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Quant Network: Token valuation dynamics and fundamentals

Quant Network: Token valuation dynamics and fundamentals
This post intends to illustrate the dynamics and fundamentals related to the mechanics and use of the Quant Network Utility Token (QNT), in order to provide the community with greater clarity around what holding the token actually means.
This is a follow-up on two articles David W previously wrote about Quant Network’s prospects and potential, which you can find here:
For holders not intending to use Overledger for business reasons, the primary goal of holding the QNT token is to benefit from price appreciation. Some are happy to believe that speculation will take the QNT price to much higher levels if and when large-scale adoption/implementation news comes out, whilst others may actually prefer to assess the token’s utility and analyse how it would react to various scenarios to justify a price increase based on fundamentals. The latter is precisely what I aim to look into in this article.
On that note, I have noticed that many wish to see institutional investors getting involved in the crypto space for their purchase power, but the one thing they would bring and that is most needed in my opinion is fundamental analysis and valuation expectations based on facts. Indeed, equity investors can probably access 20 or 30 reports that are 15 pages long and updated on a quarterly basis about any blue chip stock they are invested in, but how many of such (professional) analyst reports can you consult for your favorite crypto coins? Let me have a guess: none. This is unfortunate, and it is a further reason to look into the situation in more details.
To be clear, this article is not about providing figures on the expected valuation of the token, but rather about providing the community with a deeper analysis to better understand its meaning and valuation context. This includes going through the (vast) differences between a Utility Token and a Company Share since I understand it is still blurry in some people’s mind. I will incorporate my thoughts and perspective on these matters, which should not be regarded as a single source of truth but rather as an attempt to “dig deeper”.
In order to share these thoughts with you in the most pertinent manner, I have actually entirely modelled the Quant Treasury function and analysed how the QNT token would react to various scenarios based on a number of different factors. That does not mean there is any universal truth to be told, but it did help in clarifying how things work (with my understanding of the current ruleset at least, which may also evolve over time). This is an important safety net: if the intensity of speculation in crypto markets was to go lower from here, what would happen to the token price? How would Quant Treasury help support it? If the market can feel comfortable with such situation and the underlying demand for the token, then it can feel comfortable to take it higher based on future growth expectations — and that’s how it should be.
Finally, to help shed light on different areas, I must confess that I will have to go through some technicalities on how this all works and what a Utility Token actually is. That is the price to pay to gain that further, necessary knowledge and be in a position to assess the situation more thoroughly — but I will make it as readable as I possibly can, so… if are you ready, let’s start!

A Utility Token vs. a Company Share: what is the difference?

It is probably fair to say that many people involved in the crypto space are unfamiliar with certain key financial terms or concepts, simply because finance is not necessarily everyone’s background (and that is absolutely fine!). In addition, Digital Assets bring some very novel concepts, which means that everyone has to adapt in any case.
Therefore, I suggest we start with a comparison of the characteristics underpinning the QNT Utility Token and a Quant Network Company Share (as you may know, the Company Shares are currently privately held by the Quant Network founders). I believe it is important to look at this comparison for two reasons:
  1. Most people are familiar with regular Company Shares because they have been traded for decades, and it is often asked how Utility Tokens compare.
  2. Quant Network have announced a plan to raise capital to grow their business further (in the September 2019 Forbes article which you can find here). Therefore, regardless of whether the Share Offering is made public or private, I presume the community will want to better understand how things compare and the different dynamics behind each instrument.
So where does the QNT Utility Token sit in Quant Network company and how does it compare to a Quant Network Company Share? This is how it looks:
https://preview.redd.it/zgidz8ed74y31.png?width=1698&format=png&auto=webp&s=54acd2def0713b67ac7c41dae6c9ab225e5639fa
What is on the right hand side of a balance sheet is the money a company has, and what is on the left hand side is how it uses it. Broadly speaking, the money the company has may come from the owners (Equity) or from the creditors (Debt). If I were to apply these concepts to an individual (you!), “Equity” is your net worth, “Debt” is your mortgage and other debt, and “Assets” is your house, car, savings, investments, crypto, etc.
As you can see, a Company Share and a Utility Token are found in different parts of the balance sheet — and that, in itself, is a major difference! They indeed serve two very different purposes:
  • Company Shares: they represent a share of a company’s ownership, meaning that you actually own [X]% of the company ([X]% = Number of shares you possess / Total number of shares) and hence [X]% of the company’s assets on the left hand side of the balance sheet.
  • Utility Tokens: they are keys to access a given platform (in our case, Quant Network’s Operating System: Overledger) and they can serve multiple purposes as defined by their Utility Document (in QNT’s case, the latest V0.3 version can be found here).
As a consequence, as a Company Shareholder, you are entitled to receive part or all of the profits generated by the company (as the case may arise) and you can also take part in the management decisions (indeed, with 0.00000001% of Apple shares, you have the corresponding right to vote to kick the CEO out if you want to!).
On the other hand, as a Utility Token holder, you have no such rights related to the company’s profits or management, BUT any usage of the platform has to go through the token you hold — and that has novel, interesting facets.

A Utility Token vs. a Company Share: what happens in practice?

Before we dig further, let’s now remind ourselves of the economic utilities of the QNT token (i.e. in addition to signing and encrypting transactions):
  1. Licences: a licence is mandatory for anyone who wishes to develop on the Overledger platform. Enterprises and Developers pay Quant Network in fiat money and Quant Treasury subsequently sets aside QNT tokens for the same amount (a diagram on how market purchases are performed can be found on the Overledger Treasury page here). The tokens are locked for 12 months, and the current understanding is that the amount of tokens locked is readjusted at each renewal date to the prevailing market price of QNT at the time (this information is not part of the Utility Token document as of now, but it was given in a previous Telegram AMA so I will assume it is correct pending further developments).
  2. Usage: this relates to the amount of Overledger read and write activity performed by clients on an ongoing basis, and also to the transfer of Digital Assets from one chain to another, and it follows a similar principle: fiat money is received by Quant Network, and subsequently converted in QNT tokens (these tokens are not locked, however).
  3. Gateways: information about Gateways has been released through the Overledger Network initiative (see dedicated website here), and we now know that the annual cost for running a Gateway will be 500 QNT whilst Gateway holders will receive a percentage of transaction fees going through their setup.
  4. Minimum holding amounts: the team has stated that there will be a minimum QNT holding amount put in place for every participant of the Overledger ecosystem, although the details have not been released yet.
That being said, it now becomes interesting to illustrate with indicative figures what actually happens as Licences, Usage and Gateways are paid for and Quant Network company operates. The following diagram may help in this respect:
Arbitrary figures from myself (i.e. no currency, no unit), based on an indicative 20% Net Income Ratio and a 40% Dividend yield
We have now two different perspectives:
  • On the right hand side, you see the simplified Profit & Loss account (“P&L”) which incorporates Total Revenues, from which costs and taxes are deducted, to give a Net Income for the company. A share of this Net Income may be distributed to Shareholders in the form of a Dividend, whilst the remainder is accounted as retained profits and goes back to the balance sheet as Equity to fund further growth for instance. Importantly, the Dividend (if any) is usually a portion of the Net Income so, using an indicative 40% Dividend yield policy, shareholders receive here for a given year 80 out of total company revenues of 1,000.
  • On the left hand side, you see the QNT requirements arising from the Overledger-related business activity which equal 700 here. Note that this is only a portion of the Total Revenues (1,000) you can see on the right hand side, as the team generates income from other sources as well (e.g. consultancy fees) — but I assume Overledger will represent the bulk of it since it is Quant Network’s flagship product and focus. In this case, the equivalent fiat amount of QNT tokens represents 700 (i.e. 100% of Overledger-related revenues) out of the company’s Total Revenues of 1,000. It is to be noted that excess reserves of QNT may be sold and generate additional revenues for the company, which would be outside of the Overledger Revenues mentioned above (i.e. they would fall in the “Other Revenues” category).
A way to summarise the situation from a very high level is: as a Company Shareholder you take a view on the company’s total profits whereas as a Utility Token holder you take a view on the company’s revenues (albeit Overledger-related).
It is however too early to reach any conclusion, so we now need to dig one level deeper again.

More considerations around Company Shares

As we discussed, with a Company Share, you possess a fraction of the company’s ownership and hence you have access to profits (and losses!). So how do typical Net Income results look in the technology industry? What sort of Dividend is usually paid? What sort of market valuations are subsequently achieved?
Let’s find out:
https://preview.redd.it/eua9sqlt74y31.png?width=2904&format=png&auto=webp&s=3500669942abf62a0ea1c983ab3cea40552c40d1
As you can see, the typical Net Income Ratio varies between around 10% and 20% in the technology/software industry (using the above illustrated peer group). The ratio illustrates the proportion of Net Income extracted from Revenues.
In addition, money is returned to Company Shareholders in the form of a Dividend (i.e. a portion of the Net Income) and in the form of Share repurchases (whereby the company uses its excess cash position to buy back shares from Shareholders and hence diminish the number of Shares available). A company may however prefer to not redistribute any of the profits, and retain them instead to fund further business growth — Alphabet (Google) is a good example in this respect.
Interestingly, as you can see on the far right of the table, the market capitalisations of these companies reflect high multiples of their Net Income as investors expect the companies to prosper in the future and generate larger profits. If you wished to explore these ideas further, I recommend also looking into the Return on Equity ratio which takes into account the amount of resources (i.e. Capital/Equity) put to work to generate the companies’ profits.
It is also to be noted that the number of Company Shares outstanding may vary over time. Indeed, aside from Share repurchases that diminish the number of Shares available to the market, additional Shares may be issued to raise additional funds from the market hence diluting the ownership of existing Shareholders.
Finally, (regular) Company Shares are structured in the same way across companies and industries, which brings a key benefit of having them easily comparable/benchmarkable against one another for investors. That is not the case for Utility Tokens, but they come with the benefit of having a lot more flexible use cases.

More considerations around the QNT token

As discussed, the Utility Token model is quite novel and each token has unique functions designed for the system it is associated with. That does not make value assessment easy, since all Utility Tokens are different, and this is a further reason to have a detailed look into the QNT case.
https://preview.redd.it/b0xe0ogw74y31.png?width=1512&format=png&auto=webp&s=cece522cd7919125e199b012af41850df6d9e9fd
As a start, all assets that are used in a speculative way embed two components into their price:
A) one that represents what the asset is worth today, and
B) one that represents what it may be worth in the future.
Depending on whether the future looks bright or not, a price premium or a price discount may be attached to the asset price.
This is similar to what we just saw with Company Shares valuation multiples, and it is valid across markets. For instance, Microsoft generates around USD 21bn in annual Net Income these days, but the cost of acquiring it entirely is USD 1,094bn (!). This speculative effect is particularly visible in the crypto sector since valuation levels are usually high whilst usage/adoption levels are usually low for now.
So what about QNT? As mentioned, the QNT Utility model has novel, interesting facets. Since QNT is required to access and use the Overledger system, it is important to appreciate that Quant Network company has three means of action regarding the QNT token:
  1. MANAGING their QNT reserves on an ongoing basis (i.e. buying or selling tokens is not always automatic, they can allocate tokens from their own reserves depending on their liquidity position at any given time),
  2. BUYING/RECEIVING QNT from the market/clients on the back of business activity, and
  3. SELLING QNT when they deem their reserves sufficient and/or wish to sell tokens to cover for operational costs.
Broadly speaking, the above actions will vary depending on business performance, the QNT token price and the Quant Network company’s liquidity position.
We also have to appreciate how the QNT distribution will always look like, it can be broken down as follows:
https://preview.redd.it/f20h7hvz74y31.png?width=1106&format=png&auto=webp&s=f2f5b63272f5ed6e3f977ce08d7bae043851edd1
A) QNT tokens held by the QNT Community
B) QNT tokens held by Quant Network that are locked (i.e. those related to Licences)
C) QNT tokens held by Quant Network that are unlocked (i.e. those related to other usage, such as consumption fees and Gateways)
D) the minimum QNT amount held by all users of the platform (more information on this front soon)
So now that the situation is set, how would we assess Quant Network’s business activity effect on the QNT token?
STEP 1: We would need to define the range of minimum/maximum amounts of QNT which Quant Network would want to keep as liquid reserves (i.e. unlocked) on an ongoing basis. This affects key variables such as the proportion of market purchases vs. the use of their own reserves, and the amount of QNT sold back to the market. Also, interestingly, if Quant Network never wanted to keep less than, for instance, 1 million QNT tokens as liquid reserves, these 1 million tokens would have a similar effect on the market as the locked tokens because they would never be sold.
STEP 2: We would need to define the amount of revenues that are related to QNT. As we know, Overledger Licences, Usage and Gateways generate revenues converted into QNT (or in QNT directly). So the correlation is strong between revenues and QNT needs. Interestingly, the cost of a licence is probably relatively low today in order to facilitate adoption and testing, but it will surely increase over time. The same goes for usage fees, especially as we move from testing/pilot phases to mass implementation. The number of clients will also increase. The Community version of Overledger is also set to officially launch next year. More information on revenue potential can be found later in this article.
STEP 3: We would need to define an evolution of the QNT token price over time and see how things develop with regards to Quant Network’s net purchase/sale of tokens every month (i.e. tokens required - tokens sold = net purchased/sold tokens).
Once assumptions are made, what do we observe?
In an undistorted environment, there is a positive correlation between Quant Network’s QNT-related revenues and the market capitalisation they occupy (i.e. the Quant Network share of the token distribution multiplied by the QNT price). However, this correlation can get heavily twisted as the speculative market prices a premium to the QNT price (i.e. anticipating higher revenues). As we will see, a persistent discount is not really possible as Quant Treasury would mechanically have to step in with large market purchases, which would provide strong support to the QNT price.
In addition, volatility is to be added to the equation since QNT volatility is likely to be (much) higher than that of revenues which can create important year-on-year disparities. For instance, Quant Treasury may lock a lot of tokens at a low price one year, and be well in excess of required tokens the next year if the QNT token price has significantly increased (and vice versa). This is not an issue per se, but this would impact the amount of tokens bought/sold on an ongoing basis by Quant Treasury as reserves inflate/deflate.
If we put aside the distortions created by speculation on the QNT price, and the subsequent impact on the excess/deficiency of Quant Network token reserves (whose level is also pro-actively managed by the company, as previously discussed), the economic system works as follows:
High QNT price vs. Revenue levels: The value of reserves is inflated, fewer tokens need to be bought for the level of revenues generated, Quant Treasury provides low support to the QNT price, its share of the token distribution diminishes.
Low QNT price vs. Revenue levels: Reserves run out, a higher number of tokens needs to be bought for the level of revenues generated, Quant Treasury provides higher support to the QNT price, its share of the token distribution increases.
Summary table:
https://preview.redd.it/q7wgzpv384y31.png?width=2312&format=png&auto=webp&s=d8c0480cb34caf2e59615ec21ea220d81d79b153
The key here is that, whatever speculation on future revenue levels does to the token in the first place, if the QNT price was falling and reaching a level that does not reflect the prevailing revenue levels of Overledger at a given time, then Quant Treasury would require a larger amount of tokens to cover the business needs which would mean the depletion of their reserves, larger purchases from the market and strong support for the QNT price from here. This is the safety net we want to see, coming from usage! Indeed, in other words, if the QNT price went very high very quickly, Quant Treasury may not be seen buying much tokens since their reserves would be inflated BUT that fall back mechanics purely based on usage would be there to safeguard QNT holders from the QNT price falling below a certain level.
I would assume this makes sense for most, and you might now wonder why have I highlighted the bottom part about the token distribution in red? That is because there is an ongoing battle between the QNT community and Quant Treasury — and this is very interesting.
The ecosystem will show how big a share is the community willing to let Quant Network represent. The community actually sets the price for the purchases, and the token distribution fluctuates depending on the metrics we discussed. An equilibrium will be formed based on the confidence the market has in Quant Network’s future revenue generation. Moreover, the QNT community could perceive the token as a Store of Value and be happy to hold 80/90% of all tokens for instance, or it could perceive QNT as more dynamic or risky and be happy to only represent 60/70% of the distribution. Needless to say that, considering my previous articles on the potential of Overledger, I think we will tend more towards the former scenario. Indeed, if you wished to store wealth with a technology-agnostic, future proof, globally adopted, revenue-providing (through Gateways) Network of Networks on which most of the digitalised value is flowing through — wouldn’t you see QNT as an appealing value proposition?
In a nutshell, it all comes down to the Overledger revenue levels and the QNT holders’ resistence to buy pressure from Quant Treasury. Therefore, if you are confident in the Overledger revenue generation and wish to see the QNT token price go up, more than ever, do not sell your tokens!
What about the locked tokens? There will always be a certain amount of tokens that are entirely taken out of circulation, but Quant Network company will always keep additional unlocked tokens on top of that (those they receive and manage as buffer) and that means that locked tokens will always be a subset of what Quant Network possesses. I do not know whether fees will primarily be concentrated on the licencing side vs. the usage side, but if that were to be the case then it would be even better as a higher amount of tokens would be taken out of circulation for good.
Finally, as long as the company operates, the revenues will always represent a certain amount of money whereas this is not the case for profits which may not appear before years (e.g. during the first years, during an economic/business downturn, etc.). As an illustration, a company like Uber has seen vast increases in revenues since it launched but never made any profit! Therefore, the demand for the QNT token benefits from good resilience from that perspective.
Quant Network vs. QNT community — What proportion of the QNT distribution will each represent?

