Why we picked Ethereum for our Initial Coin Offering

Sep 29, 2017 · 5 min read

After much thought and analysis, we finally settled on the Ethereum blockchain. At CrowdWiz, we have huge ambitions for our crypto fund project. So we took time to evaluate the best platform for our clients and upcoming ICO. We stacked up all our alternatives next to each other and weighed their pros and cons.

In summary, it was ideal because

Ethereum supports decentralized applications more than any other blockchain

Ethereum has a clear vision and a committed decisive leadership team

Ethereum is working with Fortune 500 Companies

Ethereum’s investors are reinvesting profits into Ethereum projects like ours

Ethereum powered smart contracts have popularized ICOs

Photo credit: Mikito Tateisi

What is Ethereum?

Ethereum is a general purpose blockchain for decentralized applications and smart contracts. Due to its flexibility, it has quickly shot up to the most popular blockchain and the second largest cryptocurrency in the market. It is undoubtedly responsible for attracting a new wave of developers, investors and mainstream institutions into the cryptocurrency industry.

In 2014, Ethereum’s choice of design was a response to the perceived shortcomings of existing cryptocurrency blockchains. As a blockchain expert himself, Ethereum’s inventor Vitalik Buterin experienced first hand the weakness of Bitcoin. Vitalik, alongside other developers, was part of Mastercoin project and colored coin protocol. Both projects were attempting to harness the power of the bitcoin blockchain by building a financial layer on top of it.

But they ran into some problems. The Bitcoin blockchain did not lend itself to meta-layers. It required complex protocol tweaks to power up simple functions. For example, the protocol did not come with a widely accepted programming language for non-core development. Bitcoin’s purpose prioritized securing the currency above everything else.

Ethereum, the go-to platform for building applications

Ethereum on the other hand, always set out to become a whole new blockchain from the ground up. You can tell from its design philosophy: a general purpose blockchain to support any application.

The result was a decentralized computer that could run any decentralized application. Developers loved it! Ethereum’s appeal to programmers was its flexibility and multiple user-friendly client implementations. Some of the most popular coding languages like Go, C++, Python, and Java have been used to build close to 600 dapps.

The variety of dapps not limited to financial applications are evidence of the community’s diversity. Practically any application include ending, education, music, crowd-lending, energy markets, and identity Dapps can run on Ethereum.

A Decisive Leadership Team breeds confidence

The decisive leadership culture promoted by the Ethereum foundation was the key to its success. Ethereum pretty much works like a decentralized startup that prioritizes users through functionality, agility and responsive development. When a problem arises, the leadership team comes up with immediate solutions.

Unlike other blockchains, politics and disagreements come second to the success of the blockchain. The DAO hack was a great demonstration of the decisiveness of the team.

In 2016, a malicious hacker siphoned off 30% of the total funds of a mutually controlled fund holding $150 million. Led by Vitalik, the Ethereum community marshaled behind a hard fork to reverse the attack and refund investors for their loss. Undoing the $50 million heist restored investor confidence in the leadership structure.

Photo credit: Yux Xiang

Ethereum has partnered with Fortune 500 Corporations

Oozing confidence comes with perks. It is why Fortune 500 companies have sought out Ethereum for partnerships. They like to see a vision followed through by execution. Ethereum checked all the boxes.

As an umbrella body, the Ethereum Enterprise Alliance fosters the exchange of ideas and experimentation with the technology. The consortium features prominent academics, startups, technology vendors, experts, million dollar companies together with Ethereum subject matter experts. Microsoft, Accenture, CME Group, and big banks like JPMorgan and UBS now associate their brands with Ethereum. They are experimenting with private implementations of Ethereum internally.

This initiative has been a big boost for the price of Ethereum which has skyrocketed over the past 6 months.

Early adopters and investors are re-investing profits

Early adopters and investors have reaped super returns from price appreciation. The $412 ETH price peak of July 2017 was a hallmark of investor appreciation of all the great aspects of the Ethereum project.

Capital inflow from investors drove up the price from $11 to $400 over a 6-month span. Ethereum’s total market capitalization is now second only to bitcoin. With new found wealth, investors are scouting other lucrative opportunities. Projects using Ethereum technology have overwhelmingly received favor.

It’s a win-win. Token holders reinvesting in the ecosystem grows long-term value for the overall project. One app will use another from the same blockchain, increasing the value of both apps and the platform.

At CrowdWiz for example, we are using Ethereum to democratize investing and capital raising. Gnosis is powering a prediction market based on Ethereum while Uport offers decentralized identity on the Ethereum blockchain. Both CrowdWiz and Gnosis could potentially use Uport for their services thus enriching the underlying platform, Ethereum.

We have witnessed this stimulative cycle play out in the last 8 months. Thanks to Ethereum’s smart contract feature and the ERC20 standard, startups like Gnosis turned to fundraising on-chain.

Smart Contract powered CryptoCurrency Crowdfunding

Only Ethereum has smart contract capabilities. Smart contracts are programs that accept inputs and respond based on a preprogrammed set of conditions. Developers consider them the holy grail of blockchain technology.

The ERC-20 token standard, launched in 2016, defines common procedures for cryptocurrency tokens issued by smart contracts on Ethereum. The most popular use, Initial coin offerings (ICOs), are smart contracts that receive investor funds in Ether and issue tokens in return.

Since July 2016 over $1.5 billion flowed into ICOs surpassing Venture Capital funding in the last 5 months of 2017 as per Goldman Sachs Investment Research. It has captured the attention of Silicon Valley’s top VCs who are now the first to invest in ICOs.

Investment opportunities are no longer limited to Venture Capitalists and accredited investors. The scope of investors is now only limited by the span of the internet.

Photo credit: Osman Rana

CrowdWiz is proud to be part of the Ethereum movement

Ethereum ICOs are a watershed moment for blockchain technology. ICOs let you and anyone else in the world be a part of a global project. They have forever changed how projects raise money. We are eager to be a part of the future.

After evaluating Ethereum on all the other points above, we had to pick Ethereum for our initial coin offering. The Ethereum project is an impressive feat of technology, and CrowdWiz is proud to be part of the decentralized movement.

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