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|In: BlockChain|Last Updated: | 0 Comments

The most popular questions in the technology world today is most definitely the one on whether Hashgraph is better than Blockchain. The life and credibility of the Blockchain is being questioned and Hashgraph is being predicted as the technology of the future.

Image Source – DLT

While it is difficult to predict whether Blockchain is a thing of the past and whether Hashgraph is the final answer, one thing is sure, Hashgraph definitely addresses a lot of the critical challenges that Blockchain has been grappling with, the challenge of speed of processing, the challenge of fairness, and the huge challenge of requiring multiple industry regulators to come together. 

Hashgraph can process 250000+ transactions per second as opposed to Blockchain’s 7 transactions per second.  Hashgraph is fast because it uses Gossip protocol to spread messages to the network and also performs some optimization of the gossiped messages to reduce the communication overhead.  One other reason behind this speed of Hashgraph is because Hashgraph today uses private, permissioned networks.

Coming to fairness, the main challenge of Blockchain is its dependence on miners.  There could be forking and delay because of the actions of the miners, who can manipulate the process.  Since Hashgraph is based on consensus and time stamping, it’s faster and more accurate.  The Virtual Voting Consensus Algorithm of Hashgraph, which was invented by Dr. Leemon Baird, makes it straightforward to know how a node would vote and this data can be used as an input to the voting algorithm and to find whichever transactions have reached consensus quickly, thus making it more fair.

According to me, one of the biggest challenge for Blockchain to be a commonly used technology, is the need for multiple industry regulators to come together and set regulations which will cut across industries. As I have said before also, a Blockchain, or for that matter any DLT is beneficial only when the chains are big or integrated to each other. While it’s not really a technical challenge, given the water tight compartments of today, it’s an enormous roadblock to overcome for a DLT. Hashgraph is planning to overcome or partially address that challenge by way of their 39-member council.  If run properly it will take care of enabling cross-industry discussions and regulations.

Added to this, Hashgraph’s security is also claimed to be better than that of Blockchain.  Hashgraph has been proven to be fully asynchronous Byzantine. This means that it doesn’t make any assumption about how fast messages are passed over the internet and this makes it resilient against DDoS attacks, botnets, and firewalls. While the security in Blockchain was never a challenge, the Byzantine Consensus of Hashgraph makes it stronger.

While Hashgraph does seem to have quite a few advantages over Blockchain, we cannot say that Blockchain is a thing of the past and Hashgraph is the new technology of the future.  I can only predict that Distributed Ledger Technology [DLT] is the way to go, but whether it will be Blockchain or Hashgraph or Tangle or any other DLT, only time can tell.  They are all evolving and evolving very fast.  As Distributed Ledger Technologies move beyond the POC stage to actual implementation stage, we will see even faster evolution.  So it’s very hard to predict which DLT is here to stay because tomorrow is truly another day!

About the author

Mohua Sengupta is the EVP & Global Head at Services at 3i Infotech Ltd. More details about her can be found here

|In: CryptoCurrency|Last Updated: | 0 Comments

Awareness around crypto-currencies is at an all-time high. More people know about these digital currencies than ever before. With the crypto-craze at its height, an increasing number of people are putting their money into cryptocurrencies! However, with the rise in the interest around cryptocurrencies, there has also been a rise in cryptocurrency related scams and fake coins which are created solely for the purpose of scamming investors.

Investors need to be alert about certain facts pertaining to the currency that they are about to invest in. These facts help them realize if the currency is a legit investment opportunity or is it a scammers ploy to steal the money from the investors.

How To Pick The ‘Right Currency’ For Your Crypto currency Portfolio

There are a number of questions that one needs to ask out loud before they invest into a cryptocurrency. The answers to these questions help an investor determine if the currency that they are about to invest in is a legit cryptocurrency or just another crypto-related scam.

Does This Cryptocurrency Solve An Actual Problem?

The first question that one needs to ask themselves is that does the currency that they are about to invest in solve a real problem? Is there truly a ‘need’ for this cryptocurrency? If the currency does propose a problem to a real-world challenge, do you believe that the currency would be able to solve this problem? If the answer to most of these questions is negative, you might just want to avoid investing in the currency.

Read The Whitepaper, Carefully!

