Op Ed: “We Never Thought of That” — When Venture-Backed Companies Undertake Reverse ICOs

Op Ed: “We Never Thought of That” When Venture-Backed Companies Undertake Reverse ICOs

With well over $3 billion raised this year alone, in very little time initial coin offerings (ICOs) have emerged as a major source of venture finance. Even companies that have already raised conventional venture funding will be tempted to raise additional funds through ICOs. Although not fully intuitive, some have labeled token issuances by entities that previously obtained equity financing as “Reverse ICOs.”

One prominent example of a Reverse ICO has already occurred. Recently, Kik Interactive successfully completed an ICO of nearly $100 million. With over $3 billion raised in ICOs this year alone, ICOs are not unsubstantial. What made the Kik offering far more unusual is that Kik has already raised over $100 million from venture investors.

The standard documents used for angel and venture investing predate the current ICO craze and, not surprisingly, do not expressly address ICOs. Understandably, these documents are all “share-centric.” The question that needs to be addressed, therefore, is: What rights, if any, do existing investors have when their company elects to undertake an ICO?

What makes the analysis particularly difficult is that, broadly speaking, there are three types of ICOs:

  • Equity Tokens — these tokens are essentially digital shares with the issuer specifying equity participation, voting rights and other token/shareholder rights.

  • Non-Equity Security Tokens — these tokens do not grant equity rights but under the Howey test are nonetheless classified as securities.

  • Utility Tokens — these tokens allow the purchaser to buy products or services from the issuer.

Although not the subject of this article, the U.S. Securities and Exchange Commission (SEC) has issued initial guidance with respect to the securities law status of tokens issued in ICOs. The SEC’s Chief Accountant has also put out guidance detailing some of the accounting issues raised by ICOs.

This article will identify several issues raised by ICOs under commonly used SAFE, Convertible Note, Series Seed and Series A documents.

Why Existing Investors Might Object to Reverse ICOs

On the surface, Reverse ICOs would seem to be a net positive for existing investors. Except for equity tokens, ICOs provide non-dilutive financing to companies. Even when tokens are classified as securities, they generally are not issued as equity  —purchasers do not have a share in the issuer, do not receive dividends and do not get voting rights. However, there are several reasons why existing investors might be concerned:

Multiple “Plays” on the Same Company

After a Reverse ICO, a venture-backed company will have both tokens and equity in the hands of investors. Prior to the ICO, the only way an investor could invest in the company was by buying its stock. After the ICO, the investor would have a choice of buying the stock or buying tokens.

At least in the current environment, there is reason to believe that demand for tokens will be greater and drive up relative prices for tokens. Equity holders may find reduced demand for their equity. Further, if the tokens remain outstanding at the time of an exit, it is difficult to predict the impact of outstanding token pools on exit valuations in either an acquisition or IPO scenario.

Impact on Follow-On Venture Funding

Many venture funds make relatively small initial investments, anticipating that they will deploy significantly more capital in subsequent rounds. ICOs may reduce companies’ needs for future equity raises. As a result, venture funds may have reduced opportunities for follow-on funding.

Delay or Elimination of Conversion Events

For holders of Convertible Notes and SAFEs, under most currently used form documents, ICOs typically will not be considered an event that triggers a conversion. In some cases, ICOs may also delay or even eliminate subsequent equity financings. Further, in successful companies, ICOs often will raise the pre-money valuation at which conversion occurs, thereby diluting SAFE/Note holders (although conversion caps in many of these instruments may mitigate the impact).

Avoiding Pre-Emptive Rights

Under the current agreement forms, tokens sold in an ICO would not trigger the pre-emptive rights of existing shareholders — thereby denying them an automatic right of participation in the ICO.

Absence of Transfer Restrictions

Under the current agreement forms, tokens sold in an ICO would not be subject to the rights of first refusal, co-sale rights and the transfer restrictions typically applicable to shareholders in venture-backed companies.

ICOs Do Not Trigger Other Typical Preferred Shareholder Provisions
  • Anti-Dilution Protection. If a company underprices its tokens, its impact on valuation could be similar to a “down round.” However, unless tokens are issued as equity, they would not trigger the anti-dilution protection clauses in the standard forms.

  • Liquidation Preferences. If token holders are given equity participation in an issuer, the issuing documentation will need to specify where they stand in the liquidation stack. For utility tokens, if the claim against the company is viewed as contractual (i.e., the holders of a pre-payment for products/services), token holders may be unsecured creditors instead of shareholders — in which case they would rank ahead of all equity classes.

  • Mandatory Conversion of Preferred Shares. Venture documents typically provide for mandatory conversion of preferred shares in an IPO of a specified minimum amount raised and minimum share price or approval by what is typically a supermajority of preferred shareholders. Several ICOs have raised in excess of $100 million. If these companies go public, it is possible that some may not need additional funding and may do so without a public offering of additional shares (i.e., a direct offering). However, if not all shareholders agree with the decision to go public, the mandatory conversion provision could not be utilized unless approved by a supermajority of the preferred shareholders, which in some circumstances could impede the ability of an IPO to proceed.

Impact on Future Cash Flow

Many ICO issuers are positioning their tokens as “utility tokens” that can be used in the future to buy the issuer’s product or service. As a result, these tokens constitute pre-pays for the future delivery of goods and services. In the future, when the products/services need to be delivered, the venture may experience cash flow issues because no new funds will be coming in to pay for the product or service.

