ICOs like to move fast and break (lots of) things

Startup life is full of quick, lateral thinking. “Move fast and break things” is the mantra. However, with the rise of token sales – essentially vehicles for untested startups to raise millions in a few minutes – lots of stuff gets broken and little gets fixed.

Take BCT – the Blockchain Terminal – for example. This frothy project led by Bob Bonomo, a former hedge fund guy turned Blockchain guru, features some interesting breakages.

Yesterday at about 3pm Eastern Time the company’s FAQ – which has since been updated but is still hidden here – read something like this:

While this sort of techno greeking is fine if you’re sending mock-ups back and forth, the token sale had been running since April 1st, a fact that was baffling to me and another reporter. Was this an April Fool’s joke? No, because when I visited the sale’s Telegram room I found a group of happy buyers asking questions about their future tokens.

Ever the reporter, I asked if anyone had seen the terminals and a community manager sent me this:

Interesting… blank screens at a demo event. The other CM, quicker on the draw, sent this:

Fair enough. In fact, crypto needs a product like this to legitimize it with Wall Street. But clearly they were moving so fast that the wheels were falling off.

Finally I did the obvious thing: visit the white paper. There we find that the Terminal is being built in conjunction with FactSet, a venerable research company that has seen all the vicissitudes of financial data. In fact, the paper is a tour-de-force on par with the best of the white papers I’ve seen. But we also discover that the white paper is a draft.

In short, BCT wouldn’t pass the average human investor sniff test but is definitely well on the way to completing its token sale. This is a problem.

BCT is not alone. I’ve spoken to development houses working with founders who barely understand cryptocurrency let alone understand their own token sales. I’ve seen founders’ eyes light up like the Big Bad Wolf eyeing Porky Pig when they talk about all the capital they will unlock. And I spoke to a founder on stage who said he would be very careful with the $80 million they raised for a company designed to raise money for ICOs. Greed is clouding this market in ways that are at once dangerous and comical.

There is precedent for this. In the early days of the Internet and even the frothiest dot-com days you could see the avarice in the eyes of Pets.com and Cisco executives who knew that big money was just around the corner. And we can’t begrudge these founders their excitement. What founder wouldn’t want the sweet feeling of being fully funded for, we presume, the next decade?

I’ve been following token sales with great interest over the past few months for a few reasons. First, I understand the hype cycle. I’ve seen tactics used by token sellers used before by hardware sellers, most notably with flops like the Phantom gaming console and the Notion Ink Adam, and there is a stink that permeates projects that are, at best, half-baked.

I want token sales to thrive as a method to raise capital. I want small startups to be able to turn on a spigot previously available to the well-connected and well-heeled. But the exact opposite seems true. Bankers are moving into a technology space that they little understand while carpetbaggers – lawyers, PR folks, advisors – are working hard to extract cash out of these windfalls. In the end the token sale industry should formalize itself and become as boring as the VC industry. I just hope it survives long enough to get there.

Bancor takes on Crypto exchanges with wallet that converts across tokens

With the number for cryptocurrencies passing 1,000, and the craze continuing, things are getting pretty wild out there to say the least. And these cryopto asssets can vary from the tokens issued by some no-name startup all the way up to Ether and the venerable Bitcoin. The trouble is, converting those coins into other currencies which you might actually use, or perhaps into the more fiat-friendly Bitcoin and Ether, has been hard. Users have to use exchanges to convert their cryptocurrencies via exchanges where prices can fluctuate wildly. Since cryptocurrency is the main “application” for blockchain technologies right now, that would mean wallets where they are held effectively becoming a new type of ‘browser’.

This is the thinking behind the launch today of Bancor’s wallet. Bancor was already an open-source protocol for automated token conversions, and had raised approximately $153 million in in ICO last year. It’s new wallet will offer built-in conversion between 75 cryptocurrencies, with more being added each day. This means users will not need to send their cryptocurrencies to exchanges if they wish to acquire other forms of crypto-assets and can instead convert cryptocurrencies directly inside the Bancor Wallet. The wallet is not a native smartphone app, but is optimised for mobile use.

Problems at the major crypto exchanges have been mounting, putting many off joining the crypto world. So it’s likely that many Crypto holders will be tempted by the relative stability of in-wallet conversion, even if they can’t play the arbitrage game so easily.

Instead of converting the currencies by matching buyers and sellers as an exchange does, Bancor’s in-wallet conversions are made against smart contracts. In theory, this gives users transparent and efficient pricing without the spreads and fees associated with exchanges. Users are always in control of their keys and Bancor neither holds nor has access to users funds.

In addition, the Bancor Wallet allows users to purchase tokens with any major credit or debit card and instantly convert them to any token in the Bancor Network, including heavily-traded coins like Ether and EOS.

Galia Benartzi, co-founder of Bancor said in statement: “In the new Internet of value, where anyone can create a currency, digital wallets are becoming the browsers which allow users to navigate the emerging world of decentralized apps. To be useful, users need seamless and secure interfaces to blockchain-based products as well as on-demand conversion between the tokens that power them.

“Money is changing, and digital wallets must be as dynamic as the currencies they hold. Imagine if your coffee shop loyalty points were accepted at any cash register in the world, or your airline miles could buy cellular minutes with the click of a button… Bancor’s new wallet aims to deliver on that promise by offering continuous access to crypto tokens and instant convertibility between virtual assets, unlocking enormous purchasing power for consumers,” she added.

Bancor Wallet users can open accounts using an email address, Telegram, WeChat, or Facebook Messenger .

The Bancor Wallet will only likely to get uptake if it can continue to add integration with tokens and maintain a live status and instant conversions. If it can do that then it may well attract users away from many buggy and controversial exchanges.

Jack Dorsey believes bitcoin will be the world’s sole currency within 10 years

We knew Jack Dorsey was bullish on bitcoin, but some new quotes reveal that he’s really, really bullish.

In an interview with The Times of London, the Twitter and Square chief executive expressed a strong belief in bitcoin’s shot at outliving its growing pains in order to grow into a ubiquitous digital currency.

“The world ultimately will have a single currency, the internet will have a single currency. I personally believe that it will be bitcoin,” Dorsey said. He added that the timeline would play out “probably over ten years, but it could go faster.”

In spite of conceding that bitcoin “does not have the capabilities right now to become an effective currency,” Dorsey thinks that it will grow into a better one over time as improvements to the core technology roll out.

“It’s slow and it’s costly, but as more and more people have it, those things go away. There are newer technologies that build off of blockchain and make it more approachable,” Dorsey told The Times.

Just last week, Dorsey contributed to a $2.5 million seed round for Lightning Labs, a Bay Area startup focused on the Lightning Network, a protocol that layers on top of a cryptocurrency like bitcoin. That layer aims to speed things up by creating a secondary channel with its own mini digital ledger that keeps excess traffic off of a congested blockchain (you can read more about how that works in this helpful Coindesk explainer).

Dorsey also intends to continue supporting bitcoin through Square, his mobile payments company. Square Cash added support for bitcoin last year and the feature recently rolled out to all Square Cash users.

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Lino is launching to be a crypto YouTube with $20 million from China’s most famous seed investor

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