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
- Hdac Project Overview
- Hdac vs Competition
- 3 Reasons Why Hdac Is The Worst ICO Of 2017
- Hdac ICO Details
- Our Conclusion
- Follow Future Posts
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 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.
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.
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).
- Hdac operating environment (To launch), Hdac IoT Contract PoC, IoT authentication and device control, Private Blockchain PoC, Smart IoT diffusion PoC
- Practical application of Hdac IoT Contract & Smart Home (To launch), Practical application of Hdac IoT Contract & Smart Factory (To launch), Hdac Hybrid Blockchain (Development).
- 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?
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:
- 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.
- 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
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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This article has been provided by the CEO; Tom Heavey.