022-023 CRYPTO 16apr2019_BLANK MASTER 23/04/2019 09:36 Page 1

22 FEATURE TUESDAY 23 APRIL 2019 CITYAM.COM CITYAM.COM TUESDAY 23 APRIL 2019 FEATURE 23

Our series on AI, , Cryptoassets and Tokenisation E: [email protected] @CityAm_Crypto In association with PARTNER CONTENT

nitial Exchange Offerings (IEOs) It is almost as if someone from Bi - CITY A.M.’S are rapidly gaining in popularity nance thought: ‘how can we revive the CRYPTOCOMPARE MARKET VIEW as the latest fundraising solution dead ICO market, convince investors for blockchain-based start-ups that it’s safe to invest in speculative to - CRYPTO INSIDER seeking to raise seed capital fast – kens again, while creating a mecha - Exchanges delist controversial coin Ias in, under-30-seconds fast in some nism that diverts the flow of money on JAMES BOWATER cases. to our own platform?’. And thus, IEOs he Crypto-sphere reacted strongly last seemingly bringing back what’s known as At a foundational level, an IEO is not were born. week to drama surrounding the the ‘ effect’. In other news about write this column from Miami where I have too dissimilar from its predecessor, It’s alarming that the crypto commu - Tcontroversial fork, Bitcoin the San Francisco-based exchange, Reuters been attending the IOHK Summit 2019. At the infamous Initial Coin Offering nity’s initial response to the BitTorrent Satoshi’s Vision (BSV). After legal threats last week estimated that Coinbase’s Itime of writing (18 April: ahead of the (ICO). (BTT) IEO – the first ever IEO – was not from BSV backer Calvin Ayre, leading revenue for 2018 stood around $520mn, Easter Weekend), Bitcoin (BTC) is trading at They both allow investors to pur - exchange delisted BSV, resulting in down more than 40% from 2017. US$5,260.54; Ethereum (ETH) at US$172.67; chase tokens at wholesale prices, several exchanges, including US-based Crypto derivatives provider LedgerX Ripple (XRP) at US$0.3364; Binance (BNB) at based entirely on speculation that and ShapeShift, following suit. The announced plans to become the first US US$21.81 and Cardano (ADA) at US$0.08231. their value will increase over time, BSV price reacted immediately to the news, firm to offer physically settled bitcoin Overall Market Cap slightly down at US$179.15bn (data source: and they both conflict with interna - dropping more than 10% in under an hour. futures. Existing bitcoin futures in the US www.CryptoCompare.com). Market prices may have changed tional securities laws as ‘unregulated The Cryptoasset markets experienced a offered by CME Group, in contrast, are cash- considerably by the time I am back in London. INITIAL IEOs actively calmer consolidation week after strong settled. If successful, the company may beat securities offerings’. Unlike its regu - One of the best things about the Blockchain and Cryptoasset lated cousin, the Security Token Offer - involve a middle-man gains in the week prior. At time of writing to the punch the highly-anticipated Bakkt industry is how close-knit the global community is. After all, it ing (STO), tokens offered in IEOs are (18 April: ahead of the Easter Weekend), exchange from NYSE parent company ICE, really is still nascent and, compared to mature markets, relatively not backed by real-world assets, nor as opposed to Bitcoin (BTC) is trading at US$5,260.54 and set to launch later in the year. insignificant in size. The downside is that with the identity of do they grant any ownership rights to EXCHANGE Ethereum (ETH) at US$172.67, according to A report published by global cryptoasset Bitcoin’s creator, , unknown there is a vacuum the purchaser post-sale. removing one CryptoCompare data. data provider CryptoCompare has revealed for competing egos to be seen as ‘top dog’. There is no more The only notable difference that sep - Social trading company eToro last week that unregulated exchanges listing divisive a figure as Dr Craig Wright who famously claimed to be arates an IEO from other crypto offer - one of outrage, but excitement. The launched its new Cryptoasset exchange, derivatives have been Nakamoto before withdrawing the claim. The trouble is that the ings is that instead of the underlying OFFERINGS: sale, which took place on Binance over eToroX. The new exchange will initially growing faster than regulated alternatives, matter has flared up again: Wright is accused by the family of project hosting the token sale, a cen - two sessions on 28 January, came to a feature eight stablecoins – with OKEx taking the lead with a $1.5bn deceased former business partner Dave Kleiman of stealing one tralised close in just 18 minutes and raised over backed one-to-one by fiat currencies – trading volume from derivatives in March. million BTC from his estate, with a value exceeding $5bn. brings the offering in-house and acts $7.2m. Since then, however, BTT has un - and may prove to be a major rival to The biggest regulated alternative, CME, Enter stage-right his ‘partner’ Calvin Ayre who with him created as an intermediary counterparty. ravelled by more than 40% from its top