Every major and legitimate currency has a whitepaper that details out the plans for the currency as well as the vision behind the creation of the currency. First off, if there is no whitepaper, it is an immediate red flag. Moreover, the goals that are mentioned in the whitepaper need to be realistic and attainable! If the whitepaper seems too good to be true, there is a chance that the currency may be a scam.

Who Are The People Backing This Currency?

Another question that one needs to ask is – who are the people who have supported the currency in the past? Sometimes, for credible cryptocurrencies, you will be able to find multiple industry experts having commented on the currency. Moreover, at times, the credibility of the founders too, tends to play a major role. One needs to check out who the creators of this cryptocurrency are – and are they members of the fin-tech industry, do they have a presence on the internet, providing expert opinions.

Moreover, one also needs to check out the social media profiles of the founders and the promoters of the cryptocurrency they are about to invest in. Sometimes, scammy cryptocurrencies make use of fake and stock images and made-up names to promote their currency. A little research on social media can help investors ensure that they are investing in the right currency.

Sentiment Analysis of the Currency

‘Sentiment Analysis’ is basically the understanding of the kind of conversations that are happening around the currency you are about to invest in. Checking out the social media pages or communities such as Reddit should give you a better idea about the conversations around the currency that you are willing to invest in. If the conversations around the currency are positive and optimistic, it indicates a strong bull-run may be coming in the days to follow. However, if the conversations are negative and the currency is caught in various controversies, it may be best advised to stay away from it.

Performance in the Past

Before investing in a cryptocurrency, it is always advised to check out the past performance of the currency. While it is rarely an indicator because prices can rise at any point of time – however, a consistently bad performance can be a clear indicator of the fact that the currency that you are investing it may not be a good choice – as the prices can continue to fall. A trend-analysis of the currency’s price-movement can help determine if it is the right currency or the right time to invest in it! You can also go through crypto guides at CryptoGround for better knowledge.

In addition to the price performance, another thing that needs to be checked out is the market capital of the currency. If the market cap of the currency tends to fluctuate a lot, it might not be healthy for a long-term investment. Currencies which show a stable growth or have a stable market cap are the best advised currencies. Moreover, the older the currency has existed, the more trusted a name it is likely to be!

About the Author

Prince Kapoor is a Freelance Marketing Analyst and Blogger. While not working, you can find him in gym or giving random health advises to his colleagues which no one agrees on :). If you too want some of his advises [on health or on marketing], reach out to him at @imprincekapur

|In: Guest Blogging|Last Updated: | 0 Comments

Cyber Security has always been discussed but never given the importance that it deserves in the boardroom. However the situation seems to be changing post 2017, which saw cyber breaches of global scale and magnitude. Myths such as – only Information Technology companies are prone to cyber attacks and that fairly advanced nations like the United States and United Kingdom would be the main targets of hackers whereas countries like India would not be victims – were broken. It is time to address cyber security as a business risk, and not just a technology problem.

Image Source – Cyber Insurance

2017 saw hackers take down a Power Grid in Ukraine, ransomware attacks like WannaCry, Petya and NotPetya caused business interruption at ports, hospitals in UK were made to turn down patients since they lost access to their systems and the Equifax breach led to the data of 143 million customers – a number higher than Mexico’s total population – being compromised. Mondelez Inc., the world’s second-largest confectionery company, said its quarterly revenue growth would be reduced by 3 percent due to a recent global cyber attack.

India too was put on the global map after becoming the third worst hit country from the WannaCry attack, with more than 40,000 computers being affected. An Indian food startup’s breach was the biggest globally in the first half of 2017, compromising data of 17 million users. The list just keeps growing.

The thing about cyber risk is that it is evolving at a pace which most companies will find hard to keep up with; attacks are getting more sophisticated – from distributed denial of service attacks to ‘man-in-the-middle’ attacks, the risk just keeps changing.

The popularity of crypto-currencies and their characteristics which prevent them from being traced back will only fuel further ransomware attacks in the future.

According to a recent report published by McAfee, the total cost of cyber crime globally is USD 600 billion, or 0.8% of global GDP. With the EU GDPR becoming effective in around two months, several global MNCs will be liable to report breaches within a set time frame and may be liable to penalties going as high as 4% of their global turnover, the cost of data breach is bound to go up.  As I write this, a fresh probe has been requested by the European Commission, asking data protection authorities to investigate Facebook’s data leak to data-profiling firm Cambridge Analytica, which uses psycho graphic profiling to change behavior, and may have used the data of 50 million Facebook users to help bolster Donald Trump’s presidential campaign in 2016.

