum are even competitors to Hdac, who are specifically focusing on the Internet of Things. You could argue that Ethereum’s smart contracts could be used for this sector in the future but they certainly aren’t direct competition.

This would be similar to Snapchat convincing you to invest in their stock instead of investing in Uber because people upload more photos to their app. It’s a fundamentally ludicrous comparison to make.

Why Have Hdac Made These Comparisons?

We believe that Hdac are making these comparisons to Bitcoin and Ethereum for 2 reasons:

  1. To Convince Investors – They believe that investors will hear how Hdac is better than Bitcoin and Ethereum in some aspects – the two biggest Cryptocurrencies – and be convinced it’s a good project to invest in. Sadly, this will probably work.
  2. To Hide Their True Competition – Their real competition is IOTA, which is also designed for the Internet of Things and has tech 1000x more advanced than them. Hdac might realise that they hold no real threat to IOTA and have ignored them as competition as a result.

 

Reason #3 – Inflation Rate 

On top of presenting very little competition to IOTA, Hdac are not even selling many of their coins in the ICO. From what we could find, only 7% of coins were being sold in this process while another 7% were being retained the company and a further 86% would be mined gradually over time.

Therefore, each year, there could be a high inflation rate which would further de-value the the coin investors would be purchasing through the ICO process.

 

8. HDAC ICO/TOKEN SALE DETAILS

  • ICO/Token Sale Link – https://hdac.io/
  • Referral/Affiliate Code – N/A
  • Pre-ICO Start Date – Completed, Raised 13,000 BTC in Eastern Asia
  • ICO Start Date – 27th November 2017
  • ICO End Date – 22nd December 2017 – 23:50pm (GMT/UTC+1)
  • Coin Price – 1 BTC = 18,000 DAC
  • Bonuses Available – 400 DAC bonus for every 0.1 BTC invested
  • Coin Supply – 12 billion over 170 years, 840 million (7%) available during the ICO
  • ICO Soft Cap – No soft Cap
  • ICO Hard Cap – 6000 BTC
  • Accepted Currencies – BTC
  • How To Participate – Click this link and follow the instruction

Keywords:

ICO Soft Cap – An ICO raise below the soft cap means that the project is cancelled

ICO Hard Cap – The maximum amount that the ICO can raise. Once the hard cap is reached, the ICO is closed

Very Important Point:

Token price is irrelevant when investing. Hard cap is all that matters for judging whether an ICO is cheap or expensive and market cap is all that matters once the Crypto hits the exchanges.

If you want to learn more about this fundamentally important aspect of investing, make sure to have a read of our brief explainer article.

What Happens If The Hard Cap Isn’t Reached?

This is where we would usually discuss whether unsold tokens would be burnt or sold at a later date etc. However, due to the nature of the Hdac project, Hdac tokens can only be mined if they have been purchased. This means that there would be no spare tokens to consider.


9. THE CRYPTOGURUS CONCLUSION

Overall, we would love to ask the question; with Hyundai being such a massive company, why do they even need an ICO? 

This project could potentially be a good investment after the ICO once token prices have fallen, even if we don’t personally think so. However, as far as ICOs go, this is the most confident we have ever been that token prices will fall as soon as Hdac coins hit the exchanges, making this ICO a terrible investment.

Remember though, that all of this is simply our opinion – we fully respect any disagreements people may feel towards everything we’ve said – but this website is for us to give investors our honest opinions and, it’s fair to say that we have been highly truthful with this article.

That’s the end of the article! Thanks for stopping by and don’t forget to check out our other articles for regular Crypto/ICO reviews and market updates.

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Disclaimer: None of the above is financial advice. Always do your own research.


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What Is Datawallet? Full ICO Review

What Is Datawallet? Full Review

Datawallet ICO Review – Take Back Control of Your Data While Earning Extra Income

Currently, third party companies collect our data and sell it on. It’s our data so why aren’t we the ones who decide which data to sell and how much to sell it for?

Datawallet is an ambitious project who wants to put users back in control of their own data. In this article and video, we will be carrying out our review of Datawallet.


YOU WILL LEARN:


What Is Data Wallet?

What Are Data Brokers?

How Can You Sell Your Data For Money?

Should You Invest In Datawallet?

 

CONTENTS:

  1. What Is Datawallet?
  2. How Will Datawallet Work?
  3. What Problems Will Datawallet Solve?
  4. Will Datawallet Token Prices Increase?
  5. The Team
  6. Barriers to Success
  7. Roadmap
  8. Extra Points
  9. Datawallet ICO Details
  10. Conclusion
  11. Follow Future Posts

 

1. WHAT IS DATAWALLET?

In Their Words:

  • A blockchain-powered data exchange that puts people in charge of their data and empowers developers to bring the next generation of world-class applications to life.

In Our Words:

  • Datawallet is a project that will allow us to take ownership of our personal data and, in turn, allow us to make extra income IF we choose to sell our data to advertisers.

 

2. HOW WILL DATAWALLET WORK?

There are two perspectives to consider when discussing Datawallet; Data Providers (regular people like you and me) and Data Requesters (companies who want to use our data). Let’s begin with Data Provider.

Data Providers (Regular People):

First, we will first download the Datawallet App. From here, the Datawallet app presents the user with a data inventory overview.

This will show us a list of all the data available, split into categories such as social media or commerce and this is where we decide which data we wish for the app to collect.

We are then presented with an overview of any interested firms and we will select the parties we are willing to share data with, while also excluding any data we don’t wish to share. For example, we may be willing to share our Facebook data but not our Amazon or Uber data.

Once we’ve shared the data with our chosen firms, we’ll receive DXT tokens in return.

The data is held in escrow until payment is received in order to guarantee security and that privacy is maintained. We can then spend their DXT tokens on AI driven services in the Datawallet App Store, or cash the tokens in for fiat currency.    

Data Requesters (Companies):

Firms will first purchase DXT from an exchange, they will then be able to list themselves as a data requester with Datawallet and petition for user’s data.

Each firm must present users with a small pitch that includes details such as: the data they require, what the data will be used for and the amount of DXT they are willing to pay for it.

Once selected by a user, the transaction is completed as above.

How Much Will Datawallet Pay Users?

We weren’t able to find specific values for how much users will get paid for selling their data – most likely, Datawallet probably don’t even know themselves.

However, we did find an article from 2015 when Datawallet were attempting to create a centralised platform before (more on that later) which describes users as receiving $3-$5 per data sale BUT this value can add up to hundreds as users will be able to sell the same data to many different companies.

Is this value accurate?

We’ve included the article link to give you guys as much information as possible but you should be aware that Datawallet are the ones providing this value of $3-$5 and they have obvious incentive to give an exaggerated value.

 

3. WHAT PROBLEMS WILL DATAWALLET SOLVE?

We say this time and again yet so many people we speak to seem to forget this important point:

Businesses are created for one purpose; to solve market problems

If a business does not solve a real problem, it is unlikely to succeed.

When it comes to Datawallet, the industry seems to suffer from three problem areas:

  1. Data Ownership
  2. Data Accuracy
  3. Data Quality

All three of these areas relate to Data Brokers; companies which collect consumer information, from a mixture of resources and sell it to organisations who use it for marketing purposes. 

As an industry, it is currently worth more than $200 billion and is forecast to become the world’s most valuable resource by 2022.

1. Data Ownership

Every day, users create a vast amount of data without even knowing it. Our user data is an incredibly valuable resource for companies already –  so why don’t own our own data and get paid for it?

The problem with the current system is that data brokers are collecting our information and selling it without our consent. Worst of all, they don’t even pass any of their profits onto us.

2. Data Accuracy

It is incredibly rare that data brokers are able to obtain a complete profile of you and your personal data in one go; your data is usually stored across multiple platforms and data brokers do not have a reliable way of connecting the two.

It is because of this that they will use probabilistic models to approximate how likely it is that two datasets belong to the same person, often without success.

3. Data Quality

This lack of accuracy then leads to a lack of quality data; firms are spending money on this data and spending millions on targeted ad campaigns based on the data.

When the data is low quality, these campaigns are much less likely to be successful, wasting valuable company resources in the process.


DATAWALLET’S SOLUTIONS

Data Ownership

By presenting users with a self-owning wallet, we will become the sole holders of our personal data; even Datawallet are unable to access our data because of the nature of the blockchain and the split-key system implemented.

As the holders of our own data, we will then be able to choose whether we want to sell it or not, along the price if we do wish to sell it to companies.

It’s our information, why shouldn’t we be the ones that benefit from it?

Data Accuracy

With the Datawallet system, companies are receiving 100% accurate information. Who’s better to provide information about you, than you?

Data Quality

This 100% accurate data is instantly of higher quality than any information a data broker could produce, especially with the additional ability to track offline data for users that Datawallet can offer.

As such, companies should be willing to spend even more to get user data from us than they will pay to a 3rd party company – why would they choose to pay for somewhat accurate data from them when they can pay us for data which is 100% accurate?

Our Thoughts

Datawallet are not going to be able to stop other firms from collecting customer data from other sources – after all, there will be many users who don’t wish to sell data or not sell enough data to satisfy the data needs of companies.

However, Datawallet’s idea could provide a truly disruptive to the current system – with users getting paid to give away data and companies receiving 100% accurate data, the middlemen data collectors could be in for a shock. 

On top of this, data collection is an ever-growing marketplace meaning that Datawallet are entering into an expanding market.

Reality Check

Even writing this article, we are aware of the incredible potential that the Datawallet project could hold BUT we’ve read through hundreds of whitepapers and many projects sound groundbreaking – this is to be expected due to the incredible potential that the blockchain holds. In reality, around 95% of these projects will most likely fail.

It’s for this reason that we love the phrase ‘The Devil is in the details‘. We recommend that you NEVER invest without delving into the details of a project – this is the difference between a great project in Cryptocurrencies and a dead one.

So, before you get too excited about this project, let’s have a look into more details first and we’ll move onto the topic of whether the token prices are actually linked to the success of the platform or not.

 

4. WILL THE TOKENS INCREASE IN VALUE?

This is another incredibly important point that people often overlook when investing in Cryptocurrencies – is the token price truly linked to the platform usage?

Investing in Cryptos is not the same as traditional investing – when you buy shares in a company, you’re buying ownership. As the company makes increased profits, the share price will increase and your investment value will rise also.

With the majority of Cryptocurrencies, the tokens don’t represent shares.

Therefore, it’s possible for the company to be successful (i.e the CEO and employees get rich) and yet the token prices may actually fall if they aren’t correctly linked to platform usage.

The ONLY factors determining token price are supply and demand on exchanges.

Obviously, supply and demand are affected by many factors but the price all comes down to the combination of these two. Because of this, it is essential to ask yourself the following two questions:

Demand – Will there be token demand on the exchanges?

Supply – Will there be excessive inflation hindering prices?

Let’s first look at demand:

What Are the Sources of Demand?

In order for a company to obtain consumer data, they will have to pay in DXT tokens which they must buy from the exchanges.

If more companies begin using Datawallet’s platform to obtain consumer data, more companies will have to buy tokens from exchanges. As a result of the higher demand,  token prices will increase. 

As such, the DXT token price has been tied to the success of the Datawallet project.

What Is The Likely Inflation Rate?

Datawallet will be creating a fixed supply of tokens mening there will be a zero-inflation rate. However, that does not mean new tokens won’t be entering onto exchanges; only 33.33% of the total tokens will be sold in the ICO, meaning that the other 66.67% will enter the market at some point but how will they be distributed?

  • 16.66% – Developer Growth Pool
  • 16.66% – User Growth Pool
  • 33.33% – Datawallet

Datawallet provide no details beyond this; there is no mention if any minimum holding period exists for the team, so it is impossible to tell when these tokens will hit the exchanges. 

$30 Million Team?!

In the ICO, Datawallet are attempting to collect a maximum of $30 Million. While it may be less than this as this is their max raise, it’s possible that they could collect $30 Million in return for 33.33% of tokens.

With another 33.33% of tokens going to the Datawallet team, they are potentially valuing their own contributions as being $30 Million from day one.

This is a concern for investors – what if the team decide to sell 10% of the total tokens over the course of a few weeks? Due to their incredibly high shares in the platform, the owners are essentially going to be whales and this is a concern because it can lead to market manipulation.

This is something that smart investors should consider before making their decision about investing.


SORRY TO INTERRUPT…

If you’re enjoying the article, don’t forget to bookmark the page for regular ICO reviews and market updates.

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Anyway, let’s get back to the content!

 

5. THE TEAM

The Datawallet website lists only the two founding members (Serafin Lion Engel & Daniel Hawthorne) and two investors (Tim Draper & Marc Benioff).

Engel is a graduate of Draper University, founded by one of the projects investors Tim Draper, a successful venture capitalist with investments in Skype, Tesla and SpaceX among others.

Some of you may recognise Draper as the man who purchased 30,000 bitcoins at public auction back in 2014. It was at this time that he predicted bitcoins price to surpass $10,000 by the end of 2017 and he was, as we know, absolutely correct.

While not much is known about it’s members, we do know that the team have been together working on this project for over two and a half years; and have previously built original centralized version of Datawallet (more on this later).

Is The Team Size A Concern?