How much revenues can Overledger generate?

I suggest we start with the basis of what the Quant Network business is about: connecting networks together, building new-generation hyper-decentralised apps on top (called “mApps”), and creating network effects.
Network effects are best defined by Metcalfe’s law which states: “the effect of a telecommunications network is proportional to the square of the number of connected users of the system” (Source: Wikipedia). This is illustrated by the picture below, which demonstrates the increasing number of possible connections for each new user added to the network. This was also recently discussed in a YouTube podcast by QNT community members “Luke” and “Ghost of St. Miklos” which you can watch here.
Source: applicoinc.com
This means that, as Overledger continues to connect more and more DLTs of all types between themselves and also with legacy systems, the number of users (humans or machines) connected to this Network of Networks will grow substantially — and the number of possible connections between participants will in turn grow exponentially. This will increase the value of the network, and hence the level of fees associated with getting access to it. This forms the basis of expected, future revenue generation and especially in a context where Overledger remains unique as of today and embraced by many of the largest institutions in the world (see the detailed summary on the matter from community member “Seq” here).
On top of this network, multi-chain hyper-decentralised applications (‘mApps’) can be built — which are an upgrade to existing dApps that use only one chain at a time and hence only benefit from the user base and functionalities of the given chain. Overledger mApps can leverage on the users and abilities of all connected chains at the same time, horizontal scaling, the ability to write/move code in any language across chains as required, write smart contracts on blockchains that do not support them (e.g. Bitcoin), and provide easier connection to other systems. dApps have barely had any success so far, as discussed in my first article, but mApps could provide the market with the necessary tools to build applications that can complement or rival what can be found on the Apple or Google Play store.
Also, the flexibility of Overledger enables Quant Network to target a large number of industries and to connect them all together. A sample of use cases can be found in the following illustration:
https://preview.redd.it/th8edz5b84y31.png?width=2664&format=png&auto=webp&s=105dd4546f8f9ab2c66d1a5a8e9f669cef0e0614
It is to be noted that one of the use cases, namely the tokenisation of the entire world’s assets, represents a market worth hundreds of trillions of USD and that is not even including the huge amount of illiquid assets not currently traded on traditional Capital Markets which could benefit from the tokenisation process. More information on the topic can be found in my previous article fully focused on the potential of Overledger to capture value from the structural shift in the world’s assets and machine-related data/value transfers.
Finally, we can look at what well established companies with a similar technology profile have been able to achieve. Overledger is an Operating System for DLTs and legacy systems on top of which applications can be built. The comparison to Microsoft Windows and the suite of Microsoft Software running on top (e.g. Microsoft Office) is an obvious one from that perspective to gauge the longer term potential.
As you can see below, Microsoft’s flagship softwares such as Windows and Office each generate tens of billions of USD of revenues every year:
Source: Geekwire
We can also look at Oracle, the second largest Enterprise software company in the world:
Source: Statista
We can finally look at what the Apple store and the Google Play store generate, since the Quant Network “mApp store” for the community side of Overledger will look to replicate a similar business model with hyper-decentralised applications:
Source: Worldwide total revenue by app store, 2018 ($bn)
The above means total revenues of around USD 70bn in 2018 for the Apple store and Google Play store combined, and the market is getting bigger year-on-year! Also, again, these (indicative!) reference points for Overledger come in the context of the Community version of the system only, since the Enterprise version represents a separate set of verticals more comparable to the likes of Microsoft and Oracle which we just looked at.

Conclusion

I hope this article helped shed further light on the QNT token and how the various market and business parameters will influence its behavior over time, as the Quant Network business is expected to grow exponentially in the coming years.
In the recent Forbes interview, Quant Network’s CEO (Gilbert Verdian) stated : “Our potential to grow is uncapped as we change and transform industries by creating a secure layer between them at speed. Our vision is to build a mass version of what I call an internet of trust, where value can be securely transferred between global partners not relying on defunct internet security but rather that of blockchain.”.
This is highly encouraging with regards to business prospects and also in comparison to what other companies have been able to achieve since the Web as we know it today emerged (e.g. Microsoft, Google, Apple, etc.). The Internet is now entering a new phase, with DLT technology at its core, and Overledger is set to be at the forefront of this new paradigm which will surely offer a vast array of new opportunities across sectors.
I believe it is an exciting time for all of us to be part of the journey, as long as any financial commitment is made with a good sense of responsibility and understanding of what success comes down to. “Crypto” is still immature in many respects, and the emergence of a dedicated regulatory framework combined with the expected gradual, selective entrance of institutional money managers will hopefully help shed further light and protect retail token holders from the misunderstandings, misinformation and misconduct which too many have suffered from in the last years.
Thanks for your time and interest.
Appendix:
First article: “The reasons why Quant Network (QNT) will rise to the Top of the crypto sphere in the coming months”
Second article: “The potential of Quant Network’s technology to capture value from the structural shift in the World’s assets and machine-related data/value transfers”
October 2019 City AM interview of Gilbert Verdian (CEO): Click here
October 2019 Blockchain Brad interview of Gilbert Verdian (CEO): Click here
July 2019 Blockchain Brad interview of Gilbert Verdian (CEO): Click here
February 2019 Blockchain Brad interview of Gilbert Verdian (CEO): Click here
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About the original author of the article:
My name is David and I spent years in the Investment Banking industry in London. I hold QNT tokens and the above views are based on my own thoughts and research only. I am not affiliated with the Quant Network team in any way. This is not investment advice, please do your own research and understand what you are buying before doing so. It is also my belief that more than 90% of all other crypto projects will fail because what matters is what is getting adopted; please do not put more money at risk than you can afford to lose.
submitted by mr_sonic to CryptoCurrency [link] [comments]

The intrinsic value of a NEO share

The question of what the intrinsic value of a NEO share has come up in the Reddit on many occasions usually in the context of someone talking about GAS having more intrinsic value than NEO because GAS has to be literally spent for smart contracts to execute on the system -- with the whole larger debate revolving around what the GAS to NEO ratio will be in the future. The question of the intrinsic value of NEO is actually interesting to me because while I had been trading stocks for some time I had never thought about the fundamental basis of a stock share (just as I never thought about the fundamental basis of monetary systems before I started learning about Bitcoin). This post is as much for me to digest things as it is for you all.
 
What is the intrinsic value of a share?
 
A stock share is part ownership of an entity. The intrinsic monetary reason why someone would want to have part ownership of anything is to get a share of the profits that the entity makes. You might also want to have part ownership of something for non-financial reasons such as believing in the entity’s mission, etc but we’ll focus on the economic part.
 
For centralized entities: the entity takes in money from customers, pays its expenses and is left with profit. This profit is then distributed to shareholders in the form of dividends.
 
What about companies that don’t pay dividends? Basically what those companies are doing are saying to their investors “hey we can all make way more money in the long run if we take the profit money we made now and reinvest it back into the business.” The intrinsic value of the shares still comes from the profit in real cash that can be made from the share it’s just that this profit is being deferred (sometimes for decades / possibly indefinitely).
 
What is the intrinsic value of a NEO?
 
NEO has a primary purpose & secondary role
Primary Purpose: It provides you a share of the profits that NEO makes
Secondary Role: It provides you a proportion of all GAS currency printed which ends up being 1 GAS per NEO over the 22 years that it will take to mint all the GAS.
 
These two things are entirely independent. The reason why NEO holders get a proportion of all GAS currency is as a solution to the problem of “how do we initially distribute money in a decentralized system?” The solution to that question could have been theoretically different. For example NEO Core could have decided that GAS is distributed to all bookkeeping nodes, or through the act of submitting code, or through sharing news about NEO on your Facebook page.
 
The point here is that even if NEO never entitled you to freshly minted GAS it would still have intrinsic value. However these days because profits still haven’t begun and the GAS minting can be seen in our accounts everyone is fixated on NEO’s secondary role.
 
If the purpose of a NEO was only to mint a single GAS over a period of 22 years then it’d be a depreciating asset because when you trade the NEO you’re essentially selling it “used” with a portion of the 1 GAS it’s going to mint not included (that portion which you took when you were holding that NEO). And in 22 years that NEO would be entirely useless.
 
Luckily, NEO are shares so it works out differently. Note that there are many shares with amazing returns on the stock market and 0% of them have ever entitled you to newly printed fiat from central banks. The GAS minting is just an added bonus.
 
What will be the traded price of a NEO?
 
Suppose that in the year 2020, one billion dollars will be spent on service charges on the NEO platform. With 100 million NEO shares this means that each NEO share will have made 10 dollars in profit that specific year.
 
As a simplified example let’s assume that traders believe that NEO isn’t going to go up and down anymore but instead will remain completely static for the next 5 years and then die an abrupt death (and let’s ignore the GAS minting completely for this as well). Those traders will have to decide how much they are willing to pay for something that gives them 10 dollars a year consistently for 5 years. If you knew for a fact you could make a total of 50 bucks over those 5 years you could reasonably buy NEO for any number below 50 today and it’d be a profitable investment.
 
OK, but now let’s imagine a world where NEO doesn’t just make a static profit year over year. Let’s say that there were more and more smart contracts every single year and NEO just kept distributing more and more profits to NEO holders. Then as a trader you have to start betting on how much service fee money will be made in the future and how much more it is than the amount that is made now.
 
This brings us to Price to Earnings ratio (P/E). The E is the earnings per share that has already happened. In NEO’s case the earnings would be the amount we make off of service fees in a specific year. But someone buying a NEO share from you tomorrow can’t ever get that money. YOU got that money. They can only get whatever the earnings will be in the future and that’s what they are betting on. This betting leads to the Price (P).
 
Here are some price to earnings ratios (P/E) for some tech stocks:
 
Netflix (NFLX): 227.47 Facebook (FB): 37.47 Google (GOOG): 33.37 Microsoft (MSFT): 27.86
 
This means that for Netflix people are paying 227 times more for the stock as the entitled earnings for that share are today.
 
So as you can see it varies a lot and depends in large part on how much of its future potential the company investors think has already been scratched. For NEO we are currently not making any service fees yet so everything is speculative but even when we get going it’d be completely reasonable to see astronomical P/E ratios which wouldn’t indicate “overvalued” because the potential is barely scratched in the present and the value lies entirely in the future. On stock exchanges, companies only begin offering shares (IPO) once they are decently mature but in crypto we get to come in at the organization’s infancy so having unheard of P/E ratios will make perfect sense in the first few years of any crypto share.
 
If NEO becomes a mature 500 Billion market cap behemoth like Facebook (note that Bitcoin is only at 65 billion and the entire crypto market is at just 135.6 billion market cap today) then maybe we’d start settling into more reasonable 30x price to earnings ratios-- which by the way while normal for tech stocks are still really high for stocks in general.
 
To say the least I wouldn’t bet on any specific ratio between the value of NEO and GAS as GAS has the economics of a currency (How much usefulness can I get out of this for goods now?) vs the economics of a share (How much money can be made from this year over year?) which while having some overlap (How scarce will this asset be?) are just completely different things. That’s not even introducing that each NEO comes with a built in portion of a GAS and now my head hurts.
 
And likewise it's not insane to believe that a NEO can have a way higher share price than a Bitcoin has monetary value without NEO being more "mainstream" than a Bitcoin since shares by definition are more future focused than currencies. Not saying it will happen but crypto economics wouldn't collapse if it did and it wouldn't indicate that GAS would now become the number one cryptocurrency.
 
