Andy Tian Interview, CEO Of The Fastest Selling ICO In Asia, $30 Million Raised In 1 Minute!

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GIFTO – Enter the blockchain

Andy Tian has been labelled a ‘traditional’ entertainment man coming as he does from the world of online, mobile, gamified entertainment. ‘That was before I moved into the blockchain arena,’ he says, ‘it is funny to think that pre-blockchain is considered traditional.’

He has the last laugh, however, with the ICO for GIFTO, the virtual gifting protocol, closing out in one minute to the tune of $30million. ‘Two third were institutional investors and the last $10million came in one minute.’

GIFTO was the fastest selling ICO in Asia. It was four times over-subscribed and it will be the largest non-crypto adoption of blockchain technology by a mile. Tian expects a minimum of 5million users and 100,000 content creators when the product launches in Q1 of next year.

How can he be so confident?  As CEO of AIG, Asia Innovations Group, Tian brings a wealth of ‘traditional’ gaming experience to the table. Previously he was head of Zynga China and there he learnt the business of gaming.

‘The millions made in the gaming industry are from virtual purchases and assets.’ He explains.  ‘Gamers buy virtual swords, armour, tools – all digital assets – with which to play their games. That is the real powerhouse of the industry.’

Tian also looked at the issues surrounding monetizing content. ‘Right now, the obvious step is to place advertising on your channel. But this sucks. No one makes any real money from advertising. It is a broken model and needs a change.’

This is where Tian is disrupting traditional advertising models; that word again.  ‘Unless you are a major brand with millions of followers it is next to impossible to make money from your content. Also, once you get advertising companies involved then they want to dictate the content to suit their audiences not the content creator or artist.

‘It is the wrong way around,’ he says.

A year and a half ago Tian and AIG launched UpLive, a live streaming platform. In just 18 months it now boasts 25million users and 60,000 broadcasters or content creators. There is no advertising. Instead fans of the broadcasters can show their love by giving virtual gifts.

‘We can customise the gift to suit the content creator,’ Tian explains.  ‘Giving a virtual gift is an emotional reaction by a fan. It is not the same as donating money; it is a very personal experience.’

Tian goes on to demonstrate. He asks me to tell him a passion of mine. I think for a moment and say that I sing in a number of choirs which I love. He then shows me a video of one of the broadcasters who sings and gives her a virtual golden exploding microphone as a gift. I watch the video and it works. This is not throwing dollars or yen but giving a gift. Had that been my channel I would have loved it.

If Uplive is a proof of concept then it is definitely a success. Already the revenue generated on the site is in excess of $100 million.

‘What is interesting too is that content creators can make money even if they only have a modest following,’ says Tian. ‘A local artist might benefit from local support and may make an income through fan support. A thousand committed fans may give more gifts than several thousand casual fans.’

Currently top broadcasters, with approximately 100,000 fans, are making $20,000 a month on average on Uplive which is considerably more than on comparable platforms.

Fees charged are a percentage of the cost of the gift – which may vary from cents to several thousand dollars. As Uplive is a live streaming site it is resource heavy and that is also reflected in the fee structure which alters from region to region.

However, Tian points out that Uplive has a limitation. It only works on that one platform.

Enter the blockchain.

‘Using the blockchain technology we can offer an independent platform for virtual gifting for content creators,’ says Tian. ‘But these gifts are not limited to just one platform, they can be used across multiple content generation platforms.’

First up will be Instagram, Youtube and Facebook with others coming on stream. Quarter 1 is the launch date and Tian expects a minimum of 5 million users from the get go. ‘It will be the largest non-crypto audience on the blockchain,’ he says with pride. ‘Content creators just need to post a link on their other sites.’

The virtual digital assets can be charged at different rates, can be replicable or unique. Fees charged by AIG will be less as GIFTO is web based.  ‘It’ll be like the Cryptokitties, ‘says Tian. ‘This is a well-developed and proven concept.’

Adding the blockchain – and smart contracts – will also allow for faster payment. Previously content creators would have to wait for 30 days until their share of the revenue can be calculated and shared. With smart contracts, the fees can be paid instantly.

Tian is a bit scathing of other ICOs that are less than ready with products. ‘I look at other roadmaps and see product not arriving for a year or two. We will have our app market ready in Q1.’

Asked what else he will spend the money on and he talks about influencers and brands. ‘Celebrity led endorsement is very powerful and we will be announcing names in the new year,’ he says.

Celebrities are used a lot in ICO marketing according to Tian but the celebrities on GIFTO will actually use the site with the tokens paying for gifts. ’It is a natural match,’ he says.

However, it is the longtail effect that interests Tian the most. ‘Local, home town heroes can generate real income from GIFTO. The days of big advertising monopolising the world of content is over.’

Not bad for a traditional man.

Trying To Bring Order And Analysis To The World Of ICOs, Dmitry Machikhin, Cofounder Of ICObench

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ICObench, trying to become the Forbes of the ICO world.