You may be thinking: ‘with a team of just two, they have no chance’.

We would agree with this except they won’t be a team of two in the future; in their ICO, they are raising a maximum of $30 Million – with 65% of this dedicated towards development, we can be pretty confident that they will be bringing in future team members.

As such, it’s impossible to judge the full team at this stage. However, the two founding members are clearly committed to this project and it is not some overnight creation. Also, the association with Tim Draper is surely guaranteed to be positive for the project.

 

6. BARRIERS TO SUCCESS

Data Collation and Summation

One potential barrier we have identified could be an unwillingness by companies to invest in extra workload; with data brokers, they often pool together large amounts of data and summarize it for a company before presenting a final findings report.

With the Datawallet system, it seems companies would receive individual consumer data and have to do this themselves. This may be fine for small campaigns focusing on one postcode for example, but would a company be willing to do this for a national or worldwide campaign?

New Crypto Economy

To us, this highlights the new Cryptocurrency economy that is emerging. What do we mean by this?

Datawallet are attempting to create a revolutionary solution to an existing problem in the marketplace, but they may encounter issues such as putting data together.

As a result, we can expect to see new companies appear in the future with this exact role – to put Datawallet’s data together in a form that companies require (assuming that Datawallet aren’t able to do this themselves).

In other words, Cryptocurrencies invented today are creating the need for entirely new businesses as the next generation economy is being created.

 

7. THE ROADMAP

Another case where we face a significant lack of detail; there is no sign of a roadmap on the Datawallet website and in the whitepaper, the only mention comes in the appendix.

Making reference to a figure XYZ (which doesn’t exist) for a time-scale is not helpful but we do know that the system will be developed in line with three major milestones: v.10, v20. and v.3.0.


This could simply be an oversight for the team – having already created a centralised version of the application, we would expect that the timeframe for the production of their next app shouldn’t be too far away. Without a proper roadmap though, who really knows?

 

8. EXTRA POINTS TO CONSIDER

Is This Datawallet’s 2nd Attempt?

Through our background research, we found that Datawallet have already attempted to create a Datawallet application – they already launched it in 2016 on the App store.

We attempted to download the app but weren’t able to as it has been removed from the app store. We did, however, find this review.

Is This A Concern?

Is it a concern that Datawallet have attempted this once already and not succeeded?

Of course it is a consideration that investors will have to factor in when making their decision. You could argue in favour of Datawallet for this:

  1. Datawallet is perfectly suited to the blockchain solutions – personally, we wouldn’t want to hand over our data to a non-crypto and centralised platform – so they should be more successful this time around with this addition
  2. They should have learnt from their mistakes from the first time
  3. The founding members are clearly dedicated to making the project a success as they’re still working on it
  4. The application development shouldn’t be too far as they already have a solid base to build upon


However, this is the most positive way to look at this revelation – many would argue that this is a negative indication for the success of the project and we wouldn’t necessarily disagree with this.

 

9. ICO/TOKEN SALE DETAILS + WHERE TO BUY

  • ICO/Token Sale Link – https://tokensale.datawallet.com
  • Referral/Affiliate Code – N/A
  • Pre-ICO Start Date – November 21st 2017
  • Minimum Pre-ICO Investment – $50,000
  • ICO Start Date – December 21st 2017
  • ICO End Date – January 20th 2018
  • Token Price – 1 DXT = $0.18
  • Bonuses Available – No mention of any at this moment in time
  • Token Supply – 750,000,000 (250,000,000 available during the ICO)
  • ICO Soft Cap – Hidden
  • ICO Hard Cap – $30 Million (with only 1/3rd of tokens sold in the ICO, this would put the total valuation of Datawallet at $90 Million)
  • Accepted Currencies – BTC, BCH & ETH
  • How to Participate – Click this link and follow the instructions

The minimum pre-ICO investment of $50,000 should be noted for readers – if you have fewer funds than this to commit to the project, you will be forced to wait for the main token sale.

Keywords:

ICO Soft Cap – Any amount of money raised below the soft cap means that the project will be cancelled cancelled

ICO Hard Cap – The maximum amount that the ICO can raise. Once the hard cap is reached, the ICO is closed

Very Important Point:

Token price is irrelevant when investing. Hard cap is all that matters for judging whether an ICO is cheap or expensive and market cap is all that matters once the Crypto hits the exchanges.

If you want to learn more about this fundamentally important aspect of investing, make sure to have a read of our brief explainer article.

 

10. THE CRYPTOGURUS CONCLUSION

Great Idea

The Datawallet concept is an incredible one; data brokers have been scraping our data for too long with users seeing nothing in return, it is for that reason that we believe there will be no shortage of data providers when the system launches.

When it comes to data requesters (companies requiring data), the uptake may be a little slower; larger companies may be reluctant to collate the data themselves as previously mentioned but also there is currently no mention of costs.

Barriers To Success

Will the costs be the same as data brokers? Will it be higher because of its guaranteed accuracy? Or will it be lower to try to encourage adoption? At this point, we just don’t know.

While the lack of some details is potentially worrying – no roadmap etc – the sheer level technical detail in the whitepaper is astounding.

Add in the fact that the team have been together working on the project for nearly three years, having already released a centralized prototype and you have another positive (or a negative depending on how you view it); it does a lot to convince that this is serious project.

Market Manipulation

With the team keeping 33.33% of tokens for themselves, they will be whales in the market and could decide to create market manipulation if they chose to.

Tim Draper

With investment from Tim Draper, a very knowledgeable and successful venture capitalist, this could lead to great exposure for the project and assist with their ICO raise.

To conclude, Datawallet are attempting to build a truly revolutionary solution to the problems seen in data collection today. The project could be huge if they are successful but it is a HUGE risk as far as investments go – all ICOs are.

Overall, the idea behind Datawallet is incredible but the devil is in the details is. We aren’t going to tell you guys whether to invest or not – we like to highlight all of the necessary information you should consider so you can make your own decision.

Remember that one of the keys to building a strong portfolio is to never invest too heavily in risky projects.

As such, if were to add Datawallet to our portfolios, we would ensure to remain well diversified and only invest an amount of money that we’re willing to lose.

Useful Links

Datawallet Website – https://tokensale.datawallet.com/

Whitepaper – https://tokensale.datawallet.com/pdf/datawallet_whitepaper.pdf

CEO Interview

As a side note before we go, you can find a very useful interview with CEO Serafin Lion Engel below where he succinctly discusses the project (beginning at 5:50)

That’s the end of the article! Thanks for stopping by and don’t forget to check out our other articles for regular Crypto/ICO reviews and market updates.

Would you like your ICO reviewed? CONTACT US Now

Disclaimer: None of the above is financial advice. Always do your own research.


11. FOLLOW FUTURE POSTS

Come join us to follow future articles and personally chat with us:

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This article has been provided by our Business Analyst; Aaron Laver.

Gladius ICO Review – Decentralized DDoS Protection

DDoS (Distributed Denial of Service) Protection is a fundamental element for the success of any large website.

Gladius are attempting to disrupt the industry – dominated by large players such as Microsoft – through the introduction of a decentralised DDoS protection system.


YOU WILL LEARN:


What Is DDoS?

What Is Gladius?

How Are Gladius Improving DDoS Protection?

Is Gladius A Good Investment?

 

CONTENTS

  1. What is Gladius?
  2. How Will Gladius Work?
  3. What are the Current Market Solutions?
  4. How Will Gladius Improve on These?
  5. Will the Token Price Increase?
  6. The Team
  7. Barriers to Success
  8. The Roadmap
  9. ICO/Token Sale Details + How To Buy Gladius Tokens
  10. Conclusion
  11. Follow Future Posts

1. WHAT IS GLADIUS?

In our own words:

  • Gladius is a decentralized cyber security tool, which aims to prevent denial of service (DDoS) attacks. Correctly implemented, this will result in an improved content delivery service and improved website loading times. 

What Is A DDoS Attack?

  • A DDoS attack is where a person aims to make a web host, server or website unavailable for use by flooding it with traffic, causing it to crash. Alternatively, they are sometimes used as a means of obtaining private company or customer data.
  • DDoS attacks are becoming more common and incredibly easy for a person to achieve; with the necessary bot available for just $5.
  • A recent, high-profile attack saw websites such as: Twitter, Netflix and Reddit shut down for more than 24 hours.
  • DDoS attacks have cost companies $150 billion worldwide so far this year. 


2. HOW WILL GLADIUS WORK?

Gladius will utilise a combination of the decentralised nature of Ethereum’s blockchain, peer-to-peer networking and DDoS Protection Software to create a decentralised DDoS protection software. 

There are two persepctives to consider when discussing Gladius; network users and contributors. Let’s begin with the network contributors:

Network Contributors

Users from around the world will download the Gladius desktop client, join a local protection pool (a group of Gladius users close to one another geographically) and begin renting their spare internet bandwidth in return for payment in Gladius tokens; a system very similar to Substratum.

Each pool will have a host who will determine aspects such as:

  • Who is allowed into the pool
  • Which clients to accept
  • The appropriate charge for doing so.

These pools allow sites to cache their content close to users and when a site is under attack, the requests are routed to all of the independent members within the pool. These members then individually verify the requests to ensure only trusted connections are let in.

If you are interested in becoming a network contributor, you can check out  their calculator so you can see exactly how much you would earn.

Network Users

The network users will be the websites looking to make use of Gladius’ DDoS protection.

Website owners will purchase GLA tokens from exchanges and pay network contributors with these in return for their services.

 

3. WHAT ARE THE CURRENT MARKET SOLUTIONS?

We say this time and again yet this incredibly important point is so often overlooked:

Businesses are created for one purpose; to solve market problems

If a business does not solve a real problem, it is unlikely that it will succeed.

So what market problems are Gladius specifically solving?

There are currently two main techniques used to try and prevent DDoS attacks: DDoS Mitigation Solutions and Decentralized Delivery Systems, we’ll discuss why neither of these offer a perfect solution below. 

DDoS Mitigation Solutions

Programmes that attempt to sort the ‘good’ traffic from the ‘bad’ traffic. They attempt to identify a websites patterns of traffic and prevent the access of anything it considers abnormal.

These systems can struggle to sort the right from wrong, which can result in not only the ‘bad’ traffic entering the network but also preventing wanted visitors from accessing a site. DDoS Mitigation Solutions are also becoming easier for attackers to circumvent if operated manually – cloud based operations often see more success.

Decentralized Delivery Systems

This is where traffic is sent to multiple individual hosts, potentially worldwide, before routing to its desired destination in an attempt to make any DDoS attack either ineffective or at least much more complicated.

While this method is considered reasonably effect, commercial content delivery systems are incredibly expensive, so not suitable for all. As well as this, they are still vulnerable to the more sophisticated types of DDoS attack.

4. HOW WILL GLADIUS IMPROVE ON THESE?

While both of these approaches are considered somewhat effective, neither are complete solutions and thus they can be improved. Gladius hopes to be just that and has three distinct benefits when compared to the previously mentioned methods.

It should be noted that we are not blockchain or DDoS Protection experts and you should carry out your own research to decide if you think Gladius are capable of offering their claimed advantages

1. Faster Content Delivery

Clients will always be directed to the node closest to them in location, this will be done using a location based DNS server, ensuring the process is completed in the shortest time possible. As mentioned above, previous decentralized delivery systems would potentially send clients worldwide to complete this process, only lengthening the wait time. 

The importance of CDN can be found here.

2. Increased Protection

By combining the two previously mentioned methods of protection, Gladius can guarantee a more secure service; the distribution of data to multiple servers helps to create a more secure system.

A final proxy server will also hide the true IP address of the client from any attack, making successful disruption much more difficult. 

3. Affordable Cost

The cost of the service is determined by the pool host and since there will be a number of different pools to choose from, there is a need to keep prices competitive. As well as this, the decentralized nature of the project means there is no middleman involved.

As a result, prices will automatically be lower than a centralized system but will still maintain value for both clients and hosts.

It is important to remember that an ICO’s whitepaper often acts as their main marketing tool, for this reason, we like to take a critical look at their claims as you can see below:

OUR THOUGHTS

Content Delivery Time

Content delivery speed is very important, especially when considering that Google favours faster loading websites meaning that it is more likely for a website to appear near the top of Google searches with high page loading times.

However, you would have to question the level of impact that Gladius’ systems will make – will a few milliseconds make a significant difference to Search Engine Optimisation

Increased Protection

The importance of this aspect simply cannot over-stated – any other benefit that Gladius can offer is simply a ‘cool extra feature’. Whether Gladius can truly offer improved protection is fundamentally the most significant part of this project.

As we’re not DDoS experts, it’s impossible for us to comment with certainty whether Gladius’ claims of increased protection are valid or not. However, we can highlight the underlying nature of the blockchain technology – which Gladius is built upon – that is to offer improved security and privacy in many different area.

Due to the decentralised and virtually unhackable nature of the blockchain, we would think it most likely correct that Gladius’ claims of increased protection are valid.

Affordable Cost

Since prices are set by the pool managers, they should in theory be cheaper, this may not automatically happen though. If the initial uptake of the system is minimal and only a few pools are created, pool managers may decide to charge a higher price.

