17 posts tagged

Digital investmens

Airdrop evolution

The airdrop buzzword can be heard numerous times nowadays. Airdrop itself is a popular approach to give away the token to the community.

Airdrop is a popular way to distribute project tokens to the community. So popular that sometimes leads to congestion in the network Ethereum and important commissions in transactions. More recently, this mechanics, which was used to vote on the stock exchange FCoin, has led to sad consequences for the entire network of Ethereum itself. A suitable algorithm allows solving several problems of smart contracts, which operate with extensive lists of users’ addresses. The fact is that putting into the contract a list of even a few thousand addresses and letting this set of addresses do something directly in the contract will not work – in the block, every byte is saved and this is too expensive.

To solve the problem, it is necessary to determine whether the address belongs to the list of “white” addresses in the contract code. If yes, then allow the desired action. The proposed option will enable to solve this problem quite merely by keeping only one number in the contract. The algorithm of brilliant cryptographer Ralph Merkle is widely used in virtually any decentralized software to ensure the integrity of data sets.

Airdrop & ACL

There is such a practice – to release your token and send out its small amounts to tens of thousands of addresses, for which there is, for example, at least 1 ETH. Such spam is extremely popular now to promote your own projects tokens. Few people like the appearance on their balance of someone’s unknown tokens. Nevertheless, the projects need this, and orders for airdrop are prevalent. This is usually done in an old-fashioned way, like this (in the example of Ethereum, but other block contracts with contracts, EOS, for example):

  • Create an address where enough tokens are stored for distribution to all from the list, or they provide in the token contract the ability to create (mint) the required number of tokens to the specified address (when sending the transaction from a particular privileged address);
  • Put on this address is enough Ethereum, enough to pay for the commission for each shipment of tokens to the user;
  • Run a distribution script that iterates through the addresses and for each creates a transaction that transfers (or toms) tokens to the specified address.
    That is, it’s just a pass on the heap of addresses and sending tokens to everyone. In decentralized systems, this push strategy is usually pretty lame, expensive, generates security holes, and generally, it’s spam.

On the commission takes much money (the more addresses, the greater the commission). Besides, at the time of mailing the commission can grow, because the load on the network grows, the cost of the transaction grows too;
Mailing requires writing a script that will send transactions, and the script contains a secret key that gives access to a heap of tokens;

Mailing must be programmed and be able to continue from the place where everything has broken down.

At the same time, the solution is much simpler, which, as is the case in decentralized networks, most of the work is delivered by the software on the client side. This is access control using the Merkle tree – an incredibly convenient data structure to store in the contract only one fixed-size number (merkleRoot), which contains information about all the data included in the tree (about a massive list of recipient addresses, for example).

There is no magic here: information proving that the address is present in the list of allowed, client code provides independently, doing relatively voluminous calculations, and eliminating the need to view a huge list of addresses. The structure of the Merkle tree is extremely useful for a variety of tasks.

So, this algorithm is suitable for creating huge ACL (Access Control List), which allow you to give access to some function of the contract to millions of accounts. To do this, you need to write down a single number in the contract to verify that the account belongs to the list.

Consider the scheme with airdrop, because it is now in high demand on the market and is a demonstrative and straightforward example of smart contracts with large ACLs.

In general, Merkle-proof can be described as “the path that can be traversed from the user’s address in the Merkle tree to Merkle-root itself.”

The Merkle-proof proof consists of log₂N hashes (rounded up to the whole). Each hash is the same size as Merkle-root, which we recorded in a contract-airdrop. That is, for a list of 1024 addresses, the user must provide 10 hashes, and for ~ 4 billion addresses – only 32 hashes. It is in the protocol of construction and presentation of evidence that the main “counter” of the contract hides – the storage of the minimum amount of information to determine the belonging of some data to an extensive list. Also, the more the list is, the higher the gain.

In reality, the contract is supplemented by the ability to take unused tokens, update Merkle root and enter time limits, for example, to prohibit the release of tokens after some time. The contract is quickly updated to distribute an arbitrary number of tokens to each address, in this case, the file contains not just the recipients’ addresses, but also the necessary sums of tokens, and the merkle-proof function is slightly modified, but the general algorithm does not change from this.
Advantages and disadvantages of Merkle-airdrop.

Separately, one can distinguish the advantages and disadvantages of the above method in comparison with the traditional script distribution:

Pros:

The transaction that requires tokens costs little gas, and this number is a constant, depending on the size of the “white” list;
After the launch of the contract, it does not require the slightest support, and all activity is provided by users;
Allows you to work with lists of almost arbitrary size with a minimum consumption of storage block.

Minuses:

It is necessary to spread the public address list somewhere;
The client code needs to see all the addresses in the “white” list and execute a fairly resource-intensive code.
In this algorithm, there are no secrets, such a payoff from the memory of the contract is generously “paid” for the work of the code on the client side to verify the membership of the list. This approach demonstrates very well the difference between the models of using smart contracts in comparison with traditional centralized systems.

The traditional distribution of tokens by the script in response can be countered only by a simple and understandable scheme of work. Moreover, the efforts of the programmer to run ordinary airdrop at times exceed the efforts for laying out the Merkle-airdrop contract, the launched script should be monitored so that it does not fall off in the middle of the list so that it does not run out of funds for commissions for transactions, make sure that no one stole the key with which the script signs transactions. Plus, if you have a file with addresses, you really do not need a programmer-it’s extremely easy to implement such a contract through public services.

Features of the implementation

In addition to the basic smart contract, the full DApp for Merkle-airdrop has some features in the implementation. In the Merkle-airdrop scheme, a significant amount of work is assigned to the code in the user’s browser, for example, building Merkle proof, for which you need to run through the entire address list. The list of addresses should be stored somewhere, and for the user, it should be no more difficult than uploading the file to the server.

Conclusion

The main “advantage” of the traditional distribution of tokens on the list is that this scheme allows you to cast tokens even to those who do not want it. There are also special perversions when you can send out tokens so little that the exchange does not even allow you to make transactions with them, and users are forced to watch these “scraps” on their addresses without being able to get rid of them.
The problem of airdrop, when the company distributes part of the system tokens in the community, is of course extremely important for the development of projects. However, such a decision is unfriendly to users and inefficient in general. So in general, smart contracts tend to gravitate towards the concept of “pull” rather than “push,” in which network users are initiators and controllers of business processes, and stories, when someone centrally imposes something on tens of thousands of users, gradually the past.

2018   Aidrop   Crypto currency   Crypto industry   Digital investmens   ICO

Top Cybersecurity menace

What represents the most terrying things for cybersecurity staff?

No doubt, the greatest threats to cybersecurity is ransomware. Now worth over a billion dollars year (and rising), with attacks like WannaCry and Petya/NotPetya wreaking havoc, every expert worth their salt was planning ways to stay ahead of the hackers.

Anyway, things move pretty quickly in the cybercrime space. Hackers are inventive, ingenious and destructive, always coming up with new ways of pushing boundaries. Ransomware was so last year. While no one will deny it’s still a (massive) problem, other types of cybercrime are beginning to spread like the bubonic plague.
Check out the top five threats keeping cybersecurity professionals up at night right now.

Ransomware

Yes, ransomware is still high up on the list, as this vicious form of cybercrime overtakes systems and locks down computer files with strong encryption. And most businesses end up paying the ransom to get their data back (especially when it isn’t backed up).

According to Peter Tran, Head of Global Cyber Defense & Security Strategy at Worldpay, data manipulation or destruction in the form of ransomware is often the most disruptive and can take out critical infrastructures including healthcare, financial services, and supply chains.

“This is a critical threat as we move toward pervasive hyper-converged mobile, cloud and IoT-based data infrastructures. There’s much more at stake now with modern IT,” he warns.

The Cryptojacking

Spiking by a massive 1,189% in Q1 of 2018, cryptojacking propelled its way past ransomware as the number one nuisance on the block. According to CSO Magazine, what makes this form of cybercrime, so “interesting” is that it blurs the ethical line between everyday internet users and criminals.

In fact, some sites like The Pirate Bay are even using it to replace advertising and earn income. How? As long as you have their site open in your browser, they temporarily hijack your device and borrow your computational power to mine cryptocurrency. As soon as you close your browser, the crypto miner goes away. In other, more serious cases, it infiltrates your system and downloads just like malware.
Since crypto jacking overtakes devices and forces them to mine cryptocurrency, it burns through a lot of CPU cycles. But, unlike DDoS attacks, you won’t see disastrous downtime or funds siphoned off into a criminal’s account. You just get servers pushed to the max mining Monero.

Cryptojacking is more of an irritation than a serious disease. It’s like trying to swat a persistent fly in the outback. In fact, according to Matt Downing, Principal Analyst at Alert Logic, the most worrying thing about crypto jacking isn’t really the crypto jacking itself – it’s the fact that you got crypto jacked.

This highlights a “vulnerability in your system,” meaning that something worse could just as easily have hacked its way in.

Data Breaches

The very word “Equifax” sends a shiver down the spines of cybersecurity professionals, especially if the companies they work for hold sensitive data. In fact, according to research by Norton, 54 percent of US consumers report having had some personal information involved in a breach.

What’s particularly worrying about this is that the data may be sold in stolen data marketplaces on the dark web. Not only do hackers stand to make high profits from this, but they can also gather extra social information they need to hack into more accounts.

Micro Breaches

Oftentimes, cybercrime is aggressive and makes a lot of noise, but this is not the case with what Tran calls “low and slow attacks.” In a type of “micro breach” situation, access is gained slowly and quietly over a period of time by subverting traditional detection methods.

He says, “Lack of visibility or ‘flying blind’ puts security professionals in a constant position of disadvantage… you can’t defend against what you can’t see or detect… that leads to a lot of sleepless nights!”

Internet of Things (IoT) Hacking

By 2020 it is estimated there will be over 20 billion connected IoT devices worldwide. This means the amount of attack vectors significantly increases. “This increases their chances of a successful breach into much larger systems that utilize IoT as their main infrastructure,” Tran advises.

Anyway a bunch of medical devices on the blink and cars crashing into each other?
“Think about it like a hub and spokes on a bicycle wheel,” he explains, “where the hub represents a single IoT device and the spokes all lead to other access points… then multiply that by 20 billion… It’s a lot to monitor for security professionals and certainly will have security pros sleep with one eye open.”

Takeaway

You may have noticed that phishing, cyberstalking, weaponization of AI, and other serious cybercrimes didn’t make a list. There are plenty of other forms of criminality on the web taking place which are keeping our dear friends in the IT department from getting a restful night’s sleep. However, right now, these are the top five on most security professionals’ lists.

2018   Blockchain   Crime   Crypto currency   Digital investmens   Fraud

Crypto cybercrime level rises

We do know that the cryptocurrencies are being used for different crimes and fraud activities. There is no wonder, and it’s almost the common knowledge. Fact is, the very small percentage of users do realize the reason underlying that.