Only formed in August 2017, already ICObench is cornering the market as the ratings agency for the ICO world. With more than 1500 ICOs listed on their pages, 100 waiting for review per day and 1000 more in the pipeline, the platform is growing faster than it can almost cope.

‘We are looking to automate much of the qualifications of the ICOs,’ says CEO and co-founder Dmitry Machikhin from St Petersburg. ‘We have six editors working full time but we have our hands full.’

It might be argued indeed that the burgeoning ICO industry needed a ratings system or platform to try and manage the difficult task of measuring the numerous offerings. While most companies use uniform website layouts, similar white papers and often share advisers, there was no formal rating system to offer a quick and easy guide for investors and industry watchers.

Machikhin’s background is maths and linguistics. He worked for Cointelegraph and used coinmarketcap.com as a ready reference but felt there was something missing – something that would bridge the gap.

‘We wanted to provide a platform where we could inform interested parties of the quality behind each ICO,’ says Machikhin. ‘We put together algorithms that evaluated the quality of people behind each ICO using past experience as a benchmark. If someone has been involved in a number of ICOs that are trading successfully, then their score goes up.’

In rating the ICOs, ICObench uses the Return on Investment (ROI) on each ICO’s token, comparing sale price with current trading value. ‘This is a simple equation but it is interesting to view ICOs together rather than in isolation – that is where our value comes in.’

‘Power of the team’ is a term that Machikhin uses on a regular basis in our conversation. ‘We judge pre-ICOs on three key components; one factor is the quality of the team, secondly the idea and if it is sufficiently ground-breaking and finally the underlying product itself.’

These attributes are judged by the 200 or so experts attached to the site. These are not paid and work transparently reviewing the ICOs on file. As they review more and more ICOs the weight attached to their ratings rises.

‘Here we are creating a database of the people of blockchain,’ explains Machikhin. ‘These experts register and are approved before they start rating. The platform allows them to grow in influence. Over time, their sphere of influence will rise and they will be invited to speak at events and exhibitions. This is an excellent way for people to create profile for themselves and deliver more work going forward.’

The ICObench people is a very important feature of the community. The Benchy bot collects data on individuals and rates them according to connections with ICOs and the subsequent success of those ICOs.

Machikhin says he cannot influence my rating even if he wanted to – ‘Ít’s all automatic and transparent.’

The editors reviewing and adding the ICOs do more than manually up-post details. They view hundreds of ICOs every day and as such are ideally placed to offer advice and consultancy to new and inexperienced ICOs.

‘This is done free of charge and is all part of the service,’ says Machikhin.

If companies wish to differentiate themselves, there is an option to purchase premium position. ‘It makes sense,’ says Machikhin. ‘Our site is used as the go-to site for researching ICOs and to be at the top of the list is most advantageous.’

Currently the fee for this premium position is one bitcoin per week. Before bitcoin did its surge, interest was strong for this service but despite failing numbers in advertisers, Machikhin believes the price is right. ‘We get quality ICOs who understand the logic of positioning,’ he claims.

Currently ICObench is experiencing large traffic with 33,000 unique visitors per day. Each visitor tends to spent 3 to 4 minutes on the site, and looks at between 3 and 4 pages on each visit. There is a 50% retention rate and this is growing daily.

In time, Machikhin hopes that ICOs will launch from the platform and intends growing the marketplace to add more services and products needed by ICOs.

A developer API has also been launched allowing other media services to pull down their data and increasing their footprint on the online ICO world. Cointelegraph is one of the first users of this free rating stream but according to Machikhin they have not implemented it correctly as yet. ‘There are only 300 ICOs listed out of the possible 1500 ICOs on our site, he says.

There are many other developments in the pipeline including a weekly financial report based on the content on the site. This will be a paid subscription service.

Overall Machikhin is happy with the growth of the platform. ‘We are aiming to automate more aspects, such as the ICO registration,’ he says.

‘We are also looking for more experts to register. We want to promote the people of blockchain.’

And finally he wants ICObench to be the platform that explains ICOs to everyone in the world. ‘To educate the mass market,’ no less he says.

CharityStars, Aiming For The Stars

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‘We are all in the gutter but some of us are looking at the stars.’ Oscar Wilde

Four years ago Francesco Nazari Fusetti set up CharityStars, a fund raising platform for charities. It linked celebrities with charitable causes, delivering funds to charities in a transparent, online manner.

Initially Fusetti approached celebrities, looking to get them to donate their time, possessions or support for charity. Over time, this has changed and charities began instead to approach the CharityStars platform to post their projects with their own celebrity ambassadors; CharityStars having proven an ability to deliver – matching causes, celebrities and donors – the latter now numbering 40,000 active people.

Fusetti is very proud of his organisation pointing to the $10 million raised since the formation of the company with mainstream charities benefitting such as WWF, UNICEF and Save the Children.

With the original office located in his native Italy and still accounting for more than 30% of all income generated, new offices have been opened in the UK and US. This is important as while the donors and bidders are worldwide, many of the celebrity experiences on offer are geographically based – such as lunch with a star or a poker game with an entrepreneur.