Impact of Regulatory, Tax and Accounting Uncertainty

Currently, the regulatory status of ICOs is unclear. Issuance of tokens in a manner that does not comply with the eventual regulations that emerge could create liabilities for the company and/or limit its ability to issue equity in the future. In addition, the accounting and tax rules for ICOs have not been established, and as a result, there may be ambiguity with respect to several representations and warranties the company typically will need to make in future financings and liquidity events.

Fiduciary Uncertainty

Officers and directors of companies have fiduciary obligations to maximize shareholder value. When companies are insolvent, these duties shift to protection of the interests of creditors. What, if any, fiduciary duties a board has with respect to token holders has not been explored. If a company is facing a decision that would benefit shareholders at a cost to token holders, do board members have any fiduciary obligation to the token holders? Investor representatives on boards of companies that have conducted Reverse ICOs will not only have to deal with uncertainty but also potential conflicts of interest if they have not participated in the Reverse ICO.

Can Investors Prevent a Company from Undertaking an ICO?

While it is difficult to believe that a company would undertake an ICO without board approval, in many early-stage companies, investors do not have control of the board. However, commonly used investment documents may leave shareholders with limited recourse where boards back an ICO. In general, in SAFEs and Convertible Notes, holders do not have protective rights and, as a result, they do not have the ability to prevent an ICO.

The protective provisions in the Certificate of Incorporation for Series Seed financings would not provide Series Seed holders with the ability to prevent an ICO. In the NVCA Series A documents, ICOs do not easily fit into any of the matters for which the investor director’s approval is required. The same applies to the protective provisions for the benefit of preferred shareholders detailed in the Certificate of Incorporation.

What Now?

For blockchain startups, ICOs have become the dominant form of fundraising — far exceeding venture capital financing. Given the strength of the ICO market, “Reverse ICOs” are likely to become even more pervasive. For investors this could be very challenging. Existing form agreements in the venture space are likely to be revised to address the possibility of Reverse ICOs. However, the regulatory, tax and accounting uncertainties around ICOs may not be quickly resolved, leaving uncertainty around some of the concerns raised in this article.

Revising the form agreements will not address the thousands of venture-backed companies that were financed using pre-ICO forms. For existing investors the path forward is more difficult. Where investors control the board or have blocking rights, they will have the ability to prevent ICOs or influence their terms. For other investors, particularly in early-stage ventures with founder-dominated boards, ICOs have the potential to overturn several assumptions under which early investors funded. These investors may have to wait for situations in which their approval is needed for unrelated corporate actions or their funding is necessary and leverage that position to insist upon amendments to existing investment documents to address some of the investor challenges resulting from Reverse ICOs.

This is a guest post by Dror Futter. Views expressed are his own and do not necessarily reflect those of BTC Media or Bitcoin Magazine.

The post Op Ed: “We Never Thought of That” — When Venture-Backed Companies Undertake Reverse ICOs appeared first on Bitcoin Magazine.

Powered by WPeMatico

Trustless Payment Startup Confido Makes Off with $375k of ICO Funds

Trustless Payment Startup Confido Does a Runner with $375k of ICO Funds

Confido, an ICO startup whose name means “I trust”, has done a bunk with 1,235 ETH. The company was supposed to have been creating a trustless payment system using smart contracts. Instead, it was the project’s founders who have proven themselves trustless after deleting all their accounts and going dark. The $375,000 exit scam highlights the risks that are inherent to the still largely unregulated ICO market.

See also: Cracks Appear as Critics Label Bitconnect a Ponzi Scheme

Trust Less, Question More

As a since-deleted Medium article published by Confido explained:

Confido takes away the trust barrier in exchanges involving cryptocurrencies, while also staying decentralised and trustless.

After protesting of “legal issues” over the weekend, however, the startup hastily scrubbed its online presence. Google still has a cached version of the site and a who.is enquiry pulls up the following information, citing a residential Berlin address:

Trustless Payment Startup Confido Does a Runner with $375k of ICO Funds

Joost van Doorn is also the project’s founder and CEO supposedly. It is unlikely that the company information is correct, although the name might be, given that van Doorn has since deactivated his personal Facebook account along with Confido’s. The confido.io domain was registered with Namecheap, who accept payment in bitcoin.

Trustless Payment Startup Confido Does a Runner with $375k of ICO Funds
Joost shut up and take my money.

An FAQ on the company’s cached website poses such questions as “Why is the hard cap so low?”, to which they reply: We think the current ICO space is messed up; companies are raising millions without a fully working product or existing customers. We have talked with financial analysts and we simply don’t need more than $400,000 to develop and market our project.”

Irony Upon Ironies and Insult to Injury

The Confido contract address currently has a balance of 0 ether and just 676 CFD tokens, worth a total of $21. As word broke of the exit scam on November 19, the token’s value plummeted by 94%. It’s currently trading on Kucoin, Etherdelta, and Mercatox, though suffice to say there aren’t many buyers.

Trustless Payment Startup Confido Does a Runner with $375k of ICO Funds

Google webcache also reveals a snapshot of the team’s now deleted Twitter, where the ironies continue to stack up:

Trustless Payment Startup Confido Does a Runner with $375k of ICO Funds

Trustless Payment Startup Confido Does a Runner with $375k of ICO Funds

The 4.5 million CFD the team refer to currently sit in this address. On 4chan’s /biz/ messageboard where traders gather to troll, shill, and occasionally dispense sound investment advice, there was an abundance of pink wojaks as the despair sank in, and it was a similar story on Reddit.

Trustless Payment Startup Confido Does a Runner with $375k of ICO Funds

What Hope of a Happy Ending?

