Why ICOs need to be more like IPOs to succeed

How you structure your ICO White Paper should follow best practice from the ICO world. The case for this approach follows insights from Novum Insights’s data scientist  who outlines what he looks for in assessing an ICO:

For reference, please see two IPO prospectuses below. The crypto markets are repeating all the mistakes which the securities markets learned from long ago.
https://www.asx.com.au/asxpdf/20141124/pdf/42tychvw1293vm.pdf
http://www.goldmansachs.com/investor-relations/financials/archived/other-information/ipo-prospectus-gs-pdf-file.pdf

Notable features:

1) Full section containing specific, detailed information about the risks of the offering. Why shouldn’t I invest in your ICO? Answer my doubts.

2) Audited financial accounts.

3) Professional presentation. No typos, grammatical or mathematical errors. High quality figures.

4) Quantitative, detailed, realistic business plan.

5) As you are selling a technology product, you need a working prototype and benchmarks. You need to answer the question “how does this improve over what we have now” convincingly. I’m looking for numbers. Specifically, I am concerned with performance.

6) How the cash proceeds will be spent. Contingency must be in cash.

7) Details of previous funding arrangements.

  • The broad gist of this is the more concrete detail you provide about the ICO business plan, the better.
  • While the full effort of producing a full prospectus is not a feature of ICOs, incorporating major features will build credibility.
  • You are not just selling a product, you are also selling a business. Treat an ICO as a VC round … which it is, except your audience is a mix of retail and professional investors — like an IPO.
  • If tokens are regulated as securities, you will have to get used to it. Figuring out these details will also make your business plan more concrete and more likely to be successful.NB: Screenshot from the Goldman Sachs prospectus for their IPO attached. This goes on for seven pages.

It doesn’t have to be this detailed, but as an investor I need to know you are aware of the challenges your business faces and how you will overcome them.

To conclude this post on ICOs, please find below a neat infographic from BTXchange.io on the ICO funding mechanism in the past, present, and future.

How blockchain could disrupt the telecoms industry

After discussing OpenCryptoTrust’s plans to disrupt the telecoms sector with COO Mayande Walker I thought I’d quickly summarise a few other ways blockchain could disrupt the telecoms industry:

  • Inter-carrier settlements: Colt and PCCW Global have started trials to see how blockchain can speed up time for inter-carrier settlements and make them more reliable. The proofs of concept they have carried out so far indicate that blockchain can cut inter-carrier settlement times from hours to minutes.
  • Cybersecurity: Colt CEO Carl Grivner says: “The settlement test with PCCW Global is a baby step.” What will follow? He already has a list of possibilities. “The most exciting of them is cybersecurity.”
  • Smart contracts: Smart contracts enable Carrier Service Providers to streamline internal processes, including interactions with suppliers and other CSPs, and improve efficiency within core management systems such as billing and eSIM provisioning.
  • Fraud: One area where telcos could clearly benefit from blockchain is fraud prevention. In the most recent published survey by the Communications Fraud Control Association, losses associated with fraudulent activity were $38.1 billion. Blockchain-based solutions could be implemented to minimize both identity and roaming fraud.
  • Identity management: A telco could participate in blockchain-based identity management for their own services as well as to offer it as a service to its partners. In a blockchain, identity authentication could be applied across devices, applications and organizations – removing the need for a user to have separate passwords for different online accounts.

Blockchain Telecoms

But blockchain isn’t only disrupting blockchain, see how it’s impacting on others sectors from banking to healthcare below:

16 Blockchain Disruptions

Infographic credit: bitfortune.net