Monies are raised in three ways; the main income is by auctioning off a celebrity experience or luxury product, secondly income is derived from direct bids on products and finally people can enter a sweepstake for $5 which enters them for a random draw for a special prize.

CharityStars takes 15% commission on the net monies raised; sometimes there are third party costs but these fees are capped so that the minimum sum delivered to the charity is 72% of the total.

‘Porting our platform onto the blockchain was a natural move for us,’ explains Fusetti. ‘Our core business has been about transparency in the charity sector.  There is an inherent distrust on how charities are managed – in direct opposition to people’s inherent desire to support their cause. We were able to bridge that gap initially through a transparent online platform – moving onto the blockchain when it became available was the obvious next step.’

This year, CharityStars created and backed AidCoin, an ERC20 utility token that allows people to donate to charities while easily tracking their donations on a public ledger.

By using blockchain technology to track transactions, cryptocurrencies to transfer funds and smart contracts to ensure donations are spent correctly, CharityStars aims to introduce a new layer of transparency, traceability, enabling a better connection and increased trust between donor and recipient, and in turn helping charities to raise more money.

‘The beauty of the blockchain is that we can show total transparently how money is donated and spent. There are no hidden fees,’ says Fusetti. ‘Every donor can see their donation.’

CharityStars recently ran a number auctions to have lunch and even play poker with some of the industry’s most prominent leaders, such as Ryan Taylor, CEO of Dash, Brock Pierce, Chairman of the Bitcoin Foundation, serial entrepreneur Jeremy Gardner, Erik Voorhees, CEO of ShapeShift and Galia Benartzi, Co-founder of Bancor.

‘This raised $60,000 for the associated charities,’ says Fusetti.

Asked about his wish list celebrity experience Fusetti was firm in his answer: ‘I would love to meet Vitalik Buterin – he has changed the world, although I am not sure if I could bid enough to win that experience,’ he says. ‘But I would also have enjoyed meeting our top tier blockchain industry leaders. I am very engaged by this space.’

AidCoin also allows charities to integrate a donation button, called AIDPay, on their website that enables the acceptance of cryptocurrencies for their fundraising campaigns. Donors can donate in any cryptocurrency or altcoin that will then be converted into AidCoin at the current exchange rate. CharityStars will be the first platform to utilize the token internally among its community of 40,000 bidders.

“With the rapid adoption of cryptocurrencies holding the potential to impact the way in which we donate, I am certain that AidCoin is set to play a leading role in this new era of fundraising,” concluded Fusetti.

In its November pre-Sale, more than $4million was raised and now the company is looking at its full ICO in January 16, looking to raise 30,000 Ether or whatever that will equate to in dollars.

Cryptocurrencies Bring Greater Freedom To Individuals, David Drake, Global ICO Expert

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“The beauty of Cryptocurrencies is that they offer the same freedom to the individual as that traditionally enjoyed by large corporates”

It must be the Swedish nature of David Drake that lends him to want individuals to enjoy the same tax and privacy privileges of large corporations. ‘Isn’t that the beauty of owning Bitcoin,’ he says on the line from New York.  ‘Anyone can enjoy the lack of intrusion or censorship operated by countries – it’s all about freedom.’

Drake is the CEO and founder of LDJ Capital, a Multi-Family Office that looks after the wealth of UHNW (ultra high net worth) individuals and families. An independent financial institution, LDJ Capitals claims to offer its clients financial advice that is uncomplicated by franchises or connections. And recently Drake has been chatting about the benefits of cryptocurrencies on public platforms and in interviews. ‘Although I do not give trading advice,’ he emphasis, ‘I am not a trader.’

Having said that Drake scored highly on the ICObench people list – at a cool 51.6 – topping the poll of ICO bench people where he is also linked to more than 10 ICOs, both as investor and adviser – including Ambrosus (November 26) covered here a few weeks ago.

‘I like cryptocurrency and see value in buying them,’ says Drake. ‘I personally hold about 30 different coins and intend hanging on to then and watching them grow. But I find people can be nervous and they are not without reason.’

Drake reckons there are three main impediments to mainstream adoption.

The first is lack of knowledge. ‘What I don’t understand I don’t trust. If people don’t understand cryptocurrency they will prefer to ignore it rather than do anything about it. No one wants to look foolish or stupid,’ says Drake.

‘Secondly, there is no insurance on cryptocurrency,’ he says. ‘The industry is crying out for insurance and peace of mind. We need to know that an insurer has got your back. If someone will offer insurance then you can be sure people will be prepared to pay for it.’

Finally, Drake reckons for cryptocurrency adoption to go mainstream, there needs to be bankers to mediate it. He laughs at this point as he is now directly arguing against the disintermediary nature of blockchain and cryptocurrency.

‘I know,’ he says, almost ruefully, ‘but if you want mainstream adoption, then people need to understand how to invest in cryptocurrency. Most people who invest their money in the stock marker are not traders but people who place their money with traders. Same too with cryptocurrency.’