There remains a slim chance of a happy ending to this sorry story. Tokenlot, who had promoted the Confido sale on their site, reportedly issued the following information after the exit scam came to light:

Trustless Payment Startup Confido Does a Runner with $375k of ICO Funds

Trustless Payment Startup Confido Does a Runner with $375k of ICO FundsDays earlier, some of the /biz/ forum’s more astute users had posted warnings that the team behind Confido didn’t seem to exist, but were shot down with one sceptic jibing “You sold the future of online crypto commerce at 5 M market cap OP. You sold too early and you will have to live with that”.

In a thread on November 19, someone posted:

wait a second, is this real? I woke up not too long ago and I am down over $54K on my investment in CFD…I bought in with almost everything I had when it was .94 cents. What is happening? I am seeing rumors that the developers did an exit scam. Is this true? Does anyone know why their website is down? I’m not getting any responses from email or anything. I feel really f*****g sick. Can someone tell me please what is happening?

The Confido scam arrives the same day a survey revealed that 15% of institutional traders won’t go near ICOs until tighter regulation arrives. While the vast majority of initial coin offerings are conducted in good faith, all it takes is a few bad apples to ruin things for everyone.

Trustless Payment Startup Confido Does a Runner with $375k of ICO Funds
The Confido team that never was.

As Confido were posting news of “legal troubles” which have been widely interpreted as the Trustless Payment Startup Confido Does a Runner with $375k of ICO Fundsfirst phase of their planned exit, one Twitter user highlighted the fact that Coinmarketcap is running a trio of ads for projects which are dubious at best and fraudulent at worst. Bitcy, Resonance, and Bitconnect all promise “guaranteed returns”, which should be an instant warning sign. As the Confido case shows, however, it doesn’t require unrealistic claims to hook investors: all it takes is a plausible sounding ICO with a modest hard cap.

Trustless indeed.

What do you think can be done to protect investors from ICO scams? Let us know in the comments section below.


Images courtesy of Twitter.


Bitcoinocracy is a free and decentralized way to measure the Bitcoin community’s stance on a given proposition. Check vote.Bitcoin.com.

The post Trustless Payment Startup Confido Makes Off with $375k of ICO Funds appeared first on Bitcoin News.

Powered by WPeMatico

PR: German Fintech Company Naga Group to Launch Token Pre-Sale

German Fintech Company Naga Group

This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. Bitcoin.com does not endorse nor support this product/service. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the press release.

The NAGA Group, creators of the first blockchain-based ecosystem for decentralized trading, investing, and education in financial markets, virtual goods, and cryptocurrencies. has announced the launch date of their NAGA Coin (NGC) token pre-sale.

Who is The NAGA Group?

Founded in 2015, The NAGA Group AG broke records earlier this year, launching the fastest-performing German IPO in the last 15 years. Listed on the German Stock Exchange in Frankfurt, NAGA Group shares are currently trading at nearly 500% above their original issue price. The company employs a team of over 120 people and has a market cap of over $250 million USD.

The NAGA Group’s flagship product is SwipeStox. Combining social features like chat channels, timeline updates, following and watching other users, etc… with a robust trading platform, SwipeStox is designed to take the confusion out of trading. Launched in 2016, SwipeStox boasts tens of thousands of active users, millions of dollars in annual revenues, and a total trade volume of over $49 billion to date.

Switex, another NAGA Group product, is the first independent legal virtual goods exchange platform. It allows video game players to buy in-game virtual items from other gamers as well as from the game publishers themselves. Other virtual items, such as concert and movie tickets, e-gift cards, etc…, can also be bought and sold on the platform. Currently in alpha, Switex is expected to launch in Q4 2017.

Biggest Names in the Crypcommunity Join NAGA Group

As if NAGA Group wasn’t stirring up enough excitement already, on November 14,2017, they announced that two of the biggest names in cryptocurrency – Bitcoin.com CEO Roger Ver and COO Mate Tokay – had joined the project’s Advisory Board. In addition, it was also revealed that the founder of the Evercoin cryptocurrency exchange and Limited Partner with Pantera Capital, Miko Matsumura, had joined the Advisory Board as well.

All three men bring a wealth of cryptocurrency and financial knowledge and experience to the table and it will be interesting to see how their influence and guidance will help shape the project’s future.

NAGA Token Pre-Sale

The NAGA token pre-sale will begin on November 20, 2017 and will end on November 27, 2017, or when the pre-sale token supply (20 million NGC) sells out.

  • Start Date: 20 November 2017 (00:00 CET)
  • End Date: 27 November 2017 (23:59 CET)
  • Ticker Symbol: NGC (NAGA Coin)
  • Token Price: 1 NGC = $1.00 USD
  • Minimum Purchase: 15 NGC ($15.00 USD)
  • Bonus: 30% bonus NGC during pre-sale ONLY
  • Accepted cryptocurrencies: BTC, BCH, ETH, LTC, DASH
  • Accepted fiat currencies: EUR, USD

For more information about The NAGA Group AG, please visit their company website. You can learn more about the NAGA ecosystem and token sale at nagaico.com and by following them on Facebook, Twitter, LinkedIn, BitcoinTalk, and Telegram.

Supporting Link
https://www.nagaico.com/
Contact Email Address
[email protected]

This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

The post PR: German Fintech Company Naga Group to Launch Token Pre-Sale appeared first on Bitcoin News.

