ICO study: Invested capital increases by 15,000 percent in 3 years

In an analysis, the Center for Innovative Finance at the University of Basel approaches the development of ICOs between 2014 and 2017. The analyses by Remo Nyffenegger and Dr. Fabian Schär show, among other things, that invested capital has increased by 15,000 percent. In addition, the researchers propose a framework for categorizing token sales.

ICOs are both a curse and a blessing for Bitcoin trader

On the one hand, they are a great source of food for Bitcoin trader of all kinds – reports of fraudulent ICOs have risen significantly in recent years. On the other hand, they offer a new vehicle for financing young tech Bitcoin trader start-ups.

These latter possibilities also arouse the interest of science – Remo Nyffenegger and Fabian Schär from the University of Basel took up the topic. The result: the invested capital increased by 15,000 percent (!) between 2014 and 2017.

In the analysis, the researchers only considered token sales, which were successfully concluded between 01.01.2014 and 31.01.2018:

“The enormous increase in both the number of token sales and the volume of financing is striking. While only eight token sales with a total value of just over 31 million US dollars were successfully carried out in 2014, thirty times more such sales could be observed in 2017”.

According to the study, this increase increased again, especially in the second quarter of 2017:

“Especially from the second quarter of 2017 onwards, an extreme increase can be observed, which is probably due to the increase in general interest in blockchain technology. Whereas in the first quarter of 2017 around 20 million US dollars were invested in token sales, in the second quarter of the year the accumulated capital already amounted to 950 million US dollars.”.

Token Sales Classification crypto trader Framework

Outside the increase in crypto trader, the study focused on the nature of token sales. From their analyses, they were ultimately able to derive a crypto trader framework for classifying Token Sales. Here is an excerpt from the study:

“Our framework is divided into four dimensions: Representation, functionality, capping and sales process. The representation describes the way in which a token is mapped to a block chain. Here we define three categories [Colored Coins, Smart Contract Token, New Blockchain]. Furthermore, different tokens can be used differently depending on their functionality. Here, too, three categories are distinguished [payment token sale, usage token sale, creation token sale]. If representation and functionality of a token are defined, the issuer determines whether he wants to make a ‘capped’ or an ‘uncapped’ sale. Finally, it is determined how the token is sold [Dutch auction, threshold auction, interactive coin offering, auction with several rounds]. This can be a sale with a fixed price and an offer or an auction.”

With its breakdown of ICOs, the study ultimately offers an orientation for companies that want to deal with the blockchain-based financing option in the future.

Blockcerts: Blockchain solution in the health sector

The Federation of State Medical Boards (FSMB), based in the USA, is the first medical organization that wants to manage official documents with blockchain technology. They are using Blockcerts software, which allows them to control data decentrally and verify it without third parties, according to WDRB.

Wallets for your own Bitcoin code

The FSMB is a non-profit organization representing the 70 medical associations of the United States. It mainly deals with licensing of physicians, but also with complaints and disciplining of violations of the law or scam according to the Bitcoin code. They also take care of the evaluation and authentication of physicians, for which Bitcoin code blockchain solutions are now used.

“The FSMB’s goal is to support the work of its members in their efforts to ensure that only qualified and able physicians practice, says Michael Dugan, head of IT at the FSMB.

“The review of the medical training and related certificates are very important tasks of the FSMB. We hope that the progress of our project will provide a new level of security. This is necessary to implement the blockchain technology into the medical licensing and evaluation process.”

Traditionally, the verification of medical education has been based on organizations such as the FSMB reviewing and validating medical profiles. These profiles are then frequently re-examined by third parties. These are, for example, hospitals or state committees.

Due to the time and personnel involved, it can happen that the processing of applications is often inadequate. Embedding official documents such as notes, transcripts and verification forms in the blockchain would allow physicians and other participants to maintain their own private profiles. This would make it easier for people to manage their fraud-protected data themselves.

Less effort and more security through Bitcoin code block certs

Blockcerts is part of Bitcoin code Learning Machine, a platform for digital data management. The software initially consists of open source libraries, tools and mobile apps. These form a decentralized and user-oriented ecosystem that enables validation processes without third parties. The idea of a self-managed identity should allow users to regain more power over their Bitcoin code.

Blockcerts was developed as a basis for users to manage their digital profiles,” says Natalie Smolenski, Vice President of Business Development for Learning Machine. “That’s the big promise of blockchain technology: individuals can now manage their digital property themselves without having to rely on intermediaries. Learning Machine forms a social infrastructure that outlasts any company or institution.”

What is stored on the blockchain is not the information itself, but only the associated hashs, the actual files are stored elsewhere. Blockcerts is therefore primarily there to validate certificates. The advantages of blockchain technology make data forgery-proof, which significantly reduces the administrative effort.