Hope you enjoyed.
submitted by max3pin to NEO [link] [comments]

What's more profitable? Mining gear vs inital BTC investment. A multivariable optimization problem

I originally posted this in /gpumining but I figured people here might get something out of it too since it relates very much to NiceHash
I'm sharing my own calculations here. I'm not asking anyone to answer the question for me, unless they feel like doing so. Scroll down for results/plots if tl;dr
I'm currently in a spot where I have a halfway decent desktop PC and I want to start mining cryptos, both in order to make extra money and for the fun of it. Although I think I would enjoy mining cryptocurrencies and the challenges associated with it, I also need to ask myself whether it is worth to invest the money in the extra gear, or am I better off just investing that money into bitcoin instead? Especially considering that mining is not as profitable as it used to be. I intend to get a feel for the problem by doing some calculations on my own instead of relying on the typical online ROI investment calculator as they don't really take the appreciating value of BTC into account. I'm specifically looking at these variables
1) Profits/day/GPU
2) How many GPU's to buy to maximize profits (this is not necessarily obvious as you'll see)
whereas the electricity and gear costs are assumed to be constant.
The specifics of my particular scenario are (that I think is pretty common for people with a gaming PC and haven't started hardcore mining yet):
Compared to investing those expenses straight in to bitcoin, are the two additional GPU's to my existing rig worth it? Is it worth investing in an additional dedicated mining rig and add as many GPU's as I see fit as well? For what ranges of profitability per GPU per day does it make sense to invest in additional mining gear?
For these calculations I make the following (somewhat arbitrary but hopefully reasonable) assumptions:
Results
3D plot
Since the profits depend on both the number of GPU's and the profit/day figures I decided to plot it as a 3D-surface: Results, 3D plot
The plot on the left is the profit made from investing in mining gear instead of an equivalent investment in bitcoin. The plot on the right is the total profit when only considering fiat money that doesn't change in value, which is what you'd typically consider.
2D plot
Results, 2D plot
This is the same results as the left plot in the above 3D plot but compressed into to the perhaps more familiar 2D graph environment.
What to make of this?
First of all it is trivial to conclude that I will make a return of my investment in fiat, no matter the configuration or the profit/day range. Even a pretty conservative $0.8/day pays off pretty decently. However this doesn't say anything about whether it's better than an initial bitcoin investment.
When considering the appreciating value of bitcoin, it gets a little more interesting. I can safely say that at the $/day profits that we get for a 1060 these days (around $0.9-$1.3) it would be a bad investment to buy an additional rig. However, if the profits were to go up to the +$2 range again I'd could start making bank by getting as many mining rigs as I possibly can. At +$1.4/day I might consider getting an additional two GPU's for my existing PC as can be seen in the 2D plot.
Looking at the above plots, at these currently low profit rates that we see today I'm better off letting my current 1060 mine away and invest the rest of the money in bitcoin.
Hopefully some of you might find this useful or enjoyable lol
submitted by skankysmurf to NiceHash [link] [comments]

What's more profitable? Mining gear vs inital BTC investment. A multivariable optimization problem

I'm sharing my own calculations here. I'm not asking anyone to answer the question for me, unless they feel like doing so. Scroll down for results/plots if tl;dr
I'm currently in a spot where I have a halfway decent desktop PC and I want to start mining cryptos, both in order to make extra money and for the fun of it. Although I think I would enjoy mining cryptocurrencies and the challenges associated with it, I also need to ask myself whether it is worth to invest the money in the extra gear, or am I better off just investing that money into bitcoin instead? Especially considering that mining is not as profitable as it used to be. I intend to get a feel for the problem by doing some calculations on my own instead of relying on the typical online ROI investment calculator as they don't really take the appreciating value of BTC into account. I'm specifically looking at these variables
1) Profits/day/GPU
2) How many GPU's to buy to maximize profits (this is not necessarily obvious as you'll see)
whereas the electricity and gear costs are assumed to be constant.
The specifics of my particular scenario are (that I think is pretty common for people with a gaming PC and haven't started hardcore mining yet):
Compared to investing those expenses straight in to bitcoin, are the two additional GPU's to my existing rig worth it? Is it worth investing in an additional dedicated mining rig and add as many GPU's as I see fit as well? For what ranges of profitability per GPU per day does it make sense to invest in additional mining gear?
For these calculations I make the following (somewhat arbitrary but hopefully reasonable) assumptions:
Results
3D plot
Since the profits depend on both the number of GPU's and the profit/day figures I decided to plot it as a 3D-surface: Results, 3D plot
The plot on the left is the profit made from investing in mining gear instead of an equivalent investment in bitcoin. The plot on the right is the total profit when only considering fiat money that doesn't change in value, which is what you'd typically consider.
2D plot
Results, 2D plot
This is the same results as the left plot in the above 3D plot but compressed into to the perhaps more familiar 2D graph environment.
What to make of this?
First of all it is trivial to conclude that I will make a return of my investment in fiat, no matter the configuration or the profit/day range. Even a pretty conservative $0.8/day pays off pretty decently. However this doesn't say anything about whether it's better than an initial bitcoin investment.
When considering the appreciating value of bitcoin, it gets a little more interesting. I can safely say that at the $/day profits that we get for a 1060 these days (around $0.9-$1.3) it would be a bad investment to buy an additional rig. However, if the profits were to go up to the +$2 range again I'd could start making bank by getting as many mining rigs as I possibly can. At +$1.4/day I might consider getting an additional two GPU's for my existing PC as can be seen in the 2D plot.
Looking at the above plots, at these currently low profit rates that we see today I'm better off letting my current 1060 mine away and invest the rest of the money in bitcoin.
Hopefully some of you might find this useful or enjoyable lol
submitted by skankysmurf to gpumining [link] [comments]

I've put together a post that has, what I think, is all the possible (english) information on SmartContainers' ICO out there

Okay, so this is going to be really long in terms of posts here. I actually have to cut out some info to make it under 40000 characters for reddit...
Typically in the market there are Currency and Utility coins. Profit-Share Tokens are relatively new, and while this ICO has 2 tokens, the profit share token is definitely the main attraction, as it's tied to a very, very promising company. This company is SmartContainers Group, and their tokens are SMARC (profit-share token) and LOGI (more on LOGI later).
“Smart Containers Group, formerly REP AG (Swiss registry of commerce, UID: CHE- 141.664.882), is a Swiss based, high tech company that provides the safest temperature controlled containers to transport sensitive pharma goods and food around the world. Our purpose is to secure sensitive goods and to make sure no compromised product is ever delivered to anyone.” - whitepaper

Product

SmartContainers Group is a holding company for SkyCell.
SkyCell is the company Smart Containers Group uses to rent/sell their containers to clients around the world.
Our containers transport some of the most expensive and temperature-sensitive goods in the pharmaceutical industry. These goods need a particularly careful and accurate protection. Through our highly secure and efficient container design, we assure the best possible protection against temperature excursions. In combination with a cutting-edge technology, it enables us to provide containers with easy handling, maximum loading capacity and highest performance on the market.
More than 50 man-years of research and development poured into the creation of an unprecedented, highly efficient insulation. This cutting-edge technology reflects a maximum of radiation while minimizing heat conducting. It is the most patent protected insulation technology on the market.
The ingenious SkyCell R&D team invented a completely new, cooling technology, that stores five times more energy than traditional methods to keep the container at a steady temperature. Consequently, SkyCell containers are automatically recharged in a cooling chamber without any manual interference. Nothing can be mixed up since all parts are integrated and fixed.
The ingenious SkyCell R&D team invented a completely new, cooling technology, that stores five times more energy than traditional methods to keep the container at a steady temperature.
 
“oh, our product needs better cooling? Okay, let’s just invent a better cooling technology, no biggie”. Who heads that team, Rick Sanchez?
I asked about this tech during their AMA, here's what they said:
Cooling technology: Yes, our containers are state of the art. Nico has developed a cooling material that freezes at 5.5°C. So if you put it in a cooling chamber that has a lower temperature, it automatically freezes and if the temperature is higher it melts. Basically, the system works like a huge ice cube that is empty in the middle. The centre of the ice cube has a steady temperature of 0° until at least 1 side of the ice cube has melted. It's the same principle for SkyCell containers, but at 5.5°C
 
The patented-in house developed cooling technology stores five times more energy than traditional methods to keep the container at a consistent temperature. After use, they are ‘recharged’ in a cooling chamber without any need for manual intervention, increasing productivity of the business and reducing cost.
I’ve forgotten to mention something so far about their product [the containers]. They’re literally (not figuratively, literally) the most advanced container ON EARTH.
 
From their ICO FAQ: Where do you position yourself compared to Envirotainer? Envirotainer is the number one container company with the largest container fleet today. We are currently fourth globally, but we reached this position in less than 5 years operating in this space. SkyCell containers have been tested and shown to be technologically superior to Envirotainer containers (5x more runtime, up to 35% lighter) which translates into safer pharma distribution and cost savings as well as a reduced CO2 footprint.
 
We are currently fourth globally, but we reached this position in less than 5 years operating in this space.
 
Another thing that’s pretty impressive, 4th largest company in their entire field… after just 5 years… but back to the main point of that statement: “SkyCell containers have been tested and shown to be technologically superior to Envirotainer containers (5x more runtime, up to 35% lighter) which translates into safer pharma distribution and cost savings as well as a reduced CO2 footprint.”.
 
Watching a video from a blockchain conference in Switzerland, I got a fair bit of info from the CEO, Richard. I’ll be quoting him in that video a few times in this post, and here’s the first: “In my industry, we talk about how many shipments go wrong - and the average is 8.5%. So for 8.5% of pharma shipments for example, the [proper] temperature is not maintained. In our case [with Smart Containers], it’s less than 0.1%. That’s 75 times better. Richard also speaks in this video about how they will be able to eliminate the amount of shipments happening every year, due to the decentralized nature of this whole system, there will be less need to send packages to places far from their end destination, to make the delivery easier on the shipping side. We’ve all had packages come from across the ocean, only for it to fly 1500 Km past us to be shipped back our way next week…
 

LogiChain

”There are 200 documents are required, or exchanged, to make one shipment happen… we estimate we can bring this down to 8” Richard Ettl, CEO
Logistics is an old industry. it started out on paper, moved through the fax, early ages of the information era, early email, current email, and is now ready to move onto the blockchain.
LOGI CHAIN GOALS
 
“By using blockchain technology, we can decentralize logistics and create autonomous containers – container 4.0. This container will know who’s renting it, when the contract ends and when to invoice the customer. That’s why we’ve created the LOGI CHAIN platform. It allows us to create a seamless, fully integrated, digital logistics process that everyone can use for free.” - Richard Ettl, CEO
“Well-established processes often generate inefficiencies that we simply accept. And of course everyone knows change is painful. But at Smart Containers, we see things differently. Change is the only way to improve. We think that every process should not only be optimized but redefined and redesigned. Logistics today is highly centralized. It’s incredibly inefficient. So many wasted kilometers to huge warehouses.” Nico Ros, CTO
 
There will be more than one blockchain at play with this system as well. The info that people deserve to know will be available on a public blockchain like Ethereum, the weight, material safety data sheets, the storage conditions (which as said up above, 8.5% of pharma shipments have issues with, and Smart Containers brings that down to below 0.1%), as well as at the same time, the info that shouldn’t be public to everyone (Bills, invoices, etc) would be stored on a blockchain like Fabric or HyperLedger. LOGI will be the fuel for the LOGI Chain.
CMO Carla elaborating on LogiChain:
The LOGI project finds good echoes with logistics players but even more with blockchain infrastructures like NEM, EOS and NEO.
Emirates for once was enthusiastic about the project and definitely wants to join the foundation. As you know, the government of Dubai is focussing on applying blockchain asap to multiple industries.
We are also in exchange with ShipChain, who are running a similar project in the US. Our goal is to collaborate with a maximum of projects around the world.
The LOGI Chain Foundation will be set up in July, right at the end of the ICO. Dr. Fabian Schär, our valued Advisor, will be in charge of defining how the LOGI Chain Foundation will develop in the next 2-3 years. We think that we will be able to put out a PoC based on SkyCell until the end of the year.
We have not yet decided on which blockchain platform to build the LOGI CHAIN. We are highly delighted with NEM since they are already operative and offer a private and public blockchain on the same protocol.
 
One Chain to Connect them all - LOGI CHAIN
One platform to get all players up to speed, to handle all documents and permissions in one place. No more floods of emails. No more polluting the environment with senseless printing of documents. No more compatibility problems and clashes of individualized systems.
To show you how vast the amount of documents (and by this emails circulated) find a list of common documents needed for one air freight shipment below:
Documents of origin, Material safety sheet, Airway bill, Bill of lading, Transport order, Customs declaration documents & bills, Invoices, Product data sheet, Storage conditions, Transport conditions, Multiple service provider billings, Licenses, etc.
This adds up to the gigantic number of about 200 manually processed emails per shipment.
A combination of public and permission based chains will allow for all players in the ecosystem to store documents needed in the logistics processes. We are looking at multiple platforms to build the LOGI CHAIN on top including NEM, Fabric, Corda, EOS and NEO.
 

Team

I’ll be using bits and pieces taken from their white paper and LinkedIn pages.
The Smart Containers team includes over 80 people, and is growing every year.
Richard Ettl - Co-Founder, CEO - LinkedIn
Richard wanted to know how things worked since he was a child. He has a passion for engineering and management. Growing up in Vienna, Austria and studying in Stanford USA and the University of Fribourg, Switzerland, he started his career at Bobst Group, a leading producer of packaging machines worldwide. In 2009, he decided to launch his own business together with his university friend Nico. After wide reaching scientific research and various proof of concepts, they founded today’s Smart Containers Group as well as SkyCell in 2012. Since then he has lead the companies to commercial success, seamlessly finding the right partners and investors at crucial points, as well as convincing more and more clients of the unrivaled benefits of the SkyCell offer
 
Nico Ros - Co-Founder, CTO - LinkedIn
Nico Ros, Chief Technology Officer & Co-Founder Nico is the mastermind behind Smart Containers Group and its technology. Growing up in Basel, Switzerland, he discovered his passion for mathematics very early on and therefore came to study mathematics, physics and engineering. Being a natural talent, he had already won prestigious architectural prizes during his studies and quickly became managing partner at ZPF an engineering company in Basel. He has constructed the most expensive buildings in Switzerland in collaboration with the famous architects Herzog & DeMeuron. Nico’s key strength lies not only in his state of the art engineering know how but also in his efficient management of teams, leading highly complex, multimillion projects to success. However, engineering alone did not suffice Nico. Having a passion for business and management, he decided to complete additional studies at the University of Fribourg, meeting Richard along the way. Everyone who meets Nico rapidly becomes aware of his sharp mind and his passion to invent new technologies. It is therefore not surprising, that both him and Richard ended up together where they are today.
 
Andreas Ernst - CFO - LinkedIn
Andreas is the true logistic finance expert in the company. He spent all his career in various finance roles of logistic service providers: from Swissair (today Swiss International Airlines), to Swissport (biggest ground service provider for airlines) where he filled the role as regional CFO for the Middle East and Africa. His last role before joining Smart Containers Group was CFO of Unitpool (now called Unilode), which is the largest independent air-freight container pooling company in the world.
 