Powered by WPeMatico

Futures Markets: What They Are and What They Mean for Bitcoin

As bitcoin gains worldwide attention, there’s lots of discussions lately about futures markets. With companies like LedgerX and some pending bitcoin-based derivatives products coming soon from CME Group and Cboe, leading to some people scratching their heads wondering — What are futures markets and what do they mean for bitcoin?

Also read: Internet Archive Adds Bitcoin Cash and Zcash for Donations

Everyone Keeps Talking About Bitcoin Futures Markets

Over the past couple of years, a few companies have been trying to apply derivative market trading into the world of bitcoin. Lately, people have been following the news of LedgerX swapping a few million worth of bitcoin-based futures products. Further, observers have heard about two of the world’s largest options markets, Cboe and CME Group, trying to build their own futures options tethered to the bitcoin economy. Many people are curious about how these types of trading markets will affect bitcoin’s price and volatility.

What are Bitcoin Futures and Derivatives Markets?

A bitcoin futures contract is a forward agreement to purchase or sell a specific amount of bitcoin, within a specified time frame for a set price.** So if you buy a bitcoin futures contract at a set price at say $10,000 per BTC; you agree to purchase the coin at the contracted rate, on the agreed upon date and the same goes for selling. Futures markets are the exact opposite of spot markets, and exchanges people traditionally use to trade bitcoin these days. Traditional types of spot trades occur immediately, in contrast to forward agreements scheduled for a specified payout date. Bitcoin-based futures derive their price according to the movement of bitcoin’s value, and these markets are very much correlated with the spot price markets.

** Its important to note there is no real bitcoin being exchanged within futures contracts. Futures products are cash-settled daily.

Futures Markets: What They Are and What They Mean for Bitcoin
A forward agreement to purchase or sell bitcoin at a future price.

 Spot and Futures: How Profits and Losses Are Tethered to Arbitrage

Now you may ask yourself why traders would want to agree upon purchasing an asset in the future utilizing a contract. The reason is that individuals and organizations make a lot of money off of arbitrage or taking advantage of the spread between two market prices. The future of bitcoin’s price is always bound to have a different value. For instance, a person could gain profits by practicing a method called ‘cash-and-carry-arbitrage.’ This means a person could take a long position using bitcoin spot markets and a short position in bitcoin-based futures. The same individual could purchase the bitcoin at $9,000 spot, and a BTC futures position at $10,000 and sell the futures contract before the expiration. If the bitcoin’s price reaches $11,000 by the end of the contract you just pocketed $1000 for taking a risk. Of course, you would lose money if bitcoin’s price went below $9000 by the contract’s expiry.

Futures Markets: What They Are and What They Mean for Bitcoin
Arbitrage is taking advantage of the spread between two market prices.

The History of Futures Markets

Active futures markets have been around since the Ancient Mesopotamia times back in 1750 BC. The first known derivatives market was initiated by the Babylonian king Hammurabi. Futures trading has also been found in Aristotle’s writings as well. The first modern derivatives market include the Dojima Rice Exchange in Japan (1700s), the London Metal Market (1800s), and the Chicago Mercantile Exchange (CME Group-1900s). Currently, CME Group is the largest futures marketplace worldwide and is one of the big names bringing bitcoin to the world of derivatives.

Futures Markets: What They Are and What They Mean for Bitcoin
The Chicago Mercantile Exchange (CME Group) trading floor back in the early 1900s.

 Nearly Every Commodity, Product and Stock Worldwide is Played on the Derivatives Markets

Now some people think futures markets will be great for bitcoin as it may streamline more mainstream exposure. Speculators think it might even help with bitcoin’s price volatility as its assumed others are taking on the risk and reward aspect of a turbulent buyers market.    

Some people don’t like derivatives markets and think that it’s basically a roulette game. Skeptics believe futures are no different than placing a wager on a horse race, but these days every single world commodity, stock, bond, debt, and now even bitcoin is traded on the roulette table. Because spot markets and futures are so intertwined people believe markets can be manipulated. For instance, people buying futures could also be purchasing bitcoin at spot to make some quick gains. While others may play futures markets, because they know some ‘big bitcoin whale’ might dump next month. Maybe insiders know about some hedge fund about to purchase large quantities of BTC spot, and they bet on a long contract that turns a significant profit. Even though derivatives are somewhat illusionary, they become very real with arbitrage, as outside forces utilizing spot markets can still be used as a correlated tool.

Will Futures Markets Affect Bitcoin Spot Markets? The Answer is Yes

So futures markets could theoretically ‘tame’ bitcoin’s price volatility, but also amplify both bearish and bullish sentiment on spot exchanges. In less than two months some of the biggest financial players in the world will be shooting the dice with bitcoin’s value, and there will likely be an impact on spot markets. If bitcoin futures become more prevalent, then everyday markets will feel the tremors. We just don’t know if that impact will be positive or negative.

What do you think about bitcoin futures markets? Let us know what you think about this type of trading in the comments below.


Images courtesy of Bitcoin.com, CME Group, and the film Back to the Future.


Have you seen our new widget service? It allows anyone to embed informative Bitcoin.com widgets on their website. They’re pretty cool, and you can customize by size and color. The widgets include price-only, price and graph, price and news, and forum threads. There’s also a widget dedicated to our mining pool, displaying our hash power.

The post Futures Markets: What They Are and What They Mean for Bitcoin appeared first on Bitcoin News.

Powered by WPeMatico

Rublix Is Reimagining Crypto Trading

RBLX thumb


The soaring fortunes of bitcoin and cryptocurrencies is attracting massive amounts of media attention worldwide. This has led to a steady stream of traders flocking to the space amid record prices and subsequent asset returns.