This may be more prevalent when it comes to the content delivery speed aspect; if there are certain areas with only one or two pools, managers may be able to charge a premium to clients wanting to be cached here.

Overall, we believe the Gladius will potentially be offering real solutions to problems in the market if they’re able to successfully build their platform as expected.

Having discussed the project and its benefits, we’ll now take a look at whether the token price is linked to the success of the platform or not.

 

5. WILL THE TOKEN PRICE INCREASE?

This is another incredibly important point that people often overlook when investing in Cryptocurrencies – is the token price truly linked to the platform usage?

Investing in Cryptos is not the same as traditional investing – when you buy shares in a company, you’re buying ownership. As the company makes increased profits, the share price will increase and your investment value will rise also.

With the majority of Cryptocurrencies, the tokens don’t represent shares.

Therefore, it’s possible for the company to be successful (i.e the CEO and employees get rich) and yet the token prices may actually fall if they aren’t correctly linked to platform usage.

The ONLY factors determining token price are supply and demand on exchanges.

Obviously, supply and demand are affected by many factors but the price all comes down to the combination of these two. Because of this, it is essential to ask yourself the following two questions:

1. Demand – Will there be token demand on the exchanges?

2. Supply – Will there be excessive inflation hindering prices?

Let’s first look at demand:

What Are The Sources of Demand?

In order for a website to use the Gladius DDoS protection service, they will have buy to pay in GLA tokens. In order to pay in GLA tokens, website owners will have to buy them from the exchanges.

As more websites begin using Gladius’ DDoS services, there will be higher demand on exchanges and token prices will increase.

As such, the GLA token price has been tied to the success of the Gladius system.

What Is The Likely Inflation Rate?

Gladius will be creating a fixed supply of tokens meaning zero inflation rate. However, that doesn’t mean new tokens won’t be entering onto exchanges;

A total of 60% of tokens will be sold in the ICO, meaning that another 40% will enter the market at some time so how is this extra 40% distributed?

  • 15% – Founders – This will include an 18 month minimum holding period so these tokens will not cause an inflationary pressure
  • 15% – Operations – This pool will be sold over time in order to assist with operating costs. As this is 1/4 of the quantity sold in the token sale, this won’t cause excessive inflation.
  • 10% – Team – In the whitepaper, the vesting period for this is listed as ‘varied’, meaning that we cannot predict when these extra tokens will enter the exchanges. However, even if we assume that the team wishes to sell all of their tokens, 10% is a relatively low figure and shouldn’t cause excessive inflation.


Overall, the inflation rate should be relatively low and the demand will be based entirely on the success of Gladius. As such, we are able to simply analyse whether we believe this project will be a success – while factoring in price – in order to determine if this is a worthy investment.

6. THE TEAM

As our regular readers will know, one of our mantras here at Crypto Gurus is to “invest in people, not ideas”. It’s based off the principle that an idea is only as good as the people who execute it. As investors, we strongly believe in this principle.

The 12-member strong team includes several advisors and designers alongside it’s three original co-founders. The first thing that jumps out about the co-founders is their age; all three are still at university. This is not to say they lack experience however; Niebylski boasts 8 years of experience in computer programming, including a spell with Bloomberg LP.

What appeals to us more is that the co-founders clearly identified that they could not achieve this project alone and went out and secured team members with the necessary experience.

Two names that offer just this are Jeremy Epstein and Michael Terpin; Epstein offers 20 years of international marketing experience, as well as being the marketing faculty member for the prestigious Blockchain Research Institute, while Terpin has multiple Bitcoin endeavours including: BitAngels, Bitcoin Syndicate and CoinAgenda.

While this is a relatively small team, there are a lot of things to like about the individuals involved and while it could be considered a negative that they have been together for less than 12 months, the progress they have made in that time, for me, dissolves any of those fears.

Sidenote

Some of you may recognise Jeremy Epstein as a previous member of the IOTA team, he was actually let go from that project after failing to disclose his affiliation to one of their most vocal competitors.

As well as this, an agreement was reportedly reached with Epstein that he would not join any further projects, since IOTA had brought him in as a lead advisor, that he also failed to honour.

Epstein seems to have taken advantage of some clever search engine optimisation (SEO), in order to place himself above the competition; looking at some of his work, there is not too much that stands out as impressive. A series of grainy YouTube videos in front of a whiteboard do not present the appearance of a ‘Professional Blockchain Genius’ as he describes himself.

This is not an attack on Epstein but it certainly brings into question whether he is the right kind of person to be involved in Gladius; a young team which may need strong guidance cannot afford to carry someone who may still possess a conflict of interests.

You may be wondering if there is there anything else currently standing in Gladius’ way? We’ll now take a quick look at a few hurdles Gladius must overcome in order to succeed:

7. BARRIERS TO SUCCESS

With a new project such as Gladius, it is important to identify any obstacles that may hinder their progress, we have highlighted a few potential hurdles:

Adoption

An internet search for DDoS protection brings up results from companies such as Microsoft and Cloudflare, with the number of high profile options available, you have to question why would someone choose an untested project such as Gladius? Gladius may not be helped by the continued scepticism that surrounds cryptocurrency either.

Countering this though, you could argue that Cryptocurrencies and some of their benefits may have become mainstream enough by the release of the platform that Gladius will be able to convince various websites to use their systems.

Slow Growth

Following on from the point above, Gladius may find initial uptake slow; the number of websites rushing for this at release may be minimal. They may have to rely on smaller companies to present their case but once people see that their system works, more may begin to come onboard. This could take time, however, as bigger companies may seek years of successful data as proof.

8. THE ROADMAP

November 24th 2017 – Public Token Sale: The first public sale of tokens for the platform.

March 2018 – Full DDoS and CDN Launch: The beta release of the Gladius network. Fully featured with the cornerstones of their CDN and DDoS mitigation services.

August 2018 – Full Public Launch: The first official public release of the network. Websites and businesses of all shapes and sizes will be able to use the Gladius network to speed up and protect their sites. Full support and assistance will be included.

December 2018 – Further System Optimizations and Stretch Goals: The final bells and whistles of the platform. From the various stretch goals, to bullet-proof security and everything in between.

9. ICO/TOKEN SALE DETAILS + HOW TO BUY

  • ICO/Token Sale Link – https://gladius.io/register
  • Referral/Affiliate Code – N/A
  • ICO Start Date – November 24th 2pm UTC
  • ICO End Date – December 30th
  • Token Price – 600-500 GLA = 1 ETH
  • Bonuses Available – Maximum bonus of 20% (600 GLA per 1 ETH)
  • Token Supply – 48.2 Million (60% sold in token sale)
  • Soft Cap – $4 Million
  • Hard Cap – $12.5 Million
  • Current Raise (28th Nov) – $6.7 Million
  • Accepted Currencies – ETH
  • How to Participate – Click this link and follow the instructions

Very Important Point:

Token price is irrelevant when investing. Hard cap is all that matters for judging whether an ICO is cheap or expensive and market cap is all that matters once the Crypto hits the exchanges.

If you want to learn more about this fundamentally important aspect of investing, make sure to have a read of our brief explainer article.

 

10. CONCLUSION

DDoS protection services are becoming more and more important with the increased growth in the number of websites. Gladius is offering a real solution to a problem and has tied their token price to the platform usage very well.

It could be relatively difficult to begin convincing websites to use their system over more established alternatives to begin with. However, with a very modest maximum raise of just $12.5 million, there is significant upside potential for this project.

Combined with the fact that $6.7 million has already been raised and the planned system launch is not that far away – March 2018 – in Crypto terms at least, this could provide an interesting opportunity for investors.

That’s the end of the article! Thanks for stopping by and don’t forget to check out our other articles for regular Crypto/ICO reviews and market updates

Would you like your ICO reviewed? Contact Us

Disclaimer: None of the above is financial advice. Always do your own research.


11. FOLLOW FUTURE POSTS

Come join us to follow future articles and personally chat with us:

  • Facebook – Vote every week for reviews you want
  • Telegram – Join the #1 group Crypto chat
  • Youtube – Follow daily educational videos

This article has been provided by our Business Analyst; Aaron Laver.

KuCoin vs COSS – Battle Of The Profit-Sharing Exchanges

KuCoin vs COSS

Profit-sharing exchanges allow you to to accrue passive income by simply holding the exchange’s tokens in your wallet.

The idea of sharing exchange fees with token holder is, in our opinion, a fantastic opportunity for investors. Therefore, today we will be discussing our extensive comparison of COSS and Kucoin – the two competitors in the space.


YOU WILL LEARN:


What Is A Profit-Sharing Exchange?

Is Passive Income A Good Investment?

Is KuCoin Better Than COSS?

 

CONTENTS

  1. What Is A Profit-Sharing Exchange?
  2. KuCoin Project Overview
  3. COSS Project Overview
  4. KuCoin vs COSS
  5. Are They Both Illegal Securities?
  6. Where Can You Buy KuCoin & COSS?
  7. COSS Since Our Last Video (For Our Followers)
  8. Follow Future Posts


1. WHAT IS A PROFIT SHARING EXCHANGE?

An online exchange is a website which allows you to convert one Cryptocurrency for another e.g. if you want to ‘exchange’ your Bitcoin for Ether.

For providing this service, an exchange will usually charge around 0.1% – 0.3% fee.

You can check out a more in-depth list of exchange fees here.

Usually, exchanges keep these fees to themselves. However, during the past year, we have seen the arrival of profit-sharing exchanges.

Who Do They Share The Fees With?

Profit-sharing exchanges share fees with their token holders.

The incentive for the exchange owners is two-fold;

  1. ICO – The exchange are able to sell their tokens – which should carry future value – in an ICO in order to raise funds and build the platform
  2. Customer Loyalty – The structure also encourages customer loyalty because, all traders who hold tokens will essentially be paying some of their fee back into their own pocket with each trade they make on the platform.

The incentive for token holders should be relatively obvious – they are able to collect regular payouts for simply holding the tokens. Here at CryptoGurus, we are huge fans of passive income so the premise behind profit-sharing exchanges is very appealing to us.

Let’s now move onto our brief project overview of KuCoin.


2. KUCOIN PROJECT OVERVIEW

The first distinction to make when explaining the KuCoin project is between the exchange name (KuCoin) and the associated tokens (KuCoin Shares).

‘KuCoin shares’ are the tokens that investors are able to purchase on exchanges and entitle them to the profit-sharing of the exchange.

Payout Structure

  • 50% of fees – Token Holders
  • Up to 40% of fees  – Referrals From Token Holders
  • 10% of fees – KuCoin Exchange

Let’s hypothetically say a trade occurred and an associated fee of $100 was charged.

From this, $50 would be distributed between all token holders. $40 would go towards whoever referred the person (via the referral scheme) making the trade and $10 would be kept by the exchange.

Token holders are paid in whichever tokens a trade consists of e.g. if the pair ETH/BTC is traded, token holders will all receive a small cut of both ETH and BTC.

If ARK/ETH is traded, token holders will receive small amounts of ARK and ETH. As such, token holders will accrue many different types of Cryptocurrencies over time.

KuCoin Exchange Profit Sharing

What If Nobody Referred The Trader?

What would happen in the situation where a trader signed up to the KuCoin exchange without being referred by someone else?

This is an answer that we searched for but were unable to find. Therefore, we believe that this 40% probably instead goes to the exchange, bringing about the following fee split model:

  • 50% of fees – Token Holders
  • 50% of fees – KuCoin Exchange

We do find it slightly shady that we weren’t able to find information about this because this will actually be a relatively common occurrence that someone signs up without being referred.

The Referral Scheme

While we’ve stated above that 40% of the fees goes toward the person that referred the trader, this was said to simplify the above explanation and isn’t entirely accurate.

Instead, this 40% fee is actually dispersed through 3 different layers of referrals. For the most easily understood description of this, we recommend scrolling down to the picture below – pictures are always easier to understand than text!

However, we’ll also explain it here for those who prefer to read:

  • 20% of your direct referral fees will be paid to you
  • 12% of second degree referral fees will be paid to you
  • 8% of third degree referral fees will be paid to you
  • In total, a maximum of 40% of fees will flow back up through the referral scheme

As we said, it’s best to use the diagram below for the easiest explanation!

KuCoin Referral Scheme

KuCoin’s Token Buyback Program

10% of net profits will go towards KuCoin’s token buyback program.

With these profits, the team will buy their shares back on exchanges and burn them (get rid of them indefinitely). As a result, this should reduce the overall supply and should bring the price down in the long-term.

The aim is to reduce the total supply by 100 million, leaving a total of 81 million tokens outstanding.

If this sounds like a big positive to you, wait until you read ‘Our Thoughts’ on this where we’ve run the calculations and it’s clear that this element has only been thrown into the platform to impress investors who don’t dig deep enough to see how worthless it actually is!

What Is The Fee Charged On KuCoin Exchange?

KuCoin are charging a flat fee of 0.1% for every trade that occurs on the platform.


OUR THOUGHTS

At the beginning of this article, we emphasised how we are big fans of passive income and, in particular, the idea of a profit-sharing exchange. As always, we’ll highlight our opinions on some of the points listed above.

Payout Structure

The payout structure is excellent – offering 50% to platform users incentivises them to remain loyal to the exchange and the additional 40% for the referral scheme encourages people to invite others, creating a network effect.