Users of block certs receive their own wallets, similar to crypto currencies. The wallets then contain the information on the certificates, testimonials etc.. In this sense, the wallets are a kind of digital portfolio over which the users have power of attorney. All participating parties, both institutions and individuals, can create such wallets by using the open source software. Finally, the software is also available on iOS and Android.

Bitcoin news: A Candy for Wall Street?

According to a new Wedbush Securities report, the Bitcoin price will continue to be volatile – good conditions for market growth and the maturation process of the digital currency.

The report, entitled “Embracing Volatility: Trading as Bitcoin’s First Killer App,” summarizes and does not negatively write about Bitcoin’s fluctuation and how the currency will benefit from its underlying infrastructure.

Gil Luria, author of the Bitcoin news report said

“Volatility in the Bitcoin price should not, in our view, hinder traders’ acceptance as they are completely shielded from price volatility by payment processors according to Bitcoin news. We hope that consumers will also benefit from this in the Bitcoin news future. “Volatility

Luria pointed out that the two US companies Coinbase and Circle are already working on such a solution. Once this solution is in place, it will be normal for consumers to use Bitcoin wallets with small sums for their online transactions, Luria said.

However, the biggest challenge is to create an attractive and volatile market for investors in which consumers can participate in a less risky environment.

The power of market perception
The report also assesses investors’ view of the Bitcoin market, which is reinforced by the belief that a single Bitcoin will one day be worth $1 million.

While the positive sentiment in the Bitcoin market continues, even the smallest changes in the long-term outlook could have a big impact on the Bitcoin price, the Wedbush report said.

If the long-term Bitcoin growth outlook changes by only 0.01%, the market value could already rise or fall by 10%.

But when it comes to Bitcoin formula, volatility attracts new investors in particular

“We think Wall Street speculators appreciate the volatility of Bitcoin formula and are attracted by the fact that Bitcoin trading takes place 24/7. The close relationship between volatility and volume is known from the equity market and is gradually establishing itself at Bitcoin as well.” Professional trading continues to evolve like this: https://www.forexaktuell.com/en/bitcoin-formula-scam/

Discussions with Wall Street traders have shown that Bitcoin trading is particularly interesting because of the strong swings in news, Luria said.

The rapid development of professional trading tools on the Bitcoin market is also interesting to observe. This attracts more and more speculators, according to the financial expert:

“We can see that this trend is continuing and that financial tools from stock trading are increasingly being integrated into the Bitcoin industry. These include derivatives, margin trading and computer trading. These tools all support the volatility of the stock market.”

It is no coincidence that margin trading was held responsible for the recent Bitcoin price collapse with a flash crash on the Bitcoin BTC-e stock exchange.

The complete report can be found here.

Announcements – Pump through Announcements

But what if you already have a currency outside and want to get into the illustrious club of the Top 100? Here you have to start the marketing machine! It needs then less interesting protocol updates like an off-chain scaling of transactions – that is already much too far thought.

The crypto market is fast and nervous. Many investors don’t buy and sell on the basis of a scalable protocol or a fantastic user experience, but because of blatant news. And these can be brought quickly: Partnerships, (alleged) former employees of large companies who join the project, stock exchange listings or other announcements have been a tried and tested means of arousing the interest of buyers for some time.

Partnerships are always a Bitcoin profit

Whether they are real or more than lip service is secondary. It is important that the name of the Bitcoin profit is next to any other project. Cynicism aside: partnerships with Microsoft, BMW, SAP or similar companies are certainly a milestone. Too often, however, it is reminiscent of the lip service paid to start-up culture by Bitcoin profit representatives of large companies. Nevertheless, there were no great innovations created by joint ventures with start-ups. As long as a partnership is not linked to a specific goal, it is first and foremost an advertising break.

Rebrands are just as often a completely comprehensible thing. Revising the user experience of all products, redesigning the logo as part of a reorientation of the project goals, drawing up a new roadmap, perhaps even changing the name – all this is comprehensible. But often you pretend that a rebrand is a great event that will dramatically increase the value of a crypto currency. The same applies here as for partnerships: without, for example, an improvement in functionality, you only have to deal with a short-term pump.

(Not) Every Bitcoin profit is breeze!

Probably my problem with partnerships and rebrands is the inflation of Bitcoin profit that currently exist for crypto currencies. Partnerships are announced (but not mentioned), a rebrand is announced, a stock exchange listing is announced, yes, an announcement is made – and the Bitcoin profit market goes crazy.

But to be fair, the correct form would be the past tense. While people reacted nervously to every announcement at the beginning of the year, the market is currently a bit calmer again.

Does the biblical “Breeze of the Wind, Breeze of the Wind, Everything is Breeze of the Wind” now apply? Not at all! Sure, a few months ago I wrote a column on the tiresome subject of bubbles in the crypto ecosystem. I have shown that the crypto currencies are not a single bubble, but rather resemble a bubble bath. Many of these Announcements, Airdrops and Hard Forks are small bubbles in this bubble bath. They should also be evaluated accordingly: they neither sustainably build up the crypto market, nor ruin it. In order for the market to continue to grow sustainably, it is important that the younger projects in particular now deliver. I am convinced that this will happen and that this year can be much more than a year of announcements!