Thomas Taroni - Head of IT - LinkedIn
Thomas is an IT-architecture mastermind. His first claim to fame is the creation of the largest media database, shared by all media houses in Switzerland: more than two million articles are uploaded every year, then queried and shared seamlessly and efficiently among multiple news companies. He founded his own IT company to design IT architectures focusing on process automation (eliminating paper and endless emails), and as a result won other clients (large banks, pharma companies and even publicly tendered government contracts). SkyCell became his client, when they needed a bespoke asset management system to track and trace their containers around the world. He joined SkyCell four years ago and since his tenure, has become the head of IT for all companies of Smart Containers Group.
 
Carla Bünger - CMO & Business Development Manager - LinkedIn
Carla is a marketing and sales expert. Building strong brands on solid foundations and convincing clients to buy its underlying products gives her huge satisfaction. She collected her experience through managing various international consumer brands, for companies such as Nestlé, Lindt and Coty. However, she discovered her passion for Blockchain technology roughly 18 months ago and has since been actively participating in the com - munity of Crypto Valley in Switzerland. The sheer endless application possibilities make her strive for more and she is drawing energy and enthusiasm from developing new business schemes around the subject. Her “can do” attitude helped to put together the high level advisory team around our ICO.
 

Advisors

Strategic advisor: Oliver Bussmann, is CEO and Founder of Bussmann Advisory, former CIO of UBS and SAP as well as the President of the Crypto Valley Association. “our main advisor” - Richard
Strategic advisor: Marc Bettinger, Altcoin and Blockchain specialist and investor, Co-Host Altcoin Meetup Switzerland (Bitcoin Association Switzerland)
Strategic Advisor: Fabian Schär is Managing Director of the Center for Innovative Finance at the University of Basel. His research focus is on the potential and applications of blockchain. In addition, he works as a lecturer in blockchain technology at the University of Basel, the University of Applied Sciences in Business Administration Zurich (HWZ) and the University of Applied Sciences Northwestern Switzerland (FHNW).
 
Technology Partner: Lykke Corp. our highly trustworthy expert in smart contract programming and ICO execution. (Lykke also audited their ICO smartcontract)
Legal Advisor: Gabriela Hauser-Spuehler was part of the team of MME, the well-known law firm in the crypto space.
Communication Advisor: David Wachsman and Emma Walker from Wachsman PR, the crypto community’s most experienced PR agency.
Richard also states they hired a lawyer that worked on the Ethereum ICO, but I don’t know if it’s Gabriela up there or another person.

Tokens

Min. investment = $500 USD for ICO, $5000 for presale (largest portion of supply), $250k for private sale.
There are two tokens as mentioned before: SMARC and LOGI. I’m more into SMARC because it’s safe (safe once the payouts start of course, as soon as a coin has a clear value like this, BTC moving up or down doesn’t matter to you), as well as obviously very attractive if you think of the long term profits.
 
Every year, the company’s annual shareholder meeting takes place, during which the shareholders will agree (or negotiate) on a proposal by the Smart Containers’ board about how much of the company profits is to be paid to the shareholders that year. 20% of that amount is taken, converted to ETH, and fairly distributed to the token holders.
Since the cofounders and all token holders will have aligned interests and incentives, we are all in a positive-sum-game. We do not want to use the ICO as a speculative springboard, but as way of funding innovation and change the world. Both Richard and Nico are committed for the long-term and not interested in a quick exit. Our aim is to use the collected funds to continue pushing the following business areas:
• Continue scaling of SkyCell in both B2B and B2C
• Establish FoodGuardians - the main goal if the ICO is to build and scale FoodGuardians
• Establish the of LOGI CHAIN Foundation
• Regularly evaluate organic scaling vs. M&A
• Evaluate IPO at relevant time
We are raising funds through an ICO to grow our container businesses in pharma and food. We push SkyCell from no. 4 to the no. 1 provider in the next 2-3 years.
 
The CEO in this video explains pretty easily why one would want to put money into this ICO over others:
“Why invest? [referring to SMARC] Simple question. It’s an up and coming company with revenue, multiple millions a year, most ICO’s have white papers…[we have much more than that].”
That's pretty clear. You can invest in random Xcoin ICO where they have some half-baked token that might see some level of adoption if it isn't just a cash grab, or you could invest in an actual multimillion-dollar company and be a part of it as it scales into what could potentially be a multibillion dollar entity.
 

The following is taken from the ICO, Legal, and Company FAQ

How will the profit share payouts work? 20% of dividends will be paid in ETH to all holders of SMARC tokens that are in circulation at the time of the payout. A given business year ends on 31st December each year with a general assembly held annually around mid-February. Therefore, dividend payout is expected around mid-March each year. In the event of a total sale of Smart Containers or the exit of one of its lines of business, the holders of SMARC tokens will receive a 20% participation of proceeds
 
Is there a future profit statement? No listed company can make an estimation or a commitment to a future return. To do so would neither be professional nor ethical. For Smart Containers, as with any company, profits may often depend upon a number of external factors, such as the general trust in blockchain technology. The question to be assessed is how fast a new disruptive technology can replace an old system. We believe that Smart Containers Group is well-positioned to facilitate this disruption, with a strong plan going forward and experienced team working to successfully implement blockchain technology in the supply chain. 5 years of industry experience, the 4th largest container fleet and a motivated team; that’s more than any idea whitepaper ICO.
 
What specific rights come with my investment? The SMARC token is a profit share token. When the company generates profits and the company’s general assembly approves a dividend payout, 20% of the defined funds attributed to dividends will be distributed proportionally to holders of SMARC tokens in circulation. In contrast, the LOGI token is a utility token that can be used to pay for transactions on the LOGI CHAIN, an open-source logistics platform for all stakeholders in the logistics field with the goal to create a seamless, fully integrated, digital logistics process.
 
Smart Containers will pay out a dividend to SMARC token holders. This would imply that the SMARC token is a security token. Are you compliant with financial regulation? Smart Containers tokens is not classified as a security in Switzerland under current law. This may be different in other jurisdictions such as the USA. Hence the SMARC token is not eligible for sale in certain jurisdictions. Our benchmark is the Modum token sale from June 2017. We have elected to use the same legal structure as it was accepted by regulators in Switzerland and well received by the ICO community and exchanges.
 
What is the vesting schedule for team and advisors tokens? Everyone will receive SMARC and LOGI tokens at the same time. Minting will occur at the end of the token sale. Advisors will have lock up periods depending on how many tokens they receive. Team members have a lock up period of 12 months.
 
Are SkyCell containers an approved ULD according to IATA regulations? SkyCell containers are exempt from the ULD rules by IATA. This has the huge advantage that, compared to our competitors, the SkyCell container can not only fly but can also leave the airport. Skycell containers are therefore a door-to-door solution. Our competitors’ containers, on the other hand, have to be unloaded at the airport and packed into a new transport unit in order to continue their journey from the airport to the final destination, increasing the risk of temperature excursion, and loss.
 
Are there financial statements? If so, are they audited, and by whom? Yes, there are financial statements for all our companies. They are audited by PricewaterhouseCoopers (PwC). To preserve our competitive advantage in the market, we have decided not to publish our financial figures online at this moment in time.
 
Are Modum and Smart Containers competitors? Modum and Smart Containers are not competitors, more future partners. Modum rents/sells sensors to track and trace shipments on temperature, whereas Smart Containers rents/sells the containers, in which products including sensors are put inside. Of course our containers have sensors that record data for quality control, but Smart Containers does not sell these data sets. In the end Modum and Smart Containers will address to the same clients - Smart Containers provides the container and Modum will put a sensor in it.
 
How many airlines fly SkyCell containers? In addition to our major partners, Emirates and CargoLux, more than 30 airlines fly SkyCell containers.
 
What destinations does SkyCell serve? SkyCell is a global company. We are shipping containers around the world and reach each pharma client within 24-48 hours. This is accomplished through our airline partners, that can fly ready-to-use containers to more than 150 airports.
 

Profit Sharing Mechanism

During the annual shareholder meeting, the shareholders in the form of the general assembly (Annual General Assembly) decide on a proposal by Smart Containers’ board regarding the usage of profit as recognized in the annual financial statements of Smart Containers in the form of distribution of dividends. Distribution of a dividend on shares shall be announced in the “Tokenholder Information” section of the Smart Containers website; such announcement shall include the date and time of the dividend payment and the dividend amount per ordinary share in USD as well as the ETH/USD exchange rate which shall become applicable, as derived from publicly available and reliable quotes. Within 20 business days of the date of the resolution passed by the Annual General Assembly regarding dividend payments to the shareholders of Smart Containers, Smart Containers will make available a Profit Share Amount to each authenticated Tokenholder equal to 20% (twenty percent) of all dividends agreed to being distributed per share to the shareholders, divided by the total number of issued SMARC Tokens (To further explain for clarity, all Tokenholders combined will receive an amount equal to 20% of the amount received by all shareholders combined.). SMARC Tokenholders shall receive these payments in ETH, at an average exchange rate specified by Smart Containers.
 

FoodGuardians

“Imagine your tomatoes tasting 1 day ‘fresher”.
One of the main reasons for the SMARC/LOGI ICO is to raise the funds to fuel the growth of FoodGuardians alongside SkyCell.
According to their CEO, SkyCell is constantly asked “can your containers be used for food?”, but there are several issues with shipping food and medicine together. This is where FoodGuardians comes in.
FoodGuardians offers the next generation of reusable containers and boxes to transport regionally and globally temperature sensitive food products.The combination of patented cooling technology, cutting edge insulation and Blockchain infrastructure allows to redefine the product’s freshness and traceability.
Our vision is to allow your local butcher to order your favorite steak directly from the producing farm and sending it straight to your grill party. (All without the buyer even leaving his home, let alone going to store)
 
Advantages of using FoodGuardians
 
Each FoodGuardians container can be tracked around the world on:
 
The phrase “Imagine your tomatoes tasting 1 day ‘fresher” has been used by the CEO a couple times, and is more or less the FoodGuardian slogan. This is referring to the fact that not only can FoodGuardian and SkyCell containers save cost, CO2, and man/brainpower, but they can also make shipments faster when combined with the blockchain (LOGI Chain) and Smart Contracts. when everything is accounted for at every second with almost as little room for human error as possible, things are far more efficient.
We are launching our first food application – we will announce a collaboration before June for a solution that can be used to ship overnight online fresh food to people homes and can be used to supply hospitals and restaurants as well.
FoodGuardians and SkyCell are two of the many possible use-cases for SmartContainers' tech:
"Other use cases. Yes indeed. We are just getting started!! However, it makes sense to focus on scaling SkyCell and FoodGuardians before starting something new. In the end we are a tech company. We have defined 7 use cases around the insulation technology. We have started with the most relevant 2 but will certainly continue."
 

SkyCellONE

SkyCell is looking to bring a business-to-consumer solution to market, that was developed and tested with one of the top 20 pharma companies in the world. The direct to patient market is estimated to increase to a 2.5 billion USD market in the future, with no other competition yet aside from styrofoam containers that are disposed of after one use. The SkyCell ONE can also be co-branded by a partner, such as a pharmacy chain that could rent it out for home delivery, business trips or even holidays.
The product is temperature stable for up to 72 hours, can be recharged passively in a fridge, or temp-controlled warehouse or truck. Currently it’s best in class for size and weight, but that’s probably down to there being no competition! Trials have been undergoing since June 2017 with an orphan drug product, and go live is expected in Q2 2018. - Cryptowithoutborders article
The SkyCell ONE container is showcased HERE
THIS could be a massive money maker. There is currently no direct pharma-2-consumer shipping service, because it really wasn’t profitable, or manageable on a central database. They can even sell this product to other supply chain entities to use. The direct to patient market is estimated to increase to a 2.5 billion USD market in the future, with no other competition yet, aside from styrofoam containers that get disposed of after a single
Q&A: Smart Containers’ Richard Ettl on Blockchain, Pharma, and how His Company’s Hardware and Software is Disrupting the Logistics Industry - Nexchange.com
We are launching also additional sizes – so we are launching a very small box to ship pharma directly to patients' homes. Amazon just recently announced that they will postpone entering the pharma distribution space, as they do not have the technology to ship to patients homes in a temperature controlled manner. We are bringing this to market later this year. This will increase the convenience of patients and reduce the costs in the healthcare system.
 

Organs

I just finished listening to this podcast (20 minutes long, but you can skip the intro stuff to make it shorter of course). I’m now twice as excited as I was before. I’m going to type out a large chunk of the podcast. I’ll be paraphrasing slightly, so I don’t have to type every “uhh” or anything, plus he sometimes starts one sentence before finishing another.
“We have some prototypes, that we built, for example, for the Children’s Hospital here in Zurich, where we’ve designed a container that can transport living skin.” [Interviewer; “Wow.”] “So for young children that suffer skin diseases that could be almost fatal, like cancer, they grow this… patch of skin, and then that skin needs to be transported, and kept at body temperature so… roughly 37 degrees Celsius. There we designed them a box that did this for 10 days, autonomously.” [“That’s amazing…”] “Yeah, we did this because we wanted to learn how to interact and work with hospitals, this is a highly specialized application, and the next step could be organ logistics, because most of the organs today are transported on ice, because that’s the standard set in the 70’s, but studies have shown that if your transport certain tissue at room temperature, it is significantly better for the tissue than if you transport it on ice.”
I can guarantee you every major hospital on earth is going to want their hands on this container that can allow them to transport both living skin, and potentially organs in the future. The fact that in this day and age we’re still throwing people’s kidneys/lungs/etc in a bucket of ice is a little weird.
From the recent AMA:
Our Container BT5: The name stands for Body Temperature 5 L content. It transports skin grafts that was cultured for children with burn accidends. The temperature range is 37°c. Nico (our CTO) was so taken by this project, that he developped this container only for this purpose for a company calles Cutiss (a start-up from Zurich). We currently only have around 10 of these containers in use. It is not produced in on a large scale. We could market it, but have bigger opportunities to tackle first with the SkyCell one. You can only focus on 1-2 projects at a time. The BT5 is a beautiful project, but will need manpower to scale production and then manpower to market it.
 

Competition

Envirotainer, The leading company in this field, has only a matter of time before they’re overtaken. SmartContainer Group’s containers are proven to be superior (5x as efficient, 35% lighter, self-charging, etc, etc, read up above for the whole deal). According to the Googles, Envirotainer’s best year (2015) saw a profit of $50,000,000. It’s logical to assume that Smartcontainers will surpass them as the top dog, and at the same time be pulling in much more profit over time by serving both pharma, and the food industry (Envirotainer only does pharma). By accepting cryptocurrency payments, saving them a fair bit in fees from cross border payments, they’ll also net a small % more in profits annually.
I asked about the state of their competition. Turns out, Envirotainer (or more specifically the private equity firm that owns them) offered SmartContainers a buy out of $125m. This was one of countless offers they've turned down, because they believe they can scale the company to much further value. The firm selling Envirotainer has been trying to find a buying for the past 3 years, at $1b. No one will buy them, because anyone who knows their shit in that industry knows SmartContainers will overtake them in no time.
From April's AMA:
Our 2 biggest competitors are for sale. Envirotainer (biggest player) is owned by a Private Equity company that wants to sell it for 1 b USD. it already tries to sell for 3 years. SkyCell is considered a threat to the valuation of Envirotainer, since we are winning one client after the other from them. While Envirotainer is the largest player with a huge sales force and well established client contacts, they are still operating on an "old" technology. SkyCell is technology leader, has lighter containers, reduces CO2 emissions and is considered to be the future.
2 days ago, a private equity company requested a meeting to see the valuation of SkyCell and evaluate to buy. We have already been approached several times. We are treated as the bride in the market. However, Richard and Nico think we can scale the business much more before we should consider to sell. We are just getting started.
We have won 3 large accounts in Q1. Today we have 1200 containers. By the end of the year, it will be 2000. Our business plan estimates that SkyCell will be profitable in 2019. Therefore you can expect first dividends in Q1 2020.
 