The team takes a relatively low cut of regular fees but still keep a large enough cut to align their incentives with those of token holders.

On the other hand, we find it misleading when they claim that they only keep 10% of the fees for themselves. After all, this only occurs when a new person joins and is tied to three higher levels of referrers – many people may sign up to the platform without a referrer.

Also, we’re not a fan of the fact that token holders are paid in many different tokens. While it’s a cool concept, the result will most likely be users having to individually convert all of these into the currencies that they actually wish to hold.

Having said that, we always try to present some negativity in our analysis to highlight some flaws behind projects in our analysis. In all honesty, the payout structure is excellent and it’s the main reason that we believe KuCoin has excellent long-term prospects.

Referral Scheme

As mentioned, this is an excellent idea as it encourages more users to educate others about the project and greater exposure can lead to a more successful project – if the team is capable of growing the platform in line with user acquisition.

Token Buyback Program

At first, we believed that this is a good addition to have – a token buyback program nearly always adds a positive element to any project… and then we ran a few calculations.

KuCoin are claiming that they will use 10% of net profits to fuel their token buyback program so how much will this really contribute?

Let’s assume that KuCoin collect 10% of the fees per trade as they say that they will. They will have expenses with their operations so let’s also assume that they have a net profit margin of 20%.

A fee per trade is 0.1%. Collecting 10% of this will mean they receive 0.01% per trade.

With a profit margin of 20%, the net profit would be 0.002% per trade. If 10% is pledged towards the token buyback program, that will equate to 0.0002% per trade.

If our calculations are correct, the token buyback program would contribute around just $2 per $1 million trading volume.

This is a great example of a team throwing in something which sounds promising to investors but has very little real value.

You can buy KuCoin here if you wish.


3. COSS PROJECT OVERVIEW

The COSS project has a very similar outline to their plan. Therefore, in order to avoid wasting the reader’s precious time with extensive details of a similar project, we will briefly outline the COSS project and then discuss the differences in the following section.

COSS is a profit-sharing exchange also which shares 50% of fees with token holders. The remaining 50% of fees are retained by the COSS team.

Payouts are made weekly to token holders and all ERC-20 tokens can easily be converted to Ether at the click of a button.

COSS charge a variable fee that ranges from as low as 0.04% up to a maximum of 0.2% based on your 30-day trading volumes.

See below for more details on the fees paid:

In a 30 day period if you trade x amount you’ll be charged x percentage fee:

e.g if you trade $0-$5,000 in a 30-day period, you’ll be charged 0.2% per trade.

$0 – $5000 = 0.2% fee

$5,001 – $10,000 = 0.18% fee

$10,001 – $25,000 = 0.16% fee

$25,001 – $50,000 = 0.14% fee

$50,001 – $100,000 = 0.12% fee

$100,0001 – $250,000 = 0.10% fee

$250,001 – $500,000 = 0.08% fee

$500,001 – $1,000,000 = 0.06% fee

$1,000,0001+ = 0.04% fee

COSS run a referral scheme. With each person that an individual refers, 10% of their 30-day trading volume is added to yours which gets you closer to being in the next category of cheaper fees (as seen above).

For more details, you can check out our COSS video recently ** Please ignore the sound quality, the professionalism wasn’t great when we began on YouTube **.

 

 

Later on in the section titled ‘COSS Since Our Last Video’, we will discuss our opinion on the COSS project specifically further.

For now, we will begin with the comparison between KuCoin and COSS.

You can buy COSS here if you wish


4. KUCOIN VS COSS: WHICH IS BETTER?

Before we begin this section, it’s essential to highlight the price difference first.

At the time of writing, KuCoin Shares have a market cap of $57 million while COSS has a market cap of $5.2 million.

Therefore, the question isn’t really whether KuCoin is better – the question is whether KuCoin is 11x better (57/5.2 = 11)?

Please bear this is mind as we go through the following section:

What Are The Similarities?

  • 50% Profit-Sharing – Both projects share 50% of fees with token holders
  • Timing – Both projects launched at similar times

What Are The Differences?

  • Price – KuCoin has a market cap 11x the value of COSS. Therefore, when making a comparison, KuCoin should be considerably better in order to justify this. This will be analysed shortly
  • Referral Schemes – The referral scheme of COSS assists traders with reducing their own fees but they receive no other financial compensation. KuCoin offer up to 40% of the actual fees to referrers
  • Buyback Program – COSS has no buyback program. KuCoin is instilling a buyback program using 10% of net profits
  • Exchange Interfaces – The COSS exchange has an easy-to-use interface but lacks some of the more advanced features of KuCoin such as the ability to add trading indicators to the exchange’s graphs
  • Daily vs Weekly – COSS pays out users weekly whereas KuCoin pays daily
  • Fees – COSS charges a variable fee based on trading volumes, KuCoin charges a flat fee
  • Current Trading Volumes – KuCoin is 16.8x higher for 24 hour trading volumes
  • Selecting The Right Listings – Correctly picking the correct new listings is where has KuCoin excelled and COSS struggled so far but this could be about to change
  • Ether Conversion – COSS offers relatively easy conversion from other currencies to Ether, KuCoin does not as far as we’re aware


OUR THOUGHTS

Referral Schemes

The KuCoin referral scheme is far better than COSS. KuCoin referrers receive real, financial payouts instead of just a discount on fees. A referral scheme can be a very effective tool at increasing exposure for a Cryptocurrency so it is evident that KuCoin’s strong referral scheme is a clear advantage for the platform.

Buyback Program

KuCoin is implementing a buyback program whereby they will be using 10% of net profits to buy tokens and burn them. COSS will not have such a program. However, if you remember from before, we pretty much ripped KuCoin’s token buyback program to shreds.

We can’t really give COSS a win here because they aren’t offering a buyback program but we certainly prefer their honesty in this, rather than KuCoin claiming their program will raise prices when the whole token buyback program will contribute a pitifully small amount (assuming our calculations are correct).

Fees

Due to their variable fee COSS could turn this element into a huge advantage for attracting serious traders. Let’s explain:

Traders tend to have very high trading volumes – duh – so with COSS’ variable fee based on 30-day trading volumes, many traders could find themselves paying significantly less fee per trade on COSS compared with other platforms. With traders making many trades on a daily basis, this difference can seriously add up over time.

On top of this, traders can become token holders and, therefore, they will effectively be paying 50% of this small fee back into a pot with which they share also. The combination of these two things, could be huge for COSS.

Not to mention, that attracting traders to the platform, is ideal also because this would vastly increase the trading volume and thus the weekly payouts to token holders.

However, there is a big IF here. Over the past few months, expectation around COSS has been relatively high yet they have failed to live up to promised potential.

For them to attract traders, they would have to manage two things:

  1. Increased Trading Volume – Traders needs significant liquidity so they can buy and sell coins very rapidly. Liquidity comes through high trading volumes and, without that, traders simply won’t use COSS. This may seem like a chicken and the egg scenario but we will shortly discuss how COSS can build their initial trading volume through clever targeting of smaller coins.
  2. Improved Interface – Traders need to see trading tools on the platform so that they can add their indicators in order to judge prices. COSS’ interface is currently very poor but we will be discussing very soon about their plans to upgrade it.

Exchange Interfaces

COSS has a much more simplistic style, while KuCoin is more advanced and faster. We would argue that, for this reason, COSS might be better for beginners who haven’t experienced much trading before while KuCoin exchange would be better for everyone else.

The issue for COSS arises in the fact that not many beginners are likely to be using their site – beginners will most likely be located on the big exchanges e.g. Bitfinex, Bittrex and thus COSS are somewhat tailored to an audience they are unlikely to ever cater for.

KuCoin, on the other hand, has a very fast interface with relatively advanced trading indicators that is likely to draw more advanced traders to the platform.

A positive for COSS is that they have recognised their need for an upgrade of the interface and investors can at least feel assured that this improvement is coming soon.

Daily vs Weekly

The benefit here is pretty obvious – who would prefer to wait a week instead of receiving payment immediately? As long as KuCoin are able to consistently manage this, they have the upper hand but this is a pretty insignificant point in all honesty.

Current Trading Volumes

The higher the trading volume, the higher the fees which means more payouts to token holders.

KuCoin Trading Volume

COSS Trading Volume

With the difference in 24 hour trading volumes that can be seen in this picture, it’s clear to see why KuCoin is priced so much higher than COSS.

KuCoin’s trading volume is 16.8x greater than COSS so it could potentially be argued that the price difference could be even higher than 11x.

Note: This doesn’t quite encapsulate the entire picture though as this would be making the assumption that the same trading volume for the two exchanges means the same payouts. In truth, due to the two exchanges having different fee structures, this won’t exactly be the case.

Also, markets are forward-looking and the counterargument could be made the COSS has significant potential – but has been wrongly focused on elements other than their exchange thus far – and, therefore, could have similar potential with more focused management which is exactly what we should soon see.

Selecting The Right Listings

This is arguably the most important element for a new exchange to get right in order to grow quickly and is one of the key reasons why KuCoin has been more successful than COSS so far.

What we mean by this is the following:

There is little point in a new exchange listing ETH/BTC because investors already have the option to trade this pair on many far more reputable exchanges with much higher liquidity so why would they choose to trade it on a new exchange?

KuCoin’s Red Pulse Exclusive Deal

Instead, newer exchanges must grow by focusing on coins which aren’t widely traded but have relatively strong demand e.g. Red Pulse on KuCoin.

As we can see from the screenshots, KuCoin is the only exchange to be trading Red Pulse which is very impressive considering it has a market cap of $22 million and a 24hr trading volume of nearly $750k.

By listing this coin alone, KuCoin have gained over 3x COSS’ trading volume. If COSS had landed this deal, the token price would have increased 4x logically.

COSS, however, have failed to list any coins exclusively – coins that anyone wants at least – and have mostly just added coins which are readily available on larger exchanges.

As a result, little trading volume has been seen on the platform outside of trading their own native tokens.

If we compare the two Twitter feeds from the exchanges, it’s immediately obvious to see that COSS have previously mis-targeted this while KuCoin are adding new listings daily.

COSS’ Twitter Feed

KuCoin’s Twitter Feed

 

A New Start For COSS?

So far, this has painted a very negative outlook for COSS and rightly so – the management has been very poor over the past few weeks. However, we believe that this could actually be their turning point. COSS have recently listed the recent Hydrominer ICO exclusively on their exchange and will be listing Gatcoin also.

COSS Hydrominer Announcement

COSS Gatcoin Announcement

Gatcoin ICOBench Rating + Hard Cap Shows They Could Be A Half Decent ICO

 

While these aren’t superstar ICOs, they do clearly represent a change in tactics for COSS – they have now understood that they must build from the bottom and work their way up instead of attempting to directly compete with the big exchanges from the beginning.

 

Personally, we believe that this intelligent shift in tactic has come around in line with COSS’ recent announcement that they would focusing on their exchange with more of their time.

While the team has been a disappointment thus far, this is a positive sign which we believe many investors may have looked over – explaining why prices are so low. 

Edit: Since writing this article, the price of COSS has spiked 22% in the past 24 hours which could have been a result of this realisation from traders.

Another positive aspect that can be seen for COSS is actually mentioned above when we discussed Red Pulse: ‘If COSS had landed this deal, the token price would have increased 4x logically.’ This sentence alone shows the potential that the COSS tokens have while they have such a cheap price.

What if they landed 3 of these deals over the next month? It’s a big IF again hence the project is undoubtedly high risk – high reward.

 

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OUR THOUGHTS – CONCLUSION

KuCoin has a significantly better interface and referral program and they have been far more successful than COSS in their plans thus far. COSS has been a disappointment so far and massively underperformed their potential.

However, this is all in the past and, our aim as investors, is to look to the future. KuCoin has very strongly leadership and have shown all the signs of a project which could excel even further in the future, potentially hitting newer heights as they grow more.

The ability of COSS to build a community has never been in question – as seen by their significant number of people signed up to the platform – but their decision-making regarding listing choices has been misguided.

As such, COSS has previously been somewhat disappointing – hence it’s priced 11x lower than KuCoin – but is now more focused on their exchange more than ever and is finally exhibiting signs of intelligent leadership.

Without price factored in, KuCoin is the obvious selection here. However, with price accounted for, we would say that both projects are potentially appealing.

KuCoin is a safer option due to its higher price tag, while COSS is riskier but has a higher potential reward due to its lower price tag.

As a result, either could be selected for a portfolio dependent on risk appetite and, arguably, both are good selections. Whether you decide to invest in both, just one of them or neither, we always recommend remaining well diversified with a portfolio – especially with such low market cap coins which carry much more risk!

It would be amiss not to discuss some of the risks involved with both coins surrounding the hot topic of securities in the Cryptocurrency space so we will now move onto that.


5. ARE THEY BOTH ILLEGAL SECURITIES?

To give a bit of background information, currently there are no regulations in the Cryptocurrency space for the majority of countries. Therefore, neither coins are at immediate risk.

However, when reading about issues in Cryptocurrencies such as the recent lawsuit laid upon the Tezos foundation, it’s a stark reminder that regulations will eventually be introduced.

