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A person who is not accustomed or used to the terminologies of crypto industry, it is difficult to conceive the idea of initial coin offering or why the tokens are generated and how to assess an initial Coin offering. For a cryptogeek it is quite simple, for him an ICO is a tool that is used to trade future crypto coins which are exchanged for cryptocurrencies having instant or liquid value. This definition may be simple for a person who deals in all sorts of cryptocurrencies and has undergone various ICOs but when talking about a layman who has no sound knowledge of crypto, it may get complicated.

How to assess an initial coin offering

For your ease of understanding we have devised a simple example from everyday life which will be quiet helpful for you if you want to understand the basic principle of initial coin offering.

Example From Everyday life

Imagine you want to start a business of your own, you have selected the appropriate location for it, and you’ve also planned the interior and exterior design with the sort of items you are going to sale.

 

But, There’s one most important thing remaining …..

 

Without a handsome amount you cannot initiate your business, You must rent or purchase the place you have chosen, stock it with the items you want to sale and also hire some staff to tackle it the way you have devised in your mind.

 

Let us assume that you are an innovative person and you don’t want to get a loan from any one, you just want to initiate your own sum. For that purpose you produce your own branded product with some specific name say for example “BIT”. But you only generate it in a limited quantity of 1,000 pieces. Let us call each piece a currency, and customer won’t be able to buy that currency until they acquire them using special tokens that you’ll release gradually over the specific period of time following your business launch date.

 

If demand for BIT is high enough and if you succeed in making your buyers believe that its demand will continue to grow, that will automatically push up the price of the tokens generated in the future. These tokens would obviously sell for large sums and as a result you’ll raise enough money to launch your business.

 

You can make it further simple to say that first you offered shares for a company which you have not yet launched but you had developed a significant trust so public bought that share for the sake of investment. That was an Initial Public Offering from your side.

How To Apply The Same Principle To ICO?

The principle elaborated in the above example, is also behind an ICO. The same way you offered the public initial shares of your company, an ICO gives public the right to buy a product which exists in a limited quantity. The company offering that product has an option to sell its rights for a higher price.

 

The beauty of the above process and the thing which differentiates it from the prior IPO example is that it is supported by blockchain technology. This technology guarantees the authenticity of the tokens offered. In short ICO is a whole new way for businesses to raise money. According to the latest ICO news update, it has already been used to generate approximately 2 billion dollars.

How is ICO Risky?

Well, we have full trust on the blockchain technology but we have no issue in admitting that it can too be risky as compared to the Initial Public Offering. Let us see how?

 

First of all the most satisfactory thing about the IPOs is that they are well regulated. Companies which make such offers are lawfully bound to reveal all sorts of information about themselves before they make it fully public. It allows investors to make fair-minded estimations about their value. The main thing is that people making these investments have full knowledge about the Pros and Cons.

 

On the other hand people who invest in an ICO have comparatively less knowledge of what they are investing in and what will be the nature of their return. But it can be easy for you if you follow the following principles devised by our crypto experts:

Factors You Must Examine

  • Is the admin panel team of that company experienced?
  • Does the product offered by the company have a good market? If the product isn’t a hot item, there’s is no use to invest in it.
  • You must have proper knowledge of the blockchain technology which is underpinning the sale. How many tokens have been distributed uptill now and what is their security level.
  • The legal and regulatory stuff surrounding the company is safe or not?
  • What are the terms and conditions outlined in the white paper and do they look fair?

 

We hope that after following these rules and regulations it will be easy for you to make a smart decision in terms of ICO investment, still we are waiting for your suggestions and criticism in the comments section below.

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Goldman Sachs – “Most Cryptocurrencies Will End Up Hitting Zero”

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According to Goldman Sachs, the cryptocurrency markets will not recover from their present correction. On 5th February, Steve Strongin (Goldman Sachs head of investment research) said, the high correlation between several cryptocurrencies makes him really anxious. Some currencies that do not survive are expected to trade to zero due to the lack of intrinsic value.

Strongin is worried about the possibility that maybe one or a few of the existing cryptocurrencies could ascend from the speculative bubbles, just like the crypto equivalents of Google or Amazon. However, he said that he doesn’t think that most of the coins will ever recuperate to their all-time highs.