Official Projections

Another redditor asked for "optimistic expectations for potential profits" during their ama, here was their answer:
How does a profit of 21 m USD on Smart Containers total in 2020 sound? This figure will then quadruple in 2021 to 76 m USD.
As you can see, this would mean that by 2021 tokenholders would not even have broken even yet. I myself am fine with this, i'm expecting to hold SMARC until the end (be it I die or the company sells, in which case i'll enjoy that fat exit payout). The potential gains from 2020-2030 are far more worth it to me than trying to make it in one year with heavy risk.
So why invest in this over a random shitcoin that might moon? If you're here to turn $1000 into $1m and get out by the end of the year, good luck, don't invest in smarc. If you're realistic and are aware that crypto will only be so volatile for so long, go ahead and think about putting a bit of your portfolio in something that will have actual value, lasting long after the shitcoins die. Crypto market could crash at any time, but that doesn't mean that SmartContainers as a company goes anywhere, nor their profits. I don't think I need to explain any further.

So…

A 5 year old company, with over 100,000 collective hours of R&D put into their products, with currently just under 100 innovative patents, that is already the 4th largest of it’s kind in the world, with the top product in their field on earth, is doing an ICO that is fully backed by the Swiss government, with a token that is due 20% of all future shareholder payouts, as well as 20% of any potential exit profits (the company being purchased). They’re already this big, and you can benefit from both their success, and their expansion into new markets.
There’s nothing stopping SmartContainers Group/SkyCell/FoodGuardians from working with VeChain in the future either. Or Walton, or Wabi, Devery, OriginTrail, Ambrosus, all of em.
 

Links4U:

SmartContainers
https://smartcontainers.ch/
https://foodguardians.ch
https://skycell.ch/
Whitepaper
FAQ
Terms of Token Sale
CryptoWithBorders Article
Medium post reviewing SmartContainers
Interview with Richard Ettl, Co-Founder & CEO of Smart Containers on SMARC Token Sale | TechBullion
Interview with Richard Ettl - CryptoRich - Richard talks about some of their patents in this video, I think about 20 minutes in. Whole thing was worth watching imo
Podcast on how Blockchain + Smart Contracts will change how we ship things globally - 20 minutes, I REALLY recommend you listen through it, but do skip the intro if you want.
CEO Richard Ettl speaking at Crypto Finance Conference in St.Moritz - about 14 minutes, also highly recommend you watch this as well.
SkyCell Video
Strategic Advisor Oliver Bussman (President of the Crypto Valley Association, Former CIO of UBS and SAP), on SmartContainers
Marc Bettinger on why he took an advisory role with SmartContainers - (many may know him as "altcoindad")
Michael Guzik - Former 'Head of Blockchain' at PWC, current Head of ICO advisory at Lykke - why he's involved with the Smarc/Logi ICO
AMA with Carla Bünger - CMO & Business Development Manager of SmartContainers
AMA with Thomas Taroni - Head of IT of Smart Containers
Q&A w/ Richard Ettl - Nexchange
 
Should you invest in this? I sure am, and am very glad to even be offered the opportunity, but it’s up to you. Read through this post if you haven't yet, then click these links and decide for yourself. Don't go all in of course, since this is a profit share token, there is much less risk, therefore less short term reward. The long term reward is what we're looking at here, don't buy into the ICO and then complain that you aren't getting 1000% ROI payouts by year one.
submitted by Haramburglar to RFIDBlockchain [link] [comments]

Only 2 days left to whitelist for SMARC ICO, an ICO for a profit-share token being held by an already multi-million dollar company.

- Credit to Haramburglar for this post, and for giving me the notepad file he wrote it in so I could share it where I wished, without even asking for credit
Okay, so this is going to be really long in terms of posts here. I actually have to cut out some info to make it under 40000 characters for reddit...
Typically in the market there are Currency and Utility coins. Profit-Share Tokens are relatively new, and while this ICO has 2 tokens, the profit share token is definitely the main attraction, as it's tied to a very, very promising company. This company is SmartContainers Group, and their tokens are SMARC (profit-share token) and LOGI (more on LOGI later).
“Smart Containers Group, formerly REP AG (Swiss registry of commerce, UID: CHE- 141.664.882), is a Swiss based, high tech company that provides the safest temperature controlled containers to transport sensitive pharma goods and food around the world. Our purpose is to secure sensitive goods and to make sure no compromised product is ever delivered to anyone.” - whitepaper

Product

SmartContainers Group is a holding company for SkyCell.
SkyCell is the company Smart Containers Group uses to rent/sell their containers to clients around the world.
Our containers transport some of the most expensive and temperature-sensitive goods in the pharmaceutical industry. These goods need a particularly careful and accurate protection. Through our highly secure and efficient container design, we assure the best possible protection against temperature excursions. In combination with a cutting-edge technology, it enables us to provide containers with easy handling, maximum loading capacity and highest performance on the market.
More than 50 man-years of research and development poured into the creation of an unprecedented, highly efficient insulation. This cutting-edge technology reflects a maximum of radiation while minimizing heat conducting. It is the most patent protected insulation technology on the market.
The ingenious SkyCell R&D team invented a completely new, cooling technology, that stores five times more energy than traditional methods to keep the container at a steady temperature. Consequently, SkyCell containers are automatically recharged in a cooling chamber without any manual interference. Nothing can be mixed up since all parts are integrated and fixed.
The ingenious SkyCell R&D team invented a completely new, cooling technology, that stores five times more energy than traditional methods to keep the container at a steady temperature.
 
“oh, our product needs better cooling? Okay, let’s just invent a better cooling technology, no biggie”. Who heads that team, Rick Sanchez?
I asked about this tech during their AMA, here's what they said:
Cooling technology: Yes, our containers are state of the art. Nico has developed a cooling material that freezes at 5.5°C. So if you put it in a cooling chamber that has a lower temperature, it automatically freezes and if the temperature is higher it melts. Basically, the system works like a huge ice cube that is empty in the middle. The centre of the ice cube has a steady temperature of 0° until at least 1 side of the ice cube has melted. It's the same principle for SkyCell containers, but at 5.5°C
 
The patented-in house developed cooling technology stores five times more energy than traditional methods to keep the container at a consistent temperature. After use, they are ‘recharged’ in a cooling chamber without any need for manual intervention, increasing productivity of the business and reducing cost.
I’ve forgotten to mention something so far about their product [the containers]. They’re literally (not figuratively, literally) the most advanced container ON EARTH.
 
From their ICO FAQ: Where do you position yourself compared to Envirotainer? Envirotainer is the number one container company with the largest container fleet today. We are currently fourth globally, but we reached this position in less than 5 years operating in this space. SkyCell containers have been tested and shown to be technologically superior to Envirotainer containers (5x more runtime, up to 35% lighter) which translates into safer pharma distribution and cost savings as well as a reduced CO2 footprint.
 
We are currently fourth globally, but we reached this position in less than 5 years operating in this space.
 
Another thing that’s pretty impressive, 4th largest company in their entire field… after just 5 years… but back to the main point of that statement: “SkyCell containers have been tested and shown to be technologically superior to Envirotainer containers (5x more runtime, up to 35% lighter) which translates into safer pharma distribution and cost savings as well as a reduced CO2 footprint.”.
 
Watching a video from a blockchain conference in Switzerland, I got a fair bit of info from the CEO, Richard. I’ll be quoting him in that video a few times in this post, and here’s the first: “In my industry, we talk about how many shipments go wrong - and the average is 8.5%. So for 8.5% of pharma shipments for example, the [proper] temperature is not maintained. In our case [with Smart Containers], it’s less than 0.1%. That’s 75 times better. Richard also speaks in this video about how they will be able to eliminate the amount of shipments happening every year, due to the decentralized nature of this whole system, there will be less need to send packages to places far from their end destination, to make the delivery easier on the shipping side. We’ve all had packages come from across the ocean, only for it to fly 1500 Km past us to be shipped back our way next week…
 

LogiChain

”There are 200 documents are required, or exchanged, to make one shipment happen… we estimate we can bring this down to 8” Richard Ettl, CEO
Logistics is an old industry. it started out on paper, moved through the fax, early ages of the information era, early email, current email, and is now ready to move onto the blockchain.
LOGI CHAIN GOALS
 
“By using blockchain technology, we can decentralize logistics and create autonomous containers – container 4.0. This container will know who’s renting it, when the contract ends and when to invoice the customer. That’s why we’ve created the LOGI CHAIN platform. It allows us to create a seamless, fully integrated, digital logistics process that everyone can use for free.” - Richard Ettl, CEO
“Well-established processes often generate inefficiencies that we simply accept. And of course everyone knows change is painful. But at Smart Containers, we see things differently. Change is the only way to improve. We think that every process should not only be optimized but redefined and redesigned. Logistics today is highly centralized. It’s incredibly inefficient. So many wasted kilometers to huge warehouses.” Nico Ros, CTO
 
There will be more than one blockchain at play with this system as well. The info that people deserve to know will be available on a public blockchain like Ethereum, the weight, material safety data sheets, the storage conditions (which as said up above, 8.5% of pharma shipments have issues with, and Smart Containers brings that down to below 0.1%), as well as at the same time, the info that shouldn’t be public to everyone (Bills, invoices, etc) would be stored on a blockchain like Fabric or HyperLedger. LOGI will be the fuel for the LOGI Chain.
CMO Carla elaborating on LogiChain:
The LOGI project finds good echoes with logistics players but even more with blockchain infrastructures like NEM, EOS and NEO.
Emirates for once was enthusiastic about the project and definitely wants to join the foundation. As you know, the government of Dubai is focussing on applying blockchain asap to multiple industries.
We are also in exchange with ShipChain, who are running a similar project in the US. Our goal is to collaborate with a maximum of projects around the world.
The LOGI Chain Foundation will be set up in July, right at the end of the ICO. Dr. Fabian Schär, our valued Advisor, will be in charge of defining how the LOGI Chain Foundation will develop in the next 2-3 years. We think that we will be able to put out a PoC based on SkyCell until the end of the year.
We have not yet decided on which blockchain platform to build the LOGI CHAIN. We are highly delighted with NEM since they are already operative and offer a private and public blockchain on the same protocol.
 
One Chain to Connect them all - LOGI CHAIN
One platform to get all players up to speed, to handle all documents and permissions in one place. No more floods of emails. No more polluting the environment with senseless printing of documents. No more compatibility problems and clashes of individualized systems.
To show you how vast the amount of documents (and by this emails circulated) find a list of common documents needed for one air freight shipment below:
Documents of origin, Material safety sheet, Airway bill, Bill of lading, Transport order, Customs declaration documents & bills, Invoices, Product data sheet, Storage conditions, Transport conditions, Multiple service provider billings, Licenses, etc.
This adds up to the gigantic number of about 200 manually processed emails per shipment.
A combination of public and permission based chains will allow for all players in the ecosystem to store documents needed in the logistics processes. We are looking at multiple platforms to build the LOGI CHAIN on top including NEM, Fabric, Corda, EOS and NEO.
 

Team

I’ll be using bits and pieces taken from their white paper and LinkedIn pages.
The Smart Containers team includes over 80 people, and is growing every year.
Richard Ettl - Co-Founder, CEO - LinkedIn
Richard wanted to know how things worked since he was a child. He has a passion for engineering and management. Growing up in Vienna, Austria and studying in Stanford USA and the University of Fribourg, Switzerland, he started his career at Bobst Group, a leading producer of packaging machines worldwide. In 2009, he decided to launch his own business together with his university friend Nico. After wide reaching scientific research and various proof of concepts, they founded today’s Smart Containers Group as well as SkyCell in 2012. Since then he has lead the companies to commercial success, seamlessly finding the right partners and investors at crucial points, as well as convincing more and more clients of the unrivaled benefits of the SkyCell offer
 
Nico Ros - Co-Founder, CTO - LinkedIn
Nico Ros, Chief Technology Officer & Co-Founder Nico is the mastermind behind Smart Containers Group and its technology. Growing up in Basel, Switzerland, he discovered his passion for mathematics very early on and therefore came to study mathematics, physics and engineering. Being a natural talent, he had already won prestigious architectural prizes during his studies and quickly became managing partner at ZPF an engineering company in Basel. He has constructed the most expensive buildings in Switzerland in collaboration with the famous architects Herzog & DeMeuron. Nico’s key strength lies not only in his state of the art engineering know how but also in his efficient management of teams, leading highly complex, multimillion projects to success. However, engineering alone did not suffice Nico. Having a passion for business and management, he decided to complete additional studies at the University of Fribourg, meeting Richard along the way. Everyone who meets Nico rapidly becomes aware of his sharp mind and his passion to invent new technologies. It is therefore not surprising, that both him and Richard ended up together where they are today.
 
Andreas Ernst - CFO - LinkedIn
Andreas is the true logistic finance expert in the company. He spent all his career in various finance roles of logistic service providers: from Swissair (today Swiss International Airlines), to Swissport (biggest ground service provider for airlines) where he filled the role as regional CFO for the Middle East and Africa. His last role before joining Smart Containers Group was CFO of Unitpool (now called Unilode), which is the largest independent air-freight container pooling company in the world.
 
Thomas Taroni - Head of IT - LinkedIn
Thomas is an IT-architecture mastermind. His first claim to fame is the creation of the largest media database, shared by all media houses in Switzerland: more than two million articles are uploaded every year, then queried and shared seamlessly and efficiently among multiple news companies. He founded his own IT company to design IT architectures focusing on process automation (eliminating paper and endless emails), and as a result won other clients (large banks, pharma companies and even publicly tendered government contracts). SkyCell became his client, when they needed a bespoke asset management system to track and trace their containers around the world. He joined SkyCell four years ago and since his tenure, has become the head of IT for all companies of Smart Containers Group.
 
