Almost seven months are passed since i joined the team and the spirit of ZenCash has fully intruded me. Focus on privacy in a cryptocurrency means standing up for human rights in the process of global digitalization. It reaches so far that zero and one based identities gets a secured economic system where participants can grow their own idea, community or wealth. No third party is able to control, limit or restrict this on a personal level. It means for me that ZEN is one of the best crypto way right now to grant and reach individual freedom.
– Arno Pfefferling – Central European Lead
What are ICOs?
It is the short name for Initial Coin Offering and describes a method to collect funds for a business, whereby the raised money is used for a specific service, product or idea. The possibility to help a new business due to find investors is not new, but got in the year 2017 on a total new reanimated stage by using cryptocurrencies and giving shares back as digital tokens. The ICOs market has not overcome the classical investment of VC´s and BA´s yet; but in numbers the whole crypto market capitalization on 1.10.2017 with 147,87 billion USD  compared to around 60 billion USD global investment (Fig. 1) looks relatively small .
Tokens for ICOs can be created on the Ethereum blockchain with a standardized smart contract using ERC20 template . If the ICO follows this standard the given shares to investors can be traded on exchanges which affects drastically the liquidity. At this point I want to reference to one of Chris Dunn´s latest youtube video  and list pro and cons:
Good things (PRO):
- creates a global investor basis
- fast raise of money and earlier market position
- low barriers to enter as private investor
Stuff to care about (CONTRA):
- the ICO needs a solid product or service and business plan/structure
- business needs to be run by a team (do they have references?) and support of a community (do they have users or corporations already?)
- highly speculative investment (can i risk a total loss of my money?)
For someone who starts a business through ICOs, he/she has furthermore less restricted, controlled or regulated processes, so clearly if you are on investor side you have to understand that the success rate is below 10%. Meaning you risk your given capital for the one winner who overcome previous losses. To be safer against scam, tricks or false promises there is SAFT “Simple Agreement for Future Tokens” available on CoinList. Companies who follow the SAFT protocol are fully legalized by US securities law including “Howey Test” . Filecoin applied this standard and had success to be the biggest ICO in history with >257 million USD raised in one round. Other ICOs who did not use SAFT have demonstrated still impressive numbers, e.g. Tezos >232 mio USD, EOS#1 >185 mio USD, Bancor >153 mio USD and TenX >64 mio USD .
Things which you can do to minimize your risk:
- analyse the transparency, are facts/numbers/smart contract accessable?
- check the development, is there a realistic roadmap with innovation?
- avoid pyramid or ponzi schemes, referral options are already an indicator!
Not all of that investment will bring big innovations, but the less 2-5%, which by that way are based on blockchain technology will bring big steps in digitization in every industry sector. Right now most effects are seen in financial services. Better ROI´s, fast transactions, flexible asset management and decentralized all over world accessible crypto coins have shown long-term practice in form of Bitcoin.
For ZenCash, it is a natural process to evolve in this market too. Special is that the included zk-SNARK allows to invest through private transactions, which decouples the original owner or source of the invested crypto coins. In this case my opinion is that the actually product, service or idea is pulled to be more in orientation of philanthropy.
Just imagine that most of the raised money comes from 100.000 private persons instead of 2-5 global companies or 5-10 big investment fonds, who both have not the same interest like you and me. If we look in the inequality worldwide there is one clear signal, rich means wealthy (Fig. 2). But if you as private person are not able to start using your “little” funds due to geographic, governmental or educational reasons, where will the wealth improvement come from? How can a person who earns below 10.000,- USD per year travel around the world and build a network for business opportunities? Where can an individual or group idea evolve in something big no matter which nationality is represented? Who will guide the business process if the resources are limited? And most important if the digitalization creates systems or platforms can this technology handle more than 2 billion potential users?
I can not answer all of the questions above. With more ICOs, however, new crypto token or blockchain based project the chances are increasing to take back the wealth from the richest of the richest.
It sounds like Robin Hood mission and currently the top two crypto eco-systems Bitcoin and Ethereum are working on scale-ability improvements. For Bitcoin the transaction fees are going higher and higher, not too mention the huge power waste in mining all the transactions. And for Ethereum the transaction Gas limitation is reached, which increase the time for new blocks.
How important solutions are shows a comparison to current Visa and MasterCard standard (Fig. 3). Companies like TenX, Monaco, Xapo, Spectrocoin, Wirex, Shift and a lot more are all based on smart contracts or in future state channels.
Even for the first ICO cooperation of ZenCash a smart contract on Ethereum is used. The product from social x network is in short a mix of steemit and instagram with focus on a decentralized mobile app. Roadmap and current progress can be checked in their telegram channel and on their page.
If you have an idea or other interesting projects for ZEN just contact us as well. In the German market more or less a political progress for a framework in crypto has started . For me the biggest effect in German blockchain technology has IOTA, founded by Dominik Schiener, because they try to infiltrate global companies with their Internet of Things products and services.
If the correct way of funding is in big long-term teams like IOTA, or if smaller teams with short-term goals like Gnosis (also founded by a German 😉 are better only time and compatibility to real use-cases can show. Since all of the blockchain technology is in a development stage it is important that more and more people are engaged to get involved. You don’t need necessarily programming skills, to know how to organize and encourage people working on different projects is helping in incubating the next killer app like ICOs.
To summarize the first question “What are ICOs?” you have to know that it is a risky but promising investment possibility based on crypto token. It uses blockchain technology and have several business areas. Since almost everyone can start ICOs. You can find dreams, scams, serious services and hard working teams with innovative products. The market needs your attention and your own research. Some of the links and references will help you to find your docking point.
What does this mean for ZenCash?
From the business development point of view it means that after our first successful ICO support for SOCX token, we are starting to work with the Blue Frontiers, Pte Ltd. on supporting their offshore land building, where an funding round through Seacoin is coming. We will give you in the next weeks more updates and news about it. Some first hand information from Robert Viglione can be found in this short video at the Seasteading Institute . Our cooperation and support will allow investing through ZEN, but includes also a long-term relationship to build barrier free sub-ecosystems with the help of blockchain technology.
Thanks for reading, please comment and share to help people see how far the ZenCash platform is evolving.
 ICOBox: Quarterly Cryptocurrency and ICO Market Analysis (Q3 2017); published 4.10.2017
 Jason D. Rowley: Q3 2017 Global Report; VC Deal And Dollar Volume Projected To Reach Post-Dot Com Highs
 Gerald Nash: The Anatomy of ERC20; What’s on the Inside of Ethereum’s Most Popular Contract
 Chris Dunn TV: The Future of Initial Coin Offerings (ICOs); published 14.10.2017
 David Gobaud: ICOs and the SAFT — Why, What, and How
 JP Buntinx: Top 10 Cryptocurrency ICOs of 2017 (So Far)
 Sarah Anderson: Global Inequality
 Joachim Lohkamp: Arbeitsgruppen starten Verbandsarbeit
 Will Lunn, Charles Brennan: BLOCKCHAIN: THE TRUST DISRUPTOR; published 3.8.2017
 Robert Viglione: Blockchain Innovations and Social Entrepreneurship; published Jan 9, 2018