exchanges. traded $70.5m. a forked version of Roger Ver’s (BCH) called Bitcoin WHO REALLY peak two months ago and struggled to Last week leading cryptocurrency CryptoCompare also announced the Satoshi Vision (BSV). Ayre is a controversial figure himself and has PROMOTION OUTSOURCED budge a pip during the recent bull mar - exchange Coinbase added REP to its addition of a regulatory panel to their Digital taken to Twitter to ramp up the war of words. Of course he has So what are the benefits of doing it this ket. Coinbase Pro platform, designed for Asset Summit in London on 12 June, reignited the ‘Craig is Satoshi’ claim, and is suing people left, right way? For a start-up, advantages of using Perhaps the most alarming point is traders. The cryptocurrency, created to be featuring speakers from the Bank of and centre. This has gone down extremely badly in the industry, a crypto exchange to host a token STANDS TO that since the first IEO in January, used in the Augur prediction markets, saw England, Financial Conduct Authority (FCA) and appears to have galvanised the great and the good into a offering include the access to high more than 22 new IEOs have its price surge 14% over the addition, and HM Treasury. counter-offensive. CZ, the eponymous founder of the world’s liquidity, an established infrastructure launched across several competing largest Crypto exchange, Binance, laid down the gauntlet by to process the sale and a guaranteed platforms; highlighting an exponen - delisting BSV, quickly followed by ShapeShift and Kraken. listing on the platform once the tially-rising demand for more of these In contract to all this turbulence, Charles Hoskinson, the offering has ended. BENEFIT? centralised, high-risk offerings. Not founder of IOHK and Cardano, demonstrated his credentials as The marketing and promotion of the only does this showcase how imma - CRYPTO A.M. INDUSTRY VOICES one of the great proponents of Crypto and Blockchain in a 45- token offering is also outsourced to the ture the market still is, but it also re - minute keynote speech here in Miami. exchange, to leverage their trusted rep - Designed by significant returns for the host well as benefit from restricting the use the first place. A vast majority of leading ICO market? Well the truth is, it isn’t at veals how little we learnt from the Undeterred by market forces, Charles espoused an altruistic utation and brand recognition. Phill Snelling, exchange and helping the start-up of non-native exchange currencies dur - exchanges that currently support IEOs, all. Yes, the ICO era wreaked havoc on ICO era. Africa is a continent of opportunity vision of the future. He focused on the potential of the continent From an investor standpoint, the sole Bowater Media reach its hard cap (the maximum ing the token sale. For example, Bi - namely Binance – the instigator of this countless unsuspecting investors and of Africa, having just seen the completion of a training course in benefit of participating in an IEO over amount of money that can be raised) nance requires investors to hold at crazed revolution – KuCoin, OkEx, Bit - heavily tarnished the reputation of the Ollie Leech (http://linkedin.com/in/ollie- ast cars, cash and market volatility build a solid blockchain, and we can Addis Ababa for 22 women in programming language Haskell. an ICO is the assumption that the host as quickly as possible. least 100 Binance Coins (BNB) – worth trex and have all chosen not to crypto space, but at least they had an air leech-9582318a), Crypto A.M. are common preoccupations in our teach others to employ that technology. A He said: “This is the opportunity for three billion people to come exchange has performed rigorous due IEO participants merely act as the $2,400, at time of writing – on its plat - publicly disclose their IEO listing fees. of decentralisation about them. IEOs contributor & financial journalist, in Findustry – but the real promise of strong partnership is key to the success of into ‘our economy’; the Crypto economy – not the US economy, diligence on the underlying project fuel that powers this new money-mak - form for 20 days prior to the IEO. Clearly they don’t want to spread fears are the complete opposite of conversation with James Bowater blockchain lies elsewhere. This move - this – and Ethiopia’s ministry of science not the European economy and not the legacy system.” He prior to the token-sale. This is allegedly ing machine. Once the tokens offi - Investors who do not have the mini - of the IEO market turning into yet an - decentralised. They are fundamentally ment is not about ‘When Lambo?’: this and technology has been a solid partner, added: “It’s going to be Crypto first and always!”