Carla Bünger - CMO & Business Development Manager - LinkedIn
Carla is a marketing and sales expert. Building strong brands on solid foundations and convincing clients to buy its underlying products gives her huge satisfaction. She collected her experience through managing various international consumer brands, for companies such as Nestlé, Lindt and Coty. However, she discovered her passion for Blockchain technology roughly 18 months ago and has since been actively participating in the com - munity of Crypto Valley in Switzerland. The sheer endless application possibilities make her strive for more and she is drawing energy and enthusiasm from developing new business schemes around the subject. Her “can do” attitude helped to put together the high level advisory team around our ICO.
 

Advisors

Strategic advisor: Oliver Bussmann, is CEO and Founder of Bussmann Advisory, former CIO of UBS and SAP as well as the President of the Crypto Valley Association. “our main advisor” - Richard
Strategic advisor: Marc Bettinger, Altcoin and Blockchain specialist and investor, Co-Host Altcoin Meetup Switzerland (Bitcoin Association Switzerland)
Strategic Advisor: Fabian Schär is Managing Director of the Center for Innovative Finance at the University of Basel. His research focus is on the potential and applications of blockchain. In addition, he works as a lecturer in blockchain technology at the University of Basel, the University of Applied Sciences in Business Administration Zurich (HWZ) and the University of Applied Sciences Northwestern Switzerland (FHNW).
 
Technology Partner: Lykke Corp. our highly trustworthy expert in smart contract programming and ICO execution. (Lykke also audited their ICO smartcontract)
Legal Advisor: Gabriela Hauser-Spuehler was part of the team of MME, the well-known law firm in the crypto space.
Communication Advisor: David Wachsman and Emma Walker from Wachsman PR, the crypto community’s most experienced PR agency.
Richard also states they hired a lawyer that worked on the Ethereum ICO, but I don’t know if it’s Gabriela up there or another person.

Tokens

Min. investment = $500 USD for ICO, $5000 for presale (largest portion of supply), $250k for private sale.
There are two tokens as mentioned before: SMARC and LOGI. I’m more into SMARC because it’s safe (safe once the payouts start of course, as soon as a coin has a clear value like this, BTC moving up or down doesn’t matter to you), as well as obviously very attractive if you think of the long term profits.
 
Every year, the company’s annual shareholder meeting takes place, during which the shareholders will agree (or negotiate) on a proposal by the Smart Containers’ board about how much of the company profits is to be paid to the shareholders that year. 20% of that amount is taken, converted to ETH, and fairly distributed to the token holders.
Since the cofounders and all token holders will have aligned interests and incentives, we are all in a positive-sum-game. We do not want to use the ICO as a speculative springboard, but as way of funding innovation and change the world. Both Richard and Nico are committed for the long-term and not interested in a quick exit. Our aim is to use the collected funds to continue pushing the following business areas:
• Continue scaling of SkyCell in both B2B and B2C
• Establish FoodGuardians - the main goal if the ICO is to build and scale FoodGuardians
• Establish the of LOGI CHAIN Foundation
• Regularly evaluate organic scaling vs. M&A
• Evaluate IPO at relevant time
We are raising funds through an ICO to grow our container businesses in pharma and food. We push SkyCell from no. 4 to the no. 1 provider in the next 2-3 years.
 
The CEO in this video explains pretty easily why one would want to put money into this ICO over others:
“Why invest? [referring to SMARC] Simple question. It’s an up and coming company with revenue, multiple millions a year, most ICO’s have white papers…[we have much more than that].”
That's pretty clear. You can invest in random Xcoin ICO where they have some half-baked token that might see some level of adoption if it isn't just a cash grab, or you could invest in an actual multimillion-dollar company and be a part of it as it scales into what could potentially be a multibillion dollar entity.
 

The following is taken from the ICO, Legal, and Company FAQ

How will the profit share payouts work? 20% of dividends will be paid in ETH to all holders of SMARC tokens that are in circulation at the time of the payout. A given business year ends on 31st December each year with a general assembly held annually around mid-February. Therefore, dividend payout is expected around mid-March each year. In the event of a total sale of Smart Containers or the exit of one of its lines of business, the holders of SMARC tokens will receive a 20% participation of proceeds
 
Is there a future profit statement? No listed company can make an estimation or a commitment to a future return. To do so would neither be professional nor ethical. For Smart Containers, as with any company, profits may often depend upon a number of external factors, such as the general trust in blockchain technology. The question to be assessed is how fast a new disruptive technology can replace an old system. We believe that Smart Containers Group is well-positioned to facilitate this disruption, with a strong plan going forward and experienced team working to successfully implement blockchain technology in the supply chain. 5 years of industry experience, the 4th largest container fleet and a motivated team; that’s more than any idea whitepaper ICO.
 
What specific rights come with my investment? The SMARC token is a profit share token. When the company generates profits and the company’s general assembly approves a dividend payout, 20% of the defined funds attributed to dividends will be distributed proportionally to holders of SMARC tokens in circulation. In contrast, the LOGI token is a utility token that can be used to pay for transactions on the LOGI CHAIN, an open-source logistics platform for all stakeholders in the logistics field with the goal to create a seamless, fully integrated, digital logistics process.
 
Smart Containers will pay out a dividend to SMARC token holders. This would imply that the SMARC token is a security token. Are you compliant with financial regulation? Smart Containers tokens is not classified as a security in Switzerland under current law. This may be different in other jurisdictions such as the USA. Hence the SMARC token is not eligible for sale in certain jurisdictions. Our benchmark is the Modum token sale from June 2017. We have elected to use the same legal structure as it was accepted by regulators in Switzerland and well received by the ICO community and exchanges.
 
What is the vesting schedule for team and advisors tokens? Everyone will receive SMARC and LOGI tokens at the same time. Minting will occur at the end of the token sale. Advisors will have lock up periods depending on how many tokens they receive. Team members have a lock up period of 12 months.
 
Are SkyCell containers an approved ULD according to IATA regulations? SkyCell containers are exempt from the ULD rules by IATA. This has the huge advantage that, compared to our competitors, the SkyCell container can not only fly but can also leave the airport. Skycell containers are therefore a door-to-door solution. Our competitors’ containers, on the other hand, have to be unloaded at the airport and packed into a new transport unit in order to continue their journey from the airport to the final destination, increasing the risk of temperature excursion, and loss.
 
Are there financial statements? If so, are they audited, and by whom? Yes, there are financial statements for all our companies. They are audited by PricewaterhouseCoopers (PwC). To preserve our competitive advantage in the market, we have decided not to publish our financial figures online at this moment in time.
 
Are Modum and Smart Containers competitors? Modum and Smart Containers are not competitors, more future partners. Modum rents/sells sensors to track and trace shipments on temperature, whereas Smart Containers rents/sells the containers, in which products including sensors are put inside. Of course our containers have sensors that record data for quality control, but Smart Containers does not sell these data sets. In the end Modum and Smart Containers will address to the same clients - Smart Containers provides the container and Modum will put a sensor in it.
 
How many airlines fly SkyCell containers? In addition to our major partners, Emirates and CargoLux, more than 30 airlines fly SkyCell containers.
 
What destinations does SkyCell serve? SkyCell is a global company. We are shipping containers around the world and reach each pharma client within 24-48 hours. This is accomplished through our airline partners, that can fly ready-to-use containers to more than 150 airports.
 

Profit Sharing Mechanism

During the annual shareholder meeting, the shareholders in the form of the general assembly (Annual General Assembly) decide on a proposal by Smart Containers’ board regarding the usage of profit as recognized in the annual financial statements of Smart Containers in the form of distribution of dividends. Distribution of a dividend on shares shall be announced in the “Tokenholder Information” section of the Smart Containers website; such announcement shall include the date and time of the dividend payment and the dividend amount per ordinary share in USD as well as the ETH/USD exchange rate which shall become applicable, as derived from publicly available and reliable quotes. Within 20 business days of the date of the resolution passed by the Annual General Assembly regarding dividend payments to the shareholders of Smart Containers, Smart Containers will make available a Profit Share Amount to each authenticated Tokenholder equal to 20% (twenty percent) of all dividends agreed to being distributed per share to the shareholders, divided by the total number of issued SMARC Tokens (To further explain for clarity, all Tokenholders combined will receive an amount equal to 20% of the amount received by all shareholders combined.). SMARC Tokenholders shall receive these payments in ETH, at an average exchange rate specified by Smart Containers.
 

FoodGuardians

“Imagine your tomatoes tasting 1 day ‘fresher”.
One of the main reasons for the SMARC/LOGI ICO is to raise the funds to fuel the growth of FoodGuardians alongside SkyCell.
According to their CEO, SkyCell is constantly asked “can your containers be used for food?”, but there are several issues with shipping food and medicine together. This is where FoodGuardians comes in.
FoodGuardians offers the next generation of reusable containers and boxes to transport regionally and globally temperature sensitive food products.The combination of patented cooling technology, cutting edge insulation and Blockchain infrastructure allows to redefine the product’s freshness and traceability.
Our vision is to allow your local butcher to order your favorite steak directly from the producing farm and sending it straight to your grill party. (All without the buyer even leaving his home, let alone going to store)
 
Advantages of using FoodGuardians
 
Each FoodGuardians container can be tracked around the world on:
 
The phrase “Imagine your tomatoes tasting 1 day ‘fresher” has been used by the CEO a couple times, and is more or less the FoodGuardian slogan. This is referring to the fact that not only can FoodGuardian and SkyCell containers save cost, CO2, and man/brainpower, but they can also make shipments faster when combined with the blockchain (LOGI Chain) and Smart Contracts. when everything is accounted for at every second with almost as little room for human error as possible, things are far more efficient.
We are launching our first food application – we will announce a collaboration before June for a solution that can be used to ship overnight online fresh food to people homes and can be used to supply hospitals and restaurants as well.
FoodGuardians and SkyCell are two of the many possible use-cases for SmartContainers' tech:
"Other use cases. Yes indeed. We are just getting started!! However, it makes sense to focus on scaling SkyCell and FoodGuardians before starting something new. In the end we are a tech company. We have defined 7 use cases around the insulation technology. We have started with the most relevant 2 but will certainly continue."
 

SkyCellONE

SkyCell is looking to bring a business-to-consumer solution to market, that was developed and tested with one of the top 20 pharma companies in the world. The direct to patient market is estimated to increase to a 2.5 billion USD market in the future, with no other competition yet aside from styrofoam containers that are disposed of after one use. The SkyCell ONE can also be co-branded by a partner, such as a pharmacy chain that could rent it out for home delivery, business trips or even holidays.
The product is temperature stable for up to 72 hours, can be recharged passively in a fridge, or temp-controlled warehouse or truck. Currently it’s best in class for size and weight, but that’s probably down to there being no competition! Trials have been undergoing since June 2017 with an orphan drug product, and go live is expected in Q2 2018. - Cryptowithoutborders article
The SkyCell ONE container is showcased HERE
THIS could be a massive money maker. There is currently no direct pharma-2-consumer shipping service, because it really wasn’t profitable, or manageable on a central database. They can even sell this product to other supply chain entities to use. The direct to patient market is estimated to increase to a 2.5 billion USD market in the future, with no other competition yet, aside from styrofoam containers that get disposed of after a single
Q&A: Smart Containers’ Richard Ettl on Blockchain, Pharma, and how His Company’s Hardware and Software is Disrupting the Logistics Industry - Nexchange.com
We are launching also additional sizes – so we are launching a very small box to ship pharma directly to patients' homes. Amazon just recently announced that they will postpone entering the pharma distribution space, as they do not have the technology to ship to patients homes in a temperature controlled manner. We are bringing this to market later this year. This will increase the convenience of patients and reduce the costs in the healthcare system.
 

Organs

I just finished listening to this podcast (20 minutes long, but you can skip the intro stuff to make it shorter of course). I’m now twice as excited as I was before. I’m going to type out a large chunk of the podcast. I’ll be paraphrasing slightly, so I don’t have to type every “uhh” or anything, plus he sometimes starts one sentence before finishing another.
“We have some prototypes, that we built, for example, for the Children’s Hospital here in Zurich, where we’ve designed a container that can transport living skin.” [Interviewer; “Wow.”] “So for young children that suffer skin diseases that could be almost fatal, like cancer, they grow this… patch of skin, and then that skin needs to be transported, and kept at body temperature so… roughly 37 degrees Celsius. There we designed them a box that did this for 10 days, autonomously.” [“That’s amazing…”] “Yeah, we did this because we wanted to learn how to interact and work with hospitals, this is a highly specialized application, and the next step could be organ logistics, because most of the organs today are transported on ice, because that’s the standard set in the 70’s, but studies have shown that if your transport certain tissue at room temperature, it is significantly better for the tissue than if you transport it on ice.”
I can guarantee you every major hospital on earth is going to want their hands on this container that can allow them to transport both living skin, and potentially organs in the future. The fact that in this day and age we’re still throwing people’s kidneys/lungs/etc in a bucket of ice is a little weird.
From the recent AMA:
Our Container BT5: The name stands for Body Temperature 5 L content. It transports skin grafts that was cultured for children with burn accidends. The temperature range is 37°c. Nico (our CTO) was so taken by this project, that he developped this container only for this purpose for a company calles Cutiss (a start-up from Zurich). We currently only have around 10 of these containers in use. It is not produced in on a large scale. We could market it, but have bigger opportunities to tackle first with the SkyCell one. You can only focus on 1-2 projects at a time. The BT5 is a beautiful project, but will need manpower to scale production and then manpower to market it.
 

Competition

Envirotainer, The leading company in this field, has only a matter of time before they’re overtaken. SmartContainer Group’s containers are proven to be superior (5x as efficient, 35% lighter, self-charging, etc, etc, read up above for the whole deal). According to the Googles, Envirotainer’s best year (2015) saw a profit of $50,000,000. It’s logical to assume that Smartcontainers will surpass them as the top dog, and at the same time be pulling in much more profit over time by serving both pharma, and the food industry (Envirotainer only does pharma). By accepting cryptocurrency payments, saving them a fair bit in fees from cross border payments, they’ll also net a small % more in profits annually.
I asked about the state of their competition. Turns out, Envirotainer (or more specifically the private equity firm that owns them) offered SmartContainers a buy out of $125m. This was one of countless offers they've turned down, because they believe they can scale the company to much further value. The firm selling Envirotainer has been trying to find a buying for the past 3 years, at $1b. No one will buy them, because anyone who knows their shit in that industry knows SmartContainers will overtake them in no time.
From April's AMA:
Our 2 biggest competitors are for sale. Envirotainer (biggest player) is owned by a Private Equity company that wants to sell it for 1 b USD. it already tries to sell for 3 years. SkyCell is considered a threat to the valuation of Envirotainer, since we are winning one client after the other from them. While Envirotainer is the largest player with a huge sales force and well established client contacts, they are still operating on an "old" technology. SkyCell is technology leader, has lighter containers, reduces CO2 emissions and is considered to be the future.
2 days ago, a private equity company requested a meeting to see the valuation of SkyCell and evaluate to buy. We have already been approached several times. We are treated as the bride in the market. However, Richard and Nico think we can scale the business much more before we should consider to sell. We are just getting started.
We have won 3 large accounts in Q1. Today we have 1200 containers. By the end of the year, it will be 2000. Our business plan estimates that SkyCell will be profitable in 2019. Therefore you can expect first dividends in Q1 2020.
 