The idea of insurance leads us onto security against theft. I moot that it is scary to think that people have lost fortunes in bitcoin in forgotten laptops or devices. Or even that if you forget your password and device, the money is gone too. And what about robbery of exchanges and I mention the theft of $70 million from a cryptocurrency mining marketplace NiceHash on Wednesday.

However, Drake points out that people get robbed all the time – up and down the country – just not for such vast amounts. Being robbed of cash is very easy, however;  just leave some under your mattress and see what intruders can take. But no one speaks of the inherently untrustworthy nature of cash, so what makes alt coins different? Their novelty of course.

Drake has been involved with different crowdfunding projects for many years and stresses that theft here is also very low. ‘However, one big fraud and everyone might turn against crowdfunding. It is all in the perception.’

Drake set up early meetings four years ago with the US Securities Exchange Commission (SEC) on the regulations surrounding crowdfunding. ‘We were mostly self-regulating but we knew we could not overstep the mark.’

He reckons that Bitcoin will go to $40,000 by the end of 2018 and he is personally holding onto his coins. ‘I predict that the next big influence on price will be the entrance of institutional funds into this space.’ He says.   ‘We are no longer talking about dollars but millions and millions of dollars investing and trading cryptocurrencies. Those big cheques will make a huge difference,’ he says.

So, while he is not giving financial advice, Drake reckons the price has a bit to climb he may well be right.

He is not alone in his predictions as John McAfee, antivirus founder, privacy campaigner and wanted man, claimed on Twitter in November if bitcoin doesn’t make $1 million by 2020 he will eat his d*ck on live television.

Wall Street Comes To Crypto Street, Bringing Financial Technologies To Cryptocurrency Markets, Alexander Kravets

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It was late Spring 2016 that Alexander Kravets first stumbled over cryptocurrency. Driving around looking for a real estate deal, a news item flashed up on his phone. It said that Ether had jumped from $80 to $130 in a matter of weeks. Intrigued Kravets had no idea what Ether was and so he rang around his friends, his trading friends, he even rang Deutsche bank but no one knew there either.

‘It was a seminal moment,’ recounts Kravets. ‘I started trading cryptocurrency the following week but it was painful. I mean it took a whole week to even open up a trading account.’

Why is this important? Well, Kravets’ early career reads a bit like The Wolf of Wall Street. While at college he got a part time job as a day trader. He got up at 6am, travelling ninety minutes to Flushing Queens outside New York and worked from 9am until 4pm, at which point he went to college not finishing until 10pm at night. This went on for some seven months with little or no success. He was threatened with firing, which as a student, did not bother him overmuch, until he got the hang of it and started making money.

‘The next twelve years saw me progress up the ladder,’ he says. ‘I was successful at trading, but I also got promoted to lots of other roles including management, training, software development (his degree is in computer science), support and sales.’

He got tired of working for the man and set up his own as an independent trader four years ago, again successfully, when he stumbled over cryptocurrency.

‘There were, and still are, huge impediments to trade effectively in cryptocurrency,’ he says. ‘For starters there are about 60 exchanges in total, albeit that the top twenty are the most liquid. But as many exchanges have been built by blockchain experts and not trading developers it is very hard to open accounts and execute effectively with most.

‘On one occasion the account opening process involved me taking a picture of a proof of identify in one hand and a signed declaration in the other – while at the same time taking a picture of myself – I only have two hands,’ he laughs.

‘Other issues include timing. There can be huge latency between the exchanges, making arbitrage very difficult; firstly to spot the opportunity and then to close it out in time. There can be a lot of slippage and on a large trade or with a volatile currency, this can impact the value of the trade as much as 10% in either direction.

‘Then there are anomalies such as no stop orders.’

While Kravets is 3000 miles away on the telephone I can almost see him shaking his head in bewilderment.

‘In a trading environment that operates 24X7 with highly volatile coins, how could a regular trader sleep? It would be insane – he might lose millions.’

Kravets could see the opportunity. What trader could not? In just one month (from October 2017) the daily traded volume of cryptocurrency has swelled from $1billion per diem to just under $30billion. ‘Given that the NYSE reports a monthly $1.2 Trillion of volume, it is easy to see where this juggernaut is headed,’ he says.

Kravets calls himself a trading veteran, pointing to his 16 years in the game. ‘I could see a natural fit for taking a traditional trading platform and mixing in cryptocurrency. The appetite for cryptocurrency is huge amongst traditional traders but people need comfort in format.’

There was Xtrade.io born. The vision of the company is to bring Wall Street Trading to the emerging Cryptocurrency markets.

‘There are three planks to Xtade.io,’ explains Kravets. ‘First we needed to do that hard work of connecting the 60 or so exchanges to traders in a familiar fashion. We used an existing financial trading protocol – FIX or Financial Information Exchange – to bring the gap. We wrote our own interface with the exchanges to integrate with FIX. Then we released a FIX API so that each trading organisation only has to integrate once – we have done all the hard work.’