However, understanding the magnitude of the problem and how it affects us as we use the internet is an important starting point.

Earlier this week, the FBI’s Internet Crime Complaint Center (IC3) released their 2017 Internet Crime Report. More than 300,000 consumers reported that they were victims of malware and cyber-fraud attacks last year (with registered losses of over $1.4 billion combined).

The most common types of crimes were non-payment and non-delivery, phishing scams, and data breaches. The crimes that cost the most regarding financial loss were compromised email accounts, investment scams, and non-payment/non-delivery. In all, the IC3 received over four million complaints between 2000 and 2017.

Profitable business

Fact is, that advanced malware protection specialists from Bromium, together with Dr. Mike McGuire, Senior Lecturer in Criminology at the University of Surrey, released a report entitled “Web of Profit” last month. The report digs into the dynamics of cybercrime and looks at how new ‘criminality’ platforms are bringing about a booming cybercrime economy, generating at least $1.5 trillion in illicit profits. In fact, according to their findings, if cybercrime were a country, it would have the 13th highest GDP in the world, comprising illegal online markets, data trading, identity theft, and ransomware.

The CEO of Bromium, Gregory Webb, says, “The platform criminality model is productizing malware and making cybercrime as easy as shopping online… We can’t solve this problem using old thinking or outmoded technology. New approaches to cybersecurity will be required.”

AI blockchained

There are many blockchains and AI startups springing up to fight cybercrime using these new technologies. Blockchain, especially at the application layer, is certainly moving in the right direction by removing easily crackable passwords. Moreover, if AI can be used to help us predict and prevent cybercrime before it happens, that could be the perfect combination.

Scott Schober, author of Hacked Again and President/CEO of BVS, says, “You’re accomplishing things much quicker when you apply machine learning to cybersecurity. You can anticipate and build up your defenses because we don’t have enough manpower to do it. Using AI and machine learning can do everything much, much quicker.”

However, while we can contemplate the uses of new technologies like blockchain and AI to fight cybercrime when it boils down to it, almost all attacks have a common element: human error.

Schober continues, “I think blockchain applied in the right area is definitely going to help secure things, but you can spend billions of dollars in security, you can implement the latest and greatest blockchain to secure things, but blockchain is fundamentally a layer underneath allowing things to happen; it’s not a magic silver bullet to stop hackers in their tracks.”

The Human Element

There are many people making money by preying on unsuspecting internet users. Also, we all know by now the importance of being careful when we go online. We don’t open links from strangers, we don’t download suspicious attachments, and we don’t respond to messages on Skype asking for our bank details.
Most of us have been victims of cybercrime at some point in our lives. It’s not surprising that criminals pick the easiest targets (people over 60, according to the IC3 report). However, even the highly technically minded among us can be affected too. Just look at the continued Binance phishing scams that have duped more than one exchange user.

However, the Schober notes that , the biggest problem in cybersecurity today is people. “We continually fall back to choosing convenience over security… We were lazy with creating passwords, and guess what? It hasn’t changed much today. We don’t take the time to carefully vet what we’re putting out on the internet and then it’s used against us. People are too trusting; we give out information too easily.”
Until we fundamentally change our habits and improve what Schober calls our “cyber hygiene,” all the blockchains in the world won’t be enough to keep our account funds or our identities intact.

So, one should start from himself when thinking about safety in the digital and crypto environment.

2018   2018   Crime   Crypto industry   Digital investmens   ICO

Most known ICO Advisor mistakes

ICO model of fundraising still rates high as the new startup appear on the market and there seem to be no end of ideas fueling the numerous blockchain based-start ups. However, the cryptocurrency market is far from its former heights, and the overall cap state is not astronomically high.

Certain prominent industry hype-trainers like John McAfee claims that the BTC price will touch $500,000 by 2020 and even the ICOBENCH report is optimistic with the prediction of the overall market recovery in early Autumn 2018.

ICO advisor is a person responsible fro project development vector, the one that can help in overall idea development and director, concept creation and expert in a specific industry field. All these qualities make him essential as a team member.

Being a famous industry person or a highly-valued professional increase a chance that a team will use advisor as one of their trumps card and investor’s hook.
Problem is, a lot of start-ups creator did overuse that practice, having attract prominent names just to be listed in the project and without having a direct impact on the development process.

One of other problems is the lack of understanding. The hired professional can be the best marketers, analysts or economists, but when it comes to understanding decentralization, and based on these singular utterances their understanding could be quite limited.

Moreover, right now there is another quite popular rumor on the market – as  nobody is interested in ICO investing anymore and there are days of this idea left to be profitable.

No wonder that over the years of million profits going to the scam projects, the regulation around ICOs has finally tightened and many countries had already made their points clear and issues the policies on so-called ‘utility tokens.’

Nowadays, the tax-havens are tricky topics as continually changing regulations make companies change their location quite often. What seemed to be easy to handle a year or a month ago today represents a stricts laws so what will the next day bring is always a question.

Things is, despite all the fraud, exchange hacks, and increasing legislative bodies regulation attempts, the amount of money in this industry gets higher and higher every year.

Due to the latest statistics, the market dynamic is definitely positive. The volume of funds attracted worldwide through the ICO for the first quarter of 2018 was $ 3.3 billion. For comparison, in 2017 with the help of ICOs, $ 6.1 billion was raised. The well-known rating agency ICORating provided the data.

As for geography – most of the ICOs were conducted under the United States jurisdiction – 59 projects totaled about $ 583.8 million; in Singapore – 34 projects raised about $ 468.1 million, and in the UK 26 projects raised $ 99.7 million. In Russia, 13 projects raised about $ 20.8 million.

During this year, the overall number of non-accredited investors investing is expected to reach the same number as the number of non-accredited investors in equities and other capital market products.

We sold the decentralization protocols to them as the silver bullet that would usher us into the era of equitable wealth distribution. This turned out to be a lie.

Another deal-breaker for the small investor is the terrifyingly frequent pumping & dumping of the market’s unworthy altcoins. Due to many advisor and consultants, specific points should be outlined of what documents should be issued before meeting investors, private or otherwise. If neglecting them, there is a slight chance that not even the best ICO Advisor could help to raise funds.

1) Decent project tokenomics.  While working on this part, specific rules should be followed as well as specific criteria to derive the token price, utility, and the total number of tokens mined.

2) Tokenization plan —  in case of utility token route, one must find out the best fit for tokenization. Most ICOs these days tokenize the access to the platform badly.

3) Working MVP — Most conservative investors whom I reached out to, “I wanna see how much skin do you have in the game.” What I learned from that conversation was that if the ICO had not invested at least 30% of the planned ICO money from their own pocket, investors are not going to like it.

4) A scalable business model —which is strong money attracting plan. However, it is not about appreciation of token utility and burning of unsold tokens. Explain why will people come to your platform and how will you monetize their interest.

5) Investor pitch deck  — An investor pitch deck must definitely have an elucidation of the business model, existing user base, and team credentials. Additionally, it must have an explanation of your product’s features and scalability potential.

6)  Elevator pitch is the thing that most often. It is useful for pitching an idea to the potential investors that you might meet at meetings and seminars etc. It is better to have an elevator pitch and save yourself from explaining the white paper to someone at a dinner party.

7) Team with decent credentials — a great idea and smart contracts are not always enough to present the successful product. Most people look for those team members who have legitimate experience in that particular space. Having a cryptocurrency advisor whose only claim to fame is that they became ‘Experts’ on ICObench does not cut ice with investors anymore. In case with ARK ICO. They have a team that has been in the business of managing seafood logistics of over 50 years combined.

8) Social media traction — if the product is so revolutionary, it must reflect on social media. While a part of your social media outreach can be seeded inorganically, you must refrain from letting it go beyond 20%. There are tools to find out the engagement on social channels such as Telegram, and it will reflect poorly if these reports come out adverse.

9) Practical market strategy —  as investors and buyers have an uncanny ability to fish out the rotten eggs and reject them.

As of Q3 2018, the ICO could not be regarded as a scheme to get easy and fast benefits from as we need to provide much more than the usual white paper to attract funds. One may also have to fork out equity to the private investor if you are really strapped for funds.

For now, there are no magic recipes to win in ICO market ultimately. One has slight chances of failing even with the decent team. If your marketing, product development, and the team credentials are great, you will raise funds.

However, there is no point in going pessimistic with your perspective ICO idea – the history had shown that even in times of hardships and calamity, man has invested, for profit or for fun.

2018   Blockchain   Crypto industry   Digital investmens   ICO   Start-ups

Gangster-powered ICO: Money laundering in blockchain industry

There are endless efforts of how fraudsters lure out the investor’s money. With the digital age, this activity had acquired new trends and options. With the blockchain technologies, the perfect tool for it became to be known as ICO.

Being developed to help provide the funding for the Internet-start ups which used such crowdfunding services as Kickstarter and Indiegogo before with the help of the new elements and securities, and digital money, over time this model began to be overused by criminal of all kinds due to its hype and convenience.

Recently, the news came around about the super-successful ICO of the former member of the Triad of Macao Van “Broken Tooth” Cup-koy. South China Morning Post officially reported that the gaming industry start-up held the initial placement of HB coins collecting $ 750 million within only 5 minutes.

However, 450 out of 500 million HB tokens intended for the general public have been sold, and the total amount of issued tokens is one billion HB tokens will be released.

At all, three events had been arranged by the same person – Wang. Initial token sale stages had been held in such locations as Cambodia, Taiwan, and the Philippines. Moreover, the people invested are known to be the senior government officials, military, celebrities and people in business from mainland China and Hong Kong, and the last round was held in Malaysia.

Also, it is known that the investment company Wang World Hung Mun Investment concluded a partnership deal with the Beijing firm Zhonggongxin Cosmos Internet Technology Limited, which includes, among other things, asset management and construction projects in Russia.

According to rumors, the parent company of Zhonggongxin Cosmos belongs to the state. However, it’s employees, incidentally, give conflicting answers to questions about the owners of the company.

Moreover, it is reported that Zhonggongxin Cosmos engaged in gambling – in online games in poker and chess. The stated prize fund of the tournament is about $ 1.5 million. Interesting is that the payments will be provided in both the traditional fiat currency as well as nd HB tokens. Moreover, it is noted that in China there is no law prohibiting the use of cryptocurrency as a prize.

The suspiciousness is also raised since the HB cryptocurrency is not provided with the tokens source code and detailed information about the technology. At the moment, the HB coin is traded on the Allin (a.top) exchange launched year by the Hong Kong-based All In Group Limited earlier this year.

The person of the day itself, Wan itself, is known as “Broken Tooth,” a former boss of the dominant 14K Triad that has figured prominently in China and Southeast Asia for decades, spent 14 years in a Malaysian prison for his organized-crime activities before being released in December 2012 for several wicked crimes.