The increasing frequency of breaches and the costs associated with it demonstrate the need for companies to purchase cyber insurance. Let’s be clear, cyber insurance will not help a company prevent a cyber breach, but it will help it survive one. The amount of loss due to cyber attacks and its spiraling effects cannot be under-estimated. A typical breach would require the company to hire forensic experts to investigate into the breach and recover its lost data, appoint lawyers to communicate the breach to the regulators, customers and other stakeholders as per regulations.

Service of a public relations expert may also be required in order to handle the press and other media. All of these expenses can make a huge dent in the company’s bottom-line, especially to the small and medium enterprises, which may not be able to afford such costs. A standard cyber insurance policy would provide cover for all these costs, and further covers such as cover for business interruption, fraudulent fund transfer, PCI-DSS may be purchased depending upon the risk profile and needs of the customer.

The ever evolving nature of cyber risk poses an even bigger challenge for insurers, as they will have to work towards providing a wholesome risk mitigation product to customers. Such a product would help them not just cover the costs associated with a breach, but also help them improve their cyber security, provide vulnerability assessment and penetration testing services, and most importantly help educate their customer’s employees about threats such as phishing,  ransomware and others – since humans are still the weakest link in cyber security.

About the author

Sanjay Datta is the Chief underwriting, Claims & Reinsurance Head at ICICI Lombard. More details about her can be found here

|In: Guest Blogging|Last Updated: | 0 Comments

After receiving his degree in Electronic Engineering, Summit Shah expanded on his work to become one of the most successful technology experts and authors in the industry who has made many accurate predictions about the future of technology and IT. Technology experts are always in high demand and should see a continued level of growth in many areas as the success often achieved by experts in the technology field has expanded to include a range of new industrial sectors growing at a fast rate.

Image Source – Tech Jobs

Technology jobs were once frowned upon as simply fashionable forms of employment with little future but have now become some of the most impressive available as new forms of energy are produced and the ‘Internet of things’ moves closer towards becoming a reality; by 2024, it is estimated more than 12 percent of tech employment sectors will grow to make this one of the largest fields of employment in the world.

Renewable Energy Technician

Across the U.S., the performance of renewable energies looks set to outstrip that of coal and other fossil fuels which are slowly being phased out of the energy production sector. Perhaps the fastest-growing job in any technology field, a Renewable Energy Technician will not be affected by robotic updates or the use of artificial intelligence in the coming years as the installation and maintenance of PV panels and wind turbines is estimated to grow by 100 percent over the next ten years.

Artificial Intelligence Engineer

There are few areas of growth as fashionable or exclusive as Artificial Intelligence Engineer which has attracted some of the top names in the tech industry who are given salaries often matching sports stars and celebrities. Any tech expert or student looking to break into the latest area of growth should be looking for skills which can be applied to AI if they wish to match the top salaries seen in this sector.

Interface Design Director

The entire sector of Web Development may have been around for as long as the Internet but it still has the potential for growth in the coming years as the number of new jobs available grows by around 27 percent across the next six years. An Interface Design Director is responsible for planning the user interface of apps and Websites and implementing the design over the course of a Web-based project providing an average salary of over $160,000 in 2018.

Video Game Streamer

One of the new sectors of jobs which will become important in the coming years is that of Video Game Streamer for Web sites such as Twitch which has more than 25,000 members streaming video games and earning money. The so-called ‘gig economy‘ is driving the rise in those looking to establish a career in a technological environment which is always evolving.

Biomedical Engineer

As the population of most of the developed world continues to age the need for new equipment, techniques, and pharmaceutical options will also continue to grow. A biomedical engineer is responsible for developing a range of new products including replacement organs, limbs, and other medically-based equipment based on the technological needs; the forecast job rate for this role is 23 percent by 2024 and offers a median salary of over $95,000 in 2018.

Software Developer

A software developer is one of the most creative people in the technology sector who is required to spend a large amount of their time exploring new ways of developing programs for mobile apps and larger hardware to the specifications of a client. Developers are also responsible for amending existing programs and apps in a timely manner to keep them as up to date as possible.

Change Management Specialist

There are few roles in technology as new or innovative as a Change Management Specialist who spends their time exploring the best ways of enacting a change within an organization without negatively impacting the majority of a company. This role offers a growth rate over the next half a decade of more than 20 percent and an average salary of more than $130,000 for those willing to take on a position where the positive reinforcement of an organization remains key to the overall health of the brand they are working with.