The Xtrade FIX API claims to reduce latency, providing relevant market data and also the ability to execute to all markets.  Speed is also an issue with Xtrade operating satellite connections so that trades can be effected in milliseconds – considerably faster than the third of a second normal for internet transaction execution.

‘The top 5 or so exchanges may be less than happy. After all, they tend to dominate most of the cryptocurrency trades, but medium size exchanges will benefit from increased liquidity,’ says Kravets.

Next up was to simulate existing trading environments. Most traders will download powerful apps into their machines to trade. These apps provide faster access but also familiar presentation and uniform order books’ look and feel.

‘We are currently building Xtrade Pro so that traders can download our app and be able to seamlessly trade in crypto. The cryptocurrency trades will look and feel just like regular trades.’

The third plank is to create accounts on most liquid exchanges and allow traders the ability to deal with us as a middleman. We take commission, hedge the deals and transact the trades so they don’t have to worry about what is on the other side.’

Target audiences include institutional traders, day traders and everyone in between. Currently Xtrade.io is conducting an institutional pre-sale. Kravets says this round of funding is aimed at $100million. Afterwards will come the public token sale.

‘We have not set a target on this as yet,’ he says. ‘Nearer the time, and depending on volumes of trades, then we will be in a better position to make a judgement call.’

‘We know that less than .2% of people are currently engaging in cryptocurrencies. This is a tiny amount.

‘This is comparable to initial uptake of the iPhone where early engagement was around .5%. Now this year more than 400 iPhone are sold every minute. You just have to do the math!

 

Why Hashgraph Could Replace The Blockchain – Dublin Meetup Sparks Interest

The first meetup for hashgraph enthusiasts in Dublin happened last night in the Bank of Ireland Workbench in Montrose. Ably fortified by pizza and coffee, approximately 20 people showed up to listen to Conor O’Higgins, content manager in Ireland for hashgraph.

A show of hands at the start showed the audience was already aware of the technology with over half hailing from an engineering background. There were some cryptocurrency traders attending as well.

Conor stepped through the interesting aspects of the technology, talking though the consensus algorithms, Byzantine Emperors and the gossip about gossip protocols. For more information on the technology visit this article. (November 29).

Questions from the meetup concentrated on how hashgraph charged per transactions – looking at the mining approach from Blockchain. O’Higgins pointed out that currently, hashgraph is only deployed in private, permissioned-based networks.

‘Real use examples included CULedger,’ he explained, ‘which is a credit union consortium supported by the efforts of the Credit Union National Association (CUNA) and the Mountain West Credit Union Association (MWCUA).’

Other engineers present were familiar with the Credit Unions example. ‘It’s a situation where individual Credit Unions don’t know or trust each other but they need to transact,’ said one engineer. ‘Hashgraph offers the speed and the security to a largely untrustful community.’

Speed was also a factor for the audience. Another participant, working the FinTech area, said he despaired of blockchain as it was just too slow. He wanted to know if hashgraph could offer an alternative. O’Higgins replied that was one of the key points of the new technology.

Other concerns raised about the current blockchain mining approach, and the concentration of powerful mining corporations in China, were discussed. Would this lead to a semi centralised centre of control or a silo of data just like traditional databases?

It was agreed that hashgraph has the potential to work outside these limiting parameters. ‘The energy costs are minimal based on the tiny size of data exchanged and the graph replacing an ever longer blockchain,’ said O’Higgins. ‘And voting only needs to be a question of polling who knows what and when – again speeding up the process.’

Questions continued until the closure of the meeting promptly at 8pm with the participants keen to come together again.

 

Will New SEC Regulation Shut Down ICOs? Munchee Forced To Abort ICO

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With $2billion raised in ICOs so far this year, it is not surprising that regulatory bodies are not only looking hard at the products and companies, but they are now starting to step in and test the veracity and legality of crypto fundraising.

The U.S. Securities and Exchange Commission (SEC) recently formed a Cyber Unit to fulfil this task. Last month it filed fraud charges against PlexCoin and it also forced Munchee, a distributed restaurant review ecosystem on the blockchain, to abort its ICO.

Earlier in the month, as a result of the SEC Cyber Unit’s warning to Munchee, the ICO was cancelled. It had only run for two days and had attracted 40 investors. On the Twitter account plans were been made to return funds as soon as possible as of November 2.

Munchee had aimed to raise $15million to provide development, grow the management team and market the product.

Now, the sale is stopped, investors refunded and despite tweets from November 2 saying the company hoped to relaunch the ICO, it has gone quiet; unless you count the filing of the ‘cease-and-desist’ papers by the SEC against Munchee yesterday.

This action tallies with a statement made by SEC boss on Monday where Jay Clayton issued a warning to investors to beware of putting their money into cryptocurrencies, saying trading and public offerings in crypto tokens may be a violation of federal securities law.

The warning and now the ‘cease-and-desist’ order would appear to leave no room for any ‘payment’ or ‘utility’ tokens at all in the US.

So how did Muchee fall foul of the SEC?