The HB cryptocurrency itself is known to be issued by the shady Chinese company World Hung Mun Investment, and that’s to be among the Wan’s property.
Wan announced the new HB crypto coin in a splashy series of events in Thailand, Cambodia, and the Philippines, with a fourth launch-related event scheduled for Malaysia early this week. Wan’s company plans to sell a billion of the HB coins, which will also be used as the framework for online-gambling offerings. The company plans to pay the winners of its live poker and chess events either entirely or in large part with the HB coin; some smaller portion of the prizes may be paid in cash as well.

The companies’ plans for live poker and chess tourneys throughout China is slated, to begin with, a major poker event in the Chinese city of Hainan this October. That initial event was announced by Zhonggongxin Cosmos (Beijing) Internet Technology Limited, or Zhonggongxin Cosmos, for short, which also announced a deal with Wan’s World Hung Mun Investment a few weeks back. Zhonggongxin Cosmos’s back.

However, exactly how all this online crypto and online/live gaming events will work out in the wake of China’s recent ban on all Texas Hold’em smart-device apps remains to be seen. Oddest of all in this strange tale is that Zhonggongxin Cosmos appears to be claiming at a deal with China’s government to allow these events to proceed.

On its website, Zhonggongxin claimed to be reporting directly to an advisory committee under the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) called the Advisory Committee on the Management of Financial and Energy Resources and Capital.

No matter, what the Zhonggongxin Cosmos’s true nature is, the whole deal looks like a big-time criminal scheme. The HB is already regarded as “suspiciously vague” cryptocurrency, and the existing code gives no idea of how many coins are created.

The launch and gaming tours are also receiving pushback from many of China’s regulated gaming firms. According to Su Guojing, the founder of the China Lottery Industry Salon, “When chess and poker games are paid with tokens such as cryptocurrencies that can be converted to fiat currencies, it becomes a disguised form of gambling in China.”

Moreover, the suspicions regarding the operations to be the money laundering are going to arise due to how the money transfers within the crypto’s exchange framework will occur still a question.

2018   Blockchain   Crypto currency   Digital investmens   Fraud   ICO

Hottest Blockchain Week News #1

1) Facebook is open for crypto advertising again

The world’s largest social network and media giant Facebook announced the revision of the total ban on advertising crypto-currencies. So, previously approved advertisers will be able to post content about crypto-currencies and related topics, except ICO. The news had been announced on Tuesday, June 26.
To obtain permission to publish advertising products and services in the field of cryptocurrency, advertisers must provide Facebook with data on licenses, listing on stock exchanges and any important public information about their business.
Facebook will make decisions based on the data received from advertisers; however, as already warned in the organization, not everyone will be tested.
The company promised to listen to the community’s opinion, learn technology and review the rules if necessary.
A recall is regarded, earlier Facebook banned advertising ICO ads and cryptocurrency, including the Bitcoin.

2) Bithumb Exchange hacked

After just over a week after breaking into the South Korean trading platform Coinrail, the crypto-exchange community shocked the news of the hacker attack on Bithumb. As a result of the hacking of this much larger stock exchange, crypto-investors lost a total of 35 billion South Korean won (about $ 31 million).
However, the management of the exchange Bithumb managed to move part of the digital assets to a cold wallet and promised to reimburse investors funds soon. Payments will be made from the fund’s own stock exchange, which holds about $ 450 million.
Against the backdrop of this wretched event, the government of South Korea announced a tightening of the regulation of the crypto-currency industry and acceleration of the implementation of the new regulatory framework.
“If the bill of the deputy from the Democratic Party of Korea, Zhe Yong-gyun, is adopted, the authorities will be able to introduce rules for crypto-exchange exchanges that are identical to those for commercial banks,” the representative of the Financial Intelligence Unit of the country (KFIU) said.
It is expected that with the participation of KFIU and the Financial Services Commission (FSC), security and the infrastructure of the crypto-currency market will be strengthened. In this case, exchanges will be obliged to work in compliance with the safety standards that apply to financial institutions.

3) John Mcafee is back to life

Unknown attackers poisoned the famous crypto enthusiast, media person and founder of MGT Capital Investments John McAfee. He was unconscious for two days but woke up on June 22, which he immediately told his subscribers on Twitter.

“I apologize for my three-day absence, but I was unconscious for two days at the Vidant Medical Center in North Carolina and just woke up. My enemies managed to spike something that I ingested. However, I am more difficult to kill than anyone can imagine. I am back.” – McCafee said.

Besides, the crypto-enthusiast has left a rather ominous message for the attackers themselves.

“And for those who did this – You will soon understand the true meaning of wrath. I know exactly who you are. You had better be gone. – He replied.
Attackers poisoned the famous crypto enthusiast and founder of MGT Capital Investments John McAfee. He was unconscious for two days but woke up on June 22, which he told his subscribers on Twitter.”

Earlier, Roger Thomas Clark, known under the pseudonym Variety Jones or simply VJ, was extradited from Thailand to the US, where he would stand trial for alleged complicity in the illegal activities of the DarkNet marketplace Silk Road.

It is believed that it was VJ that prompted Ross Ulbricht to order the murder of Curtis Green, the Silk Road administrator of the Silk Road, caught by the FBI.

2018   2018   Blockchain   Crypto industry   Digital investmens   Future

Gambling goes blockchained

During the last couple of years, the popularity of digital currency casinos has increased considerably, given the wide variety of benefits being offered to players worldwide. Many people believe that the Bitcoin and some top coins are the perfect currency for online casinos, and recent statistics show that the market agrees with this mass opinion.

The blockchain industry victorious march is even out of the question for – the next years will undoubtedly see this prominent technology getting adopted in more and more industries. Banking area, transportation, jurisdiction, logistics, different productions, healthcare, gaming – there is potentially no shortage of sectors of current human activity where the blockchain cannot be applied for improving the existing solutions. Verifications of the highest possible level, unmatched security&safety options, smart contracts that can ensure payment transactions on the new standard.
Online gambling represents one of the first industries that went on experimenting with the use of blockchain technology, as different bitcoin casinos represent one of the most widespread use cases of cryptocurrency in its early years.

However, despite the evolution of cryptocurrencies in recent years, the overall impact on online gaming had been relatively small so far.

Anyway, despite the cryptocurrency market rapid shifts the last couple of years, the digital currency casino market has evolved and grew, given the appearance of more game types, features, bonuses, and more.

Nowadays not many even professional online game players and supporters do realize the potential benefits of cryptocurrency casinos when compared to more “traditional,” fiat-currency based online casinos.

1)The blockchain technology allows providing the games results, stats, and ratings that cannot be counterfeited. Different solutions out there in the market even before the blockchain adoption, though so far nothing is likely to provide better security and privacy in the coming years.

2) Client’s anonymity of the top level and best access options. Years before many had legitimate doubts and concerns with the personal information being shared on third-party gambling resources. And of course, this isn’t a case with crypto casinos. However, many gambling solutions are so easy-to-use that they automatically register user accounts when accessing the websites, and therefore, do not require personal information such as email, name, or real postal players address. Of course, it is a positive approach as an anonymity level like this also allows users located in countries where online gambling is under a legal ban, still access the resources and play their favorite games.

3) Unfortunately, some emerging crypto casinos currently suffer from the governmental tightening regulations as they are required to obtain licenses and apply more and more stricter rules over time.

4)The astronomically high speed of transaction execution. Before the blockchain stepped in, both the deposits and withdrawals in online gambling had never been that fast. Most popular existing casinos require transactions to have one confirmation on the blockchain network, before allowing users to wager the funds. However, the overall process can require no more than a few seconds or a couple of minutes, based on the client’s digital currency of choice. In contrast, the withdrawals are usually processed almost instantly. Users no longer have to wait for days before being able to play or withdraw their funds.

5)Lowest fees – the modern digital currency casinos had proven to have some of the most affordable dues on the existing market. Most cases show no cost associated with either deposits or withdrawals, and many new startups aim for low maximum indications to be attractive in this market and cope with numerous competitors.

The market for mobile applications and online games shows tremendous growth and an ever-increasing influx of new users over the past few years. According to 2017’s “AppAnnie 2017 Retrospective: A Monumental year for the application economy”, the overall market capitalization of mobile applications has reached $ 86 billion.

Due to the latest Newzoo insight, in 2018, the mobile games market will generate $70.3 billion – 51% of the overall global games market. However, the data from Statista reports that social casino revenue worldwide is estimated to reach $5.89 billion by 2022.

Moreover, according to Newzoo – the quarterly update of its Global Games Market Report service – the current forecast shows that 2.3 billion gamers across the globe will spend $137.9 billion on games in 2018. This represents an increase of +13.3% from the year before which was $16.2 billion.

Digital game revenues will make up 91% of the global market with a value of $125.3 billion. Mobile gaming will continue to be the largest segment following 10 years of double-digit growth since the first iPhone was launched in 2007. In total, mobile revenues will grow +25.5% year on year to reach $70.3 billion. This means that for the first time, more than half of all game revenues will come from the mobile segment.

No doubt that in fact best options for immersive player experience nowadays are provided by the most reputable companies.

2018   Blockchain   Crypto industry   Digital investmens   Future   Gambling

The most known jesting coins

The traditional, centuries ago-established banking systems had proved itself being extremely hard for accepting changes and innovations. With the advent of blockchain technologies, it became possible to create the decent payment option with the cryptocurrencies assets. Over the years, the number of the cryptocurrencies in circulation had reached more than 1,500 and the capitalization of all assets in the brightest market moments was more than $500 billion – a decent result in comparison that in the first day of the year 2017 it was estimated only to $17,7 billion.

Though major five currencies are a long time, not the subjects the of jokes on the Internet since they present decent growing digital assets, the modern reality dictates the more pragmatic approach.

However, among the hundreds of currently existing digital assets, there had been numerous attempts taken by different geeks and crypto enthusiasts only to provide the so-called joke currencies, which hold a significant place in the crypto world.
Of course, there is a certain degree of coins which sole purpose of existence was the scam fundraising made by cyber pranksters, and some are hardly worth anything at all, yet they all provide a critical outlook on the hype. Their worth is mostly based on their critique of how we react to the financial world, both new and old.

MONACOIN

Introduced back in December 2013 Monacoin was the first distinctly Japanese cryptocurrency. Its icon is a cat featured on a golden coin resembling the mint of Dogecoin. Although its website is more bare bones than tongue in cheek, Monacoin’s community is very robust and engaged in the crypto world. Having been birthed in 2013, Monacoin has longevity relative to other joke coins. Most of its humor is geared toward Japanese speakers. However, every once in a while, a Western investor will speculate, “What about Mona?”

JESUS COIN

There are fewer things older than money and religion. Parodying the human relationship between the two is most certainly a stroke of genius. The Jesus Coin website fully mimics an ICO’s front page with a team, roadmap, and cartoon. Jesus Coin is a classic comedic coin for fans of joke coins.

USELESS ETHEREUM TOKEN

The Useless Ethereum Token is marketed as the most blatantly honest ICO ever created. The website’s creator is totally transparent about using the funds from the ICO for flat screen televisions and other electronics. Hilariously acronymed “UET” in the style of tokens that present themselves for mass trading, UET also flaunted bonuses to entice initial investors.