Information Security Analyst

The cyber attacks taking place across the globe have had a positive impact on the industrial sector of the Internet security. An information security analyst is a role growing at a fast rate as every company and organization identifies the need for a high level of security across their group which is one of the major reasons for the U.S. unemployment rate of just 2.7 percent in this role. As attempts at cyber attacks become increasingly common in the 21st-century this role looks set to increase in importance across 2018 and beyond.

About the Author

Summit Shah is a specialist who has helped several companies integrate technology into their business. At present, he has helped over 20 companies in his several areas of expertise such as internet marketing, customer feedback solutions, data analytics, and product development. For more information about Summit Shah, visit him on his website,  Summit Shah Tech

|In: BlockChain|Last Updated: | 0 Comments

Ever since the Punjab National Bank Fraud case has come to light, many believers of Blockchain have been saying that Blockchain could have stopped it.  Present company included.  I for one, very truly believe that Blockchain will become pervasive and not too far away.  But could it have avoided this huge fraud that has shaken the Indian Banking system? Well it’s hard to respond in the affirmative knowing that no technology is smarter than the human brain at its best. If the intent is wrong, loopholes are found or made. Just as in this case.

Image Source – BlockChain

What was the main reason behind this fraud? While there were multiple, like mal-intent of account holders, corrupt employees, audit failure, manual contracts etc., the key reason was un-integrated applications, i.e, the SWIFT gateway was not integrated with PNB’s Core Banking System. So transferring data from one to the other was a manual process! When money was lent by foreign branches of other Indian banks, based on the false LOU issued by PNB, no record was being made in the banks CBS.  Thus year after year, the fraud remained under cover. 

Could Blockchain have solved it?  Well the answer is yes and no. Blockchain definitely has much higher security capability built-in. The basic concept underlying Blockchain, is Distributed Ledger Technology or DLT. So the master data is maintained in every node of the distributed ledger and hence there is no dependence on a single source of truth. While today the banks CBS is the single source of truth for the bank, in a Distributed Ledger framework, each node would contain the same truth. So tampering one node would not be possible and would immediately bring to light any kind of malpractice. So technically speaking Blockchain technology does have security mechanisms to deal with these frauds. However the success of this would depend on how distributed the ledgers are and how big the chains are.

Anytime there is a gap or a break between the chains, or two or more chains are not integrated, demanding a human intervention, mistakes or fraud are likely to happen. So whether or not Blockchain technology could have stopped the PNB fraud, would depend on how integrated the Blockchain was. So even in a Blockchain scenario if the Bank and the SWIFT payment gateway were not connected by a single chain or two integrated chains and had it required a manual intervention, the problem couldn’t have been avoided inspite of Blockchain technology. So Blockchain technology alone, is not an answer to avoiding such problem, intentional or not.  The most critical requirement is for all stakeholders to be part of the Blockchain, with no breakage in the chain.

There are a few other necessary conditions to the success of Blockchain as well

  1. All Manual contracts of today will have to be converted into smart contracts to run some automated checks on them, whenever there is any transaction involving a contract.
  2. Since the security will be so much dependent on the technology itself, technology audits will have to become much more stringent and pervasive
  3. Finally in order for all stakeholders, no matter which industry they belong to, need to come together as part of the same or connected Blockchain, there needs to be common processes and protocols accepted and agreed on by regulators of all industries. Hence the Regulators need to come together to ensure the same.

So bottom line is no technology can eradicate fraud. People are much smarter than computers, being the inventors of all technology.  And people with mal-intent will be there. So while Blockchain has the technology built-in to improve security, it is definitely not the answer to all fraud.

About the author

Mohua Sengupta is the EVP & Global Head at Services at 3i Infotech Ltd. More details about her can be found here

|In: Guest Blogging|Last Updated: | 0 Comments

While the influence of technology has permeated every industry and sector conceivable, whether it’s Banking, Manufacturing or Healthcare, the role technology is playing in shaping the real estate & construction industry is of transformational nature.  Of particular interest is the role new-gen technologies like Blockchain, Internet of Things [IoT], Machine learning, Artificial Intelligence and Robotics are playing in shaping the industry. And among them Blockchain related technologies seems to be most talked about and most misconstrued as well. Industry pundits, across the globe, seem to reckon that Blockchain could have a large and lasting impact on the way real estate gets done, but it requires big changes, not just minor tweaks.

