Brinc finance (BRC)- a background
I discovered Bitcoin in 2013 and and within days of setting up an account on Coinbase and purchasing about ten BTC, I lost half my investment. Having previously operated a small ecommerce site, I had experience working with most of the leading payment processors: Paypal, Moneybookers, Skrill, Google Checkout, etc. I knew how unfriendly payment processors were to merchants; chargeback fees, FX fees, slow transfers, and poor customer support. So in 2013, I saw more to Bitcoin than a spivy coin price; I saw the future of digital payments and money.
Fast forward to 2017, I had read about Binance, Omisego, ICON, and other ICOs and thought that this was a very interesting way to raise capital. A friend at a small fintech company was desperately fund raising with VCs, unsuccesfully so I initiated and advised on their ICO; it was hugely successful, raising US$20.4 Mil in a matter of minutes. The offering was oversubscribed by more than 9x with almost $200M sent to the company’s Ethereum wallet over the blockchain. This was the future of finance and it was only the beginning.
On January 1st, 2020, I decided to work on my next project and went back to the drawing board to start writing my second White paper (here is the link). I was really just reading and brainstorming for a new idea. And after a lot of research and thinking, I came to the simple, and maybe even obvious, realization that it really was difficult to determine the fair price and value of cryptocurrencies. Don’t get me wrong: I love everything crypto stands for, but, I wanted to try and better understand what the real value of one BTC was.
With stocks/equities, company earnings or cash flow is used to determine “intrinsic value” with metrics such as Price-to-earnings ratio, EV/EBITDA, or a discounted cash flow analysis and that would allow you determine the true value of holding a company’s stock. However, with Bitcoin and other leading cryptocurrencies, the primary value is in the network as opposed to the cryptocurrency. When a BTC is sent over the bitcoin network, miners validate transactions by solving complex problems and are rewarded by the blockchain with payment in BTC. There is value provided to miners on the network in terms of mining rewards, however, there is no value provided to the holder of a BTC. If, some of the network earnings or another use case of network were passed onto holders of BTC, then there would be intrinsic value in holding it.
A great place to start really learning about cryptocurrencies, is to actually read what is possibly the most important document ever written: “Bitcoin: A peer-to-peer Electronic Cash System.” Vitalik Butterin describes the importance and focus of Bitcoin in the opening lines of the Ethereum Whitepaper:
“Satoshi Nakamoto’s development of Bitcoin in 2009 has often been hailed as a radical development in money and currency, being the first example of a digital asset which simultaneously has no backing or intrinsic value and no centralized issuer or controller. However, another — arguably more important — part of the Bitcoin experiment is the underlying blockchain technology as a tool of distributed consensus, and attention is rapidly starting to shift to this other aspect of Bitcoin.”
In order to solve the “backing” or store of value problem with cryptocurrencies, Tether (USDT) a USD-pegged stablecoin was launched on the bitcoin blockchain. USDT is currently the most-actively traded crypto in terms of daily trading volume. However, Tether initially claimed that they are a stablecoin backed 1-for-1 with US dollars, which were held in banks, there is a distinct lack of transparency, and this has never been independently verified. Tether management originally said backing was 1-to-1, then 0.7-to-1, and the latest is that their reserves are now not all cash but cash and “securities.” There is a huge moral hazard that could completely crash the crypto market if Tether LLC is simply minting tokens without actually backing their tokens with equivalent value in cash; this would mean that USDT is not actually worth $1, an yet, over $100 Billion are bought and sold daily which represents 73% of all crypto trading. Go to tether.io and click on the button on their main page; the latest update they gave was on June 1st, 2018.
So while many new crypto projects launched were trying to build a better faster blockchain, or solve for a stablecoin solution by pegging themselves to fiat currencies, I realized that a fundamental problem with cryptocurrencies was coins themselves. BTC and ETH are great blockchains but were less so as currencies, while stablecoins like Tether represented everything that crypto was not supposed to be: centralized, opaque, and “tethered” to the banking system. So, my idea was simple: to create the first cryptocurrency with real value that’s completely decentralized. And no better use case than the nascent defi space which draws heavily on stablecoins as a base currency. And after a whole lot of research I discovered a relatively unknown cryptoeconomic concept, bonding curves and applied this to a new type of token; BRC is a token that is fully-backed by reserves and algorithmically increases in price with supply.