In some circles, this exuberance has to raise concerns about a bubble akin to the great global recession of 2008. On a weekly basis, a seemingly endless stream of new crypto projects, many predicated on little more than a hastily developed white paper and website, are being launched and creating a crowded array of options for would-be traders.

Enter Rublix, a Canadian blockchain and smart contract technology startup that aims to eliminate many of the common concerns and uncertainties arising in the prevailing world of decentralized markets or speculative asset classes. Charting a course of transparency, while nurturing a world-class ecosystem of problem solvers and supporters, Rublix endeavors to create a new normal for trading performance among cryptocurrencies or any asset class. Bolstered by highly astute technology and investment experts, Rublix is actively unveiling a suite of products tied to an ambitious roadmap with a series of launch dates.

The Rublix platforms are being developed in collaboration with some of the top designers and coders in the world and the team is seeking to attract professionals in the finance space who desire to actively participate in the world of decentralized markets. Its target market? Traders of any sophistication level in any industry including people who believe that cryptocurrencies and the blockchain have barely scratched the surface in terms of its growth potential.

Hedge

Rublix’s flagship product is called Hedge, a platform which assists those who are interested in, yet unacquainted with, trading in making thoughtful, informed and educated decisions. Users will have the ability to track and mimic trades made by sophisticated investors on the platform with a verified ranking. The more accurate a trader, the higher their corresponding rank. The platform features an advanced block explorer that displays and records real-time trading predictions on the Rublix chain. The result is that novice traders will be able to rapidly assess and learn from more experienced counterparts with proven track records.

“The problem with many trading platforms that allow entry level traders to follow ‘successful traders’ is that they employ a month-by-month portfolio model,” said Rublix co-founder and CEO David Waslen. “Unfortunately, portfolio growth is only one piece of the puzzle when analyzing performance. A twenty percent increase in one’s portfolio is not an accurate measure as to whether a trader is highly skilled or not. Perhaps they got lucky with one trade while the balance of their portfolio is mediocre or poor.”

The goal of Rublix, Waslen added, is to change this dynamic.

“Rublix, therefore, aims to expose each trading prediction both before and after the event to increase transparency and accountability,” he said. “By making each blueprint public information with blockchain immutability, we give users a secure tool that will aid in making calculated decisions on which information to trust the we hope will help them enter the cryptocurrency space and successfully trade.”

Cryptocurrencies, with prevailing volatility in a marketplace that never closes, provide an abundance of opportunities for any trader. What is needed is a trusted source of advice to help professional and novice traders develop their knowledge base and hone their skills. That is why through integration with three inherent components of blockchain technology – transparency, decentralization, and immutability – Rublix’s Hedge platform debunks market manipulation while providing a trusted source of trader information.

“The blockchain aids in keeping our data secure and unsusceptible to intrusion or manipulation,” Waslen said. “It’s obviously a foundational element in helping us create a reliable, unbiased data source that will allow users to make calculated decisions on how to trade appropriately. A decentralized database of users’ past trade history paired with smart contract verification will give us a significant competitive advantage over other trading networks.”

Waslen goes on to note that the platform rewards users with the company’s native RBLX token on an exponential scale based on how many times they are “accurate” in their predictions. Hedge is targeted for release in Q1 2018.

TradersEdge

Rublix’s next product for helping new traders enter the cryptocurrency market is called TradersEdge. Set to launch in Q3 of 2018, it will feature a suite of tools that offer a similar feel and aesthetic to that of many well-known modern trading platforms. This attention to user experience is seen as a vital cog to building long-term interest and user adoption in the crypto-sphere as many cryptocurrency exchange platforms lack a user friendly interface.

Centurio

Finally, Rublix is building a tool called Centurio which will assist newcomers in getting up to speed with how to use cryptocurrencies for daily transactions and savings. This cross-platform solution, which doubles as a wallet and contract organizer, is targeted for release in early 2018.

Unfriendly platforms, difficulties in finding trusted information and general hesitation are what limit the growth and proliferation of cryptocurrencies. Recognizing this, Rublix is laser focused on bringing a whole new cast of entrants into the marketplace by mitigating a number of common concerns that hinder adoption. Rublix’s goal is to create an environment where embracing the blockchain and owning cryptocurrencies feels second nature.


The post Rublix Is Reimagining Crypto Trading appeared first on Bitcoin Magazine.

Powered by WPeMatico

PR: Crypto20’s Autonomous Crypto Index Fund Passes $15 Million

Crypto20 Index Fund

This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. Bitcoin.com does not endorse nor support this product/service. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the press release.

CAYMAN ISLANDS – CRYPTO20 is continuing to gaining momentum as it hits $15 million for its Cryptocurrency Index Fund. Over 5,000 contributors are part of the fund which, unlike competitors, is a finished product with a range of investor tools.

With just 10 days left to run, the team behind CRYPTO20 is expecting to build even further and cross the $20 million mark in the coming week. The fund’s token, C20, is a representation of an investor’s share of the fund, and the fund’s value is equal to the combined value of its assets.

Actively managed funds consistently fail to beat the market index despite decades worth of data, billions of dollars and hundreds of analysts at their disposal. When they have, their fees dilute investor returns to less than if they had simply held the index.

Daniel Schwartzkopff, CEO & Founder of CRYPTO20, stated:

“We have known for a long time that the crypto world should benefit from the introduction of the most proven, practical, tried and tested investment vehicle – the index fund – and we are pleased to share this outlook with over 5,000 contributors.”