Image Source – BlockChain

Estimates peg the global market for Blockchain at $708 million in 2017, anticipating it to reach anywhere close to $60.7 billion in 2024. Hence the impact this technology is poised to play in the near future cannot be undermined. However, before we delve any further on how Blockchain is set to impact the industry, we need to understand the underlying technology.

At the core of it, Blockchain is a digital ledger containing digital record of transactions, maintained by a network of computers. This means information of a financial or non-financial transaction is shared with a decentralized network and validated by the entire network. With Blockchain technology, one can transfer assets digitally without the need for a central verifying authority.  This is in itself is a revolutionary way of doing things. A Blockchain framework effectively reduces the chances of data manipulation and leaves lesser scope for a hacker to corrupt the computer system.

While the legality of crypto-currencies is still being debated in India, companies have begun shifting focus to the utility of Blockchain technology. According to an industry report, 56% of Indian businesses are inclined to make Blockchain a part of their core business. You may ask, how does it all Pan-out for the real estate & construction industry? The answer is that, Blockchain could open up newer models of ownerships like shared ownership helping first time buyers to purchase only part of property and proportionately earn rental incomes on the same.

In the construction industry, which requires bringing together large teams to design and shape the built environment the potential uses of this technology can be a real differentiator. With technology and in particular Building Information Modeling [BIM] becoming more widespread, openness to collaboration and new ideas is increasing across the industry. This momentum could be leveraged to bring the use of Blockchain technology to the fore. The potential uses of Blockchain, among many could be: Recording Value Exchange; Administering Smart Contracts; Combining Smart Contracts to form a Decentralized Autonomous Organization [DAO]; and finally certifying proof of existence for certain data.

Hence, through this technology there is an opportunity to create a leaner procurement method which better engages the individuals who make up a project team. This will result in reducing costs by removing intermediaries, where a client has more control and transparency of cost, time and scope on their project.

A Blockchain-powered online ledger could overcome complications on multiple owners by securely and reliably tracking the size and value of individual stakes in the property in the same way as stock in companies is recorded on exchanges. Incorporated into land dealings and real estate, Blockchain could provide immense business opportunity in the future making way to a reliable property search, efficient management of property and cash flows. Blockchain integration constantly records and shares information to address traditional process inefficiencies in the commercial real estate industry.

While there are more advantages to it, there are few hurdles that the industry collectively needs to address before capitalising on the benefits of Blockchain. The adoption of Blockchain in real estate would require legislative changes, standardisation and education around Blockchain concepts so that every stakeholder understands the various stages of the transaction. The success or failure of this attempt will surely determine how government organizations feel about implementing these solutions in the future.

As per analysts, putting India’s land records on Blockchain would greatly increase efficiency and reduce fraud. While the Indian government has renewed its interest in digitizing land records through the Digital India Land Records Modernization Programme [DILRMP], the implementation of a distributed ledger first to digitize existing land records and set the precedent for future transactions ensures a legitimate, government-approved record of transactions.

It’s heartening to see that some of the Indian states have taken the lead in adopting this technology to solve real-world problems, which include – Karnataka, Andhra Pradesh, Telangana, Maharashtra, Gujarat and Rajasthan. While the adoption of Blockchain is still in a nascent stage and the world is still experimenting, it will undoubtedly create a new platform with a scope of positive outlook in the real estate market. With digital transformation taking place everywhere, Blockchain is all set to revolutionize the real estate sector, thereby bringing in reforms in the country.

About the author

Antao AV is the Chief Operating Officer of Synergy Property Development Services. More details about him can be found here

|In: Guest Blogging|Last Updated: | 0 Comments

User experience, Customer experience or Customer satisfaction! There are some synonyms that have become extremely common in the past few years. The customer of today has zero tolerance for any mistake. With mobile usage increasing drastically, the mobile world is also no longer untouched with this demand of smooth user experience. For anyone who is interested in customer retention, mobile app is as important as any other campaign. You offer your users a smooth experience or they will soon churn!

Following are some best practices for mobile app designing, implementing which can give your users a smooth experience around your app and will make them come back.

Tip 1: It’s all about grid and white spaces

Gridding is the basis of mobile app designing. On every surface of mobile app, you will find an invisible grid. Although you won’t be able to see it, but trust us guys, this is going to guide you through.