With an ICO in the summer of 2017, the dawn of the year of ICOs, Useless Ethereum Token is an apt reminder of the fool’s gold ICOs that plague the Ethereum network and the crypto community at large.

GARLICOIN

Garlicoin arose after a Reddit post which said that if it garnered 30,000 upvotes, its author would create a new coin. Well, the author’s position reached its goal, and so a new coin was forked from Litecoin on December 25, 2017.
Most of Garlicoin’s comedy comes from its community’s subreddit. The initial post has enough hilarious comments to keep you entertained for the better part of an hour. Its subreddit is also a central hub for humor with a vibrant community of memes and banter. Although Garlicoin is a very new joke coin, it will be interesting to track its progress throughout the year.

DOGECOIN

With over 110 billion coins mined and a rich meme culture of its own, Dogecoin is most certainly the king of joke coins. This widely known and well-loved coin was initially designed to illustrate the volatility of the crypto space and behavior. With its first flourish in December 2013, it soon became apparent that the joke was lost on its buyers, or that crypto traders will try to make a profit on just about anything. Its subsequent crash illustrated the darker side of cryptocurrency, with memes trolling the market. Perhaps even more ominously, a thief stole millions of Dogecoin around Christmas. However, the community united and donated funds to those who had lost them.

Fast forward to 2017, and Dogecoin had climbed to a $2 billion market cap. That amount has since declined, but Dogecoin continues to unite and inform crypto enthusiasts on various issues. One of its creators, Jackson Palmer, warned against its success in a series of press articles during the bull run of 2017-2018. It seems that despite its blossoming success, the joke was momentarily lost on at least one of its founders. Dogecoin’s staggering volatility, poignant moments and lingering humor place it at the top of the list.

2018   Blockchain   Crypto currency   Digital investmens

The most underrated cryptocurrencies of 2017

The last year had brought the world crypto community attention to some relatively small digital currencies, which until the specific time had been regarded as failed even by many experts. We outline the most successful cryptocurrency projects that had achieved an unexpected acceptance by the community in 2017.

1) Monero’s main feature is that it’s entirely a unique kind of cryptocurrency — an utterly private coin. No one will be able to track the amount of your savings on this blockchain, unlike popular Bitcoin or Litecoin. The Monero network is constructed with the usage of the CryptoNote Protocol, which is the evolution of the principles which are behind the original Bitcoin. In contrast to the transparent blockchain of the Bitcoin which allows any member of the network to determine the sender as well as the recipient, Monero transactions cannot be tracked, making all the participants anonymous. A temporary drawback is the fact that a small by now number of users hamper the procedure of mixing transaction, and as a result, significant transactions can be visible and tracked down.

Initially launched in 2014, Monero uses a famous principle of proof-of-work. For a long time, it had been considered being an another-bitcoin-double as the media often used the expression “the perfect solution for the fraud and drug trafficking” because of its high level of privacy. However, in 2017 the value of this currency rose more than 3000%. Now Monero is the perfect choice not only for dubious personalities — the developers are actively working on the promotion campaign with five online stores and almost 50 well-known musicians, including Mariah Carey, Sia, Weezer, G-Eazy and many others, who will accept this currency as payments for their services during the holiday season. An exciting and competent move for the legalization and promotion of their cryptocurrencies, no doubt.
The main characteristics of Monero that explains its popularity as t
he currency are the following: maximum security, anonymity and transaction privacy.

2) Ripple cryptocurrency platform is focused on transactions to currency with no chargebacks. A Ripple company’s currency main feature is the usage of “consensus in the registry.” The system had been originally launched in 2012; the Protocol supports tokens representing fiduciary money, cryptocurrency, commodity or other objects, such as frequent flyer miles or minutes of mobile communication. At its core, Ripple is based on an open shared database that uses a negotiation process that allows you to make the exchange in a distributed process. The main feature of Ripple is the low and adequate value that will enable it permanently to be in the top 5 currencies by market capitalization.

The Ripple skeptics always had a negative attitude to it due to the apparent platform centralization as they believed that the blockchain must be decentralized. Thomas Ripple is going to dispel this myth, making efforts for a broader implementation of his creation — after all, with the mass success of this technology, there will be no more long days of waiting when the bank completes your transfer.

Nowadays Ripple indeed drew the attention of major players in the financial world like Western Union. In early 2017 Ripple had signed an agreement with the National Bank of Abu Dhabi, which operates in 17 countries. Today the list of organizations working with Ripple is мукн extensive. It is worth to note the expansion system — recently an additional service had been launched that allows you to complete even precious metals transactions. That had undoubtedly made Ripple a pioneer in this direction and significantly increased the confidence of investors — now even some trust funds make the Ripple deposits.

During the 2017 total rate of the Ripple has grown by more than 4000%, and the experts say that in the future this trend will continue.

3) The main advantage of Stellar Lumens cryptocurrency is its cheapness. Many experts claim that the purchase of XLM tokens is quite profitable because the buyer will not have to worry about the possible substantial loss if XLM is eventually removed from the list — which is very unlikely in the nearest future. Another argument in favor of this cryptocurrency is the trading volume, and the experts also draw attention to the XLM liquidity. Stellar Lumens — one of the undisputed leaders in the alternative coin market capitalization. Another attractive feature is that the XLM tokens can be used as a link between currencies that have no direct private market. They are always among the top altcoins by market capitalization, which means that major “players” are also waiting for the big payouts.

4) The New Economy Movement (NEM or XEM) cryptocurrency has very ambitious goals.

XEM is a peer-to-peer cryptocurrency platform. It’s written with Java and JavaScript and uses the 100% original code. XEM is a model for widespread dissemination and adds some new features to blockchain technology with the importance algorithm confirmation of POI (Proof-of-Importance). NEM also offers an integrated peer-to-peer system for the exchange of encrypted messages, accounts with multi-signs and the reputation system Eigentrust++.

NEM (XEM) project does have ambitious goals. With the blockchain technology, one can create billions of services on it, from online shopping to decentralized social networks, structures with decentralization and the protection of the highest level.
XEM rewards those who support the internal project economy, so users can earn tokens by merely completing the transactions. This model of growth has much more sense than the conventional mining. No doubt, it also may be a revolutionary way to control the future. The developers have plans to create the first cryptocurrency trading platform like eBay, but with the technology power of the blockchain.

2018   2017   Blockchain   Crypto currency   Crypto industry   Digital investmens

Why so DAICO?

As Initial Coin Offering Model popularity literally raised to the moon in recent years and the blockchain projects segment continued the constant development, new ideas regarding the future of this model arised. Back in January 2018 one of the the crypto industry top known persons, Vitalik Buterin, had suggested the DAICO model use in order to further advance the security measures.

The initial idea concept makes it possible to develop a more accessible way to manage the initial coin offering (ICO). This could be possible by combining the more traditional ICO concept with a decentralized autonomous organization (DAO) features, which is governed by the rules strictly enforced in the code.

ICOs allow the team to find investors who believe in the idea (or speculation) and directly invest in it. This allows developers to bypass traditional methods of fundraising, such as IPOs and venture investments.

Up to date, almost $4 billion is involved in the ICO market.

So, how does it work? First of all, it starts off as a Smart Contract in contribution mode. However, the DAICO contract features a specific mechanism for the contributors to send funds into the project in exchange for particular tokens of the network. Point is, after the final crowdsale date this contract will prevent any further contributing attempts.

That could be done by involving the investors in the initial project development process. The scheme looks the followings: to further enable token holders to vote for the refund of the contributed funds if they are not happy with the progress being made by developers.For projects that implement the DAICO concept, it will force a level of accountability on developers and give token holders additional assurance that they are guaranteed to either see at least a minimum viable product or get their money back.

The model difference

The main point that shows the DAICO supremacy over the traditional ICO model is the access to funds. Basically, it begins with the distribution, which allows the team to raise funds. Investors can send ETH to DAICO and get project tokens in exchange for their investments.The tokensale may have several conditions, such as: limited sale,auction,interactive offer of coins,sale to resellers.Once the distribution period ends, tokens can be traded.

First, at no point is complete trust placed entirely on a centralized team. Decisions on funds from the get-go are decided by a democratic voting system.Second, funding is not released in a lump sum, but a mechanism is implemented to spread it over time.
And finally, there is an opportunity to refund the contributed money. This decision is based on the ‘wisdom of the crowds,’ i.e., the contributors can vote for a refund of the remaining finances, if the team fails to implement the project.

While with ICO model, once the token sale finishes, developers have complete access to all the contributed funds. Developers have to calculate in advance how much is necessary to produce a minimum viable product and once they reach this amount, called ‘the soft cap’, they can start to work on the product and spend the money on whatever they deem necessary. If they don’t reach this initial soft cap, they have to refund the money. But if they do, there’s no further real obligation. With a DAICO, contributors can vote on resolutions (during the development phase) to either increase the tap or to return the remaining contributed funds (self-destructing of the contract).

Benefits of usage

The promising DAICO financial model basically puts more control in the hands of investors, contributors have much more options and influence possibilities during the development stage of the project. In case the majority of them are not agreed on project progressing, they can set the contract to withdraw and get a refund.
It definitely can make the risk of scam ICOs absent, where developers hold a token sale and then run away with the money as soon as the ICO is finished, without producing any product, MVP or even a prototype.

With an ICO, once the team raises tens of millions of dollars, it suffers deterioration in its motivation to implement the project; or, at least, the activity decreases significantly. With DAICO model increases slightly the team’s motivation to bring the idea to life, – to deliver the final product, is sustained over a lifetime period. What are some of the potential challenges with DAICO’s shortly?

-If developers hold a large chunk of the distributed tokens, they potentially only have to influence a small percentage of contributors to sway their vote and get more funds released from the Smart Contract.

-Contributors’ education is also crucial. They need to understand why the price of a specific token is rising or falling to make the right decision when voting on increasing the tap amount, or returning the funds. The best decision is one based on the facts relating to the project itself, not on emotions connected to the price of a particular token.
-Finally, contributors can also completely disengage by putting all their trust in the DAICO concept itself and therefore feel it’s not necessary for them to actually partake in votes and resolutions, reducing the majority threshold and weakening the security of the mechanism.
The ultimate goal of DACIO implementation is to establish control over the budget intelligently, to achieve the goal, not throwing away other people’s money and increasing the overall responsibility of the team. For example, while the team is on the road map creation stage, the amount of funds issued can be increased so that the team continues to grow. If the team is irresponsible or seems to be scammers, investors can cancel DAICO and minimize their losses.

DAICO Security

The common knowledge is that, any voting on a decentralized network is subject to 51% attacks. However, DAICO minimizes risks in several ways.If during the manipulation of voting the amount of funds is increased at a time, the team has the opportunity to reduce it.