CRYPTO20 has released trading tools and insights that are generated live from the eight exchanges connected to the system via a simple, unified API. The trading tools are available in the fund investor portal and include information on slippage, the best price, and trading pair to acquire assets with and the volume by exchange.

The fund is fully AML/KYC compliant and operates as a registered LLC in the Cayman Islands, a popular fund jurisdiction.

The CRYPTO20 fund mitigates risk and volatility and historically has provided better returns than the market cap leader, Bitcoin, alone.

ABOUT CRYPTO20

CRYPTO20 is a Cryptocurrency Index Fund that will use the token sale funding to buy the underlying crypto assets. No broker fees, no exit fees, no minimum investment and full control over your assets. Full blockchain transparency.

WEBSITE: www.crypto20.com
SLACK: https://goo.gl/rNBdVJ
CONTACT: [email protected]

This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

The post PR: Crypto20’s Autonomous Crypto Index Fund Passes $15 Million appeared first on Bitcoin News.

Powered by WPeMatico

CME Group Plans to Launch Bitcoin Futures December 10

CME Group Plans to Launch Bitcoin Futures December 10

Just recently news.Bitcoin.com reported on the Chicago Mercantile Exchange (CME Group) planning to launch its bitcoin-based derivatives products this quarter. Now according to CME’s bitcoin futures market specs, the firm plans to launch its derivatives products on December 10 pending regulatory approval.

Also read: Troy University’s Malavika Nair Says Bitcoin Is Something Different Than a Classic Bubble

CME Group’s CEO Terry Duffy: ‘Our Exchange is the Natural Home for This New Bitcoin-Based Vehicle’

CME Group Plans to Launch Bitcoin Futures December 10At the end of October, the world’s largest options exchange announced it would be offering mainstream investors the chance to participate in bitcoin-based futures markets in Q4 of 2017. The company will follow the firm, LedgerX, which has been swapping bitcoin futures for a few weeks now. Terry Duffy, CME Group’s CEO, and Chairman explained at the time that there is a lot of interest in bitcoin derivatives products stating;

Given increasing client interest in the evolving cryptocurrency markets, we have decided to introduce a bitcoin futures contract — As the world’s largest regulated FX marketplace, CME Group is the natural home for this new vehicle that will provide investors with transparency, price discovery and risk transfer capabilities.

CME’s Aims to Launch Futures Products on December 10

CME has released its futures market specs, and on November 19 a date was revealed for launch time pending U.S. regulatory approval.

“Effective Sunday 10 December 2017 for trade date Monday 11 December 2017, and pending all relevant regulatory review periods, please be advised that CME will launch Bitcoin Futures,” explains CME Group’s most recent update.

CME’s futures will be based on the price of BTC per USD with a contract unit of five index points. The products will be listed on CME, Clearport, and CME’s Globex central standard time, and the five index points will be $25. Further, registered monthly contracts will be for the nearest two months in the March quarterly cycle (Mar, Jun, Sep, Dec) plus the nearest two serial months not in the March quarterly cycle, explains CME.

CME Group Plans to Launch Bitcoin Futures December 10
CME Groups Specs updated yesterday on November 20 detailing that the firm’s bitcoin-based futures markets will begin on December 10, 2017.

Will Futures Tame Bitcoin’s Volatility or Amplify Price Swings?

Some speculators believe CME’s futures products will bring less volatility to bitcoin spot markets. For instance, the company’s contracts will be issued for $25 USD but will not swing more than 20 percent above or below the previous settlement prices. However taming bitcoin’s significant price fluctuations with futures markets is currently a theoretical concept as cryptocurrency is a whole new beast as far as trading is concerned.

For now, a bunch of bitcoiners are looking forward to seeing what CME’s bitcoin futures bring to the digital asset’s ecosystem, and cryptocurrency enthusiasts will soon find out.

What do you think about CME Group launching its bitcoin futures contracts on December 10? Let us know in the comments below.


Images via Pixabay, and CME Group.


Do you like to research and read about Bitcoin technology? Check out Bitcoin.com’s Wiki page for an in-depth look at Bitcoin’s innovative technology and interesting history.

The post CME Group Plans to Launch Bitcoin Futures December 10 appeared first on Bitcoin News.

Powered by WPeMatico

The White Paper is Dead – Here’s What Should Replace It

The White Paper is Dead. Here’s What Should Replace It

“Bitcoin Silver combines the revolutionary power of cryptocurrency with the speed of the Ethereum network to extend it’s [sic] accessibility and use value to the rest of the world.” So stutters the cover notes for one of the 300+ crypto white papers published this year. With more ICOs than there are writers qualified in the field, it’s no wonder their academic quality has plummeted. The white paper, as a pitch model, is dead. The question is: what should replace it?

Also read: Bitcoin.org Owner Wants to Revise Satoshi’s White Paper

Drowning in a Bukkake of White Papers

As Wikipedia explains:

A white paper is an authoritative report or guide that informs readers concisely about a complex issue and presents the issuing body’s philosophy on the matter. It is meant to help readers understand an issue, solve a problem, or make a decision.

To many blockchain startups, however, the white paper is little more than the preamble to an adult movie; an inconvenience that’s destined to be skipped. Impatient investors, looking to flip tokens for an easy 2x, don’t care about problem statements and explainers on the untapped market for cryptocurrencies – just show them the token model.

Nevertheless, the format persists as the thin veneer of respectability that even the most dubious of ICOs must come wrapped in. “Course it’s not a scam bro. Did you not read the white paper? We’re creating a revolutionary decentralized ecosystem with its own governance model, and we’re gonna bank the unbanked billions globally”.