Similarly, the second you place a dot, word or even line on the display, the margins and paddings are defined. With every stroke, you clearly define the space where you are going to work. Having said that, always keep in mind to maintain some consistent heights and widths along with the padding and margins.

Tip 2: Create hierarchy with colors

Did you know every color value denotes a purpose and can affect your user behavior in a certain way? For e.g., let’s talk about Black and gray-scale color. Let’s say you have made one button as black, the next one as dark gray and the next to it as light gray, it will indication ‘the first one is the most crucial to the visitor, second one is less and third one is the least’. Hope you got the drift!

Additionally, make sure to avoid using same color for buttons as you have used for app as this will make your buttons look lost. Instead go for contrasting color. Also, experts recommend to avoid using bright red color for buttons as in US, it indicates STOP. Often the users won’t click on it, thinking something suspicious.

Tip 3: Choose colors that reflect your brand not you

Now that you know how big role colors play in user experience, another thing you need to understand is that these color scheme settling should be defined based on the target market you are focusing. These colors should reflect your BRAND, not YOU! You can see many case studies on how even a minor change in the color led to huge boost in conversions. Also try to understand the color psychology. It’s best to go through the meaning and impact of every color before settling for any. Your brand has a specific purpose for your target audience and choosing the right colors is the best way to convey this relationship.

Tip 4: A great logo might not help you, but a poor one will definitely spoil you.

We all know, a brand and a customer, both are incomplete without each other. Logo is the quickest way to bring out your brand among a huge audience. Although investing in an extremely costly professional logo might not seem right to you, but settling with a poor one can really ruin your reputation. And the same thing applies in your mobile app too.

Unlike what people say, logo is not timeless. As the logo is a design and no design is timeless, how can a logo be? With time, most of the big names in the industry have modified their logo to match their modern audience. So make sure to update your logo time to time. Although if you are on tight budget, you can easily look for free online logo designer tools and get it done without spending fortune.

Tip 5: Using Outdated design or elements is a strict NO NO

No matter you are designing for desktop or mobile, one thing you have to constantly ensure is that your design is up to latest trends. If you are still stuck with those old school design trends, your customers won’t hesitate in shifting towards your competitors.

Customers today love modernity. They want everything updated and more in-sync with their personality. One such example is the huge shift towards flat designs. These days, flat designs have totally replaced Skeumorphic induced designs. And if any of the app is still holding anything but flat design, its audience will soon turn their backs to it.

The key here is to be totally aware of your users’ expectations, likes and dislikes. You err.. And they won’t spare you from judging. If you are modern, they will love that, if you are old school, they will note that.

Tip 6: Don’t throw sign up on their face as soon as they land on your app

Imagine your visitor has just landed up on your app and you slap one big ‘Sign-up’ button on their face, what are they going to do? You guessed it right, finding you creepy, they will simply press the Back button.

So guys, first wait for the users to browse your app and make some engagement such as liking a product or adding it to the cart. Another way here is to add Social Login. For those who are not aware of it, social login allows your users to sign in using their existing social media accounts such as Google+, Facebook, Twitter, etc. This will save them from the trouble of going through a long registration form that is asking him to create another username and password, he is going to forget as soon as his task is done.

Tip 7: Lastly, don’t forget to follow the visual guidelines

Although most people are not aware, even the UI world comes with certain guidelines. So while you are experimenting with user interaction or navigation, you must keep standards in mind. Try to focus on core features of the app instead of minor ones. If you want your app to be listed on the app store, you must optimize your website based on their criteria. Android, iOS, Windows, everyone has their certain guidelines around styling and other details. Avoiding them can create issues for you in future.

Finally, the best way to build an awesome app is to make your audience priority. Think how they think, design how they behave and you can never go wrong.

About the Author

Prince Kapoor is a Freelance Marketing Analyst and Blogger. While not working, you can find him in gym or giving random health advises to his colleagues which no one agrees on :). If you too want some of his advises [on health or on marketing], reach out to him at @imprincekapur

|In: CryptoCurrency|Last Updated: | 0 Comments

ICOs are the new series B while they create new bubbles they are also unlocking new kind of value as we speak. This is how Naval Ravikant, CEO of Angel List and one of the most influential thinkers in silicon valley described ICOs. Before I go about explaining my take on various ways in which ICOs will influence startup markets let’s have a quick primer on what are ICOs.

