Virtual, Real, Mixed: What Economy Sector Would Lead The ICO Revolution?
Welcome to the blog of Ubcoin Market! We are a project developing a smart ecosystem for easily investing and exiting cryptocurrency by buying and selling goods. We have been analyzing the ICO market closely and we have accumulated some insights which we would like to share with you.
As an aspiring ICO project, it would be only logical for us to kick-off with an article on the recent ICO boom. And if you have not noticed, ICOs have been booming. The first initial coin offering was held in 2013, but this fundraising method really took off only last year and to such an extent that ICONOMI’s CEO Tim Zagar called 2017 ‘the year of ICO.’ There were about 450 successful ICO projects in 2017, raising an average of $12.7 million. More than $5.5 billion were raised in total through ICOs during the course of this year, and the boom shows no signs of slowing down — almost 200 new ICOs are already planned for 2018.
Interestingly, the numerous ICO projects come from all different types of fields. For example, IT, real estate, medicine, gaming, and so forth, all of which can be differentiated quite neatly into three categories: ICO projects from the virtual, real, and mixed sectors of economy.
So, let’s take a closer look at each of these categories.
Virtual Sector Projects
The virtual sector is the largest sector of the decentralized economy both in terms of the number of startups and the amount of raised funds. These ICO projects are the pioneers of the virtual and blockchain world having been created on the Internet for the Internet. They create virtual platforms, apps, networks that help their users to manage virtual items — ads, digital files, in-game valuables, etc. So there is the solid conceptual logic to their tendency of favoring and utilizing the ICO virtual fundraising model.
Some various examples of virtual sector projects: Filecoin, is a project developing a decentralized storage network that raised a record-breaking $257 million in August, 2017; First Blood, a blockchain platform for cyber athletes; Aragon, a decentralized governance software company; DMarket, a decentralized marketplace for trading in-game valuables; BitClave, a decentralized search engine; Bancor, a blockchain startup developing token changer smart contracts; Gnosis, a blockchain prediction market; AdEx, a blockchain-based digital advertising exchange. Those are just some of the virtual sector projects, as there are other various projects that are developing blockchain-based platforms for advertising, data storage, online gaming, financial services, all within the virtual sector of the ICO economy.
Blockchain is an intrinsic part of the above mentioned virtual projects and without blockchain there would be no Filecoin. But there are also some companies working in this sector (like the messaging app Kik) that deal with virtual goods, services, and products too, but blockchain is something they do not necessarily need. They use blockchain only to utilize the ICO model as an additional method for raising funds.
Which brings us to the next topic…
Real Sector Projects
There is a whole class of ICO projects that have nothing to do with the virtual economy in general and with blockchain in particular. These are organizations from the ‘real’ world — manufacturing plants, transportation companies, agricultural enterprises, etc. — that just have turned out to be tech-savvy enough to jump on the blockchain bandwagon and to raise funds through an ICO. The means of raising money is virtual, but the product is quite real.
And, as opposed to the tokens of the virtual sector ICO projects — that have only an investment value and give you only a means of paying for services associated with a given platform — the tokens of these ‘real world’ companies provide their owners with a more tangible value: you may get a proof of ownership of some ‘real’ assets like oil, bananas, steel pipes, or sand.
Not surprisingly, some of these companies do not resemble blockchain projects, not even in the slightest:
The above depicted scientists do not look like your regular Silicon Valley startup, right? That is because they are not and are actually developing a production plant in Russia for the manufacturing of a superhard material known as zirconium dioxide by applying revolutionary methods. Additionally, they have established their own cryptocurrency called ZrCoin and held a successful ICO raising of more than $7 million!
The success story of ZrCoin is not a single occurrence, many other examples have followed the approach ZrCoin used. For example, a pipe-rolling factory in Cherepovets, Russia is raising money through an ICO for a major overhaul. The factory plans on accomplishing this overhaul by issuing a token called ZavodCoin (‘zavod’ is Russian for ‘manufacturing plant’); A Laos banana plantation created a Bananacoin token and launched an ICO.; An Agro Tech Farm is raising money to build a cannabis production facility in Canada; ODMcoin is selling tokens to open an oil drilling site; SoyCoin wants to start a soybean processing facility; Satoshi Brewery is planning on opening a craft beer brewery and is raising the funds through an ICO; Sand Coin is raising money to start a sand quarry; Drivezy, an Indian rent-a-car company, is offering to the owners of its Rental Coins shared ownership of the cars the company is going to buy after the ICO.
Many other examples exist. However, the above mentioned projects appear destined to remain on the sidelines as more of a curiosity and oddity of the decentralized economy due to the somewhat artificial nature of their association with blockchain.
Mixed Sector Projects
The ‘mixed’ sector consists of the ICO projects bringing the best from the both worlds: the problems they are dealing with are ‘real’, but the solutions they are using to tackle them are ‘virtual’. They do not use the ICO model just to raise money and do not slap something together blockchain related as an afterthought. The mixed sector projects create meaningful ways of applying the blockchain technology to real-world needs.
Some examples of mixed sector projects: TE-FOOD is launching an ICO to build a blockchain-based farm-to-table food traceability system; AIDA Market is building a better, smart-contract-based version of Amazon and AliExpress; ArmPACK is a blockchain-based counterfeit protection solution for manufacturing companies.
The logistics industry is being actively transformed by the blockchain technology which is supposed to bring transparency, speed, and efficiency to this field. Most importantly, blockchain enables these systems to automatically track the movement of goods or components from the manufacturer to the customer, while concurrently maintaining meticulous records about the ‘journey of the product’. ShipChain, Immla, A2B Direct, SLOGN are but a few ICO projects working in this direction.
Creating decentralized marketplaces is another major trend in the mixed sector. Take for example, virtual platforms where virtual currencies in conjunction with their own digital tokens can be used to sell or buy tangible goods or services. AntiqMall is building the world’s first blockchain-based antique shop; Blocklancer is developing an Ethereum-based job marketplace for freelancers; Primalbase is creating a community-based alternative to coworkings by developing an ecosystem where you can book workspaces using their tokens; and of course, Ubcoin Market is working on bringing you a smart ecosystem for easily investing and exiting cryptocurrency by buying and selling goods.
The Ubcoin Market will be powered by Ethereum smart contracts and our own tradeable cryptocurrency UBC that will be used for settling deals and paying fees. Our platform will have two goals: giving an easy entrance to the world of crypto investment by simply selling one’s goods or services and empowering cryptocurrency owners to use them directly, without converting them to fiat currencies.
The team behind the project has several successful mobile apps under their belts including UBank, which is a banking and finance management app that, as of today has been installed by more than 16 million users around the world and has been pre-installed by Samsung and Fly on all of their smartphones sold in a dozen countries. Hopefully, our platform will find a wide audience and will manage to bridge the real and crypto worlds.
The mixed sector appears to be showing the most intensive, successful and interesting development. A phenomenon has emerged where part of the decentralized world is merging with the real one. Specifically, blockchain-based tools are being implemented towards non-virtual tasks. We definitely would not be doing what we are doing if we thought otherwise.
Let us know what you think about these different ICO projects in the comments section and stay tuned for our new posts!