Official Projections

Another redditor asked for "optimistic expectations for potential profits" during their ama, here was their answer:
How does a profit of 21 m USD on Smart Containers total in 2020 sound? This figure will then quadruple in 2021 to 76 m USD.
As you can see, this would mean that by 2021 tokenholders would not even have broken even yet. I myself am fine with this, i'm expecting to hold SMARC until the end (be it I die or the company sells, in which case i'll enjoy that fat exit payout). The potential gains from 2020-2030 are far more worth it to me than trying to make it in one year with heavy risk.
So why invest in this over a random shitcoin that might moon? If you're here to turn $1000 into $1m and get out by the end of the year, good luck, don't invest in smarc. If you're realistic and are aware that crypto will only be so volatile for so long, go ahead and think about putting a bit of your portfolio in something that will have actual value, lasting long after the shitcoins die. Crypto market could crash at any time, but that doesn't mean that SmartContainers as a company goes anywhere, nor their profits. I don't think I need to explain any further.

So…

A 5 year old company, with over 100,000 collective hours of R&D put into their products, with currently just under 100 innovative patents, that is already the 4th largest of it’s kind in the world, with the top product in their field on earth, is doing an ICO that is fully backed by the Swiss government, with a token that is due 20% of all future shareholder payouts, as well as 20% of any potential exit profits (the company being purchased). They’re already this big, and you can benefit from both their success, and their expansion into new markets.
There’s nothing stopping SmartContainers Group/SkyCell/FoodGuardians from working with VeChain in the future either. Or Walton, or Wabi, Devery, OriginTrail, Ambrosus, all of em.
 

Links4U:

SmartContainers
https://smartcontainers.ch/
https://foodguardians.ch
https://skycell.ch/
Whitepaper
FAQ
Terms of Token Sale
CryptoWithBorders Article
Medium post reviewing SmartContainers
Interview with Richard Ettl, Co-Founder & CEO of Smart Containers on SMARC Token Sale | TechBullion
Interview with Richard Ettl - CryptoRich - Richard talks about some of their patents in this video, I think about 20 minutes in. Whole thing was worth watching imo
Podcast on how Blockchain + Smart Contracts will change how we ship things globally - 20 minutes, I REALLY recommend you listen through it, but do skip the intro if you want.
CEO Richard Ettl speaking at Crypto Finance Conference in St.Moritz - about 14 minutes, also highly recommend you watch this as well.
SkyCell Video
Strategic Advisor Oliver Bussman (President of the Crypto Valley Association, Former CIO of UBS and SAP), on SmartContainers
Marc Bettinger on why he took an advisory role with SmartContainers - (many may know him as "altcoindad")
Michael Guzik - Former 'Head of Blockchain' at PWC, current Head of ICO advisory at Lykke - why he's involved with the Smarc/Logi ICO
AMA with Carla Bünger - CMO & Business Development Manager of SmartContainers
AMA with Thomas Taroni - Head of IT of Smart Containers
Q&A w/ Richard Ettl - Nexchange
 
Should you invest in this? I sure am, and am very glad to even be offered the opportunity, but it’s up to you. Read through this post if you haven't yet, then click these links and decide for yourself. Don't go all in of course, since this is a profit share token, there is much less risk, therefore less short term reward. The long term reward is what we're looking at here, don't buy into the ICO and then complain that you aren't getting 1000% ROI payouts by year one.
submitted by nineonetwoonethrow to CryptoCurrency [link] [comments]

AMA Recap: DBCrypto and 8BTC

AMA Recap: DBCrypto and 8BTC
AMA Recap: DBCrypto and 8BTC
by bloXroute Team (Original post here)
https://preview.redd.it/wofpz6u4s4m21.png?width=1200&format=png&auto=webp&s=130a488552c9485affdc14a08f8f8a49c6b48cb8
This past month the bloXroute team participated in 2 AMA’s. Our Co-Founder Professor Emin Gün Sirer synced up with our Chinese-speaking community on the 8BTC Forum, and our Co-Founder and Chief Architect Professor Aleksandar Kuzmanovic, Strategy & Operations Manager Eleni Steinman, and Marketing Associate Brooke Walter connected with blockchain enthusiasts on the DBCrypto Telegram group.
There were many great questions asked so we wanted to share our answers with the rest of our community on Medium. For some of the questions, we expanded upon our answers and edited for clarity and brevity.
The questions are organized into four sections: Tech, BLXR, General, and the Blockchain Ecosystem.

Tech

Can someone explain the “magic gateways” a little more? Is this patented and closed source tech?
  • “Magic gateway” is a small piece of code that sits on a machine running a blockchain node with one side speaking the blockchain “language” with the node, and on the other side speaking bloXroute “language” with our Relays. It also shrinks blocks from the nodes to the Relays, propagates transactions etc. Yes this has been patented for a simple reason — the work was initially done at a University, hence we had to license (our own work) from the University. That’s how it works. While we patented the system, we are going to open source the Gateways.
When will the source code be released?
  • The source code for the Gateway software will become available from Day 1, i.e., as soon as we start testing with miners. The source code for the rest of the system, i.e., Relays, will become available soon after.
From reading the whitepaper it seems as though on-boarding bloXroute can take a bottom up approach. I.e. it sounds like crypto miners can start using the bloXroute network right away, without needing to integrate software into the bloXroute servers or get any approval from the developers of the crypto project? Is this right?
  • That’s right! Any miner can start using bloXroute on its own without any approval. We will provide open source code that miners download, we call magic gateways, that is run on the same machine they mine on. Miners send blocks to the gateway like they would any other peer node. And that’s it. Since bloXroute BN lets you hear about and send blocks faster, miners who use it are obviously at an advantage.
Will the blockchain be able to test bloXroute’s net neutrality? If yes, how? Will bloXroute’s net neutrality testing ability be on the developer or miner level?
  • Certainly! Net neutrality is at the heart of bloXroute, and something I am personally passionate about. Net neutrality mechanisms (please see the WP for details) will be enabled from day one. Everyone, including miners and developers, will be able to test, in real time, bloXroute’s network and its behavior.
How can bloXroute be decentralized and trustless? Does it rely on servers? If we can’t find a better way to solve block propagation problems other than bloXroute, then obviously nodes (especially mining nodes)have to completely rely on bloXroute. If bloXroute has any problems, the whole network will be at risk.
  • Excellent question that gets to the heart of bloXroute’s core contribution. bloXroute is a unique solution that is *centralized yet trustless*. It consists of a network of servers operated very efficiently by a centralized entity — this is how it achieves its high performance. At the same time, the technology is constructed such that these servers *cannot* misbehave. They cannot discriminate on the basis of transaction content, and they cannot selectively censor. So, the overall network is efficient because it’s centralized, like Akamai’s content distribution network, and it’s also trustless, like Bitcoin’s underlying network. Also, by open-sourcing our entire codebase (once the system reaches some maturity) we enable everyone to run a backup network to take over in case bloXroute is shut down by any means, preventing it from becoming a single-point-of-failure.
Also, I remember that ‘bloXroute will keep neutrality by encrypting blocks’, but what if somebody uses bloXroute to send spam? Will it be a problem?
  • Indeed, we have implemented various measures to handle the spam issue. In particular, the bloXroute network keeps and propagates provenance information, allowing the system to limit the traffic a node sends based on their usage of the system. Keep in mind that all large networks, whether it’s Google’s, Facebook’s or Akamai’s, are under constant spam attacks. We use well-established techniques from that domain to ensure that spammers can be efficiently identified and limited.
What is a sufficient number of servers?
  • Our V1 is going to have around 15 servers on 5 continents, roughly. Blockchain traffic currently isn’t particularly large. We hope to change that!
Is it advantageous for miners to be in relative close proximity to a BloXroute server?
  • Yes. But the difference is very small. A really dramatic difference will be between bloXroute-enabled vs. non-bloXroute enabled miners.
Could you elaborate on the servers a bit more? I heard Uri talking about utilizing trusted organisations to do this. I know my concern is that this may create some level of centralised power.
  • We are fully aware of this concern. This is why we are making sure to utilize a large number of independent providers. This is creating a lot of operational issues on our end (because different providers use different software environments) but this is a top priority for us.
How quickly will idle backup networks be operational/online in the case of a main bloxroute network fatal failure? Does this backup network set-up require some work/adjustments on the client/nodes side?
  • The backup will be automatic, such that the effects of a possible failure on the mainnet is minimized. Given that the process will be automatic, no adjustments will be needed on the client side.
Have you established an “ideal” number of independent providers to reduce such concerns? Or is this something still being established?
  • There’s no magic number, the more the better!
I assume having servers in different geographical regions is important. The EU for example could outlaw BloXroute servers. I assume it would be way too expensive for a regular person to setup a BloXroute server?
  • I am hopeful the EU would not do that! :) But the point is that even in absence of servers in a particular region, things can still work pretty well for users in that region.
If that was the case, will they be disadvantaged as the message will need to be relayed further?
  • Necessarily so. But the system would still be operational, and would be able to operate at a fairly high TPS rate.
From both a tech and adoption level, what are some of the biggest difficulties bloXroute faces?
  • Technical difficulties are present on a daily basis, but we are coping with them. As a technical person, I simply know we will resolve them all. I am also convinced that a number of blockchain communities will adopt our system. But if you ask what a bigger challenge is, I think adoption.

BLXR

Does bloXroute have native tokens? If yes, when will the tokens be released? Is it an ERC20 token? Will it be listed on exchanges? What can the tokens do on your network?
  • Yes, bloXroute will have BLXR tokens, which will be listed on exchanges. The BLXR tokens are security tokens that entitle the holder to a share of the revenues of the company. Of every future dollar that bloXroute makes, a proportion goes into a pot, and this pot is divided among the BLXR holders. Think of it as instant, auditable dividends in perpetuity. And BLXR tokens thus act like a fund, where the fund’s contents change over time to track whichever coins are using bloXroute more. If BCH miners use bloXroute, BLXR will have more BCH in it; if ETH adopts bloXroute, then it’ll swing towards ETH, etc. So the tokens can serve as a blanket bet on adoption and use of cryptocurrencies, kind of like how Akamai was a play on Internet content being in demand. I will leave it up to the company to announce its projected dates. I’m focusing mainly on the technology behind the scenes.
Is it correct that you plan to go down the STO path or simply the security token path and the BLXR will be a security token?
  • Yes, BLXR is a security token. The good thing is that we’re clear about this from the very beginning. Hence we were able to cope with regulations on time.
When do you plan to do the STO?
  • Our team of lawyers is working very closely with the SEC to take all of the required steps to ensure everything we do is in compliance with regulations. We hope to have all necessary approvals for an STO in Q3 / Q4 2019.
That’s really great that you’ve been working with the SEC. Does that mean you plan to sell the BLXR token to American citizens?
  • We hope that to do as wide of a sale as possible, so not just Americans.
How does this work? What jurisdiction have you chosen to setup this token etc? Or is this all still being figured out?
  • It has to do with the regulation you file under. Some regulations require that you only raise from accredited investors and others let you raise from anyone.
Will accredited investors only be able to participate in the the BLXR token sale or is there a plan to try an include non-accredited investors as well?
  • The plan is to make it as wide of a sale as regulation allows. We (our lawyers) are working hard so it’s not just accredited investors.
You have recently changed your BLXR security token from 50% revenue reserve model to 100% revenue direct dividend model. How direct will it be? In what time frame or frequency will BLXR token holders will receive their pro rata share of collected revenues to their wallets?
  • 100% of the fees associated with the cryptocurrencies using bloXroute’s BDN become immediately available for withdrawal by BLXR token holders. Right now the plan is for a calculation to run once every 24-hours to update what we call an “Owner balance” — this is how much crypto is available for withdrawal for a given BLXR holder based on their pro-rata share. To withdraw one’s dividends, a BLXR holder must provide a wallet address in the same currency as the crypto they wish to withdraw. The owner balance will then instantly update to reflect this outflow.
How will bloXroute operations be covered in this new direct dividend model?
  • In the new model 100% of the revenues will go to token holders. bloXroute, as a token holder, can use the revenues it receives for its ownership portion to fund operations.
With BLXR being an ERC-20 token, does Bloxroute plan to set up the benefits of the token (accumulation of relative % of fees for projects using the network) so that it can be accumulated by the owner whilst also possibly locking BLXR in a MarkerDao CDP?
  • Dividends will accumulate in a reserve account and be available for withdraw. Our current plan is for Owner Balances to be updated every 24 hours. BLXR holders can transfer their dividends to their wallets and use them as they wish. :)