Microsoft takes over GitHub: What does this mean for the crypto economy?

As was announced on Monday, June 5th, the software company Microsoft is digging deep into its pockets and buys the open source platform GitHub for 7.5 billion US dollars. Since many blockchain protocols, including the Bitcoin blockchain, manage their source code on GitHub, this purchase also has an impact on the crypto economy. Will things change in the future?

The open source platform GitHub is a very popular website among programmers. Here they can work together on projects and exchange ideas, the code base is available for everyone to view. This also maintains the feedback loop, since outsiders can view and comment on the codes. The platform is therefore particularly interesting for decentralized peer-to-peer blockchain projects.

Now the software giant Microsoft has also become aware of the successful platform. In order to stay with GitHub, the Seattle-based company is opening its pockets wide: it will pay 7.5 billion US dollars for the takeover by the end of the year. Microsoft is now turning to open source, after long relying on specially developed software applications. After all, Microsoft developers are also using the platform to exchange information and optimize codes.

Does the Bitcoin formula have an impact on the crypto economy?

There is no clear answer to this question. On the one hand, Bitcoin formula plays an important role, since a large part of the blockchain codes are located on GitHub. The platform’s focus on open source projects makes it very attractive, especially for decentralized distributed ledger technologies, to make the codes visible to everyone and to open their use to outsiders. In this respect, all changes in the Bitcoin formula network can also be felt by the blockchain projects.

On the other hand, a takeover does not automatically mean that Microsoft plans to change essential features of GitHub. On the contrary: Microsoft acquires the platform precisely because the company is currently so successful with its business model. Thus one would like to try not only to receive the product, but above all also to profit from the experience of GitHubs as an open source platform. This makes sense especially since Microsoft had finished its own open source experiment CodePlex last year.

Crypto scene not very enthusiastic about Bitcoin trader

Although for the Bitcoin trader probably not much will change in the near future, the crypto community already quickly became critical voices. Many users complain that they have not been asked, although the amount of code provided is the essential part of the website. Petitions have already been filed demanding the independence of the platform. Concentration of power and centralization are feared, in the coder scene Microsoft is mistrusted. However, one should also bear in mind that Bitcoin trader itself is not a decentrally organized platform.

The idea of using GitHub less in the future is actually being considered. Alex van de Sande from the Ethereum Foundation will be speaking on Twitter. There he notes that the centralized platform is not the same as a completely decentralized Git Repository. According to van de Sande, the reason why GitHub was able to establish itself as the number one platform in its field is the convenience that the centralized website brought with it. He describes the fact that Microsoft is now taking over this as a lesson.

Bitcoin Quarterly Report Q1: Record investments

CoinDesk has published the latest Bitcoin Quarterly Report #Q1 2015. The following article deals with the top topics of the report and discusses the most interesting developments in the first quarter of 2015.

State of Bitcoin Q1 2015 from CoinDesk

The Bitcoin VC investment totals 676 million US dollars. In the first quarter of 2015, a record amount of 229 million US dollars was invested in Bitcoin start-ups.

21 Inc and Coinbase alone received VC (venture capital) of 116 and 75 million US dollars, respectively.

With venture capital totalling 121 million dollars, 21 Inc has now been able to obtain Coinbase as the best financed Bitcoin startup. Nevertheless, very little is known about the company that calls itself a “universal” Bitcoin company. ( Slide 27).

In total, around 676 million US dollars have been invested in Bitcoin start-ups since 2012. This is a growth of 51% compared to the end of 2014.

The number of countries that received a VC increased from 18 to 22 countries in the first quarter.

New countries include Barbados, France, Kenya and Switzerland. BitPesa thus became the first Bitcoin startup to benefit from VC capital in Africa.

Bitcoin price stabilized

Overall, the Bitcoin ecosystem showed robust growth in the first quarter after an extreme price drop in January. By falling below the 200 dollar mark, which is seen as an important psychological mark, the Bitcoin price surprised most of us.

On 14th January the price per BTC fell to 177 US dollars (CoinDesk BPI), a 24% loss in value (slide 11).

Even though the Bitcoin price has fallen considerably since the beginning of 2015, it was able to settle at around 250 dollars. The trading volume, on the other hand, was unimpressed by the fall in prices (slide 12). This can be an indicator that Bitcoin was able to trade profitably in both the upward and downward trend.

Bitcoin news about the Bitcoin price also seems to have lost attention. In Q3 2014 there were 7 articles among the top 10 articles on CoinDesk that dealt with the Bitcoin price. In Q1 2015 only two articles made it into the top 10 (slide 21).