IOUX may be unique, but it’s not alone
By Edward W. Mandel
When you think of cryptocurrency, you usually think of Bitcoin. Maybe you’re also aware of Ether or Litecoin or Ripple or Monero or some other niche-y but widely traded digital money.
The IOUX coin offered by the IOU.io team is different. It’s essentially the token used to manage both the transactions on our platform and the social network which envelops it. That means it wasn’t developed to be traded on speculative markets, but rather to be used for a specific purpose.
That purpose is to facilitate ecommerce. And, while IOUX is specific to the IOU marketplace, its use case has been proven. There are already several successful ecommerce tokens, and it’s time we took a look at them to determine why they’re thriving.
The big list
We must also, sadly, dwell a bit on some lessons learned.
I’m indebted to CryptoSlate for their list of actively-ish traded ecommerce-specific coins. At last check, it was comprised of 43 tokens with a total market cap of $97.7 million. That is, it’s about one-tenth of one percent of total digital coin assets.
These tend to be ERC20 tokens built on the Ethereum blockchain — just like IOUX — or roll-your-own assets on their own, proprietary blockchains.
Ecommerce, as defined by CryptoSlate, is distinct from 32 other sectors from advertising through virtual reality.
For current purposes, we’re going to take a look at the Top 10 on CryptoSlate’s ecommerce list, but first we need to linger over the coin that owns the №1 spot.
The $64 million question
The top-ranked ecommerce coin by market cap, at $64.1 million at last check, is Storeum, which trades as STO (not to be confused with the acronym for securities token offering). That’s more than six times the value of the second biggest, and accounts roughly two-thirds the market cap of the whole sector. Storeum, then, is essentially the Bitcoin Core of ecommerce coins.
Except for one thing: Bitcoin Core is a widely traded, with a more-or-less market-based value. Sure, you can get a consortium of whales — especially those aligned with one or more of the limited number of mining farms — and manipulate the BTC market a bit, but it’s much easier to do that on Storeum’s scale. And it so happens.
I don’t think Storeum necessarily started out to be a scam, but there’s always been something that didn’t feel quite right about it. First, the team members don’t appear to be real people. I don’t mean they’re pseudonymous, I mean the “co-authors” of the white paper look like they’re totally made up. That white paper, by the way, is long on market research — if that’s what you call copying and pasting outdated eMarketer charts from Statista — and very short on any mathematical or coding rigor. The white paper isn’t even white — it’s on a navy blue background, and they threw in a lot of fluff and a lot of slack to stretch the page count. It’s as if they weren’t so much launching a blockchain project as writing up a 30-page Marketing 101 paper the night before it was due. And there’s doesn’t seem to be a fixed address in fiat-space.
Most grating to me, though, is that Storeum calls itself “the world’s first decentralized, peer-to-peer marketplace”. There are a few people here at IOU who beg to differ.
Anyway, Storeum launched in the summer of 2019 and, like anything new and shiny, it saw a bounce before settling down into a trading range. Little else happened until November 2019 when there was a spike.
Wait, it gets worse. Credit: CoinMarketCap
If this looks like a pump-and-dump to you, you’re not alone. Apparently, there was a rumor that STO was about to trade on a major exchange. It didn’t happen, and its price went down to about what it was before the whispers.
There’s a saying, “Fool me once, shame on you. Fool me twice, maybe I shouldn’t be in crypto.” The same thing happened again in March 2020, except at an order of magnitude that swamped Novembers shenanigans into irrelevance.
So enough about Storeum. Let’s see if there’s another team in the ecommerce token game that is honestly trying to realize its vision by providing a solution to an actual use case.
The final four
Turns out, there are.
№2 on the list is Chimpion, trading as BNANA (isn’t that precious?). I’m really happy to be in the same world as these enterprising Estonians, who are actually doing something productive. It’s not so much an ecommerce cryptocurrency in its own right as a settlement system that helps merchants translate between fiat currencies and the contents of digital wallets.