General

I understand that one of the benefits of bloxroute for the ecosystem is users will have a much lower fee to pay for their transactions. Will users be able to get this much-lower-fee benefit from bloxroute only through wallet(s) they use by choosing to pay a *tiny* fee to bloxroute instead of a *large* fee to miners or can they also get that benefit in some other way?
  • To start, users can use bloXroute immediately as the first 100 TPS are always free. Only after 100 TPS can a user choose to pay bloXroute a tiny fee to reduce her overall fee (albeit a user would only choose to pay bloXroute if this is true). All users benefit from bloXroute on day one as the first 100 TPS are always free. Users do not have to use wallets that partner with bloXroute to take advantage of the fee reduction service, but it’ll certainly be the most streamlined method. Any user that knows bloXroute’s public address can include in their transaction an additional output that pays bloXroute’s public address to reduce her overall fee.
Typically, how many X tps improvement should we see for the various major blockchains that bloXroute will target?
  • We are targeting approximately 3,000 TPS for Bitcoin and Ethereum.
In terms of technology, what is bloXroute’s core competitiveness? How many people are on your team?
  • Our core competencies are as follows: (1) we have some of the world’s foremost experts on blockchain and network scaling, (2) we have innovated across all aspects of the emerging blockchain stack in the past and bring that experience to bear on the chain scaling problem, and (3) we are the first group to identify Layer-0 as a scalability bottleneck, the first to apply network neutrality techniques to blockchains, and thus the group with the most extensive track record on how to build efficient and trustless systems. The team is just over 20 employees, it is hard to keep track now because, in addition to our headquarters in Chicago, we also have a satellite office in Tel Aviv, Israel and two need employees start this week. We are currently building our platform. Though the core of the platform has been in operation for 2.5 years already on the BTC and BCH networks, we are extending it to other systems, e.g. ETH, and adding new features.
How does bloXroute’s solution work on different blockchain networks?
  • bloXroute’s solution has been operating continuously for the last 2.5 years. In that time frame, it has been deployed on Bitcoin (BTC) and Bitcoin Cash (BCH). It has ferried every transaction and every block found in that time frame. To this, we recently added the ability to support Ethereum. And we recently announced a partnership with a large miner. In all of these cases, bloXroute provides an additional fast-path to existing coins for the delivery of financial data, just like Akamai added a fast path for the delivery of regular content on the Internet. It’s optional, opt-in, and completely voluntary. It’s just a faster way to deliver blocks and transactions. In return for ferrying this financial data, bloXroute collects transaction fees, and BLXR tokens receive these collected feeds.
With bloXroute already forming a partnerships with mining companies, do you plan to establish more relationships with similar organisations? If so, given the obvious concerns about the environmental impact of traditional mining, does bloXroute aim to establish/support relationships with mining companies who utilise renewable and sustainable energy?
  • We hope to establish relationships with all miners :) In regards to environmental concerns, our BDN actually helps miners more efficiently utilize their power consumption. Since miners hear about blocks sooner, they can immediately start mining the next block, and thus more efficiently utilizing their resources.
When will you start v1 testing with miners?
  • Early to mid March.
Will the v1 testing be predefined (for preselected miners/mining pools) or it will be possible to join the testing on the go? How can a miner apply for the testing?
  • Yes, the V1 testing will happen with a predefined group of miners. If you’d like to join, please send me an email ([[email protected]](mailto:[email protected])) and I’ll follow up.
Will the v1 testing be with one or with multiple blockchains? Will there be BTC and/or ETH miners in the v1 test pool?
  • It will be with multiple blockchains and yes, we connect with both BTC and ETH (and BCH) miners in V1.
Will bloXroute produce better results (TPS) for PoW or for PoS consensus protocols?
  • We are currently working with PoW and we are seeing some great results (still can’t share publicly). We should definitely see a comparable performance with PoS, but we currently have no empirical data.
Are there any difficulties you faced trying to convince major blockchains like btc, eth etc to increase block size?
  • We view ourselves as providers of networking that removes the scalability bottleneck. It is up to each community to take advantage of that efficiency how they see fit. That said, we already know some communities want scale. For example BCH has 32 MB blocks because after 32MB the thing breaks (i.e. they hit the scalability bottleneck). With bloXroute, I’d expect them to increase their blocksize.
Which pipelines of blockchains likely to come on board 1st on bloXroute in 2019?
  • In V1 we will provide support for BTC, ETH, and BCH. We are talking to many other blockchain communities, and will provide an open API allowing any blockchain to use bloXroute.
If 10% of the blockchain miners/pool have 10% of the hash power (which results in approximately a 10% probability of mining a block) and they start using bloxroute while the other 90% of miners/hash power do not use bloxroute yet (gradual deployment), how does the usage of bloxroute benefit the 10% of miners vs. the other 90%?
  • Good question. The benefits for early-adopting miners start to kick in immediately. In your example, the probability of the 10% of miners that use bloXroute increases above 10% the probability to win a mining round. This is because they “waste” (much) less time on mining blocks that will not eventually get “on chain”.
Does the TPS order of improvement through bloxroute depend on the network size and distribution of nodes (decentralization level) of particular blockchain?
  • It necessarily does. The larger and more decentralized a network is, the TPS rate decreases. The big difference is that without bloXroute, the TPS decreases exponentially, i.e., very quickly. With bloXroute, we are seeing sublinear, i.e., marginal, degradation in TPS as the network size increases.
Are you partnering already with some wallets? If yes, with which ones? If not, is it too early to disclose?
  • Our first goal is to gain adoption. Once we have adoption, we plan on working with wallets to add in an option to streamline the process of including a bloXroute fee. We expect wallets to include such a fee to have an advantage because it offers their users lower overall fees compared to competitors. It would be up to the wallet to decide to show an “bloXroute transaction” feature or simply show lower fees. That said, we are very well connected to some of the most successful wallets in the crypto ecosystem, and have already discussed the matter with some of them.
Do you foresee users migrating to wallets that partner with bloXroute from the ones that don’t?
  • Users do not have to use wallets that partner with bloXroute to take advantage of the fee reduction service, but it’ll certainly be the most streamlined method. Any user that knows bloXroute’s public address can include in their transaction an additional output that pays bloXroute’s public address to reduce her overall fee. Our first goal is to gain adoption. Once we have adoption, we plan on working with wallets to add in an option to streamline the process of including a bloXroute fee. We expect wallets to include such a fee to have an advantage because it offers their users lower overall fees compared to competitors. It would be up to the wallet to decide to show an “bloXroute transaction” feature or simply show lower fees.
Will it be easy for a wallet to integrate bloXroute or it will require deeper dive?
  • Integration with wallets should be equally straightforward, from the technical point of view. We plan to actively work with open-sourced wallets to help them implement the change. The change includes a UI update to prompt the user and ask if they want to use bloXroute or not, and if they do, update the transaction to commit a tiny fee to a publicly-known bloXroute address.
Are you on track with your roadmap?
  • We are only a few weeks behind on our roadmap (we wanted to do our miner test for end of Feb and now it is early march) but I think for the tech world that’s still pretty good!
Did crypto winter changed your roadmap in certain aspects?
  • The crypto winter I think actually helped us. We are a free service to make miners more money. That has to be appealing in this environment.
When will the Proof of Concept be released?
  • The PoC should come at a similar time like V1, maybe a couple of weeks later, we’ll see.
What is the biggest challenge you’ve encountered after starting the company? What has helped you overcome challenges and stick to your goals?
  • Biggest challenge we have faced is finding talented individuals who understand this technology. The area is brand new, and it’s difficult to find qualified engineers, builders, and business folks. What makes me really motivated every morning is looking at the world and noticing just how antiquated our current systems are, how much they operate based on trust, and how much better they would be if they were open to all and auditable by anyone.
The white paper doesn’t give a full description of bloXroute’s tech, instead it gives a very simple explanation. Do you have concrete plans on how your project will be applied?
  • Our technology has been in operation for 2.5 years. Writing a whitepaper is a difficult task, trying to make a complex technology accessible to the masses. That said, I am pretty sure that we covered the core of our plans, and we have more papers in the pipeline describing the operation of the system for an academic audience. [Check out our resources page for detailed explanations about our technology]

Blockchain Ecosystem

People are talking a lot about Layer-2 scaling solutions in recent years. Compared with layer-0, will layer-2 be a better scaling choice? Or does it depend on different scenarios?
  • When it comes to scaling, there is no “one good layer to scale.” To reach really large numbers of transactions per second, one needs to tackle the bottlenecks at all levels. And Layer-2 cannot actually be made secure unless Layer-1 has enough space to on-board new users, as well as settle the transactions from existing channels. This all cannot be done at 3 tps. To support 1,000,000 tps and above, the underlying chain has to offer high throughput. So it’s absolutely essential to examine Layer-0 solutions.
You said currently there’s no crypto that can be truly decentralized. You also believe PoS is better than PoW. Does that mean that you think bitcoin is not decentralized? What’s the problem with bitcoin’s PoW mechanism?
  • Bitcoin’s blockchain today is created by around 19 mining entities. Some of these are pools, but nevertheless, these are individuals that came together and are operating in unison towards a common aim — they may not have corporate paperwork filed, but they are indistinguishable from any other corporate entity at this point. Just 4 of these command the majority of the hashpower. That’s it, the sum total of Bitcoin’s decentralization. EOS has 21 block producers. Ethereum has 11 miners now, and will reach around 60 with Casper. These are all tiny numbers. The big elephant in the room that no one dares to talk about is precisely how centralized most coins are today.
Do you find there is enough awareness about the block propagation as one of the major (if not the major) scalability bottlenecks within the crypto community/blockchains?
  • The short answer is no. Many people have heard about scalability being a hot topic in crypto/blockchain, but almost no one knows exactly what or where the bottleneck is. That’s why one of the most important parts of telling our story is educating at the same time. The blockchain community has many different types of people with varying levels of knowledge, so it’s a balance to develop a voice that speaks to everyone. In response to this challenge we have developed an educational Youtube series where we give detailed explanations about topics in crypto and blockchain. We hope it will provide tools to have more technical understanding and meaningful conversations about our product and the ecosystem in general.
During the BCH Hash War there was a block propagation bottleneck real case scenario on the mainnet when BSV tried to mine large blocks — something like 40MB and later 64 MB, but at both trials they failed on block propagation as it took too long and forks occurred. The large blocks were orphaned so the experiment clearly failed. As bloXroute’s focus is on this exact scalability bottleneck, block propagation, you came out as a *winner* from the hash war according to Professor Sirer. Have you experienced some benefits of being a winner, such as a larger awareness and interest in your project within the crypto and blockchain community?
  • We are having a lot of communication and open discussion with a lot of blockchain projects out there. We did indeed notice an increased interest after the events that you mention above.
What if industrial giants launched their own public chains one after another, what do you think the community should do?
  • This is exactly what we are going to see, with Facebook leading the way. I’m not too worried about these corporate approaches. While these companies have immense resources, they are starting quite late and do not have the kinds of thought leadership we possess on building peer-to-peer systems. All of these big behemoths are experts at building centralized client-server systems, which are the exact antithesis of what we are building with cryptocurrencies. So I don’t think we should be worried or do much: let them build out, welcome their efforts, and treat them the same way we treat every other altcoin. They will play a big role in onboarding new users into crypto, and they will help make the space more healthy and exciting for all of us.
What different scaling challenges are Ethereum and Bitcoin facing now? What do you think of these challenges?
  • The scaling problems faced by these two systems are slightly different. Bitcoin is a payments system. As such, it is concerned primarily with point-to-point value transfers. And it is facing a basic capacity problem: if everyone in Venezuela were to switch to Bitcoin today, every adult would get to transact only once per month! That’s clearly nowhere near the dream that has been sold to the masses. And it’s not clear what Layer-2 can achieve, because its capacity depends on the emergent network. At the moment, most attempts to send $1000 over LN fail. The challenge in Bitcoin and similar systems is to retain the security of the underlying protocol, avoid forks, and at the same time, increase the number of transactions per second. Naive attempts to do this, for instance, by arbitrarily increasing the block size to really large numbers, are not a good idea. We have seen that BSV is going down this route, and it is leading to excess centralization. bloXroute can help avoid centralization, and help drive protocol scales up by orders of magnitude. The challenges faced by Ethereum are slightly different. The interactions with smart-contracts tend to be multi-point to multi-point, that is, they involve multiple parties. So we see a different, more difficult problem emerge. And Ethereum is driving its network to its limits at the moment. The Ethereum mining network is beginning to show signs of centralization. ETH’s current set of block size and block frequency parameters are a little bit aggressive, and we are seeing signs that would indicate an advantage for mining centralization. bloXroute can help reverse this process and enable the protocol to be driven even more aggressively.
Ethereum researchers claim that their sidechain snark handles 17,000 TPS, do you think we can achieve higher capacity while the network is absolutely safe?
  • We can, and need to, achieve far higher numbers if the blockchain revolution is going to be anywhere near as big as it can be. If IoT devices go online, we will need 1M tps. On the other hand, I’m highly skeptical of all performance claims. BTC achieves around 4tps today, while ETH achieves 15 on a good day. Achieving 100–500, sustained in the real world, is actually very difficult. Any time I hear a number in excess of 10,000 tps, and the technology involved still uses LevelDB, I know that the numbers are obtained in laboratory conditions. That said, I believe this announcement was referring to a sidechain with a small number of trusted peers. In such a setting, sure, one can do anything because the trustlessness is not an issue. I’m concerned about public blockchains, where the nodes do not and cannot trust each other. We can only get to 10,000tps and above by re-thinking Layer-1, as we are doing with Avalanche, and re-doing Layer-0, as we are doing with bloXroute.
Thank you again to everyone who participated ! If you have more questions for our team, feel free to ask us on the bloXroute Telegram channel or ourReddit page.
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BITCOIN BREAKDOWN BEARISH SCENARIO VS. THE BULLISH SCENARIO!!!! TOP 10 HIGHEST PAYING DIVIDEND STOCKS FOR 2019 BREAKING! BITCOIN GOING PARABOLIC! - These Are My Targets! - Bitcoin Price Analysis Should I Choose PPS or PPLNS? - Antminer S9, Avalon 741 THE Bitcoin BEAR Story That BULLS DON'T WANT TO HEAR

Pay Per Last N Shares (PPLNS) – This is similar to the proportional type but varies in rewarding each share in multiple rounds. Full Pay-per-Share (FPPS) – It is similar to PPS but includes dividing transaction fee among miners along with rewards. The transaction fee is distributed according to the miner’s hash power. As in our last post, we discussed 10 Best Mining Softwares, Now let’s talk about “TOP 10 BITCOIN MINING POOLS”. As the value of Bitcoin continues to rise steadily, one cannot help but search for the ways to earn Bitcoins. Ninety-nine percent of the time, when a user searches for the ways to get more Bitcoins you tend to the see ‘Mining Bitcoins’ or ‘Bitcoin Mining‘ as an option. PPLNS – Pay Per Last N Shares. Similar to proportional, but instead of looking at the number of shares in the round, instead looks at the last N shares, regardless of round boundaries. Score – Score based system: a proportional reward, but weighed by time submitted. Each submitted share is worth more in the function of time t since start of current round. For each share score is updated by ... The value of cryptocurrency, according to current pricing models . At the end of 2017, the price of bitcoin rocketed up to nearly $20,000. In June 2018, a single unit of cryptocurrency cost "only ... Unlike the Pay Per Share method, which guarantees a fixed value for your shares, the PPLNS method is gives you a proportional reward based on blocks that the pool finds. It is open to varience and luck, as the pool may either have relatively steady amounts of blocks found, or either get them in batches or not at all for a period of time.

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BITCOIN BREAKDOWN BEARISH SCENARIO VS. THE BULLISH SCENARIO!!!!

Bitcoin vs Gold: How I Believe That Bitcoin Has Intrinsic Value Like Gold Bitcoin is a consensus network that enables a new payment system and a completely d... The lack of growth in bitcoin transaction volume will not make up for the loss of revenue as the halvening reduces mining income. At the same time, confidenc... Welcome to Team Underground, I (Thomas) do weekly BTC price analysis on YouTube. I've been full time trading bitcoins for over a year now and I've decided to share some of my analysis on YouTube ... PPS(Pay Per Share), PPLNS(Pay Per Last N Shares), and Proportional. PPS and PPLNS are the most common for sure, but the general consensus is that proportional is the fairest to every miner. The ... I'll use technical analysis on the Bitcoin price to make a Bitcoin price prediction. Watch the video to learn more! 0:40 Bitcoin Berish Scenario 8:30 $5,000,000 Per Coin 13:56 Ponzi Scheme 🔥HOW ...

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