As the amount of funds that gets released from the Smart Contract is limited and strictly controlled, it will reduce the occurrence of 51% attacks. Even if a 51% attack takes place, where an attacker wants to send funds to a chosen third-party, the consequences will be contained to the amount that was authorized to be released by the contributors (or the developing team) at any one point (the so-called tap).
If the team does not work according to the initial planned, you can vote for fund self-destruction.If the hackers/ network attackers manipulate votes in favor of canceling the project, investors return their money. The team can create a new DAICO, and investors simply re-send their initial investment back to the team. Although this model is for those who invest in the project, and not those who invest for the sake of quick sale after entering the exchange.
Please note that two of the potentially most dangerous types of 51% attack: sending funds to a third party chosen by the attacker, and reducing the tap to keep funds pledged in a smart contract are simply prohibited.

To DAICO or not to DAICO?

Vitalik Buterin himself gave several ways to enhance and optimize the process further:

Use ETH instead of internal tokens,
Use a “crane” with dollars per second,
Develop and introduce new consensus mechanisms beside simple voting system.

Considering all this, the 2018 may be the year of DAICO rise. Improved levels of  security can attract investors who previously feared the ICO or those who suffered from fraudsters/scammers/hackers while being involved to ICOs previously and therefore, got a negative experience in this field. The established control mechanisms must filter the scum projects and fraudsters, clearing the way for a real, innovative and useful projects as well as perspective developers teams.

2018   2018   Blockchain   Crypto industry   DAICO   Digital investmens   ICO

Initial Coin Offering vs Crowdfunding model

The modern digital world had seen the creation and development of the fundraising platforms due to rising need of an individual availability of the real opportunities and small private businesses development as well as innovative ideas financing via the Internet.

Even long before the Initial Coin Offering model came into big-time market play, the popularity of those largest platforms had been more noticeable, which had provided the chance to promote and finance the project online, like the most significant players of this business – Kickstarter and IndieGoGo.

Nowadays, the promising startups of independent projects have the opportunity and alternative to the classic venture capital funds. Anyway, both models do exist in parallel at the moment, each of them having apparent advantages and disadvantages, cons, and pros. Let’s have a closer look at the ICO and crowdfunding models, considering their best and worst current features.

The rise and fall of crowdfunding: from first success to the major problems.
The first example of the successful fundraising by the public network had been made 20 years ago – in 1997 the British band Marillion successfully raised $60,000 for its American tour, which was a significant event at the time.

However, this model of financing had gone mainstream only after more than a decade – with the advent of specialized websites like Kickstarter and IndieGoGo. Gradually, the private business shifted to the Internet, and yet, despite the popularity of such money investments grow even year, the main problem is still not resolved – the number of technological solutions of development had only increased the competition run, but it had not created fundamentally different mechanisms of financing for independent projects.

Right now, the undisputed market leader among the crowdfunding projects is the Kickstarter for sure. The platform, launched back in 2010, had shown consistent growth of almost 200% every year, but since 2014 the situation began to change, and it began to show serious problems.

Moreover, as the number of ambitious projects grew, eventually the attracted volumes of funds had reached tens of millions of dollars. Unfortunately, some of the extremely expensive projects had become an excellent example of the high-profile scams either dissatisfaction with the final product after the release date shown by many investors.

Here is the most striking example of such phenomena – at the time the project team behind the refrigerator Coolest Cooler creation, which raised $13 million, had not fulfilled its promises, and backers supporting the project lost severe investments. Another excellent case of the significant losses – a video game micro-console Ouya, which had cost its investors nearly $9 million. The project had been successfully funded, but in the final prototype was something much less than expected – beyond the user’s hope, as well as its sales were unsatisfactory.

An infamous project of Zano drone that devastated pockets of its bakers by as much as $3 million is also worth mentioning. At its time, it had been one of the most successful European project platforms, but with 12,000 investors extreme dissatisfaction of the unfulfilled promises by developers and the final poorly working prototype, general disappointment in the platform Kickstarter and crowdfunding had come along.

Video game developer had undoubtedly liked the crowdfunding model – a lot of teams collected vast amounts of funds, but the projects often did not reach even the stages of beta versions. Someone had focused their efforts for simple theft of tiny amounts– the indie project “Mansion Lord” developer had just disappeared a few years ago, after collecting a total of $30,000 from his project contributors.
These factors had a significant influence on the popularity of Kickstarter at all: if during 2013 more than 44,000 campaigns had been created, in 2014 the number raised to 67,000, 2015 had already started to show the growth rate slowing down – only 77,000. In 2016 the number of created campaigns decreased to the total number of 58,000, which gives a very negative outlook for future if the rules of the game on the platform stay the safe in forthcoming future.

Next, another serious problem is that the original essence of the platform created for the development and funding of the independent projects had somehow become smudged and almost lost. After the waves of success of particular small projects on the platform, the stable big-budget companies with colossal funding came into play. It is a fact that significant investments lead to significantly higher losses.

The fraud schemes involving the use of several hundred or more users appeared, which meant that companies had funded the successful launch of the campaigns from their own pockets – only to have real backers joined after noticing the sky-high start of a particular project on the platform. Because of such dishonest practices, the chances for the small developers and enthusiasts had been reduced slightly – without proper investments in PR-campaigns and Internet traffic, they risked to collect absolutely nothing or fail while being half-way to success.

According to all-time official statistics of the platform, over $ 3.3 billion of investment had been raised since launch, 13.6 million users had supported at least one campaign, and the total number of successfully funded projects is now more than 132,000.

If in the nearest future arrangements for the regulation of domestic competition are not introduced, the major players from the world of business will continue to reduce the number of advanced independent projects even more. Also, such things as fraud, deceit, and failure of obligations of the campaign organizer of the project are still present at large.

With the growth of demand for independent financing, the number of websites for crowdfunding is growing, but they mostly just copy the functionality with the addition of minor features to the existing and heightened competition. With the development of blockchain technologies and the emergence of ICOs independent entrepreneurs had gotten a real chance.

ICO features

Initial Coin Offering is a crowdfunding campaign based on the blockchain technology, it has a lot in common with the traditional crowdfunding, but there are also significant differences. Initially, ICO was one of the crowdfunding variants specified for cryptocurrency projects that did not want to work with traditional venture funds and capital – because it would, in fact, mean the loss of desired independence.

The most important difference between the ICO-crowdsale and crowdfunding lies like a financial asset that investor acquires. The crowdfunding campaigns get the real, Fiat money from its sponsors and that is, actually a payment in advance for the final product of a particular project. ICO, in turn, involves the purchase of a digital token for use by the client of the service project after its launch. In most cases, these tokens can be traded on the stock exchange, and some investors have the opportunity to obtain exclusive rights of a shareholder.

The ICOs organizers seek to obtain investments in the project by the concerned community, where funding is likely to be done with the use of Bitcoin or other cryptocurrencies. The nature of these digital assets allows one to send them to the recipient anywhere in the world, quickly and almost without any cost, as well as avoiding the traditional banking system. No doubt, such advantages will be appreciated by those who had ever transferred money overseas.

It should also be noted that, over time, the collection of money has ceased to be the single most crucial part of the ICO often tokens of the project are used as the local currency for various actions on a specially created platform. 2017 showed a real boom in the growth of the ICO projects. According to CoinSchedule, compared with 2016, the number of successful and active ICOs in the past year increased significantly from 46 to several hundred. As at the end of 2017, the funds raised during the ICO investments in the USA exceeded $4 billion, reports Bloomberg, citing data from Autonomous Research LLP.

Unfortunately, there is still a shortage of solutions allowing investors and startups find each other because the technological complexity sometimes is beyond the understanding of project participants and the conducting of its developers and organizers.

Besides the funding approaches, there are other significant differences. The ICOs and crowdfunding project principles of conduct are not the same, so is their audience.
The main differences between ICO and crowdfunding are:

1)The Product:

While investing in crowdfunding projects, backers pay for the result of the job of the specific team that they are interested in – final products, merely saying.
Cryptocurrency projects investors are mainly driven by the motivation of fast earnings or promotion of the new technologies in specific areas. In the first case, the prepayment is made for the product, in another – it is the financing of an idea or concept.

2) Campaign length:

Crowdfunding projects take too much time to prepare and conduct the campaign. For example, it took the LHV Company 2 long years to develop its campaign. It is not the tool that is best suitable for independent startups – the only exceptions are those campaigns that are funded by the venture capital investors. ICOs, in turn, can be carried out much faster – from weeks to minutes and seconds even.

Some striking examples of it:

Based on blockchain technology internet browser Brave raised $35 million, and although it’s not much for the modern ICO market, the fact is the full amount had been collected in only 24 seconds, and after a week the benefit of the investors of the project came to astonishing 676%. The most recent example – on Dec. 27 the Singularity Net startup, designed to create a decentralized framework for AI-based blockchain, during only 66 seconds collected $36 million for its developer company.

3) Financial features:

Top projects crowdfunding with multi-million dollar budget, as mentioned above, can often fail or merely turn out to be a Scam. With traditional crowdfunding, users can risk of losing investments of Fiat money – besides, the investor should invest their money, wait until the company begins to create the product, but if the development does not succeed, the money can be lost in many cases. In case of ICO, the investor can track what is happening with the project. The potential benefit for the future investors grows in many times.

4) Investor accessibility:

Nowadays, most crowdfunding projects are restricted to a particular region or a specific country that is native to the people behind the project. While some of the projects are global, not all apply to a broader scope, unlike ICOs.
In turn, many would be able to participate in coin offerings as the accessibility for it falls on a broader range. A lot of ICOs have gathered investors from all over the world as they are more accessible for people around the globe as they are advertised well in social media.

Besides that, they offer something much more that would attract the eye of the masses. Although some of the newer token sales set restrictions to be able to join, a lot of people still pass those restrictions and can participate in the mentioned ICO.

5) The contributor’s confidence:

In contrast to the dynamically growing ICO project markets, the crowdfunding platform like Kickstarter, in particular, is inferior not only regarding the growth rate but also in steadily decreasing of the number of completed projects. Pure statistics: back in 2015 this figure was 22,000 projects, and – already 18,800 in 2016. The share of successful projects from 2011 to 2014, on average, ranged from 45 to 50%, and this fell to 20-25% in some categories. Slightly better things are with the budget projects with funding of up to $10,000 – 69% of current success, according to the recent statistics Kickstarter campaign.

6) Regulations

Fact is, existing crowdfunding platforms are registered and regulated by the law.
This perspective market is expected to reach $96 billion by 2025. Anyway, some countries governments have already come up with regulations that set requirements for crowdfunding projects and define liabilities. One of such regulations is JOBS Act, issued in the US in 2012. Only qualified investors could invest in startup projects due to it, and France is the only country to perform government control over crowdfunding in the European sector.