In a ten page legal document the SEC argued that the MUN tokens were securities as defined by Section2(a)(1) of the Securities Act of 1933 because they were investment contracts.

The document went on further to elaborate that an investment contract is an investment of money in a common enterprise with a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others.

Much of the evidence was taken from Munchee’s own white paper. The distributed ecosystem allowing restaurant reviews was not under fire, but the token was. Munchee argued that the MUN token, issued as part of the ICO, would rise in value due in part of the work undertaken by the team at Munchee as well as by trading on secondary markets.

Munchee’s arguments to persuade investors to purchase MUN tokens were also directly under fire from the 1933 Securities Act. Across its collateral, Munchee said it would run its business so that MUN Tokens would rise in value.

The Legal papers stated the obvious – that purchasers would reasonably view the MUN token offering as an opportunity to profit if the Muchee project was successful.

Munchee had been bullish in the run up to its ICO. On October 30th in a blog it listed seven reasons why someone should invest with reason number four talking about more users, more value and also burning of excess tokens to maintain value.

An earlier podcast with one of the founders spoke about increasing numbers of reviewers and restaurants coming on board which would raise the token value.

And on Facebook at the same time, a slightly overcooked youtube video projected 199% gains on MUN tokens, and speculated that a $1000 investment in MUN could create a $94,000 return.

The legal document even honed in on the target audience for Munchee’s ICO. It pointed out that Munchee and its agents promoted the MUN token offering in forums aimed at people interested in Bitcoin and other digital agents rather than long term users and partners in the food review ecosystem.

It would seem Munchee was being penalised for adopting strategies of the majority of successful ICOs before – and in future.

However, Munchee’s failure was to offer a utility token which the SEC viewed instead as a security token without registering with the SEC or obtaining an exemption from registration.

As the respondent (Munchee) stopped the sale immediately after the SEC warning there were no civil penalties but the company is now ordered to cease and desist from committing or causing any future violations of the Securities Act.

It looks as though there will not be a resuming of the Munchee ICO any time soon.

 

The Difference Between A TGE And An ICO, Gabriele Giancola Explains More

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We find out more about loyalty programs on the Blockchain delivered by qiibee, a decentralized, Ethereum blockchain-based loyalty ecosystem.

Its name, which is derived from qii for energy and bee for the one of the world’s most important insects, is not the only different thing about this company. It is also looking at a Token Generation Event (TGE) next year.

A TGE is different from an ICO in legal terms according to co-founder and CEO Gabriele Giancola. Incorporated in Zug, the heart of the Crypto Valley outside Zurich, Giancola says that the Swiss like to keep things above board and that hosting a TGE is easier to run than an ICO and certainly it makes issues like regulation much more straightforward. Currently there is a hardcap of 70,000 ETH to be raised in Q2 of next year. The token is a qiibeePoint or QBX.

qiibee is a classic example of a traditional technology solution pivoting onto the blockchain for two main reasons: scalable data capture and security. qiibee began life trying to solve the loyalty program platform. Giancola and his brother, both co founders, looked at the loyalty program space and saw a lot of problems.

Loyalty Programs are big business. The market is estimated to be worth $300billion and research points to 80% of all adults in the Western World belonging to one or more loyalty schemes. However, membership of multiple loyalty programs can have limited value as many accounts are inactive.

Loyalty programs are often fragmented meaning each program operates different terms and conditions. So while the average American may have joined up to 29 programs they will only use less than half of those. Given the large marketing budgets spent to acquire new customers, brands are missing out on a big chance to radically impact on their customer base.

In 2015 qiibee developed a proof of concept pilot with limited numbers: some 20 local brands and 800 customers. As Giancola says: ‘We wanted to see if we could create a unique eco system, a single platform for multiple brands to operate. Back in 2015, it was about homogenisation of the platform and so we scaled it up in 2016.’

2016 saw a huge leap in numbers and brands. With more than 100,000 customers and 900 brands the brothers began to acquire serious feedback. Brands such as Subway and Eat.ch joined the program.

The user base was 45% male, 55% female with a mean age of 25 years. Typically they were on the platform five times a week, averaging 27 minutes per session. The feedback was vital according to Giancola.

‘During the scaled up project we created a lot of data, sensitive data,’ he says. ‘’ That meant we felt the platform was exposed and open to potential hackers. We knew we had a solution to a problem but we needed to find a technology to support it.’

Enter the blockchain. Reduction of risk and cost were both key elements offered by the blockchain.

‘We also discovered that we were not able to provide a loyalty solution that suited every brand,’ says Giancola.  ‘At this point we realised that qiibee was valuable as an independent loyalty platform – that we could bring the benefits of blockchain to brands.’

This ‘aha’ moment tallied with their research. ‘Brands are sometimes too focused on their loyalty program to realise that the customers were feeling pain. This is where we could add value.’

Building an infrastructure upon which brands can add their own applications was a direct extension of their thinking. ‘We wanted to take the headache away from Brands and build in better value to their – combined – loyalty programs,’ he says.