The White Paper is Dead. Here’s What Should Replace It
Seems very legit. Not.

WWSD – What Would Satoshi Do?

Words that don’t appear in Satoshi’s white paper: decentralized, revolutionary, advanced, innovative, ground-breaking, state-of-the-art. Words that appear in every half-baked ICO white paper: all of the foregoing. Satoshi Nakamoto’s paper runs to just nine pages and is a masterpiece of taut, academic writing. Compare that with the ‘white paper’ for Bitcoin Silver – which is by no means the worst offender, it should be noted.

The White Paper is Dead. Here’s What Should Replace It

Much merriment was derived this week after it emerged that cut-price jobs market Fiverr is offering white papers for as little as $80. A more realistic estimate from earlier this year placed the cost of authoring a crypto white paper at $2,000+. For cash-strapped startups trying to cut corners until their ICO leads them to Lambo-land, the prospect of a knock-off white paper can seem enticing. They would do well though to recall the maxim about The White Paper is Dead. Here’s What Should Replace Itgetting what you pay for. Investors might be greedy but they’re not dumb, and the prospects of raising millions off the back of a Fiverr white paper seem fanciful.

Startups miserly enough to buy into that offer, and investors daft enough to buy into the ensuing white paper deserve everything they get – which is likely to be a worthless shitcoin that will be lucky to make Etherdelta. The white paper meme has been flogged to death, with the bona fide papers suffocated by the faux pretenders. But what are the alternatives?

Enter the Pitch Deck

A pitch deck is a presentation, typically created in Powerpoint or Prezi, that provides a business plan overview. It’s the tl;dr version of the white paper: less rambling, less typos, and less buzzwords. If your business idea is “A decentralized X” or “Y on the blockchain”, you probably don’t need a 20-page white paper. We know what smart contracts are, we know how blockchain works, and we are well-versed in the benefits of tokenization. Just give us the cliff notes and be done with it. Persevering with white papers, long after the format has ceased to be taken seriously, is both disingenuous and inefficient.

There is one exception to this suggestion: for complex crypto projects, the white paper is still the best means of outlining the concept. If you’re creating the next Chainlink, in other words, stick it in a white paper. The next already existing app to be decentralized, “Blockchain for X”, on the other hand, should be hand-written on a sheet of toilet paper and air-dropped to investors in adjoining cubicles.

The Bitcoin Silver white paper concludes:

We have an incredible team consisting of financial experts, blockchain developers, telecommunication influencers, international law experts and local business ventures…working together to revolutionalize decentralize [sic] currency for the rest of the world.

Enjoy your Cryptopia listing.

Do you think the ICO white paper should be laid to rest? Let us know in the comments section below.


Images courtesy of Shutterstock, Fiverr, Bitcoin Silver, and Comedy Central.


Express yourself freely at Bitcoin.com’s user forums. We don’t censor on political grounds. Check forum.Bitcoin.com.

The post The White Paper is Dead – Here’s What Should Replace It appeared first on Bitcoin News.

Powered by WPeMatico

62% of Institutional Investors are Buying or Considering Buying Bitcoin

62% of Institutional Investors are Buying or Considering Buying Bitcoin

Over the past few weeks, a string of surveys has provided an insight into the public’s perception of bitcoin. Japanese; Americans; millennials – all have been grilled regarding the world’s leading digital currency. One group that have yet to speak their piece en masse is institutional traders – until now. A newly released survey sheds light on what investors think of bitcoin and it makes for interesting reading.

Also read: Troy University’s Malavika Nair Says Bitcoin Is Something Different Than a Classic Bubble

Traders are Fascinated by the Bitcoin Rollercoaster

Despite numerous soundbites from Wall Street CEOs, their underlings have remained conspicuously absent from the bitcoin debate. We know what Jamie Dimon and Lloyd 62% of Institutional Investors are Buying or Considering Buying BitcoinBlankfein make of bitcoin, but what about the average institutional trader? Thanks to the efforts of Triad Securities, we now have an answer to that question. Between 6 and 13 November, they spoke to 317 institutional traders in a survey that reveals conflicting views on bitcoin.

When asked whether they had ever bought bitcoin or other cryptocurrencies, 31% said yes, with around half having done so only within the last six months. Another 36% professed to be considering buying bitcoin, 31% ruled it out altogether and, not surprisingly, just 1.5% of respondents confessed to being unfamiliar with bitcoin.

Bitcoin Good, ICOs Bad?

The same group of traders was also asked about ICOs, which received markedly less enthusiasm than bitcoin. The number of traders who had invested in them was less than 8%, and 48% stated that they hadn’t even looked at ICOs. 29% of those surveyed did admit to considering the merits of ICO investment, and another 15% expressed a desire for additional regulation before they would consider venturing into the space.

62% of Institutional Investors Have Bought or are Considering Buying Bitcoin

Last week, Coinbase announced that they were launching cryptocurrency asset management for institutional investors. The Triad Securities survey was conducted just before this story broke, so it is hard to say whether the news would have caused respondents to answer otherwise to the next question – What is your level of confidence in current bitcoin custodial offerings? As it was, just 9% claimed to have a high level of confidence, versus 26% having low confidence in the ability of Coinbase, Gemini, and others to safeguard digital assets.