This Won’t Be The Wild West Forever.

As such, there is concern around both of these project due to the fact that some would say their tokens fall under the category of ‘security tokens’.

Issuing of securities is illegal in other industries except for accredited investors only. In accordance with this, some countries may decide that these two projects are in violation of the law as a result.

How Will They Combat This?

Both projects are already aware of this issue and have addressed it in their plans which is why they both plan to transition to become decentralised autonomous organisations (DAOs).

If this were to occur, governments would have great difficulty affecting either project as there is no single source of failure with a DAO.

Whether this will work or not is something we simply cannot predict at this stage. In fact, whether or not they will even face a real threat is something nobody can predict – the regulations for the vast majority of countries haven’t even been announced yet.

On top of this, we would be surprised if either project hasn’t already begun other plans to ensure they’re in accordance with securities laws as they are both attempting to build real projects for the long-term.

However, this is still a consideration that all investors should bear in mind so don’t say we didn’t warn you! 


6. WHERE CAN YOU BUY BOTH COINS?

The easiest and cheapest place to buy both coins is on their own exchanges which you can find through our links below. Please note, these are affiliate links so if you would like to show us support, you can use the links below and we receive a small payout. If you don’t wish to, feel free to not use the links below! 

Buy KuCoin Here

Buy COSS Here


7. COSS SINCE OUR LAST VIDEO (FOR OUR FOLLOWERS)

A few weeks ago, we put out a video discussing COSS and our belief that it’s valuation would increase. As a result, several of our investors jumped on-board and have been worried as the price has fallen since.

This is our message to all of these followers.

We have to admit that we jumped in on COSS at the wrong time and we apologise if anyone who follows us did the same – it had dipped back to $0.12 after increasing above $0.20 so we believed that this retracement presented an opportunity.

In reality, the poor focus from the management of the project has dragged the project down even further.

What Do We Think Of The Project Now?

It’s easy to see prices falling and lose faith in it, as a result. We’re only human and we’ve done the same thing at times.

If you wish to sell at this point, we completely understand.

Personally, we aren’t selling our tokens because we believe the project is still undervalued and we’re finally seeing some positive signs from the management after weeks of very poor performance! 

Believe us, we’ve felt the pain as COSS’ price has dropped just as much as you!

While we’re not adding to our positions at this time, we are also not planning to sell either.

As we said before, this was always going to be a high risk/reward investment which is why we always recommend that investors remain well diversified and never commit too much to any position, especially risky ones!

We’re In This Together

That’s the end of the article! Thanks for stopping by and don’t forget to check out our other articles for regular Crypto/ICO reviews and market updates.

Would you like your ICO reviewed? Contact Us

Disclaimer: None of the above is financial advice. Always do your own research.

 

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This article has been provided by the CEO; Tom Heavey.

What Is Utrust? Full Review

What is UTRUST? In this UTRUST review, we will explaining how they are positioning themselves to become the Paypal of Cryptocurrencies.

Through the introduction of buyer protection, UTRUST are merging the safety of fiat currencies payment systems with the many advantages of Cryptos. This could be a huge step towards mainstream Cryptocurrency adoption so keep reading if you want to learn more…

 


YOU WILL LEARN:


What Is The UTRUST Project About?

Are They Solving Real Market Problems?

Is UTRUST A Good Investment?

What Is The CryptoGurus Opinion On UTRUST?

 


CONTENTS

  1. What Is UTRUST?
  2. How Does UTRUST Work?
  3. What Problems Are UTRUST Solving?
  4. Will UTRUST Token Prices Increase?
  5. The Team
  6. Roadmap
  7. ICO/Token Sale Details
  8. Extra Points 
  9. Conclusion
  10. Follow Future Posts


1. WHAT IS UTRUST?

In our own words:

  • UTRUST will be a payment gateway that aims to become the Bitcoin/Cryptocurrency contender to Paypal.
  • It will unique to other Crypto payment gateways in that it offers buyer protection – just like Paypal – hence eliminating some of the most significant risks involved with Bitcoin/Crypto payments.

Utrust Buyer Benefits
What Are Payment Gateways?

A payment gateway is an API that websites can use as a means of accepting payments. Still confused, right?
The easiest thing to say here is that Paypal is an example of a payment gateway. As is Stripe.

Essentially, they are a method to allow websites and shops to accept alternative payments types to using your debit/credit card.

The Next Big Step For Mainstream Adoption?

In our opinion, payment gateways are one of the biggest steps in introducing Cryptocurrencies to the masses. Imagine if, when buying things online, you had the option to pay with Cryptocurrencies and the process was as simple as checking out with Paypal.

Suddenly, we could see a huge rush of Cryptocurrency users actually spending their coins for real purchases, rather than just HODLing them.

“Tom, isn’t this already possible through payment systems like Bitpay and Monetha?”

I’ll move on to Bitpay shortly under the section labelled ‘Current Market Problems’ but, for now, I would like to discuss Monetha because there isn’t much of a difference functionally between them and UTRUST and yet the difference that does exist changes everything.

Monetha was a recent ICO that I was quite excited about; it is a payment gateway that is also intending to be the Crypto-contender to Paypal.

However, Monetha have missed out something huge; Buyer Protection

Let’s say you order a product and it arrives faulty or it never even turns up. Using Paypal’s buyer protection, you can request your funds back and have them validly returned to your bank account.

With Monetha, this isn’t possible; once you’ve paid for the item, the funds are gone and you cannot get them back. From a buyer’s perspective, this simply isn’t acceptable.

In today’s world, buyer protection is an absolute must. Without it, Cryptocurrency payments will appear scary and off-putting.

The key to on-boarding the general public is to provide a Cryptocurrency payment system that is very similar to what they are already comfortable with (e.g. similar to Paypal) and buyer protection is fundamentally important for this.

UTRUST will offer customers buyer protection.

Their plan is to use the benefits of Cryptocurrencies (unhackable, cheap and trustless) and merge them with the safety of fiat currency payment systems (buyer protection and a number to call if things go wrong) such as Paypal.

With UTRUST, users will be able to spend their Cryptocurrencies in a safe and reliable manner.

UTRUST will be the ‘first cryptocurrency payment platform to deploy consumer protections’.

We’ve briefly covered what UTRUST is and why buyer protection is essential to encourage mainstream Bitcoin/Cryptocurrency adoption.

Now let’s run through the buying process so you can understand the next biggest selling point in this UTRUST ICO  which relates to how it works.


2. HOW DOES UTRUST WORK?

Utrust How Does It Work? CryptoGurus.comThe process goes like this:

  1. Merchants will list products on their website as normal and integrate the UTRUST system just like Paypal
  2. The buyer selects an item to buy and checks out via UTRUST (choosing this over Paypal if he wishes to use Cryptocurrencies)
  3. The buyer selects on of their existing Cryptocurrency wallets as a source of funds (e.g. their Bitcoin, Ethereum, Litecoin wallet)
  4. The buyer will be shown the total amount to be paid including a a 1% commission and exchanges conversion fee (from Crypto money to fiat money)
  5. The buyer hits the ‘Buy Now’ button and their chosen Cryptocurrency is converted into fiat currency immediately (for an additional fee)
  6. This fiat currency (USD, EUR etc.) is held in escrow hence the buyer protection
  7. Once the holding period is over, the merchant will receive their fiat currency.

Huge Selling Point:

Merchants receive FIAT currency (USD, EUR etc.) NOT Bitcoin/Cryptocurrencies

Until recently, most people thought that shops would have to begin accepting Bitcoin and other Cryptocurrencies for us to spend them.

That’s not the case; once platforms such as UTRUST and TenX are running, we will be able spend Cryptocurrencies while shops can still receive their regular currency. It’s a huge win-win

What If There Is A Dispute?

  • The buyer will open a dispute. The merchant and buyer will enter a resolution chat between the two of them in order to try to settle the dispute
  • If both parties are still not happy after 7 days, the buyer can escalate the claim to a UTRUST mediator
  • The UTRUST mediator will collect evidence from both sides and have the final say on which party is correct
  • If the buyer is correct, a refund will occur with an additional 2% fee charged to the merchant
  • If the merchant is correct, the funds will be released and they will be paid
  • If one party is found to be lying, their trust score will decrease found to be lying, their trust score will decrease 

What Does The Trust Score Mean?

  • The trust score dictates how long funds are held in escrow
  • If a merchant has a very low trust score, the buyers’ funds will be held for a long time for a long time
  • As the merchant uses the platform and is found to be reliable and honest, their trust score will grow over time and funds will be released to them much more quickly with each purchase
  • There is clear incentive for merchants to maintain a high trust score and, therefore, there is an incentive to act in a trustworthy manner within the UTRUST platform


3. WHAT PROBLEMS ARE UTRUST SOLVING?

Utrust or Paypal CryptoGurus.com

We say this time and again yet so many people I speak to seem to forget this incredibly important point:

Businesses are created for one purpose; to solve problems

  • Netflix was created to solve the problem of having to rent individual movies from a store for expensive prices (remember Blockbuster?!)
  • Uber was created to solve the problem of expensive taxis

If a business does not solve a real problem, it is incredibly unlikely that it will succeed.

So what market problems are UTRUST specifically solving?

There are 2 main competitor sectors so we will discuss how they’re solving the problems of both of these sectors:

  1. Regular (Fiat) Currency PaymentsPaypal, Stripe etc.
  2. Cryptocurrency PaymentsBitpay etc.

Paypal Market Problems

  • Seller FeesPaypal charge a minimum of 2.9% but can go as high as 5% after hidden fees are accounted for.
  • Physical GoodsPaypal only apply buyer protection to the purchase of physical goods
  • Exchange fees According to the UTRUST Whitepaper, Paypal and Bitpay ‘provide exorbitant internal exchange rates’ when converting between foreign currencies
  • FraudPaypal is a centralised system that holds your money and is therefore subject to hackings and fraud
  • Fake Chargebacks Paypal merchants suffer from fake chargebacks – when a user asks for their money to be returned with no legitimate reason – because the system is set up heavily in favour of the users and they are believed without producing much evidence

UTRUST’s Solutions

  • Seller FeesUTRUST will charge 1% for seller fees
  • Physical Goods UTRUST will cover all physical good plus the majority of virtual goods and services also
  • Exchange FeesThe UTRUST whitepaper dictates that they will ‘connect to multiple cryptocurrency exchange providers to offer very low exchange rates’
  • Fraud With the UTRUST system, you will hold your own funds (and your private keys) so the risk of fraud is eliminated
  • Fake Chargebacks UTRUST will implement a fairer system where both merchants and buyers will provide evidence equally. A UTRUST mediator will then fairly decide which side is correct.

Our Critique

  • Seller FeesUTRUST regularly quote 1% as their fee. However, this doesn’t include the conversion from Cryptocurrencies to fiat currency. With this included, what will the real fee be?
  • Physical GoodsPaypal doesn’t cover services or virtual goods. There must be a reason for this decision so what is it? Perhaps, it is too difficult to mediate if there is a dispute with services or virtual goods?
  • Exchange FeesUTRUST claim that Paypal and Bitpay ‘provide exorbitant internal exchange rates’ when converting between foreign currencies. Without real numbers provided, it is difficult to know if this point is valid

Bitpay Market Problems

  • No Buyer ProtectionIf the merchant doesn’t deliver the item or it is faulty, buyers have no means of getting their money back
  • Bitpay only accepts BitcoinBitpay doesn’t accept other commonly used Cryptocurrencies
  • Exchange feesBitpay and Paypal ‘provide exorbitant internal exchange rates’ when converting between foreign currencies

UTRUST’S Solutions

  • Buyer Protection Buyers will be able to appeal and potentially be refunded if the merchant has not been truthful or the product is not as expected
  • UTRUST will accept many CryptocurrenciesIn their whitepaper, UTRUST describe how they will accept Bitcoin, Ethereum Litecoin, Dash and Monero to begin with. They also plan to add to this list regularly
  • Exchange FeesThe UTRUST whitepaper dictates that they will ‘connect to multiple cryptocurrency exchange providers to offer very low exchange rates’


4. WILL TOKEN PRICES INCREASE?

This is another incredibly important point that many people overlook when investing in Cryptocurrencies.

When you invest in a company, you are buying shares. As the company makes profits, the shares increase in value. In other words, you are investing in the value of the company rising.

With the majority of Cryptocurrencies, the coins/tokens don’t represent shares. Therefore, the company can increase in value (i.e the CEO and employees get rich) and yet the coin/token may actually fall in value. 

The ONLY factor determining token price is supply and demand on exchanges.

Obviously, supply and demand are affected by many factors but the price all comes down to the combination of these two. Because of this, it is essential to ask yourself the following question: 

Will there be token demand on the exchanges?

If the answer is no, token price will fall. If the answer is yes, the token price COULD rise. This idea is the most important element of any investment and yet so misunderstood with Cryptos.

So, let’s look at the demand.

What Are The Sources of Demand?