. done to protect investors from fraudu - cially launch onto the market, they mum amount in their exchange wallet other ‘pay to play’ system, where the centralised. They actively involve a IMPORTANT INFORMATION: THE VIEWS movement is about changing the way keen to explore the benefits that Charles’s message is that “when you get three billion people lent platforms, but it also prevents the experience the same pump-and-dump during the snapshot cannot partici - values of a quality-driven market are middle-man as opposed to removing AND OPINIONS PROVIDED BY CITY A.M.'S everything works. And where better to blockchain could bring. Last year, we into the kind of ethics [Crypto is about], you get rid of ‘too big to exchange from receiving backlash if cycles that we saw in the ICO market pate in the IEO. overlooked in order to make fast, easy one, and encourage investors to place CRYPTO INSIDER AND IN THE CRYPTO start than Africa? signed a memorandum of understanding fail’ and you change the world - that’s what I signed up for.” the project turns out to be a scam. where investors fight it out to dump Perhaps the biggest profits for ex - money. their trust in central, overriding A.M. SECTION SHOULD NOT BE TAKEN AS In recent weeks, IOHK – the company I (MoU) with the ministry to look at using their coins as quickly as possible. changes come from the hefty fee that authorities instead of fostering trustless INVESTMENT OR FINANCIAL ADVICE. founded after quitting as CEO of blockchain in the supply-chain for coffee, Charles Hoskinson writes about Africa’s potential in ‘Crypto WHO REALLY BENEFITS? Meanwhile, exchanges bank enor - they charge each project for the privi - TRUST IN AUTHORITIES ecosystems where wealth can be ALWAYS CONSULT WITH YOUR Ethereum – completed training its first Ethiopia’s biggest export product. This A.M. Industry Voices’ on the opposite page IEOs are almost all about creating mous profits from transaction fees as lege of featuring on their platforms in So how is this an improvement on the distributed equally. FINANCIAL ADVISOR. batch of Ethiopian and Ugandan develop - would allow farmers to track the move - ers. At the Ethiopian government’s re - ment of produce as it passes to wholesale quest, the entire intake was women. We buyers, and will see their earnings in - sifted hundreds of very qualified appli - crease as abuse is cut from the system. cants down to 22, and held a class over In Miami last week we announced a sec - Wayne Lloyd, two months in Addis Ababa. The stu - ond MoU with Ethiopia. This is to create a founder and RECONCILING DIFFERENCES: WHY A dents’ enthusiasm for blockchain tech - digital currency, to be used for transport Crypto AM shines nology was overwhelming, as evidenced and utilities payments in the capital. CEO, Smarter Contracts BLOCKCHAIN IS THE BEST SOLUTION by their commitment to learning com - Ethiopians will be able to pay for trans - Our vision resonates plex programming language, Haskell. port and utility bills with this new cur - its Spotlight on Troy Norcross , Co-Founder, Blockchain Rookies Of the graduates from that free course, rency, pegged to Ethiopia’s currency, the with our clients and we’ve hired 10 so far – six directly with birr. The token will be part of the ecosys - ow many millions are spent and disputing, agreeing and correcting any a long way from legacy systems that were IOHK and four with Ugandan partner or - tem of Cardano, a leading global cryp - the wider blockchain lost in the process of reconciliation? discrepancies. (or are) often paper-based. These ganisation, CryptoSavannah. The rest will tocurrency we released in 2017. We expect Smarter Contracts community HWhether it is reconciling accounts But what if you could do away with systems are internally focused and go on to contribute their new skills to the digital birr to be used by millions. between vendor and customer when reconciliation and have a single source of require vendors and partners to conform their local economies. And it’s not just Ethiopia. Wherever we marter Contracts, a blockchain-focused But Lloyd is conscious about remaining counting bales of cotton or reconciling data that all parties agreed to use? With a or they require integrations that are Here lies blockchain’s true potential: to have travelled in Africa, we have found of - software and services consultancy, was focused on a manageable number of sectors have worked for some of the world’s top international remittances between single source of data, there would be no expensive to develop and maintain. If bring the technology to the three billion ficials, leaders and entrepreneurs excited Slaunched earlier this month by company with the aim of becoming the market-leading consultancies, delivering complex digital Brazilian Reals and British Pounds need for reconciling between records. All everyone in an industry or ecosystem people worldwide who are shut out of about this emerging technology. Africa is founder and CEO, Wayne Lloyd. blockchain technology partner in each. transformation and technology projects. It Sterling, the cost of reconciliation is transactions would use a standard used the same system –even across the banking system. With blockchain, why we choose not to focus on short-term Located near to London’s Cannon Street In addition to consultancy services, Smarter gives the company a structured