Image Source – ICO

ICO [Initial Coin Offering] is a way to raise funds where-in a startup or an existing business sell tokens to public or private entities in exchange for ether/bitcoin or fiat money. ICOs are a recent phenomenon and the first ICO happened in 2013 with Mastercoin ICO. Some of the big projects which have raised money using ICOs include Ethereum, Stratis, Stellar lumens, Ripple and many more. Tokens offered do not give you any ownership in the companies and hence cannot be treated as security.

ICOs exploded in 2016 with many startups joining the bandwagon to sell tokens and raise money coinciding with the boom in Crypto-currencies and lured by easier money availability, fewer regulations, etc.

Below are the six ways ICOs have/might impact Startup Funding:

Easier Access to Money in short term

ICOs or token sales have suddenly created a new funding mechanism which is far easier to access than any traditional funding methods.You suddenly have the whole world as a possible investor.

With money raising strictly dependent on demand and supply dynamics and a large demand fueled by Crypto boom of last two years, Founders have never had it easier with large demand for anything blockchain and everyone looking to make quick money the whole ICO space has snowballed into tons of dumb money chasing projects.

VC Unfriendly/Open Source projects getting funded

While ICOs have eased access to capital and lot of dumb projects are getting funded It has also created a great way to fund ideas with no immediate commercial viability or ideas which VCs think are unpopular.

ICOs can be a great way to fund new protocols or next generation of smart technologies which will lay the foundation for a new wave of applications and products to be built on these new technologies. ICOs might be the best thing to happen to open-source projects adding a much needed incentive layer for developers.

Disrupting the existing VC model

ICOs are disrupting the existing VC models where Venture capital firms traditionally not only provide seed capital for MVP and building a product market fit but also growth investing to grow the business.

With ICOs and token sale as an alternative entrepreneurs with running businesses can just launch a new coin and raise funds required for growth. Token sales result in no dilution of equity and provide a great way to build community the value creation shifts from stakeholders to coin holders. It is entirely possible that community might become a strong moat for businesses in future and token holders will signal real value of the company.

Also some of the core open source projects can raise money without worrying about how VCs might dilute their vision.

Community Development becomes integral to Startups

Two skills which are going to become integral to blockchain startups are technical expertise on new set of technology and skills to build, nurture and harness communities. Startups which can build strong communities will have access to funds, new customers and new business at fraction of the cost.

Velocity and Value of the tokens will be directly linked to how strong and connected your community is to your product which can bring in new and unique network effects.

Lot of Scams in the Short Run

As is with anything path breaking it attracts a lot of unwanted folks and scamsters lured by easy money, fame or both. ICOs driven startups are going to have a fair share of scams. Not just scams majority of startups will not be able to deliver on promises. The deluge of ICOs hitting market include scamsters, failed ideas which could not raise money in traditional ways, forced token ideas where tokens are not required even blockchain is not required.

So brace up for many scams and failed projects in the short to medium term until the dust settles and sanity prevails and we are able to see the real gems. This is very similar to what happened during the heydays of the internet boom.

New Governance Models for startups

While in traditionally funded startups there were checks and balances built with early stage investors have a board seat and experiences VCs/Investors not only providing money but also helping with setting up processes and governance mechanisms.The new Crowd funded startups will have not have an obligation to investors and hence will create new challenges on oversight and governance sides.

How will token holders keeps teams honest. Will token holders be able to influence roadmap or prioritization. How much influence can token holders have on founders and the executive team. Can they throw out CEO for non-performance these are all very interesting questions.

Finally, ICOs are at  a very early stage of evolution and almost all players are making their moves. Some of the best VCs have already started investing in tokens and leading early round of token sales. Entrepreneurs who want to raise growth funds are watching on the sidelines watching intently on how this evolves and does it create new options for them to grow their business. Finally regulators are grappling with how to treat token sales.

They are not securities in the traditional sense. Some tokens have utility on the platform other apparently do not have any utility so regulating token markets is going to be another area which evolves in due course of time.

About the Author

Sarabdeep Singh is ex-Head for Digital Marketing and CRM for Ebay India. He Co-founded Bodhik.com an online mutual fund investment service. In his spare time he is building sipacoin.com a simple service to set up Bitcoin Price Alerts. He tweets infrequently @sarabdeep