  1. The Token Buyback Program
  2. Using The UTRUST Token = Zero Conversion Fee

1. The Token Buyback Program

  • Token Supply will begin at 1 billion
  • UTRUST will a ‘percentage of transaction fees’ to buy tokens on the exchanges and burn them
  • This will reduce the overall supply of tokens, driving up price
  • A maximum of 50 million tokens will be burnt every year
  • The goal is to reduce the tokens to a total supply of 100 million

1. Our Critique

  • What percentage of the transaction will it be? 75% of the fee is very different to 10%
  • Burning 50 million tokens is perhaps possible in the beginning but this gets more difficult as supply reduces and it costs more to buy 50 million tokens. Will they be able to manage it?
  • Once the total supply reaches 100 million, the buyback program will stop. What will cause token prices to rise now? Admittedly, this point is moot for many years until they reach this time

2. Using the UTRUST Token = Zero Conversion Fee

  • If you choose to use the UTRUST token, the 1% fee will be waived

2. Our Critique

  • Unless people plan to use UTRUST very regularly, will people really convert their tokens from other Cryptocurrencies and hold them as UTRUST tokens?
  • For me, the answer is no BUT UTRUST seem to think that they buyback program is the most significant means of raising token price so this point isn’t too much of an problem.


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5. THE TEAM

Utrust Team CryptoGurus.com


When looking through an ICO team, the famous phrase ‘Invest in people, not ideas’ come to mind. It’s based off the principle that an idea is only as good as the people who execute it. As an investor, I believe strongly in this principle.

Sadly, however, it is very difficult to analyse the team of any ICO. ICOs have team profiles on their website. The problem is: guess who writes their profiles? They do. Anyone can write a good profile on themselves.

Regardless, the UTRUST team appear to be strong. Their CTO has been the ‘former CTO in a leading digital payment platform company and is the current head of Development of a Swiss-based Cybersecurity company’ and other team members have similarly qualified background.

Finally, I like the size of the team – they have 17 members in their core team with a further 16 advisors. This is a much higher number than you see for many other Cryptocurrencies with similar valuations.


6. THE ROADMAP

Utrust Roadmap CryptoGurus.com

  • Q1 2018 – They will have the first API ready to test
  • Q2 2018 – Development will continue and theback-end interface for mediators will be added
  • Q3 2018 – ‘The initial pilot launch will feature a curated selection of merchants’

Our Critique

  • With the initial pilot launch occurring in Q3 2018, the platform won’t actually be fully functional for another year
  • This is such a long time away – especially in Crypto-world – that is raises the question of whether it is best to invest in the ICO or wait until afterwards once the hype has dropped down and token prices might potentially be cheaper?
  • After all, the only factor driving demand over the next year before the platform launches is speculation
  • You have to ask yourself if you think that speculation will drive prices up after the ICO or whether a new, shiny ICO will come along in the meantime and people will sell their UTRUST tokens to fund their next purchase?

The decision is entirely up to you – we are not attempting to encourage or discourage anyone with their choice.

We simply aim to open the eyes of investors by exploring all possible options in our analysis.

With that in mind, let’s move onto the ICO/token sale details next.


7. ICO/TOKEN SALE DETAILS

  • ICO/Token Sale Link – https://utrust.io/ico
  • Referral/Affiliate Code – N/A
  • Pre-ICO Start Date – 28th August 2017 (Finished)
  • ICO Start Date – 2nd November 2017, 2pm UTC
  • ICO End Date – 9th November 2017, 2pm UTC
  • Token Price – $0.065 (6.5 cents)
  • Bonuses Available – N/A
  • Token Supply – 1 billion
  • Soft Cap – N/A
  • Hard Cap – $49 Million
  • Accepted Currencies – BTC & ETH
  • How To Participate – Click this link and follow the instruction

Very Important Point:

Token price is irrelevant when investing. Hard cap is all that matters for judging whether an ICO is cheap or expensive and market cap is all that matters once the Crypto hits the exchanges.

If you want to learn more about this fundamentally important aspect of investing, make sure to have a read of our brief explainer article


What Happens If The Hard Cap Isn’t Reached?

  • If UTRUST’s hard cap isn’t reached, the unsold tokens will be burnt
  • For example, if only 500 million tokens are sold in the ICO, the remaining tokens will be    destroyed
  • This protects your investment from being diluted


8. EXTRA POINTS TO CONSIDER

  • UTRUST’s Pre-ICO sold out in just 90 minutes, raising $1.5 Million
  • Since then they have ‘boosted their infrastructure’ and are looking to sell out their main token sale as quickly as possible
  • It is impossible to say whether they will hit their hard cap or not. However, it is fair to say that there could be high demand during the ICO
  • Therefore, IF you plan to participate, I would recommend signing up beforehand and being ready with your contribution immediately after the ICO opens


9. CONCLUSION

  • We believe that the project is very strong
  • The price is relatively cheap; with a hard cap of $49 million, this would put the UTRUST platform as the 91st most expensive project on coinmarketcap.com (at time of writing)
  • However, the platform will not be released for general use for another year – in ‘crypto-land’, this is a very long time
  • People may sell their tokens after the ICO in order to fund other purchases. This could make you think that an investment post-ICO might better than during the ICO

That’s the end of the article! Thanks for stopping by and don’t forget to check out our other articles for regular Crypto/ICO reviews and market updates

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Disclaimer: None of the above is financial advice. Always do your own research.


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What Is Power Ledger? Full Investor Review

What is Powerledger ICO Review

What is Power Ledger? In this Power Ledger review, we’ll be discussing how the project could represent the first step in a plan to revolutionise the energy industry forever.

With the growing popularity of renewable energy, more and more people are left with excess energy which they wish to resell. Selling it ‘back to the grid’ offers terrible prices due to the monopoly held by energy companies.

Power Ledger will double the price you receive through the introduction of a peer-to-peer network.

 


YOU WILL LEARN:


How Will Powerledger Revolutionise The Energy Industry?

How Are Powerledger Better Than The Alternatives?

Is The Token Price Linked To The Success Of The Platform?

Is Powerledger A Good Investment?

 

 


CONTENTS

  1. What Is Powerledger?
  2. How Does Powerledger Work?
  3. What Problems Are They Solving?
  4. Will Powerledger Token Prices Increase?
  5. The Team
  6. Roadmap
  7. Since The ICO
  8. Extra Points
  9. Conclusion
  10. Follow Future Posts


1. WHAT IS POWERLEDGER?

Power Ledger is an Australian based peer-to-peer energy trading platform which integrates with the existing electricity system.

As a platform, it supports a number of different applications including: Peer-to-Peer (P2P) Trading, Wholesale Market Settlement, Electric Vehicles and Carbon Trading.

These applications are not just conceptual; they are proven and already deployed in certain communities and energy markets around the world.


2. HOW DOES POWERLEDGER WORK?

To explain how Powerledger works, it’s first necessary to understand the two types of tokens related to Powerledger:

  1. POWR Tokens (For sale on exchanges)
  2. Sparkz (Only used within the platform)

POWR Tokens

POWR tokens are ‘access tokens’. In other words, they allow users access to the platform – and thus, without them, you cannot use Powerledger.

Once purchased, users can convert them to Sparkz via a smart holding contract and then they can use their Sparkz on the platform.

Sparkz Tokens

Sparkz are the tokens used within the platform. They cannot be bought externally on exchanges and they can only be gained by converting POWR tokens.

The value of Sparkz depends on the cost of local energy. These tokens can always be sold in return for your local currency.

To gain a greater understanding of how Powerledger works, let’s now look at the process from two perspectives:

  1. Energy Sellers
  2. Energy Buyers

Energy Sellers

An energy seller is someone who produces more electricity than they consume which – common in locations such as Australia due to the vast amounts of sun and high prevalence of solar panels – and thus wish to sell their excess energy

The Process:

  1. Sell your excess power to energy buyers in return for Sparkz on the app/website
  2. Convert your Sparkz to your local fiat currency via app/website e.g. USD, AUD etc.

That’s it. You’ve just sold your energy to other app users and for a much better price than you would have been offered compared to selling it back to the grid.

Energy Buyers

The Process:

  1. Buy POWR tokens from exchanges in order to access the platform
  2. Convert your POWR tokens to Sparkz
  3. Use your Sparkz to buy excess energy off people for great prices
  4. Use the energy you bought and you can even re-sell the excess that you don’t use


3. WHAT PROBLEMS ARE POWERLEDGER SOLVING?

Peer-to-Peer (P2P) Trading:

The issue with the current system arises due to the stranglehold that the energy corporations have over the market.

Due to the oligopolistic nature (several key players with no outside competition) of the industry, these companies can offer consumers virtually whatever price they want because consumers have little alternative in choice.

We’ll give a higher level of detail below to explain further how the current system works in Australia and how Power Ledger are significantly improving upon it.

The Current System

Excess energy can currently be sold back to the grid, through the local utility company, for 7c/kwh. The utility company then sells this on at a much higher price.

Power Ledger’s System

Power Ledger will be doubling this payout from 7c/kwH to 15 c/kwH for energy sellers, producing a clear incentive for them to make the switch to selling via Power Ledger instead of the regular system of selling back to the grid.

How Can Power Ledger Offer Such Good Prices?

Power Ledger will be hosted on the Ethereum network which means they can make use of smart contracts to cut out the middleman and reduce costs to a fraction when compared with the energy companies.

On top of this, Power Ledger are not even offering ridiculously good prices based on a fair market valuation – the current system is underpaying consumers and Power Ledger are bringing in a more fair price in terms of general open market standards.

5c/kwH will go towards paying for the usage and maintenance of the power lines plus a small cut from this will be paid to the Power Ledger team.


4. WILL THE TOKEN PRICE INCREASE IN VALUE?

This is another incredibly important point that many people overlook when investing in Cryptocurrencies.

When you invest in a company, you are buying shares. As the company makes profits, the shares increase in value. In other words, you are investing in the value of the company rising.

With the majority of Cryptocurrencies, the coins/tokens don’t represent shares. Therefore, the company can increase in value (i.e the CEO and employees get rich) and yet the coin/token may actually fall in value.

The ONLY factor determining token price is supply and demand on exchanges.

Obviously, supply and demand are affected by many factors but the price all comes down to the combination of these two. Because of this, it is essential to ask yourself the following question:

Will there be token demand on the exchanges?

If the answer is no, token price will fall. If the answer is yes, the token price COULD rise. This idea is the most important element of any investment and yet so misunderstood with Cryptos.

I’ve written a short article explaining how important it is to understand this. You can check it out here.

So, let’s look at the demand.

What Are The Sources of Demand?

In order for consumers to buy power from the Power Ledger platform, they will first have to go to exchanges and buy POWR tokens. Otherwise, they cannot use the platform.

Therefore, as more people wish to use Power Ledger, there should be a greater demand on exchanges for the tokens, thus driving prices higher.

As a result, Power Ledger have very effectively linked their token price to the usage of the platform.

 

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5. THE POWERLEDGER TEAM

As our regular readers will know, one of our mantras here at Crypto Gurus is to “invest in people, not ideas”; you could have the greatest idea in the world but without proper execution, it will not matter.

An Impressive Team

With three names jumping out as being particularly strong after a little digging: Dr. Jemma Green, John Bulich and Dr. Gov Van Ek. Dr Green spent over ten years working in investment banking in London, while at the same time completing a Masters degree and two postgraduate diplomas at Cambridge University.

She is also a research fellow at Curtin University Sustainability Policy (CUSP). The other two are the founders of Ledger Assets, a venture that has successfully created and commercialized a number of blockchain systems and applications including Uproov.com.

The team seem to have a good mixture of experiences and knowledge bases, all of which seem suited to what they are trying to achieve.

A Strong Advising Team

As well as this, lead Board Advisor Bill Tai has been a highly successful venture capitalist for a long time, Richard Branson hosted the team at the 2017.

Necker Island Blockchain Summit and Elon Musk has even reached out to Dr Green for more information on the project.

We feel this the correct time to mention how impressed we are by the sheer abundance of information provided by Power Ledger.

Not only do they provide the obligatory Whitepaper, there is also a detailed slide presentation helping to outline the way the system works (which was presented at the Necker Island Summit) and an extensive token paper among other things.

To us, this shows a team that have not only done their homework but are also determined to successfully bring this project to market.   


6. THE POWERLEDGER ROADMAP

Q4 2017:

  • Application Development: The first applications to be in beta testing after the token sale will be the Microgrid/Embedded Network Operator/Strata and the Electric Vehicle Trading Applications.
  • Green Energy Loyalty Rewards Program: The green energy incentive formula weighted towards renewable producers will begin and accelerate renewable energy generation.

Q1 2018:

  • Begin Distribution of Growth Pool: Early Application Hosts will be gifted POWR tokens to incentivize their use of and contribution to the platform.
  • Technology Layers Transition: Power Ledger will complete the transition to a modified fee-less Consortium Ethereum network.

Q3 2018:

  • First Asset Germination Event: Power Ledger and Platform Application Hosts will begin conducting Asset Germination Events, where POWR token holders will receive priority to become co-owners and beneficiaries of renewable assets. 
  • Marketing and Partnerships: As new applications are developed potential Application Hosts will be targeted and/or Power Ledger may directly deploy the application.

Q4 2018:

  • Beta Test of New Applications: Begin beta test of Autonomous Asset Management and Neo-Retailer and Carbon Trading Applications.

