Birdchain ICO Review & Analysis
Most of us have a SMS plan (often unlimited) on our phones that we rarely use to send messages, despise that we normally receive SMSs from companies and other businesses in the forms of alerts, promotions, reminders, tracking order status, check-ins, two-factor authentication, and a few more use cases.
Birdchain aims to create a DApp where users can sell their unused SMSs to companies and earn a passive income by simply using the app.
For this review, I have studied the Whitepaper, the team involved, the market they plan to enter, token value for investors, looked for pros&cons, possible red flags, and also have spoken directly to somebody involved in this project to answer my questions and doubts, in the case of this ICO I have participated in their live Q&A.
The Birdchain DApp will work as a messaging system (like whatsapp, telegram), but by using the app to send regular messages to somebody else the app on it’s background will send SMSs that were generated by companies who signed up with Birdchain, the user would earn BIRD tokens based on the number of SMSs his phone is sending.
A few notes about the platform:
- The app users will be able to choose how much SMSs they want to sell.
- The app user phone number will be seen by anyone receiving the SMSs, however the app will block any message or call from that receiving number for 72 hours.
- SMSs will not be send to phones listed on the user’s contact list.
- The SMSs being send will be based in geographical location and carriers in order to reduce costs, meaning that app users do not have to worry about their phones sending SMSs that they maybe charged, usually SMSs between the same carrier are unlimited and free.
- The app will have measures to prevent exploitation by bots, in order to ensure regular users will be earning BIRD.
- The app will be available in Android only.
and a few extra features of the app that are worth mentioning:
- Content engagement, companies will be able to use the app to stream advertising videos to users based in their location, age, gender, etc. The users viewing this advertising will earn some BIRD tokens that were previously been bought by that company.
- Live streams, users will be able to create live streams that could be either free or paid, in the case of free content they still can get donations by other users.
- In-App mini games, the app plan to have a space fore mini-games to be played, the users could spend their BIRD tokens on it.
- Personal data marketplace, allows users to sell their personal data to companies, the app will select some randomly selected users and ask if they want to sell their personal data, the user can either reject it or accept for a immediately reward in BIRD tokens.
All those extra features will be secondary functions of the app and not their main market point, some of them even still lack detailed documentation in the whitepaper, however the data marketplace idea itself could be a HUGE thing, in fact there are other Cryptos such as Streamr that are already focusing on creating a marketplace for users sell their data to companies.
The team
Birdchain is part of a parent company called Vertex, and Vertex have already established itself on the SMS aggregation business as VertexSMS, with some rather large clients.
It’s safe to say the Birdchain team is pretty strong on this market segment, with a already a established business.
Quick Analysis of the Market & Competitors
SMSs are still the one of the best and cheapest ways for companies to send messages to customers.
For this ICO, I was able to find a professional market analysis:
for the full analysis:
http://www.marketresearchstore.com/news/global-a2p-sms-market-set-for-rapid-growth-122
Few things worth noting:
- Birdchain will be able offer it’s service to companies at a significantly cheaper market rate for this segment, meaning they could easily get a big chunk of the market once the DApp is launched.
- Two-factor authentication by SMS is something really unsafe and exploitable, no one should be using it specially Banks, however that is just a single use case of SMS and there are several other cases where SMS are still the best option.
- I could not find any blockchain competitors for this market segment.
Token Usage & Value
For a company to use any of the Birdchain main services, such as the A2P SMS, buying data from users, video marketing, they must purchase BIRD tokens. This is extremely important, since this is what will driver the prices of BIRD tokens to go up, as more companies join the platform and constantly need to purchase more BIRD in order to send more SMSs.
Looking at the currency flow, Advertising and SMS companies should buy BIRD in order to use the platform.
While the DApp itself does not require blockchain technology to function, this business model requires a blockchain token for it to be viable for micro transactions between companies and users, as well as being a global crypto currency that will not have high fees when paying the app users, such as credit cards for example, or paypal.
ICO Details
76% of the total tokens will be available for sale during the ICO, the hardcap is actually low and it should be achievable.
Pros & Cons
Pros:
- Very solid and experienced team in this market segment, with a already established company behind them.
- MVP already exists
- No Blockchain competitors
- A solid use case of what they are trying to sell, the SMS technology maybe outdated by it’s still very much used by companies and small businesses alike.
- It will allow users from all over the world to earn a passive income simply by using the app.
- Very low High cap, based in this project possible market.
- Data Marketplace, I could write another review in just how important this will be in the soon future, this has the potential of returning a higher revenue than the A2P SMS market itself.
Cons:
- App user’s phone numbers will be publicly exposed
- Telephone carriers may not like the idea that their clients are selling their SMS plans to companies and may take action against it. However the cost of SMS for carriers its really extremely low (that’s why its often unlimited), therefore it maybe not worth their effort to do something about it.
- Two Factor Authentication by SMS is unsafe, exploitable, and I do not recommend anyone ever use it. I predict more financial institutions and companies will switch to using other 2FA solutions. However this is just a single use of SMS technology, there are far more use cases that are good.
- Offical DApp Launch planed for Feb 2019, Token price may not significantly raise this year.
- Android exclusive
Verdict:
I think this will be big by next year, the company already established themselves in this market segment, they know the market, they already have the customers, and when people hear about a app that allows them to earn money simply by using it to message others, the App itself could gain huge popularity.
One could argue that by being exclusively to Android and exposing the user’s personal number, could cause several people not to use the app, however this doesn’t matter that much for investors since the main force driving the BIRD token prices up will be the companies buying the BIRD token for sending SMSs, not the app users. It’s always much easier to find people willing to receive money than to spend money.
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Disclaimer: I’m a amateur investor not a financial adviser, the purpose of this review to give a second opinion about this ICO from my own research and perspective, use this as a second opinion and always do your own research before committing your money into any investment including this one.