Nowadays, ICOs are still usually unregulated. In consequence, ICO investors and project enthusiasts are subjected to some risks. Of course, the investors in ICO startups cannot be fully protected. As a result, many lost their money. According to Chainalysis, for the year 2017, fraudsters appropriated about 14% of the funds raised by projects using the Ethereum-based ICO, namely approximately $ 225 million out of $ 1.6 billion. As a result of fraudulent activity, about 30,000 investors suffered losses with an average of $7,500. Cybercrime concerning investors’ financial resources is growing faster than the number of investments attracted within ICO. The jump in both these indicators has become especially noticeable since March 2017.

Security and Exchange Commission had recently imposed first charges on companies that went on ICO for fraud. Among other risks are technical mistakes in smart-contracts that lie underneath ICO processes – one of the most infamous examples of it is the DAO that raised over $150 m and lost one-third of its funding due to the exploited by hackers vulnerabilities in smart-contracts. Filecoin ICO, for example, had become the first regulated ICO ever and raised record-breaking $252 million in less than an hour.

7) The rewards

Traditional crowdfunding model bakers don’t expect some decent rewards. Companies or enthusiasts who launch campaigns may offer fancy, but useless stuff like T-shirts, a copy of the final product upon the release or pure gratitude in credits. Other case sees reward models offer the possibility to pre-order the product.

The Initial Coin Offering participants receive tokens in return according to the amount contributed. Some issued tokens give access to the services that platform will offer in the future. An ICO might involve attributing equity to a token so that ownership provides voting privileges and access to future dividends. The typical use case of a token issued in an ICO is the creation of an asset that gives access to the features of a particular project. Besides, some view tokens as an investment opportunity as they hope that the price will go up sooner or later.

Both models, ICOs and CF, have a lot of advantages and significant features. Initial Coin Offering and Crowdfunding may seem to have a similar nature, at first sight, but they do differ in many key aspects. Traditional crowdfunding is regulated and is less risky for investors and the blockchain project, and ICOs is the fastest and easiest way to raise money. In some cases, the amount of money raised may surpass the sum required to launch a project.

Therefore, technical progress always wins, and there is no doubt about the future triumph of the new technologies such as blockchain startups.

2018   Crowdfunding   Crypto industry   Digital investmens   ICO   IPO

How to ensure ICO security from Ddos attacks

The security problem is among the top issues of the entrepreneurs which have chosen the Initial Coin Offering model to fund their project.

As for Q2 2018, the total amount of funds attracted using the ICO model stands at more than $2 Billion which indicates a steady market growth – for example; this number had risen from $26 million in 2014 to $225 million in 2016 and to $5,4 Billion in 2017. That undoubtedly high number still doesn’t include some significant future projects as Telegram’s planned $1 Billion ICO, or Overstock’s ICO and less perspective ones, so this year will definitely show new record heights.

Bold statistics show a visible increase in specific segments of business – Internet of Things and People, Financial Markets, Investments, Banking & Payments and Cryptocurrency sectors are the most popular at the current state.

In total, there are 225 crypto funds across seven strategy types (hey there Salt’s credit fund) and see assets in the space being between $3.5 billion and $5 billion.

As the number of ICO projects are rising steadily, the percentage of cybercrimes growth become disturbingly high. In 2017, for example, more than 10% of all the investments in Ethereum had been stolen by hackers and fraudsters.

This market is still a Wild West territory, specific measures are to be taken in order to protect the project before and during the ICO.

Nowadays a distributed denial of service (DDoS) attack is one of the most common, dangerous and hardest to prevent problems which gives a serious risk for any ICO. How does is basically work? During the DDoS attack, the project website is flooded with queries executed by a distributed network of malware-infected computers (botnet). Over time, eventually, the servers run out of resources and are down.

It is important to realize that the main reason behind the DDoS attacks which serves more as a smokescreen. While performing it, the hackers and internal attackers go for exploit the more serious security breaches and expose the most vital weak points. Usually, it refers to the access the control panel of the website either to mass mail spam of a link containing an attack vector to users and potential ICO token buyers.

Hackers go for complete control of the website and most likely change the purse addresses for the coin buyers. Next, fraudsters replace the content of the users’ page and use the original website address for the more effective phishing attack.

We outline the most typical and often attacks that take place:

1)Http flood attacks

This refers to the application level attacks, in case of which the main load is directed to the app server. In this case, the vital point is separating the real users from the bots. There are different ways to do it – installing cookies, JavaScript or flash flags.

2)Volume-based attacks

These kinds of network attacks are associated with the number of queries. When the number is too high, it can saturate the bandwidth of the targeted website and drain the network capacity.

3)Protocol attacks

The protocol attacks aimed at direct drain actual server resources, or the resources of firewalls and load balancers.

It’s also important to consider that:

-Be aware that the search engines to track the website activity as well as DDoS robots.

-JavaScript and cookies are not the ultimate solution for security as specific bots could be programmed to avoid these measures. To put it simply, they are implemented to basically increase the cost of attack for hackers.

-Important tip: the load from security measures should be lower compared to the case when the bot overcomes it.

Now, let’s consider the security measures that are to be taken in order to comply with the rising number of threats.

1) The main thing to do is to go for search and install the advanced anti-DDoS services. Particularly, such could be named as CloudFlare, Incapsula, Akamai, or DoS Arrest which are aimed at resolving issues with the volume-based attacks. Anyway, never forgot not to rely entirely on them as the third-party services are still may present a certain degree of danger. So, track their performance at times and look up for any unusual activity.

2) Web application firewall is a decent thing to use when it comes to security, so the impact of malicious payloads could be observed in real

time. In that case, a user should check up for any excessive rules not to be imposed.

3) Choose the reliable hosting with decent security features. Another major requirement for the hosting is the scalability options.

4) Check for any project code issues. The final quality control of the code and its scalability options is one of those things that should often be kept in mind at the last stages of development. Audits performed to double check the smart contracts and the website code would be of help as well.

5) The website. Nonetheless, it is essential to track your website always in order to notice even the slightest changes to the web pages, the size and content posted. The higher is the frequency of these check-ups from your side, the faster will the potential threat situation will be handled, and the control will be restored.

The final thing to keep in mind is your own ability to react to any rapidly emerging issues. No matter what measures are taken or implemented, that DDoS attack might still take place before or during your ICO. If a certain situation will happen despite all odds, a splash page must be used, to inform that the website is under attack, so the potential investors/visitors will be redirected to visit the social platforms and official chats to be appropriately informed.

2018   2018   Crypto industry   Digital investmens   ICO   ICO 2018   ICO Risks   Start-ups

ICO Market Progress – Q1

Despite the cryptocurrency market fluctuations, Initial Coin Offering market grows progressively as the number of specialists and enthusiasts involved in this industry only rises each month.

Due to the latest statistics, the market dynamic is definetly positive. The volume of funds attracted worldwide through the ICO for the first quarter of 2018 was $ 3.3 billion. For comparison, in 2017 with the help of ICOs, $ 6.1 billion was raised. The data was provided by the well-known rating agency ICORating.

However, as noted by the company’s specialists, the indicators take into account only the funds collected during the ICO. The statistics do not apply to the data of the unfinished sale rounds of funding, indicators of presale and round of the Telegram messenger private sale (the volume of funds attracted here is undoubtedly is the highest here).

In late 2017 and early 2018, many companies have entered the ICO work in the fields of financial services, exchanges, e-wallets, as well as in the blockchain infrastructure itself.

The average duration of all ICOs during the latest time varied from one to two months. At the same time, only half of the projects were able to attract more than $ 100,000 of capitalization.

As for geography – most of the ICOs were conducted under the United States jurisdiction – 59 projects totaled about $ 583.8 million; in Singapore – 34 projects raised about $ 468.1 million, and in the UK 26 projects raised $ 99.7 million. In Russia, 13 projects raised about $ 20.8 million.

Speaking about the stage of the product, analysts found out that 46.6% of the total number of ICO-projects did not have a finished product at the time of the token sales launch. This not obviously relates to the scam project nature (which reached the 90% level by the end of 2017), but for the funds required to develop a minimum viable product (MVP). According to ICORating, MVP was available only for 26.2% of projects, 15.5% created an alpha version of the product, 11.2% – a beta version, 0.5% of the projects had a primary code available only.

“When choosing similar projects that have nothing but an idea or concept, investors cannot in any way check the network performance, its bandwidth or other characteristics. Therefore, users are faced with a choice when they can either blindly trust or look for another project,” the researchers noted.

It was also noted that only 21% of new tokens had been added to the exchanges – by comparison at the end of 2017, this figure was 33%. Such a significant fall can be explained by the fact that 83% of coins issued from January to April 2018 are now lower than during the pre-sale period.

Back in 2017, the finance sector had become the most popular segment for ICO. This is still actual for early 2018, though, in total, there are 225 crypto funds across seven strategy types.

2018   2018   Blockchain   Crowdfunding   Digital investmens   ICO   ICO 2018   ICO campaign launch   Start-ups

Why so serious? The reasons behind governments worldwide ICO regulations

As more and more entrepreneurs do engage in worldwide ICO boom, the more extensive growth the popularity, which, of course, increase the governmental suspiciousness and alert level. As Initial Coin Offering model itself present a new way of attracting investments, which has been free of any legal rules at first place, the needed measures were to be taken in order to establish control.
Instead of shares in traditional IPO financial model, an ICO investor receives project tokens, that may one day present certain substantial value. The unmatched liberty of this market in recent years had caused the incredible rise in start-ups numbers, which had moved beyond the 1,500 figures as for Q2 2018.

Of course, such major market increase had attracted not only the initiative and smart entrepreneurs but the ones willing to succeed on the overall worldwide hype. The fraudsters’ actions on the creation of ICO bubbles and Ponzi schemes caused the rise of so-called scam project to the level of 90% by the end of the 2017 year, and in 2018 the situation ain’t much better.

As for Q2 2018, the total amount of funds attracted using the ICO model stands at more than $3 Billion which indicates a steady market growth – for example; this number had risen from $26 million in 2014 to $225 million in 2016 and to $5,4 Billion in 2017. That undoubtedly high number still doesn’t include some significant future projects as Telegram’s planned $1 Billion ICO, or Overstock’s ICO and fewer perspective ones, so this year will undoubtedly show new record heights.
Bold statistics show a visible increase in specific segments of business – Internet of Things and People, Financial Markets, Investments, Banking & Payments and Cryptocurrency sectors are the most popular in the current state of market.
In total, there are 225 crypto funds across seven strategy types and see assets in the space being between $3.5 billion and $5 billion.
More and more individuals and private companies became to recognize the convenience and perceptiveness of fundraising possibility of ICO.

The absolute absence of investment regulations and attractiveness of certain opportunities went hand to hand with no safeguard options for investors. The project documentation most of the time went on describing the promises in a white paper to solve the specific issue using the Blockchain as the most innovative and influential tool, and these promises quite often proved to be empty. However, holding them to those promises have not always worked.