Q2 2019:

  • Frequent Asset Germination Events: Asset Germination Events will be frequently conducted by Power Ledger and its Application Hosts, driving the intrinsic value of the token.
  • Transition to Public Blockchain: Power Ledger aims to be operating fully on a public PoS blockchain.

Q3 2019:

  • PowerPort and Future Applications: Begin beta testing of the PowerPort Application, as well as Wholesale Market Settlement, Distributed Market Management, and other future applications that cannot even be imagined yet!


7. SINCE THE ICO

With an ICO price of $0.088 per token, the Power Ledger token has trebled in value since trebled in value.

There was significant hype around the project during the ICO which has continued ever since and this provides positive indications for the short-term prospects of Power Ledger also.

 

8. EXTRA POINTS TO CONSIDER

Growing Marketplace (Positive)

With the amount of research and funding into renewable energy resources growing rapidly, we are sure to see technological advancements increase the efficiency of the renewable sector.

This should lead to an increased quantity of energy production from regular people and thus an expanding marketplace for Power Ledger to grow into

Consistent Energy Supply (Negative)

A side note we’d like to include is one that is relatively obvious when talking about Solar Power, but needs mentioning – the varying levels of energy production that could be achieved across the globe.

A household in Australia would produce a much greater quantity of surplus energy, than houses in cooler climates which could hamper development in certain locations.


9. THE CRYPTOGURUS CONCLUSION

Short Term

Currently, market prices are driven by speculation rather than usage – look at IOTA, for example, it’s used by virtually nobody and yet is valued at over $1 billion. This is entirely based on the potential it holds for the future – not its current usage.

With Power Ledger, it’s fair to say that the potential is huge. Because of this, we expect to see prices rising in the short term based on speculation alone.

Long Term

In the long term, the team, technology and practical use cases are all there; this cannot be said for most ICO’s.

The number of successful trials as well as the committed partnerships only supports this stance and the fact that both Richard Branson and Elon Musk seem to see something in the project would be more than enough for most casual investors.

It certainly seems to favour long-term, organic growth; the nature of token as discussed means that as Power Ledger are able to draw more hosts on board, the value should only increase.

However, it’s very important not to overlook the many risks involved with this project – it would be naive to expect the energy companies not to attempt to disrupt Power Ledger in some way.

With their deep pockets, we wouldn’t be surprised for a smear campaign to be produced about Power Ledger in order to protect their own businesses.

Furthermore, the difficulty of achieving their goal is immense. Is it realistic? It’s a huge ask for certain.


As investors, we are always looking at the risk vs reward when considering any investment. In the case of Power Ledger, we believe that the reward does justify the risk so we would consider adding this to our portfolio.

However, due to the large risks involved, we would only consider a relatively small allocation towards this project (5% or less) for our own portfolios. This is, in no way, a recommendation for anyone else!

That’s the end of the article! Thanks for stopping by and don’t forget to check out our other articles for regular Crypto/ICO reviews and market updates.

Would you like your ICO reviewed? Contact Us

Disclaimer: None of the above is financial advice. Always do your own research.


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11 Reasons To Avoid BitConnect

Bitconnect Scam - 11 Red Flags

While cryptocurrencies like Bitcoin attempt to break new boundaries, BitConnect’s goal is to become the biggest Ponzi scheme in history.

Are the rumours true or is there really a trading bot behind the scenes? Let’s discuss.

 

YOU WILL LEARN:


How BitConnect Are Claiming They Can Pay Investors So Much

Our 11 Red Flags

What Is The CryptoGurus Opinion On BitConnect?

 



CONTENTS

  1. What Is BitConnect?
  2. How Does BitConnect Work?
  3. Are They Solving Market Problems?
  4. The BitConnect Team
  5. Our 11 BitConnect Red Flags
  6. When Will BitConnect End?
  7. Mt Gox Potential?
  8. Conclusion
  9. Follow Future Posts 


1. WHAT IS BITCONNECT?

In their words:

BitConnect Coin is “an open source, peer-to-peer, community driven decentralized cryptocurrency that allows people to store and invest their wealth in a non-government controlled currency, and even earn a substantial interest on investment”. 

In our words:

It is an investment programme that promises entirely unrealistic returns, with very little evidence to support their claims.

2. HOW DOES BITCONNECT WORK?

The process works like so:

    • You deposit Bitcoin on a given Bitcoin address in order to purchase BitConnect Coins from the BCC Exchange.
    • You then lend your BCC back to BitConnect whose trading bot’ will make use of their ‘Volatility Software’ in order to accrue daily interest on your investment
    • The level of interest you receive depends on the level of your investment but your money remains locked in the system for between 120 and 299 days – dependent on the level of your investment
    • You are paid daily interest and receive your initial investment, plus all of the intreest accrued, once the lockdown period has expired.
    • You are then able to withdraw your funds in USD, or reinvest back into the system.


3. ARE BITCONNECT SOLVING REAL PROBLEMS?

With all of our reviews, we include a section about the market problems that the Cryptocurrency is solving. We do this because we believe that the underlying technology of Cryptocurrencies is truly staggering.

The potential to improve on the current systems that we’ve created through the innovative use of the blockchain is truly remarkable.

Contrasting this, is BitConnect who solve zero market problems.

In fact, as they’re most likely a scam, they’re adding to many of illegitimacy connotations surrounding Bitcoin and all Cryptocurrencies in general. Good job BitConnect.


4. THE BITCONNECT TEAM

There is not a single piece of information regarding the team on the BitConnect website. There is no mention of when the company was founded, who owns it or where it is physically based out of. The owners also pay an annual fee to keep their details hidden from public record.


5. OUR 11 BITCONNECT RED FLAGS

1. Their Website

When you first open their website you are certainly not met with an abundance of information, in fact you have to dig pretty deep to even find out what BitConnect claim to do.

In between the grammatical errors you can find an entirely unhelpful animated video featuring buzz phrases such as “financial freedom” and “Income stability in an unstable world”.

2. No Whitepaper

BitConnect have no whitepaper; the go to document for most ICO investors. It is incredibly rare and concerning for a project to not produce one.

3. No Long-Term Aims or Ambitions

The BitConnect roadmap only goes as far as November 2017; beyond this date, there seems to be no further aims or objectives for the company. Looking at past stops on their roadmap, the primary focus seems to be on marketing and driving new money into the project, as opposed to any kind of project development.

This potentially highlights the real motivation for those involved.

4. ‘GUARANTEED PROFITS!!!’

This phrase alone makes me shiver a little; we all know that you can never guarantee profits, especially in an industry as volatile as Cryptocurrencies. Yes, the overall market has been on the rise for a while but no-one can say for sure what is around the corner. It’s simply not realistically possible to GUARANTEE profit for all of their users.

A great article from Crypto Investor calculated the exact figures behind their claims. He found that if all of BitConnect’s claims were true, a $10k investment accruing compound weekly interest would return $337,253 in year.

Extrapolating this further, the same $10k investment would be worth just under $15 trillion after six years. Usually, we would explain how unrealistic this is but, in this case, we’re talking about a $10,000 investment returning the GDP of a small country in six years; come on now.

5. No Transaction History

While we’re not asking BitConnect to give me their secret algorithm, if there is one, it would be nice for investors to at least have access to a transaction history. Currently, there is no proof as to how this bot makes its money, or where any money is being held.

This just raises more questions and a reluctance to answer will only continue to raise further suspicions.

6. The 5m Disappearing Coins And $1 billion Market Cap

On November 3rd 2017, BitConnects market cap dropped by nearly $1.5 billion in less than two hours due to a recalculation of the coins circulating supply; dropping from 7.1 million to 2.1 million coins.

We have no idea what happened to those 5m tokens that were taken out of supply – it’s just another ridiculous page in BitConnect’s fairytale that will end in a swift collapse.

7. They Want Bitcoin, Not BitConnect Coin

You also have to ask yourself why the company are asking to receive Bitcoin as opposed to their own coin? Is this because they know that once the plug is pulled, the BitConnect Coin is going to be worthless?

Once the site is shutdown the owners will still hold Bitcoin, which will still have a significant market value, while the users will be left empty handed. 

8. The BitConnect Exchange

The BitConnect exchange currently deals with nearly 95% of all transactions involving BCC. Since they possess the only exchange BCC can be readily traded on, the chances for market manipulation are extremely high.

With the core premise of BitConnect being a scam in the first place, it’s fair to say that we would expect market manipulation is occurring also.

9. Misuse Of The Referral System

It has seen a recent overhaul but the initial referral system offered by BitConnect just did not seem sustainable; it was an eleven tiered pyramid with users able to collect 0.01% interest for an infinite number of referrals past this.

This has led to a number of YouTube promoters collecting upwards of thirty thousand referees and allowing them to claim they have made ridiculous amounts of money through the system.

BitConnect have recently announced that a change in the system. Ironically, they’ve illustrated this change through the use of a pyramid diagram!

10. Dash and Vitalik Buterin

For a long time, people have been wanting to hear the opinions of some of the Cryptocurrency elite and, while many have kept quiet, Vitalik Buterin (Co-Founder of Ethereum) was recently asked his opinion about the project on Twitter.

His response was rather short but it certainly speaks volumes; “If 1%/day is what they offer, that’s a Ponzi”.

Another opinion came from the offical Twitter account of Dash, who many believe have one of the smartest and brightest teams around and it simply said “CoinMarketCap, take BCC down! You are supporting a Ponzi scheme! #scam”.

A respected company like Dash wouldn’t lodge accusations lightly; they have to be 99.99% sure that their statement is true otherwise they are risking an awful lot. Let’s be honest, we’re all 99.99% sure.

11. Companies House

November 7th 2017 could soon be considered an important day in cryptocurrency; BitConnect Ltd. were issued with a notice from Companies House that read as follows.

“Companies Act 2006 (Section 1000(3)): The Registrar of Companies gives notice that, unless cause is shown to the contrary, at the expiration of 2 months from the above date (November 7th 2017) the name of Bitconnect Ltd. will be struck off the register and the company will be dissolved. Upon dissolution all property and rights vested in, or held in trust for, the company are deemed to be bona vacantia, and accordingly will belong to the crown.”

While we are not able to say with complete certainty that the BitConnect involved is our BitConnect, mainly down to the fact that their owners pay an annual fee to keep all of their details hidden. The market certainly seemed to think this was true as their coin price dropped by more than 25% in the days following this issue.


SORRY TO INTERRUPT…

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6. WHEN WILL BITCONNECT END?

Speaking to other Crypto-enthusiasts, it’s pretty clear that the majority of people know that BitConnect is a Ponzi scheme and yet people still continue to invest. Why is this?

The issue is that the price of BitConnect coins simply keeps on increasing. The reason behind this is because, other than relatively irregular complaints, BitConnect continue to pay out the promised rates.

How Are BitConnect Paying People?

The answer is not a trading bot. No trading bot in the world can turn $10,000 into $15 trillion in any time frame.

Realistically, there are probably 2 ways:

  1. Using new investors’ money to pay the old investors i.e Ponzi scheme 101
  2. The BitConnect team are most likely investing their earnings into Bitcoin. As the price of Bitcoin increases, they are able to sell off small amounts to pay investors anything extra that they need to.

When Will BitConnect Stop?

Many people are saying that these two elements above are key and, as long as money continues entering BitConnect and the value of Bitcoin keeps rising, BitConnect could continue for a long time.

We don’t agree; the letter – as quoted above – issued to BitConnect by the UK government brings in the question of regulations.

In regular financial markets, Ponzi schemes usually collapse as soon as their true nature becomes evident. In the case of BitConnect, this hasn’t occurred which is why we believe that governments will step in as regulations are gradually brought into the market from around the work.

With the threat of strong legal action, it’s likely that the BitConnect team may take their money and run – they’ve already made many millions, why would they continue with the threat of jail time looming over their heads?

7. MT GOX POTENTIAL?

What Happens When BitConnect Collapses?

For some cryptocurrency followers, this situation trigger thoughts of the MT Gox Exchange collapse in 2014. For those who don’t know, the MT Gox exchange handled 80% of all Bitcoin transaction at the time and it suddenly shutdown and filed for bankruptcy.

It is not officially known whether this was an act of fraud or embezzlement, or whether the system was in fact hacked as their CEO claimed. The end result was the equivalent of nearly $100 million disappearing overnight and faith in cryptocurrency being shaken with the market taking a big hit.

The worry here is, if many people’s beliefs surrounding BitConnect turn out to be true, the sudden disappearance of a top 20 cryptocurrency (based on current market cap) could begin a series of negative discussion and could once again see the market plummet. 

This of course depends on how developed the market is at the time – if BitConnect were to collapse before Cryptocurrencies gained mainstream adoption, it could be devastating on the market.

If it were to occur at a time when the market is more educated about the underlying blockchain technology, it seems less likely to cast negative connotations on the whole market – you wouldn’t think that the internet is bad because of an internet scam but you may have thought that before you knew much about the internet.

8. CONCLUSION

Stay as far away as you can from BitConnect.

While there is no denying that people are making money from this system, there is very little information that supports any form of legitimacy and their entire system relies on the continual input of new money.

If this revenue stream dries up then there is no future to the system. Equally, if the price of Bitcoin was to take a hit, BitConnect’s would equally struggle to pay investors.

