We have been hired to create tech for a long time and this is the kind of tech you want to be involved in. It's disruptive and I believe that most companies in the next 5 years will have some sort of software connected to the blockchains.
This market is insane, it has Billions being invested into it, the market cap has been over $700 billion at one point and we were getting close to $1 trillion. So what happened?
Everybody started talking about Bitcoin, how it will reach $50.000 within just months, to the moon, HODL, when lambo?!
I was sitting on the sideline looking at this and seeing how people were loosing it, no due diligence was made and investors and people started just throwing money at it....not so healthy right? Everybody wanted in. We focused on the tech and to see if we could be come a leader in creating tokens for companies, learning about the blockchain and ICO:s
We are usually under very strict NDAs when we do an ICO:s but this time it is a publicly listed company on the Frankfurt Stock Exchange we are helping in creating the tech and marketing for the project! It has gone out in a pressrelease that we are involved and I am allowed to talk about it and explain more about the world of the ICO:s. http://www.dgap.de/dgap/News/corporate/stockholm-ventures-stockholm-ventures-announces-terms-upcoming-ico/?newsID=1057341
The project is called Bytemine and I will help you understand the project and what is happening as I write up about ICO:s generally speaking.
So here goes, what is an ICO (Initial Coin Offering)?
It is basically exactly what it sounds like, someone has created a Coin or a Token and are releasing it to the market. It is very similar to an IPO (Initial Public Offering) of stocks when they get listed on exchanges.
This is setup with a crowdfunding structure to help finance new projects, it has thus far been extremely effective. We work as consultants and invoice an hourly rate to set everything up more or less. If you don't want to sell off the company but be tradeable and give tokenholders value, an ICO is great.
Usually these coins/tokens are based on an existing blockchains such as Bitcoin or Ethereum, the later being the most popular one for ICO:s. We usually also help companies create ERC-20 based tokens which is a Ethereum based token but we can also do it in Bitcoin Core. The language that Ethereum uses is a newly created language called Solidity / SOL, it is based on Javas and therefor very similar to Java and very good and logical. There are some frameworks out already but they are still not 100% and the guides don't work that well, it will mostly take you more time to figure the process out than learning to code a contract from scratch.
When the token is created a website is created to basically crowdfund the project. Here different companies create different functionality for the tokens, it's about getting creative. Some do Airdrops which are giveaways of tokens for free to create a following, spreading etc, it is many times a very smart method to get people to read about and find your project. These tokens are sometimes locked a specific period of time depending on the value the company is "giving" away. This is to not dilute the value when the tokens are released to the market as tradeable.
The next step is to create a white paper.
A white paper is basically a business plan sales pitch for the project where the company aligns why a person/investor should buy into the ICO. A shorter presentation compared to a business plan that could count up across 100+ pages, the white papers usually have from 10-50 pages of content. Only the most important and crucial, it is basically a business pitch to the market.
Channels to do marketing for ICO:s
Unfortunately both Facebook and Google blocked crypto-ads but that's not a problem, there are several places where you can go on to market yourself. There are a TON of websites out there, news magazines, ICO news, Airdrop news etc.
The channels that are a must for running an ICO is the following:
We work very effectively with Telegram to increase the number of members in telegram groups. The last month
Bytemine.io was the fastest growing cryptorelated group in the world. We went from around 500 members to over 7000 within 48 hours.
The group currently has almost 10000 members and is growing rapidly
This is a must have channel for running ICO:s
If you want to check out the Bytemine.io telegram group you can klick on the image.
Getting listed on Exchanges
When the ICO has been finished you want to get listed on as many of the 24 hour exchanges available out there. The largest one being Binance. Many of the exchanges have systems ready to list ERC-20 based tokens and that is why it is so popular. There are also others such as Bittrex, Kucoin, Okex, HitBTC etc that list several ERC-20 based tokens.
The larger exchanges in the world also include Coinbase, Bitstamp, CEX.io, Bitfinex, Kraken etc. These exchanges mainly supply tools to trade the largest cryptocurrencies in the world.
Listings can be free but it can also cost upwards of like 30 BTC + a certain amount of capital raised in the ICO. Yes the prices can truly be insane and many times it's even more expensive than a regular IPO.
It is important to be persistant and talk to as many exchanges as possible to get the best possible position. If you are able to build up your marketing channels and there is huge demand it gives you better negotiation options.
The group currently has over 9500 members and is growing rapidly
This is a must have channel for running ICO:s
If you want to check out the Bytemine.io telegram group you can klick the image.
Security tokens vs Utility tokens - Legal
There is also differences in the classifications of the coins/tokens. Utility and security tokens. Utility tokens are based on usage of the coin whereas the security tokens are created as investments. Utility tokens are basically digital coupons to a new service that the company is creating. If your token is backed by something it will be classified as a security token and needs to then follow federal regulations for it to be legal. Failure to comply might land you big fines and you might even be considered illegal enough for lawsuits and jail.
Because this is a new phenomenon vi recommend that you seek legal council before you start your ICO, ofcourse we can also help with legal council through the advisors we use. We never recommend running the ICO:s out of Europe because of MIFID and it is also hard throughout the rest of the world. Some countries are getting more crypto friendly such as Malta, Singapore, Seychelles and Dubai. Every single ICO will have it's own challenges and the legal aspects is one major aspect to get right from the start.
Look at Binance for instance who has had to move 3 times already and now ended up in Malta.
Is an ICO right for you?
So, is an ICO right for you or your company? It's hard to say but if you have a product/service that could benefit from being tradable without having to go through the compliance of listing them on a regular stock exchange (IPO) it is a phenomenal way of raising capital to the investors out there that believe in the business. We have been asked to create commodity tokens backed by gold, oil etc, all of a sudden you can do this much easier. You might also want to join the whole blockchain hype and become blockchain friendly, maybe you want to implement the service you have into a blockchain for verfication purposes, for security reasons or anything else, an ICO will also be interesting for you.
Blockchain and ICO:s is about making the world faster, it is about getting value-transfers made easier, more secure and verifiable. It's about storage and to take our society into the space where financial systems can be open 24/7, you can get your value out anytime you want.
This is the next implementation that will be necessary for any bank out there to implement into their financial services and we think you should already start looking at this already!
Hope you enjoyed reading this and I will follow with more cryptocurrency and blockchain related articles