and significant. format for entering the data and for any competitive lines –the cost and efficiency people can gain access to loans, microfi - swings in the market, but instead to con - station, Smarter Contracts has been working Contracts is also building its own blockchain- methodical approach to delivering change – Costs attributed to reconciliation conversions. Data would be readily savings to all participants would be nance and other financial services that centrate on fundamental computer sci - with the C-Suite of the UK’s most recognisable based tools aimed at driving transparency this is key given its belief that transformation include not only the process of available for audits by independent third substantial. banks will never provide because that ence research and development. brands, helping them understand the digitally and security across digital supply-chains. through blockchain will at first be reconciliation, data-entry errors and of parties or by internal audit teams. And yes - –that system works best on a market is too costly for them to enter. IOHK is built on the brightest minds transformative impact that blockchain Meanwhile the firm also has plans to launch incremental. course the losses resulting from theft and Without the need for a reconciliation Blockchain. Where multiple distrusting Blockchain also opens the door to prop - from around the world in fields such as technology, and its convergence with other data services using blockchain oracles. While building up its client-list, Smarter fraud. There are costs when there are process, the time associated with parties can agree to a single source of erty registration, allowing people to dis - distributed systems and programming emerging technologies, can have. It has been a great start for Smarter Contracts is also focused on harnessing the inaccurate or incomplete translations reconciliation would be eliminated as well. truth. pense with fraudulent or missing paper language design. We are inspired by soft - “We start by helping our clients understand Contracts but given the quality of his team, it blockchain industry’s collaborative spirit. The between one set of measurements and For businesses that have a digital records and prove their ownership. Peo - ware engineering practices from indus - the technology and we love taking them on is nothing less than Lloyd expected: “The company has recently partnered the London another, like when we convert from transformation process underway, Get in touch with us ple will be able to demonstrate their tries such as aerospace to ensure the that journey of discovery,” says Lloyd. team is made up of exceptionally talented Derivatives Exchange (LDX), while it has also metric to English. And of course, there is automated procurement and accounts [email protected] / identities using the technology, creating systems we build are secure enough to “The reason for that is, once clients begin to people who are working tremendously hard been working on building strong relationships the time involved in identifying, payable systems have moved enterprises Twitter @igetblockchain accurate and reliable public records. All carry billions of dollars-worth of value, understand it, they themselves start to to deliver our collective vision –to enable with some top global blockchain providers. this will cut fraud, waste and abuse, and and will be fit for generations to come. recognise the potential the technology can brands to build brand new, immersive If you want to learn about how blockchain increase transparency, not to mention This will put everybody in charge, not offer. It’s extremely rewarding being able to experiences through the power of blockchain could transform your business and enhance kickstart a revolution in local economies. just a small group. The opportunity is witness clients think differently about their technology. Our vision resonates with our the experiences of your customers, Smarter This is why we decided to go to for three billion people to leave the in - business before our eyes, knowing you have clients and the wider blockchain community Contracts hosts drop-in sessions at its Ethiopia, Africa’s second most populous adequacies of the legacy financial sys - inspired and been a significant contributory and, in the coming weeks, we will be WeWork office, 33 Queen Street. nation, and work with the government tem and enter the Crypto economy. factor for that new way of thinking.” announcing some further key hires and to train local people with skills that will That is how you change the world. Smarter Contracts has been approached by partnerships that I believe will make the For more information and to book your transform communities. brands covering financial services, company even stronger.” drop-in session see We don’t claim to have the solutions to By Charles Hoskinson, co-founder and CEO, commodities, retail, technology and sport. Members of the Smarter Contracts team www.smartercontracts.co.uk local problems, but we do know how to IOHK; www.iohk.io