For us, the introduction of regulations could be the end for BitConnect and the market may some day looking back at the day BitConnect received the letter from Companies House as the moment it all began to collapse.

We’re going to end with the famous quote “If it seems too good to be true, it probably is”.

That’s the end of the article! Thanks for stopping by and don’t forget to check out our other articles for regular Crypto/ICO reviews and market updates.

Would you like your ICO reviewed? Contact Us

Disclaimer: None of the above is financial advice. Always do your own research.


9. FOLLOW FUTURE POSTS

Come join us to follow future articles and personally chat with us:

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This article has been provided by our business analyst; Aaron Laver.

Substratum Project – Post ICO Review For Investors

What is Substratum ICO Review

Substratum is an ambitious Cryptocurrency attempting to lay the foundation for the decentralised internet.

If successful, they could overcome many of the current issues that the internet suffers – censorship and many others – and provide an incredible opportunity for investors looking for the next big Cryptocurrency.

 


YOU WILL LEARN:


Substratum – What Is The Project About?

Are They Solving Real Market Problems?

Will The Token Price Increase?

Is Substratum A Good Investment?

 

 


CONTENTS

  1. What Is Substratum?
  2. How Does Substratum Work?
  3. What Problems Are Substratum Solving?
  4. Will Substratum Tokens Increase In Price?
  5. The Team
  6. The Roadmap
  7. Since The ICO
  8. Our Conclusion
  9. Follow Future Posts


1. WHAT IS SUBSTRATUM?

In their words:

Substratum are “an open-source network that allows anyone to rent their computer as a hosting server”. The Substratum Network is a worldwide collection of nodes that uses industry-leading cryptography to deliver secure content anywhere, all without the need for VPNs or Tor.

In Our Words:

Substratum are attempting to create the foundation of the decentralised internet through the introduction of decentralised servers.

2. HOW DOES SUBSTRATUM WORK?

The Current System

Before we talk about Substratum, it is important to comment on how web hosting works on the current centralized web (this a very oversimplified overview);

  • Websites are essentially a group of files that need to be stored on a computer connected to the internet
  • These computers are known as “servers” as they serve up a websites files when a person visits a particular domain name e.g. CryptoGurus.com
  • Currently, companies such as GoDaddy and Blue Host operate within those role as web hosts
  • Customers pay these companies to put their files on the GoDaddy (or other company) web server and this is known as buying hosting

For a slightly more advanced yet still concise description, check out the video below:

This is a video from Bluehost above. We have zero affiliation to them – their video has only been included as this is one of the best, simple explainer videos.

Substratum’s System

Look around you right now and you’ll probably see of a few of your devices (mobile phone, computer, tablet etc.). These devices are most likely only using a small overall percentage of their processing power.

Substratum works by storing website securely files on your phone. Then, your phone will transmit these files to the network, using a small amount of processing power from your phone. Your phone effectively becomes one of the servers on the network.

The idea is that regular servers are producing lots of processing power in order to connect to the internet and host websites. Why not use the extra processing power from everyday devices instead of a single central server?

As many devices around the world are all contributing to the network, Substratum are providing a decentralised system which has many benefits but we’ll get into that in a bit.

First, we’ll talk about why anyone would choose to let Substratum use their devices’ operation power.

Why Let Substratum Use Your Device?

When you opt in to your device becoming a node within the network, you are paid a micro-transaction in SUB (Substratum’s currency) for each and every time that your device carries out an action to help run one of the hosted websites to run efficiently.

Users can then cash out their SUB for fiat currency (USD, GBP etc.) on exchanges.

In other words, there is a financial incentive to help contribute to the network and users won’t have to do anything other than switch their device on.

Won’t This Slow My Device Down?

When discussing the Substratum project with people, their immediate reaction is usually concern as they believe that it will cause their phone/computer etc. to overheat or use too much processing power and slow the device down.

This is where Substratum becomes very clever – your device contributes a varying amount of processing power based on its current usage.

Therefore, during the day while your using your phone, it will contribute a minimal amount or, perhaps even nothing. During the night, however, while your device is using virtually no processing power for itself, it is able to provide a greater contribution to the network.

As a result, your devices will earn you more money while you sleep.

Here at CryptoGurus, we’re very keen on sources of passive income so this is a huge selling point for us.

We’ve talked about why people would want to become a host on the network. In the section titled ‘What Problems Are Substratum Solving?’, we’ll discuss why websites would benefit from choosing Substratum as their host but, first, let’s run through the process that a website goes through to use Substratum.

How Do Websites Get Hosted?

The process is very simple – website owners will sign their website up to the hosting service via the Substratum website/app in the future in order to begin the hosting service.

They will then pay via the CryptoPay system which is a simple API – similar to Paypal – that allows easy checkout and purchases for website owners.

They will have the option to pay in a variety of Cryptocurrencies which will then be automatically converted to SUB and distributed to the network contributors.

3. WHAT PROBLEMS ARE SUBSTRATUM SOLVING?

Substratum vs The Current System

In the following section, we will be outlining a few of the problems currently surrounding the centralized web and detailing Substratum’s solutions to them. After that, we will highlight one of Substratum’s biggest advantages it holds over its main rival – Maidsafe.

Problem # 1 – Digital Censorship

In many countries internet censorship and restriction is rife; government intervention means users are unable to access certain websites. This is a problem all over the world with countries such as Russia and China leading the way. The current way around this for users to use complex and potentially expensive software such as Tor and VPNs.

Both Russia and China have also recently based laws, banning the use of VPNs for the general public, further exacerbating the problem. The beauty of the decentralized web is that censorship cannot exist; governments are unable to get involved due to the lack of a central access point.

Problem # 2 – Ease of Use

As mentioned above, the current solution for the censorship problems is to use software such as Tor or VPNs, these can be notoriously complicated for the average internet user. Substratum have placed a focus on good user experience and created a product that requires no special software; it can all be completed from any browser.

Problem # 3 – Privacy, Security and Encryption

With a single centralised server – i.e. the current system – there is a single point of failure. This means that a hacker only has to gain access to this location or a fault to occur for a catastrophic outcome for all websites hosted on that server.

The beauty of decentralisation is that there are millions of locations all contributing to the network. Therefore, a hacker would either have to hack all of these locations simultaneously – not possible – or hack the underlying technology called the ‘blockchain‘ which is also virtually impossible as it would require a quantum computer and no examples of these currently exist.

Problem # 4 – High Hosting Costs

Hosting fees are currently very high for businesses wishing to get their websites on the internet; centralized web hosts charge a company whether their content is doing anything or not.  When you host with Amazon Web Hosting services, for example, you are charged a flat monthly fee regardless of whether your website receives visitors or not. On top of this, you’re also charged a variable fee as visitor numbers increase.

With Substratum, however, you are only charged for each request that is processed. In layman’s terms, you might pay a variable fee but you pay zero flat fee plus the variable fee will be minimal in comparison with traditional web servers.

Problem # 5 – Net Neutrality

This is a large topic at the minute; censoring and content regulation means that people have no control over what they do or do not want on the internet, it is really just a matter of corporate money changing hands. The founder of the worldwide web himself, Tim Berners-Lee, is a big advocate of net neutrality.

Substratum say that “With the Substratum Network, ALL websites and applications will have EQUAL ability to be broadcast in an equal and fair manner”. Also, any member of the network will have the ability to vote content up or down.

This allows people to identify bad players like child pornography or terrorism and get them removed from the network.

Implementing a community-based system for highlighting good content and removing negative content is an idea that we strongly advocate due to much evidence proving the efficacy of this model as Reddit has proven.

Substratum vs Competitors

Now if you know a little about cryptocurrency, you may be thinking

“But Aaron, haven’t other projects already tried to achieve this?”

The answer is yes. The most direct comparison would be Maidsafe, who are also aiming to decentralize the web.

Maidsafe however have seen a few barriers to success; they require users to host their websites through a subdomain. In simple terms this means that rather than listing your website as ‘cryptogurus.com’ for example, Maidsafe would require the domain name to in fact be ‘cryptogurus.maidsafe.com’.

Now this is not an appealing idea for us, so you can only imagine how unappealing it would be to large operators such as Amazon or eBay.

4. WILL THE TOKEN PRICE INCREASE IN VALUE?

This is another incredibly important point that many people overlook when investing in Cryptocurrencies.

When you invest in a company, you are buying shares. As the company makes profits, the shares increase in value. In other words, you are investing in the value of the company rising.

With the majority of Cryptocurrencies, the coins/tokens don’t represent shares. Therefore, the company increase in value – i.e. the CEO and employees make lots of money – while the coin/token price may actually decrease in value.

The ONLY factor determining token price is supply and demand on exchanges.

Obviously, supply and demand are affected by many factors but the price all comes down to the combination of these two. Because of this, it is essential to ask yourself the following question: 

Will there be token demand on the exchanges?

If the answer is no, token price will fall. If the answer is yes, the token price COULD rise. This idea is the most important element of any investment and yet so misunderstood with Cryptos.

So, let’s look at the demand.

What Are The Sources of Demand?

For anyone to host their website on the Substratum network, they must either buy SUB from the exchanges or they can pay using other Cryptocurrencies. If they are buying SUB on the exchanges, this will increase demand on the exchanges and cause prices to rise – this is great for investors like you or us.

What If They Pay With Other Cryptos?

If website owners pay with other Cryptos than SUB, then surely there will be no demand for SUB, right? Wrong.

The Substratum app/website, will automatically convert whichever Crypto it is into SUB in order to pay the people offering their device operating power to the network. In order for them to be able to do so, the Substratum company must regularly buy back SUB from the exchanges.

This will create buying pressure on exchanges and drive prices up.

In this sense, the usage of the platform is linked very well to the usage of the platform – as the platform grows in popularity, so too should the valuation of their tokens.

Another point to add to this is the comparison with Maidsafe in relation to price. While it is only fair to point out that Maidsafe are a team who have been working on their project for much longer, they have a valuation of 6.5x that of Substratum (at time of writing). This could be seen an indication that Substratum has room for growth in relation to prices.


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5. THE TEAM

One of our mantras here at Crypto Gurus is to “invest in people, not ideas”; you could have the greatest idea in the world but without proper execution, it simply won’t succeed.

The Substratum team consists of 22 developers, designers, architects and project managers, most of whom have been working together for the last 13 years. During this time, they have developed and deployed software solutions for a number Fortune 500 companies including: Apple, Disney and Facebook.

We believe that this is a huge challenge for them to attempt in building such a network and it brings with it many inherent risks but, they are a capable team, and this is a positive indication that they could be the right team for the task. 


6. THE ROADMAP

Substratum Roadmap Post ICO Review

You can see the roadmap image as shown above.

The most important update to inform you of the initial alpha release which is planned for Q4 2017 or early Q1 2018.

Buy The Rumour, Sell The News

As the famous dictates, it’s likely to see prices rise in the build up to this day and a drop in prices shortly after. This could represent a good buying opportunity that we are considering.


7. SINCE THE ICO

Substratum’s ICO closed on August 14th 2017 with tokens being sold at a value of 3000 SUB per ETH. This would put token price at around $0.09-$0.10 depending on the timing that individuals contributed.

Currently (16.11.17), Substratum tokens are valued at $0.152, resulting in a 50+% gain for ICO contributors.

This price increase has been driven be speculation as progress is currently very limited in terms of producing an actual product as we discussed before in the roadmap.

The Token and ICO Fund

At the close of their ICO sale, Substratum had raised a total of $13.8 million, this including a $5 million investment from US based payment and processing company Render Payment Systems (Who were in turn given 50 million SUB).

How Will They Spend Funds?

  • 60% – Product Development
  • 30% – Product Awareness
  • 10% – Network Infrastructure

An appealing element here is the 30% allocated to product awareness; it is important to remember that cryptocurrency is still in a very early adopter market and Substratum recognise this.

The growth of the token will only come through participation and this is not possible if people do not know about the project.


8. Conclusion

A decentralized web is viewed as the future by almost everyone and with China and Russia both recently passing laws banning the use of VPNs by the general public, the need for a solution grows even greater.

Short Term

By ‘short term’, we’re referring to a 3-6 month period – for any time frame less than that, you should consult a trader to study the graphs; an addition we will be making to our team very shortly.

Within this 3-6 month period, we expect prices to rise further due to the overall trends of Cryptocurrencies gaining traction within mainstream media and the introduction of financial institutions to the Cryptocurrency market which we expect will cause a flood of extra investments.

Long Term

While the team is highly qualified and the idea is incredible, the project is highly ambitious and could struggle to gain mainstream adoption. However, if they are able to do so, the payoff based on current token valuations could be huge.

For any investor, it’s always a question of Risk Vs Reward. In the case of Substratum, the risk and reward are both high but we believe that the reward outweighs the risk and, therefore, we would consider adding SUB to our portfolios.

Due to the risky nature, only a small allocation of our portfolio would be dedicated to this project. Please note that this is our personal plan but we are not making any recommendations for others.

That’s the end of the article! Thanks for stopping by and don’t forget to check out our other articles for regular Crypto/ICO reviews and market updates.

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Disclaimer: None of the above is financial advice. Always do your own research.

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This article has been provided by our business analyst; Aaron Laver.