Bitcoin Keeps Bubbling Nicely

The survey concludes by revealing a few tidbits of collective wisdom from the institutional Institutional Investors are Considering Buying Bitcointraders involved. 41% see bitcoin as a safe store of value similar to gold and just over 39% think bitcoin is a bubble that’s destined to crash. Not all traders are as pessimistic about the currency’s prospects however: 27% think it will continue to rise gradually, and another 17% are bona fide bulls, asserting that bitcoin will double in value in the next six months.

For investors accustomed to enjoying single digit growth, bitcoin, with its explosive growth, is an asset whose rise can only be watched with a mixture of envy and apprehension. No one knows where bitcoin will be six months from now, but one thing’s for sure: Wall Street’s watching closely.

Do you welcome institutional money flooding into bitcoin? Let us know in the comments section below.


Images courtesy of Shutterstock.


Need to know the price of bitcoin? Check this chart.

The post 62% of Institutional Investors are Buying or Considering Buying Bitcoin appeared first on Bitcoin News.

Powered by WPeMatico

Hundreds of Bitcoin Cash Are Stuck in Segwit Addresses – But There Might Be a Way to Get Them Back

Hundreds of Bitcoin Cash Are Stuck in Segwit Addresses – But There Might Be a Way to Get Them Back

Hundreds of thousands of dollars worth of BCH is languishing in segwit addresses. The funds were mistakenly sent there by users who have no easy way of differentiating segwit and non-segwit addresses. Retrieving the funds is difficult, but not entirely impossible, as p2sh.info’s Antoine Le Calvez has revealed. He’s discovered what’s believed to be the first successful bitcoin cash recovery, aided by the miners who confirmed the transaction.

Also read: Amaury Séchet Proposes New Bitcoin Cash Address Format for January 14

Stuck in No Man’s Land

When bitcoin forked leading to the creation of bitcoin cash, woeful tales of funds sent to the wrong chain abounded. With bitcoin and bitcoin cash addresses indistinguishable, it’s an easy mistake to make. Provided the user holds the private keys to the destination wallet, however, retrieving the coins is relatively straightforward.

Hundreds of Bitcoin Cash Are Stuck in Segwit Addresses – But There Might Be a Way to Get Them BackSending BCH to a BTC address on an exchange is a different matter. Without private keys, the customer is reliant on the goodwill and patience of the exchange to remedy the mishap. Some exchanges have done their best to help; some have shrugged it off as not being their problem; and then there’s Bittrex, who said they would consider looking into such cases, but there would be an admin fee of at least 0.1 BTC.

Uncovering the Secret Segwit Addresses

Sending BCH to a regular BTC address is unfortunate but not always fatal. But what happens when bitcoin cash is sent to a segwit bitcoin address? That’s when things get complicated. Legacy bitcoin addresses start with a 1, whereas segwit addresses generally start with a 3. (There are also segwit addresses that start with bc1, but we’ll ignore them for now.) The trouble is that while segwit addresses start with a 3, not all addresses that start with a 3 are segwit compatible. And there’s the rub.

It’s easy to send bitcoin cash to a 3-address without realizing that it’s actually a segwit address. Le Calvez claims that at least 478 BCH, worth over half a million dollars, is trapped in this manner due to the ambiguity of segwit addresses. There is some good news though for affected parties: at least one victim has successfully recovered 100 BCH that were thought to be lost.

Segwit or Not Segwit?

The technicals behind the segwit debacle go as follows: BCH supports P2SH addresses – i.e. ones that start with a 3 – but it doesn’t support P2SH-P2WPKH addresses – i.e segwit addresses – which also start with a 3. At present, there’s no easy way to distinguish between the two. The only means of determining whether a 3- address is segwit-enabled is once a transaction has been sent from that address. At that stage, it’s possible to enter the transaction ID into the blockchain.info explorer, select ‘Advanced view’ from the bottom right corner and then view the segwit input data which should look like this:

Hundreds of Bitcoin Cash Are Stuck in Segwit Addresses – But There Might Be a Way to Get Them Back

Le Calvez cites the following address as having received a total of 100 BCH in error. This is borne out by examining the transaction data. Officially, those funds should be lost forever, but unofficially, it’s still possible to recover them. For those who are intrigued by such matters, the workaround is explained in detail by redditor btctroubador here under “More Problems”.

The simplified version goes as follows:

1. Contact the mining pool who found the block in which the fatal transaction occurred.

2. Ask them nicely to assist (offering a share of the spoils may help your case).

3. The miners must then mine the transaction but not broadcast it, to prevent the risk of someone else double spending the coins.

Hundreds of Bitcoin Cash Are Stuck in Segwit Addresses – But There Might Be a Way to Get Them Back

This solution isn’t foolproof, and relies on the honesty of the miners, who could just as easily retain the coins for themselves if they were feeling greedy. In the case of the 100 BCH sent to a segwit address, BTC.com rode to the rescue and saved the day. Not all miners can be counted upon to act so benevolently however.

If the proposed new address format for bitcoin cash is introduced next year, such problems should be eliminated. Until then, when sending BCH to an unfamiliar address, double check before you hit that button. As for the remaining 400-odd BCH still stuck in segwit addresses, they seem destined to remain there unless the miners and the senders can work out a deal.

Do you think miners should be obliged to help when BCH goes to segwit addresses, or is it just tough luck? Let us know in the comments section below.


Images courtesy of Shutterstock.


Keep track of the bitcoin exchange rate in real-time.

The post Hundreds of Bitcoin Cash Are Stuck in Segwit Addresses – But There Might Be a Way to Get Them Back appeared first on Bitcoin News.

Powered by WPeMatico