At such circumstances, the political moves directed on ICO market were the matter of time. There are a lot of reason behind specific rules applied by different countries, so specific main reasons behind specific strict rules are worth mentioning below:

1)Fraud activities/SCAM project level rise

The percentage of scam project within the ICO fundraising models’ boundaries had risen drastically. For example, In June 2017, only 7% of total projects failed or turned out to be a scam, while in August-September this number had risen to 54%, and to 67% later in the following month. Financial reports indicated the rise up of SCAM-level up to 90% as of late 2017 and early 2018.

2)Pyramid/Ponzi schemes

The creation of more complex ventures explicitly made with one aim – to lure the investors’ money, had become a reality in ICO market quite a long time ago.
We can remember the infamous One Coin project – an actually MLM Ponzi scheme exposed worldwide. This project turned out to be much more sinister and ambitious as well as long-playing. Truth be told, the well known now Ponzi scheme of the OneCoin project should have met its demise many years ago. The amount of evidence contributing to One Coin’s status as a pyramid scheme is much more than considerable – its directors have previously been involved in other known scam operations, its resources contain no verifiable evidence for any of its business claims and documentation uploaded to support claims often conflicts with the claims themselves. Certain steps have been made by the many countries’ governmental organizations to put this project under the legal heat and stop it forever.

3) Fever ICO market nature

Some financial analysts had come up with the idea that the ICO market has specific indicators of a gold-rush feverish mentality, which harms both individual investors that follow the crypto market hype trends and both the companies.

4) Funding the terror organization cells

The absence of regulative and overwatch tools raised talks about the real danger of ICO model being used to support different worldwide terrorist groups and large organization even, although confirmations are hard to prove.

5) Manipulation

The United States SEC commission made the official statement alerting the public community that many companies can use the so-called “pump-and-dump” schemes with the goal to influence and fluctuate the market indicators and prices.

6) Money laundering

Last, but not the least point of justifiable governmental anxiety, is that the ICO model structure makes it perfect use for the good old way of money laundering.

Anyway, as ICOs itself present quite a new world phenomenon, regulators are about to formulate and create the new rules of tackling the incoming issues – in fact, most of the strict rules or official public statements had been done quite recently.
The legal base development is quite a time-consuming process as many governments try not to react on first notice but research the impact of the ICO on their economy as well as the country developments and effect causing ICO popularity growth on its citizens.

2018   2018   Blockchain   Crypto industry   Digital investmens   ICO   ICO Risks   ICO Scams   Regulations

Top rating ICO platforms

The creation of the marketing campaign for ICO projects is the brand new fusion of the latest advanced informational resources and modern advertising tools. Right now, listing sites or trackers are the most convenient and useful means that are used to post information about upcoming or already running ICO projects. At the moment, only a few platforms offer free listing though, most of the trackers require their services to be paid and sometimes the charges maybe be quite high.

Let’s have a closer look and examine the largest and most popular platforms nowadays: CoinSchedule represents a popular platform with listing support, and discussion forum of potentially successful and exciting projects are provided along with ICO-crowdfunding. The main feature of this website is selectiveness regarding the projects — not every team can host their idea here. To get listed on the website, the plan must be successfully approved by the community regarding specific features: the Whitepaper and core team review, the website and roadmap checking. This web portal would be interesting to the contributors willing to invest at least $100,000 in certain ICO-project. The administration will also check the Whitepaper and the project team themselves.

The standard placement fee is usually around $300-$800, and premium slots will cost your company up to $2,000-$3,000 per month. Average monthly website attendance is between 800,000 to 1 million unique users with almost 2 million hits monthly. Nearly 25% of the visitors are from the United States, nearly 10% — from European countries, up to 5% and 4% from India and Turkey respectively. ICObench allows you to overview a large number of discussions regarding active and upcoming ICO/crowd sales, ICO-calendar and convenient to use website structure. This platform has a constant and active community; the website is also interesting for investors because of high worldwide popularity among developers.

Every month up to million unique users attend this website, and a total number of hits is estimated around 2–2, 5 million. Up to 20% of the visitors come from US market, 10% — from Europe, 7% users come Vietnam, 5% — from Japan. The standard listing here is free, priority package will cost you around 0.05 BTC, and the premium listing for seven days is 1 Bitcoin (Fiat currencies are not accepted). ICO Drops This platform is quite popular and well-known among the major investors from USA, Europe, Russia and Japan as it provides a large and continuously updated list of prominent ICO projects. At the moment, it’s in the top-3 listing website for the English-speaking audience. The platform has a user-friendly interface, supports a rating system of “Interest level” for potential investors, a comfortable ICO-calendar and Bounty-list.

At the moment, the website traffic reaches 1–2 million unique users per month, and total monthly hits of the platform reach nearly 3 million. Speaking about the countries — 20% of visitors log in from the United States, 15% — from Europe, 7% — from Russia and 6% from China. The platform hosts projects only after a careful check of Whitepaper, website, and ICO project team done by the administration. A premium listing is not provided, the accommodation here is free. ICOrating is also quite well-known resource that maintains the listing of current and future ICO projects, token sale and crowdsales. Projects are evaluated with consideration of many criteria, mainly in the advanced products or projects with unique features are listed here. Previews and comments on the upcoming ICOs are supported.

The attendance of the resource per month is nearly 500,000 unique users along with 1–1,5 million hits. Most users (17%) come to this platform from Vietnam, up 12% — from the USA, 7% -from Russia, 4% — from Japan.

Standard listing here is free, and priority package will cost nearly $50–500. ICOExaminer platform is mostly aimed at preview and evaluation of future and upcoming ICOs and review of current projects. It has an active forum with a large number of members. This resource is in the top 5 in attendance the international community in the network.

The platform also has a section of educational materials for ICO conduction and identification of fraudulent projects.

Every month website is viewed by almost 100,000–200,000 unique visitors with a total of 500,000 hits. The community consists of: 30% of visitors come to the USA, 10% — from Canada, 8% of the users are from Australia and up to 10% — from Europe. No fees required for the standard listing and the premium package will cost up to $ 500.

2018   2018   Crypto industry   Digital investmens   ICO   ICO Platforms

How much costs the Initial Coin Offering Campaign?

Consider that your company seriously takes advantage of rising crypto market and decides to fund the project using the Initial Coin Offering model, instead of going through the long and tensioned IPO-process or a complicated search of traditional venture investors. The ICO campaign complexity and cost depends on many factors.
In order to have a full and transparent understanding of the possible future budget needed for a specific project let’s take a closer look and examine each of the items of expenditure of this complicated venture separately.

1)Hiring a team of professionals

When you have already come up with an idea as well as clear working concept, the next thing in line is to gather a team of specialists. It will be the core, the heart of your project. A lot of professionals in different fields would be required for hiring: from the frontend and backend-programmers to community, HR- and PR-managers. You will also need financial and blockchain analytics, smart-contracts developers and more. It is essential for members of your project team to know at least one foreign language, English preferably because ICO projects are aimed to the worldwide market, so the communication and understanding of specific professional moments would be more comfortable for the whole team.

The salary of each position varies depending on specific factors as the development duration, project complexity and country of project origin. It may be a wise idea to use the hired developers outsourced from other countries which have less high incomes to lower the overall budget.

Here is the data of annual income of the key team members in ICO project in the US market according to the information of early 2018:

Frontend developer income varies from $45,000 to $150,000; Backend developer:$25,000 - $80,000; Blockchain analyst:$40,000 - $165,000; Cryptoeconomist:$45,000 - $150,000; Public Relation Manager:$35,000 - $100,000.

For example, the highest salaries in European market industry (and in the world pretty much at all) right now is observed in Switzerland, where the top blockchain companies base. The monthly income for Frontend and Backend developers in this country is around $10,000 - $15,000 which makes the annual earnings up to $120,000 and $180,000. PR-Manager can get up to $45,000-$120,000 annually working in Switzerland while the Blockchain analyst earns around $50,000 - $150,000.

According to Glassdoor data, the salaries on Asian market are not that high of course, but the industry is growing, and the situation changes dynamically here as the number of major crypto exchanges rises. Heads of Department blockchain development in Japan and South Korea can obtain up to $7,000-$10,000 monthly, approximately $100-$120,000 per year. PR-managers, in turn, earn an average of $3,500 per month – from $30,000 to $55,000 per year.

Frontend developers have an income in a range from $3,000 to $5,000 per month, the annual salary of an experienced programmer usually is around $60,000.
In Russia and the CIS countries, wages are somewhat lower, Frontend and Backend developers earn about $2,000 -$3,000 per month, which makes about $25,000-$36,000 per year. Technical Director with professional experience earns an average of $5,000-$6,000 monthly and $50,000-$70,000 per year, respectively. PR Manager usually earns from up to $2,000 per month and up to $24,000 annually. Email marketing specialist income ranges from $1,500 to $2,000 per month, $18,000 -24,000 per year. Head of development earns about $2,000 - $4,000 per month and $24,000 and $48,000 per year, respectively.

It is essential to ensure the presence of the well-known and reputed advisors from different areas and technical experts  in your team – sometimes their opinion may slightly influence not only the investor’s viewpoint whether to invest or not but the further direction of the project development at large.
This whole part cost is considered the most voluminous and can absorb up to 50–60% of total funding.

2) The technical developments

The next relevant of importance topic should be split into individual parts for easier comprehension:

The Token

For a start, your team will need to create a tradable token that your investors will use to fund your project. Most exchanges require that you have an ERC20 compliant token that will allow the transfer of tokens from one address to another.

At this stage, you will have to hire an ERC20 token developer. Although finding a good Ethereum developer is hard - an experienced freelance developer could be hired to work with for approximately $10,000 per month/project in the U.S. This cost will be up to $5,000-$7,000 in other countries.
The program for smart contracts execution is required to deliver tokens to investors in exchange for Ethereum. This part of work will need the presence of developer or a group of them to create a decent Smart Crowd Sale Contract; the process can take up to 3–4 weeks and cost you on average $15,000-$20,000.

Smart Contract Audits

To guarantee and ensure your investors in the complete security of their investments, you will need to perform an audit of your smart contracts. Frankly, the significance of this stage cannot be overestimated as you will expose any vulnerabilities in the project code. The cost of this service done by a reputable company ranges from $10,000 to $30,000 depending on country and the company reputation. This figure is steadily increasing due to the growing number of ICOs on the market.

3) ICO campaign preparation stage

On this milestone, your team will need to work hard to complete all parts of project’s presentation materials and more - that means creating a convenient and easy to comprehend website, complete the SEO-optimization, create the promo materials and highly engage in the media field.

• Website and SEO-optimization

Another important and responsible step. You must choose a reliable hosting and website structure (now favorite and user-friendly one-pagers come into consideration) that has a functional design and be user-friendly, as well as protected from possible DDoS attacks. Your website must list specific promo materials including the video presentation about the project, a transparent and easy-to-understand Whitepaper, Roadmap with clear milestones, the project team with photos and links to their social networks and LinkedIn, a list of partners and advisers involved contacts and active social network channels. Search Engine Optimization (SEO) also has the significant importance to improve positions in Google search system and, simply put, allow investors faster access to your project.