There have been many questions arising like, is there any cryptocurrency that’ll be like Google or Amazon? Or are they going to end up just like the other now-defunct search engines? Strongin said that this doesn’t mean that the prices of cryptocurrency cannot increase at all because they are in a speculative bubble at this time. But at the same time he said, that most of the cryptocurrencies might bounce back to their all-time highs, but some of them are never going see their current peaks ever again.

most cryptocurrencies will end up hitting zero

This clearly shows that the speculative bubble is coming to its end and rather than as a collective asset class, investors are going to start judging the cryptocurrencies from their individual merits as a lot of casual retail investors are already familiar with it. It also seems like the ICO (initial coin offering) success will suddenly come to its end.

Strongin said that the winners-take-most sight of the market is not very unique to Goldman Sachs. On Wednesday, the founder of DCG (Digital Currency Group) Barry Silbert, offered the same remarks at “Yahoo Finance All Markets Summit: Crypto” with explicably more positive stance on the entire industry.

According to Silbert, a huge majority of crypto-assets are facing a binary outcome. They are either going to become extremely valuable or they are going to become worthless. He added, this is why Grayscale Investments (a DCG portfolio company) launched its newest product, a fund related to crypto-asset investment and it holds the market cap (weighted positions) in the most major five cryptocurrencies and balances it again quarterly to imitate market movements.

Many other experts have also warned the investors on cryptocurrencies. Nouriel Roubini, who’s a well- known economist said on Tuesday, that the price of bitcoin would also crash to zero. Warren Buffett also said in a recent interview that cryptocurrencies are definitely going to have a bad ending.

 

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Introducing Blockchain-Based E-Voting system in Moscow

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It was in 2014 when Moscow’s Mayor, Sergei Sobyanin launched an innovative Active Citizen app. This app was actually an e-voting platform designed solely for the residents of Moscow to vote on municipal projects pertaining to non-political city decisions, e.g.; naming of subway stations, setting up speed limits, plotting of bus routes, replacing the building’s entrance door or even hiring a new management company etc.

The Active Citizen app was a huge success since its launch, more than 2,800 polls were being administered and over 2 million users participated via the app. But according to some critics this app grew vulnerable to manipulation with the passage of time.

That’s why, Moscow officials announced that they have piloted the Active Citizen onto the blockchain technology in order to minimize the vulnerability issue.

Usually, the term of blockchain is referred to the cryptocurrency transactions. It is a sort of a digitalized and decentralized online database pertaining to public ledger of crypto transactions and interactions. Though specific for tracking secure financial transactions of cryptocurrency, it will now also be used in the e-voting platform of Moscow.

blockchain based e voting

What makes it a safest choice?

Russia’s National Settlement Depository (NSD) has successfully tested this blockchain based e-proxy voting system. This voting system is comprised of the following steps:

  • In the first step a Bondholder will pass vote to a nominal bondholder (NB)
  • The Nominal bondholder will in turn submit that vote to the blockchain
  • The designated Counting commission will count the votes and submit their results to the blockchain
  • Bondholder can latter verify whether the votes were counted correctly or not.

Hence it can be easily concluded that the process of blockchain based e-voting will resemble the secure crypto transactions to a great extent. Once the vote will be placed, it will be listed in a ledger consisting all the votes taken place across a node-to-node fully secure network. So, there will be no chance of data loss, fraud or third-party alteration once the vote has been casted.

In other words, blockchain is becoming a hallmark of digital accountability and security. It comprises of such a complicated mechanism of digitized security that it is almost impossible for the general public to ‘’hack’’ it in their traditional way.

According to some experts the use of blockchain technology will improve the transparency of e-voting system in Moscow and it should also be tried in the general elections as well.

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Australia Introduces Regulations for Cryptocurrency Exchanges

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According to the latest information on the website of AUSTRAC (Australian Transaction Reports and Analysis Centre), digital currency exchanges must have to be registered with authorities now and should also commit to several identity checking and reporting procedures. It’s been confirmed by the Australian government as well that the Australian cryptocurrency exchanges are abided by the new AML (Anti-Money Laundering) rules.