And actual businesses are using it to sell actual products. Global apparel retailer H&M, for example, relies on Chimpion to clear transactions not only in Ether and three different Bitcoin flavors, but also in Litecoin, Dash and Zcoin. So do specialty retailers Semperlite and ATPTrucks. This growing degree of adoption apparently drove its surge in the first quarter of 2020, while most the world was fretting over other, more immediate concerns.
Rounding out the top 5 are:
· Aladdin (ADN) which, unlike Storeum, was able to convert some exchange listing rumors into actual listings; it also has a real-life development team including a direct, patrilineal descendent of Albert Einstein. Rather than the ubiquitous proof-of-stake consensus model, Aladdin uses a supposedly harder-to-hack delegated proof-of-stake. “What ADN intends to provide is a blockchain with high-throughput, high scalability, and high availability for Decentralized Applications (DApps) in the ADN ecosystem,” according to its white paper. “Combining the benefits initially proposed by its cryptocurrency predecessors such as Bitcoin, Ethereum, EOS and TRON, The project will also have a built-in investor-oriented mechanism programmed to protect the interests of the investors when they invest in cryptocurrency projects ICOs based in ADN.” What does any of this have to do with ecommerce? I don’t know. Maybe CryptoSlate miscategorized it.
· Zano (ZANO) is the new kid on the block, having launched in January 2020, and is not to be confused with the drone company that went down in history as the greatest failure in crowdfunding history. So far, crypto Zano has been fairly successful. With its private blockchain and hybrid consensus algorithm, it endeavors to be the privacy coin for legitimate ecommerce. The white paper even references Nicolas van Saberhagen, Monero’s pseudonymous founder, and CryptoNote, the Stanford University project on which he worked. Keep an eye on this one.
· Bezant (BZNT) has a spiky fever chart, which doesn’t necessarily mean its price is manipulated. Maybe it’s just news driven. This Korean-Singaporean team does attract a lot of news. Starting with a pretty spectacular ICO in 2018, it found its way onto both Binance and Bithumb which is, of course, a big deal, and secured a number of corporate partnerships. Then a company called Korean Prepaid Card made an equity investment and became Bezant’s second-largest shareholder. The “blockchain-as-a-service” provider lives on the permissioned Hyperledger Fabric platform and has ambitions beyond ecommerce. It’s also expanding into enablement of peer-to-peer lending.
It’s not all roses
The unsettling thing about CryptoSlate’s view of ecommerce tokens is just how tough the sledding is. On one recent day, the sector’s index was down 39%, giving it the distinction of being the coldest of the cold. It was a down day across the board, but there were still bright spots; coins focused on business services, healthcare, manufacturing and transportation were all mildly positive, and real estate tokens were particularly strong, up 7% while broader indices were dropping between 3% and 4%.
Still, that was mainly a factor of Storeum’s latest pump-and-dump. The others in this space seem to roll along without a lot of bounce. In other words, they appear to be stable stores of value and media of exchange — you know, like money is supposed to be.
Still, it’s naïve to think that Storeum’s stench won’t attach itself to ecommerce coins in general. Sadly, there’s little we can do to address the misdeeds of our rivals. All we can do is endeavor to be honest brokers and continue to maintain our own respectability.
If IOU.io does that, and other reputable project teams does the same, then time becomes our ally. People will eventually forget Storeum and see the good that ecommerce tokens can bring — taking friction out of transactions, enabling markets to determine creditworthiness and building community bonds among consumers and merchants. And I am confident that, as that plays out, IOUX will climb to the top of CryptoSlate’s leaderboard.
Edward W. Mandel is a strategic advisor for IOU.io, an Ernst and Young Entrepreneur of the Year finalist, blockchain enthusiast and visionary behind many successful organizations. An avid entrepreneur, Edward has a knack for designing distinctive business models complemented with superior technology to deliver unparalleled service and profitability. Edward also has been advising and consulting for various successful blockchain technology and ICO projects and recently launched his own BQT.io P2P hedge exchange helping traders connect with each other to leverage their crypto assets.
IOU is a blockchain-based peer-to-peer platform designed to unify ecommerce transaction and customer retention processes, incorporating tradeable IOUs. The platform can be found online at IOU.io and its community on Telegram at https://t.me/IOUCommunity.