• Whitepaper & Roadmap

The whitepaper is the primary document that serves as a presentation of the project to potential investors, explaining the vision, objectives, implementation and milestones in the project development. Visualizing your concept vision to potential investors is essential, so the infographics should illustrate the main financial indicators that the company plans to achieve in the first place. Also, any signs of market research are better perceived in this format. But do not forget about the information value - you can come up even with a 100-page text document, but investors will find it simply not interesting to read and hard to understand. This document must have a transparent structure, support the statements with facts, clearly explain the concepts and potential benefits from participation in your project. Not all the project teams are capable of writing this document themselves; therefore, often a professional help may be required. Of course, it is possible not to spend money on this stage at all by making it by yourself. The cost of creating a Whitepaper with third parties companies’ involvement estimates from $2,000 and may even reach $10,000 in the USA and European countries, and this cost is growing.

• Publicity and Advertisement

You will also need a marketing team to create a buzz online so that you can capture the attention of investors and enthusiasts before the start of the pre-ICO and ICO stage.

The team should promote the project in traditional media and social media advertising, write articles and news about the project, make publications on crucial web resources. Some of them may be free; others will require part in the premium services (for example, the popular web platforms like Cointelegraph listing cost is estimated at thousand dollars).

In the United States, banner ads with a so-called “Hot-rate” will cost nearly $10,000- $15,000 for two weeks at the central website position, and mailing to the whole database of investors for the same “burning” rate will cost around $6,000-8,000.
The total cost of marketing and promotion can be slightly different — you can spend $5,000- $10,000 or even more than $100,000 at this stage, depending on how much your company can invest in the project. It includes interviews with the company founders and member, advisors, promotion through social media channels and forums. Many teams are willing to pay huge money to specialized advertising companies for the traffic to achieve contact with the target audience of the project. Marketing cost typically eats up to 30% - 50% of total budget depending on the project complexity, time limit and orientation.

4) Legal support and project security

This step includes ensuring the web security measures made to prevent project data and financial information leak and making hack risks as low as possible.
During the Initial Coin Offering campaign, a lot of investors make substantial financial donations to the project; this cannot go unnoticed by the fraudsters and government agencies of course. ICO regulations in most countries have not been appropriately developed on the legal stage yet, so the wise decision would be ensuring the assistance of lawyers to resolve contentious issues before they occur. Unregulated ICOs always stand at risk of being disavowed from legal inclusions. But just to be on the safe side, legal experts on the advisory board would still be a plus.
The cost of legal support varies depending on the level of experts involved — usually, the price ranges from $20,000 to $100,000 for the entire project (in the USA) and $10,000-$50,000 in other countries.

5) Logistics and live-conferences participation

Considering the magnitude of the ICO market and the growing number of specialized conferences with industry professionals throughout the world, many new and experienced developer teams often make journeys to other cities, countries and even continents with the aim of establishing business and professional contacts. The cost of participation in such events depends on a place, speakers level and prospective partners/investors. On average, the team may need $10,000-$20,000 during the project. Logistics costs can also assume the purchase or transportation of specialized equipment as required.

Conclusion:

Summing up the figures of crucial position salaries for 5–6 months of ICO-campaign project duration, approximately $100,000- $400,000 will be spent on the creation and ensuring of the team smooth workflow (depending on qualifications) in highly developed first world countries like USA, UK, Switzerland, etc.

In Asia, this number would be approximately $100,000-$250,000. In Russia and the CIS countries, cost of team hiring is nearly $50,000 - $150,000 respectively.
Moreover, software and tokens development, smart contracts, an audit performed by the professional company with a good reputation will cost your company up to $50,000-$80,000 in the U.S. market and $20,000-$50,000 in other countries. Functional website creation and proper SEO optimization, the Whitepaper done by the professional company will add the cost up to $20,000 mostly. Promotion in media varies greatly — on average, $50,000-$100,000 or eve more in the US market and $20,000-$50,000 for active work on the development of your platform in the Asian region or Russia/CIS countries.

Legal support of the project cost in the United States - $20,000 to $50,000 for the entire project timeline, $20,000-$50,000 in Asian countries and up to $10,000 in Russia or CIS countries.

Nearly 50–60% of a total budget will be spent on the salaries of the team and the project advisers as well as the technical development, and media promotion also gets a significant amount of the budget – to 20–30%, 15–20%  -  will also go for the for legal support of the project. It is possible to separately allocate 5% of this amount for logistics and worldwide conferences participation expenses.
Summarizing all these data, we get the estimated budget ranging from $300,000 to $700,000 and even reaching a $1 million (depending on PR-and media-coverage) needed for the successful launch of the ICO campaign in the United States. In Asia market, this number is estimated at $180,000 -$400,000, and in Russia/CIS countries, respectively, $70,000 to $250,000.

The total amount of costs is determined by the geographical area (country of origin) in which the project is planned to be launched and overall professionalism and competence of the team and project advisors.

You can also use the specialized services of companies to conduct the ICO. Typically, an infrastructure of Initial Coin Offering presented by the third party will cost the company about $40,000 to $100,000.

2018   2018   Crypto industry   Digital investmens   ICO   ICO launch   ICO price   Start-ups

Top ICO Risks

The Initial Coin Offering is one of the most popular and trendy way of funding the independent projects and entrepreneur startups nowadays. During the last year, the broad public opinion of ICO role had significantly changed – from an innovative but rarely used model it had gone to a real mainstream.

Even despite the idea had attracted millions of people – as entrepreneurs with numerous projects so the ones willing to invest, the regulations are still something rare to be seen as the legislative base for ICOs and cryptocurrencies are still in development in many world countries.

Many people and even popular investors are trying to get on ICO hype train in order to get fat profits, being unaware of numerous risks associated with this new and highly perspective kind of investments.
Considering these hardships and risks, a particular effort is required to protect investors money from the possible risks.

1)Regulations risks

Sooner or later, the governmental regulatory bodies all over the world will apply serious grasp at ICO model. Considering this, no one knows what might happen to the wide range of tokens from the previous Initial Coin Offering campaigns. Moreover, it is hard to say whether the contributors will have difficulty in selling their ICO tokens to others when the new regulations arrive and how can it influence the overall rising successful market of startups at large. Tightening regulations from SEC and other world governmental bodies already have serious effects worldwide, and there is more to come, no doubt.

2) Taxes risks

As the crypto industry continue to rise, the world countries will have to define whether contributing in a particular ICO is a taxable event in their tax domicile. In these conditions, many potential bakers will probably try to avoid trouble with the taxes by avoiding the ICO participation. Also, unclear is should taxes be paid when receiving “dividends” from a crypto token. And, none of the least vital questions is what may happen if contributors resident in a certain jurisdiction contribute, even though they were not allowed to invest according to.

3) Legality risks

Nowadays, it is also which court can accept such official ICO document as whitepaper as a basis for litigation. Moreover, the ICO project can fall under the different jurisdiction, and it is unclear – would it be under the country of incorporation of the holding company or where the investment was made at first place. Also, there is no mechanism present at the moment, for token holders challenge the white paper’s authors legally if the white paper and roadmap are not followed through the milestones? Speaking about the tokens, it is not clear, what happens if the company which issued the tokens is sold and whether token holders have any rights under the new management.

4) Risks for businesses

Within the model popularity rising, a lot of people with bright ideas try to get into emerging business opportunities and get their think slice of pie.
Sadly enough, many projects underestimate the Regulatory challenges and commercial licenses needed to convert their business model into a viable legal business. The absence of these should definitely be a red flag to the potential ICO contributor.

5) Risks for investors/contributor

And of course, there is a lot of possible dangers and risks for the future investors: basic lack of knowledge from an investor/contributor on how to value, buy and sell the ICO tokens.
Not to mention such an unpleasant and infamous factor as FOMO – Fear of missing out. This definition had become quite popular during last year as the crypto market begun the seemingly unstoppable victory march. The idea of being left out from the ICO hype train can result in insanely large investment decisions and, as a result, significant losses. Contributing to one ICO, means these funds are not available for other kinds of investments and many contributors are not aware that there are different regulated ways to invest in startups other than ICOs.
And there is more to mention – the so-called Whales or “major contributors” are using their technical prowess to get into the ICO before other investors, merely to buy low and sell high without any view of the fundamentals of the ICO itself. And this discourages a rational conversation about the viability of these ideas and the trustworthiness of the team behind them.

6) ICO Structure Risks

Most projects try to give the bright insight for the future contributors/investors and provide a transparent scheme of ICO funds usage after the campaign is over. But in most times, specific points of funds usage are mixed. The founders’ reward can come along with the legal marketing costs and salaries – all of it complicates and makes harder for an investor to realize of on how much money exactly will be working for the contributors and how much will go into the founders’ pockets. Moreover, the token holders cannot vote out the management of the token issuer.
The absence of the vital financial documents, in regard, makes it extremely difficult for the token holders to analyze what is happening behind the scenes of the specific project and it, of course, reduces the chances for interest among investors.
The ICO project structure often raises the FOMO factor (Fear of Missing Out). That means that the initial contributors will have a vested interest in pumping the ICO in future. The late-stage involvement into ICO can be expensive as this structure is tilted in favour of early contributors, at the expense of the late ones. This reduces the opportunities for a rational discussion on the actual fundamentals, risks and opportunities of an ICO.
In theory, the token issuers could use ICO funds from previous ICO waves themselves to buy their own token on the open market or during subsequent ICO waves, this drives up prices and creates additional artificial interest to the ICO project.

7) ICO Team Risks

A decent project cannot be organized, developed and maintained by the weak team with insufficient experience. A team is the heart of the project. Those teams which do not have the real-world business experience organizing an ICO are mostly going to fail in the short or long run regardless as there is a difference between creating a crypto project and real-world business.
The most documents including white papers are based on the future possibilities of the project and of course, not the current success or positive market performance. The reputation and experience of the project founders and the observed success of rival companies on the particular market are the only things that could drag the interest of the investor. Of course, the practice of making unsupported claims are quite often within this industry as well as setting multiple fake LinkedIn profiles and bold statements about past success which cannot be verified in any way.

8) ICO Token Risks

And none of the least, a lot of risks associated with the project tokens.
-Tokens can be lost in specific ways

  • Tokens may be just stolen.
  • Many kinds of online and offline cryptocurrency wallets can be hacked and the tokens inside are stolen.
  • Certain challenges and hardship as DDoS-attacks, the excessively high fees, and unforeseen manner of work and upcoming regulations are those challenges that can project face which tokens are based on blockchains (like Ethereum and so on).
  • The token liquidity is reduced over time as tokens are not instantly listed on exchanges.

9) Risks after the ICO campaign

After the successful ICO campaign, many company may do the undoubtedly wrong step and rapidly reduce their communication. Every day that goes by without news, internal reports or some stories about the project, reduce the overall value of the issued tokens as a result.

2018   Digital investmens   ICO 2018   ICO Risks