The Australian authorities are trying their best to close the remaining loopholes in cryptocurrency usage, concerning identity management and taxation of cryptocurrency. In contrast to a backdrop of discontent due to such sharp upsurge in scams, last week, the Australian Taxation Office was asked for taxpayer’s contribution into how deductions rising from the cryptocurrency returns should be assembled efficiently.

cryptocurrency exchange

Four-Principle Rules

Meanwhile, exchanges now must follow the four prime rules so that they can function above board, as a part of the security reformation. Following are the four rules:

  • Identification and verification of identities of their clients.
  • Keeping particular records for 7-years.
  • Accepting and maintaining a CTF/ AML program for the identification, alleviation, and management of terrorism financing perils and money laundering.
  • 6 months refinement period that will escort the new regulations, in which AUSTRAC will be a lot more compassionate on operators who “fall short of requirements.”
  • Reporting to AUSTRAC sceptical issues, and transactions linked to the physical currency of $10,000 and even more.

The laws relating to cryptocurrency exchanges regulations in Australia are also getting stricter, while the government has guaranteed that the investors wouldn’t feel left out. The Australian government took feedback from the public to know what their views are on the cryptocurrency taxation structure and are they going to like it or not.

The ATO (Australian Tax Office) had also posted:

“We’ve timed this consultation to coincide with an update to our website, which should address some of the feedback we have received to date about our cryptocurrency guidance. We’re eager to hear your feedback about cryptocurrency and its tax implications as the technology may impact how business operates in the future.”

Feedback from Taxpayers

Many governments across the world are getting stricter, especially when it comes to the taxation of cryptocurrencies. Many exchanges are being forced by the governments to disclose the data of consumers and to send out subpoenas to investors who have high net-worth. While many governments are getting stricter, the decision of Australian government to get the feedback from taxpayers before applying these tax laws is notable.

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Bitcoin Price Once Again Struggles to Sustain Momentum

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Bitcoin price has rebounded from $6,500 to $7,034 with the market cap of $125 billion, at this very moment. Other smaller cryptocurrencies including VeChain and Steem have somehow surpassed bitcoin with a 50% and 25% surge in value, respectively, while other major cryptocurrencies like Ethereum, EOS, Bitcoin Cash, Ripple, and Litecoin have also performed quite well over the past few days.

bitcoin price surge

Bitcoin Price Surge

Since 30th March, bitcoin couldn’t surpass the $7,000 mark, due to its low volume.  However, on 25th March, Bitcoin price achieved $9,000, with comparatively strong volumes on the cryptocurrency exchanges. But since then, the price of bitcoin has seen a constant decline. Even though the price of Bitcoin went to $8,800 but then again, it failed to sustain momentum and its price fell to $6,400.

For surpassing the $7,500-mark, Bitcoin will have to sustain its volume for the next few days, then it will be able to move back to the $8,000 mark.  At this time, the RSI (Relative Strength Index) of bitcoin is at 39.2 however, earlier, it was at 30, indicating oversold situations. Bitcoin is currently being traded in a neutral zone, also the top-cryptocurrency hasn’t shown any overwhelming sell volumes.

Therefore, the next few days are going to be really important for bitcoin, as its value has increased over the past 48 hours, and according to bitcoin’s MACD (Moving Average Convergence Divergence), it has started to gain a little bit momentum.

Jon Matonis’s Views About Bitcoin

A well-known investor, an executive at VISA and the co-founder of Bitcoin Foundation, Jon Matonis, has stated that the entrance of financial institutions such as Goldman Sachs could lead to an increase in the demand towards bitcoin (in the mid-term). Different Bitcoin analysis are being done, but if the leading cryptocurrency can recuperate from its present bear cycle, then experts like Matonis are predicting a bull run for the top-cryptocurrency, Bitcoin.

Matonis said:

“I think it’s fabulous that they’re getting into it because it brings in new liquidity. They’re going to develop futures markets, options markets, I even think you’re going to start to see interest rate markets around bitcoin. We’re used to hearing things about Libor, the index for bitcoin interest rates is Bibor”

SEC Against ICOs

Also, according to the New York Times report, the ICO founders, called Centra, were arrested for defying US SEC (Securities and Exchange Commission) as they were distributing securities without getting any approval from the US Securities and Exchange Commission. If the SEC still keeps on curbing ICOs, it could lead to a wane in motion within the ICO ecosystem, globally.

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