Creating an eco system for loyalty programs also has a very real benefit of eliminating complex and costly liabilities of un-redeemed / outstanding rewards. ‘We discovered that in a real world use case, Mariott International (the hotel chain) had to account for liabilities generated from their loyalty program in the order of $2.6bn or 25% of their total liabilities. This is ungoverned spending. We knew we had a solution.’

The qiibee plan is to build a distributed blockchain application and present SDK (software developer kits) to brands wishing to take part. Core to the qiibee platform is the qiibee token and wallet. Interested brands purchase qiibee tokens and set an internal exchange rate on their rewards.

A customer earns rewards from brands which they can value as qiibee tokens. They can then subscribe to other loyalty programs on the qiibee eco system and spend qiibee tokens across multiple products. They can use the qiibee wallet to exchange out into fiat or other cryptocurrency coins.

The concept is very simple. It is also very attractive to customers who weary of trying to keep track of their different rewards across different companies or platforms. Consolidation of rewards to buy other products is also very appealing to customers.

There are also two other interesting aspects to qiibee.  The first is that brands like what Giancola and his team have done. They respect the background in loyalty research and pilots undertaken. They like the idea of not having to invest in their own blockchain and to piggy back on qiibee. Giancola also reckons the other possible competitors in the industry will probably join up as co-operators.

‘Typically we come up against consultants in this area or software developers looking to create a kick-ass loyalty program for different brands. In either case, we say join us. Join our eco system. It works for us.’

In a second but complementary development the qiibee eco system, with multiple loyalty programs cooperating, can address the secondary issue of changing or rewarding customer behaviours outside of simple spending.

‘We’ve been approached by insurance companies that would like to reward customers for good driving by reducing premiums. Or other brands that want to incentivise customers to do their marketing for them – by sharing content on social media for example,’ says Giancola.

‘When there is an integrated loyalty program that is valuable and switchable between brands, then we will see value added to the system.’

We look forward to their TGE next year and to see if the cryptocurrency investor community reacts any differently to TGEs as opposed to ICOs. With the current SEC action against ICO Munchee, TGEs may be the way to go.

The Crypto Valley Of Zug, Why Switzerland Is The Place To Be For Bitcoin, Ethereum And Blockchain Initiatives

CCN

Coming to a city near you…

At first glance it might seem an unusual choice for the hottest tech location in Europe, if not EMEA, but Zug, named for its fishing rights is both a town and canton in Switzerland and home to a little under 30,000 residents. It is an affluent area, a low tax region and a base for several multinational companies. In 2001, it first sparked to international recognition when a disgruntled gunman shot 15 people, including himself, in the Zug Cantonal Parliament in what became known as the Zug Massacre.

This year, Zug was very much back in the news for quite different reasons. In January 2017 a not for profit organisation was formed: the Crypto Valley Association (CVA) headquartered in Zug and formed for the express purpose of attracting and supporting blockchain companies and organisations to Switzerland. Prior to the formal establishment of CVA, the Crypto Valley in Zug had been the brain child of Johann Grevers who based his cryptofinance startup Monetas in Zug in 2013. He outlined all sorts of positive reasons why Switzerland was attractive for blockchain companies and soon attracted broad support from numerous individuals, startups, corporates, service providers, industry associations, educational institutions, governments and regulators.

Grever’s own particular career has been recently mired by his own success. Tezos, which aimed to build a new digital commonwealth, used Grever’s ICO foundation company through which to raise money. They were successful, very successful with $232 million raised (and now worth twice that with inflation), but Grevers and the founders of Tezos are locked in a bitter infight. Sometimes the price of success is too high.

Zug itself carried on as a leading light for crypto companies. Ethereum incorporated in Zug in 2014 and the first bitcoin ATMs were installed. In 2015, Shapeshift located in Zug and in the same year the Swiss Federal council issued a report that bitcoins were regarded as a virtual currency and no further regulations were required.

The following year the Zug tax authority issued guidelines for the accounting and tax treatment of bitcoin and the city of Zug became the first government in the world to officially accept bitcoin payments.

Oliver Bussman, as President of the CVA, is overseeing a membership which is growing at an exponential rate. Since its foundation in January membership has grown to in excess of 500 members and that figure is growing at 30 new members per month. Membership fees are denominated in Swiss Francs (CHF) costing 100 CHF for an individual member and CHF 300 for a corporate.

In an interview with Bitcoin Magazine, Bussmann explained that unlike other ecosystems, such as Silicon Valley, entrepreneurs can expect to find every possible resource necessary for a successful token launch within a 30-mile radius of Crypto Valley.

“We have advisors helping with value proposition and token economy, seasoned legal experts, tax experts, accounting experts, people specialized in global marketing and global communications PR, secure ICO launch platforms, independent audit firms, smart contract audits, KYC, AML utilities and a community of investors looking to support the product.”

Switzerland has a lot of historic features which lends itself to the decentralised view of the world. Its own political system is based on a citizen-controlled ethos and boasts century’s old culture of individual rights. Coupled with Swiss neutrality, business-friendly environment and privacy-friendly financial and legal infrastructures, it is very successfully marketing itself as a hub for crypto friendly companies.

