It often takes being burned to learn a lesson!
The year planning an ICO token has many untold secrets until you finally launch your token. The struggles range from, “you want a smart contract? sure, how much? we only charge 80K dollars”, to the fiverr.com self proclaimed gurus willing to do it for $100. So, you look for the medium with concern for quality and security, you ride the middle line and pay 40K dollars. After it’s all done, you say “okay, but before I launch I need to have the smart contract audited”. Once again you’re being offered the 30K range before you know your Smart contract is ready for launching.
So, after suffering countless days and hours of work and no sleep, the final day arrives. The launch….. and, then you notice all the campaigning and advertising is not really doing anything. You get 3000K emails a day from some new ICO posting site. You get another 3000K emails from guys willing to write some nonsense for you to say that you’re posted on Bloomberg and all the major networks when in reality they are posting content in comment feeds. All your friends and family know how hard you worked on the project and they make trades for your ICO token. During all that time you notice all the underlying issues like: the volatility, the idea that the smart contract is not so smart. Why? you ask. Well, a smart contract determines the trade amounts, which means what you take and what you give. The sad thing is, if you did it like that hopefully your ethics would say that something was wrong because the first person in the ICO would be getting the best discount. Now, if down the road in three months Ethereum drops below the initial trade amount due of the volatility, then the person on the end that’s not supposed to get a discount less or equal to the beginning trades does, or better yet, gets it for nothing!
So the smart contract is not so smart and you, the ICO issuer – with the idea that all things being equal – now will need to issue manual trades. Of course, you see that the volatility in Ethereum is also reflected in the transfer fees. Paying the expense to send out your ICO token along with the volatile transfer fee begs the question of why bother in the first place. Then the realization hits you that you will be married to the Ethereum platform and all your ICO token holders will always need Ethereum to transfer the token you gave them.
Say that again!!
Let me explain in easier to understand terms. Let’s say I have traders that posses my token. They figure they want to buy a bicycle with my token, so they go to the store, agree on the amount of the trade with my token – let’s call it the “dollar-token”, and now the store owner accepts. But now that I paid the owner, the platform needs a “euro-token” to cover the transfer. So now I need two types of tokens to make the purchase. Dumb, right?
So now I’m married to this platform and I ask myself, what just happened? I traded for this Ethereum and I can’t even pay my staff because I’m currently at a loss. And, not only that, but if I wasn’t at a loss the exchanges are not converting the Ethereum into fiat to cover payroll. It makes me think that a lot of ICO’s are in trouble if they are experiencing these same issues. I believe most ICO people don’t understand the cost to the person making the trade. Most allow the smart contract to do its thing which means the person making the trade is usually bound to all the transaction fees. It’s not going to be until they personally transfer the tokens themselves will they realise the dilemma.
So, you want to know the solution to fixing the problem?
Catch the next article on how to joint-venture with a Gold backed blockchain. It will save you thousands if not hundreds of thousands. The solution provides the future along-side the best technology for building your own ICO. With our experience you can have an ethical crypto currency and do it the right way. In the end you can have something people can actually use.