The Crowdsale Analyst: Inchain — Where is the market?
This will be a very short review of the Inchain project. There are a number of ICOs going on or that will shortly be started, so in this case I will highlight what stands out most for me and then continue on and look at other projects.
As far as I know the ICO started on October 27, aims to go on until November 22. At the time of writing 6847 eth has been raised.
I’m subjectively scoring each of the below categories from 0 to 5, where 3 should be neutral in the eyes of the investor. Below 3 is bad for the investor and above 3 is good for the investor (and could be good for the project as well). At the end I’ll add a conclusion where I rate the whole ICO based on the combined information I have as negative, neutral or positive.
Project: Inchain
Inchain is a decentralised insurance platform, that will be created to mitigate risks of crypto assets due to cyber attacks and hacks. What stands out to me when reading about the project is that no software has been built, and there is no demo, proof of concept or minimum viable product. So, basically they are marketing and selling a business idea with this ICO.
Market Potential 0/5
I will make this review short and only focus on the market potential for Inchain. The core vision they describe is decentralised insurance for crypto assets against cyber attacks and theft. The problem with this approach is that I don’t see any market at all. Sure, there is a problem with hacks and thefts for crypto exchanges but creating a complicated platform and raising risk capital for this seems like the wrong approach. This problem will be dealt with in at least three ways over the coming months and years (all probably here before Inchain will be able to release a product):
1. Next generation exchanges. There is rapid development going on for decentralised and relay type exchanges (such as ShapeShift and EtherDelta). These will not require you to hold any funds in the exchange, eliminating the risk of losing funds in a hack.
2. Better security. Systems that increase transaction security and reduce risk of errors are coming. A prime example is uPort.
3. Prediction markets. Augur and Gnosis will be launching within the next few months. I expect there will be prediction markets for the hack of your favourite exchange available, and just joining one of these will be the same service as Inchain plan to provide.
Conclusion — Negative
Given the points above, even if Inchain does develop a working and secure product in reasonable time, I just I don’t see how Inchain will be able to develop a sustainable business. Therefore I score the market potential to 0, and with no market I don’t see a point in going on with the analysis. I will gladly consider feedback and continue on with the analysis if I’m given good arguments for why this service is needed and why it will be chosen instead of the prediction markets listed above.