Last month, the CVA announced its first strategic partner in KPMG Switzerland. KPMG will be an active member and chair two working groups; one on Tax, Accounting and Structuring and the other on Cyber Security. But it is not just corporations that want in; a local hotel and restaurant, the Swiss Chalet Merlischachen, is now accepting bitcoin and ethereum as payment for its food and hospitality. It claims to be the first hospitality company in Zug to accept alt currency.

Zug and the Crypto Valley would seem a powerful advocate for all things blockchain. Their example is catching. Just a week ago, Ireland stepped up to the plate and announced its own crypto centre. Called Crypto Coast and headed up by blockchain veteran Reuben Godfrey, the Irish hub is seeking to do the same as Crypto Valley. However, where Switzerland and Zug may offer traditional financial expertise, Ireland’s Crypto Coast has based its foundation on a wealth of blockchain professionals and positive government support.

In conclusion, it’s not really a question of the Crypto Valley being in competition with the Crypto Coast and more a question of how soon the rest of the world will follow suit

Indorse – Spelling The End Of The Dishonest CV…

Just how do you know if what people claim in their CV is true? For a time, google seemed to deliver an endless source of data on other people. You could search for people online and see where they had worked. Then social media made it even easier to track people – or so it seemed.

In the last few years prospective employees have been warned that when they attend interviews, the company looking to hire will include a trawl of their social media to see if what they say is true or to ascertain the calibre of the person.

Of course there have already been cases where legal claims have been made against individuals abusing social media, but even harmless activities may be seen as detrimental to prospective employment. Applying to a company where the CEO is teetotal? Then perhaps don’t post those post party pictures on FB. Looking to work in a company that works in pet supplies? Perhaps posting pictures of you supporting the local hunt might not be so clever. The list is endless.

However, while verifying your character online is one thing, verifying your career details is another. Most CVs have referees which a thorough employer will use, but what if the person has set out to deliberately inflate their CV. Is it possible to check that online?

The majority of employers would head over to Linkedin – and indeed most management on ICOs link directly to their Linkedin page. Linkedin in an established platform but there is a flaw. Only the individual can insert their CV details. No one else can comment on them. The nearest there exists for validation of the CV details is in the recommendation section – but these could be from friends or even fake accounts should a person wish to deceive.

So how can an employer quickly check out the veracity of a CV, or indeed how can a candidate stand out with their skill sets?

Indorse, a decentralised professional social media network, think they have the answer. And so do 1800 token account holders that helped raise $9 million over their ICO in September. This sum will keep them going for the next two years says co-founder David Moskowitz. ‘We learnt a lot from our ICO – basically to keep any future ones shorter and have more focus on the secondary market.’

His co-founder and CTO, Guarang Torvekar adds that they would have liked to have more celebrity endorsement. Ánd better known advisers.’

Which brings us to one of the principles of Indorse – peer to peer validation. Peer to peer validation on Indorse is random and anonymous.

‘There have been a few ICO scandals recently over CVs from the fraudulent state where advisers were not part of the team to the lesser crime of inflating their CVs quite dramatically. Even today what we read on Linkedin we tend to believe – despite the fact that it is published by the individual,’ says Mosowitz.

‘You cannot game the system on Indorse,’ adds Torvekar. ‘You can’t ask your spouse or colleague to endorse you. All the validation is random and is only allocated once a consensus is reached to the order of 70%.’

The individual adds their skill sets with attached proof. So, if someone claimed to have Java programing skills, they could attach their certification. Then anonymous, random peers can validate – or not – that section.

Timelines are important too according to Torvekar. ‘Someone working for 20 years should have a much greater wealth of experience than someone working for less than 5 years, and that is reflected too in how the Indorse CV is created.’

People deemed to have authentic and experienced CV will receive an Indorse Score. This is delivered in the form of a non-transferable, non-tradable token. This is to reflect their reputation. Other members of the Indorse community can earn tokens as rewards for participating on the site. These are tradable and transferable and mimic the popular Steemit model.  In time the co-founders hope the IND tokens will be used to purchase or sell additional services on the site.

The use of blockchain is core to the project according to Torvekar. He was instrumental in setting up the Singapore Ethereum meetup two years ago (where he met Moskowitz) which now regularly attracts a couple of hundred to each gathering. They launched Indorse at one such meetup.

‘Blockchain underpins our decentralised model in four ways,’ explains Torvekar. ‘’The first is the management of the data – there is no single point that is vulnerable. Secondly, Indorse is completely autonomous – no one is in control.

‘We use Byzantine Fault Tolerance to produce consensus and finally it is transparent – no more inflated at best or totally dishonest CVs on our platform.’

Already 1800 people have signed up for the beta MVP version and both co-founders hope to hit 3000 before the end of the year.

With two years’ worth of salaries in their pocket what next for the founders? ‘Company pages.’ says Moskowitz. ‘We want to extend the same transparency to corporates.’ Now, that will be interesting.

CNN