The largest international blockchain forum in Europe was held on March 28. For two days, experts in the field of digital economy shared their experience. We have pointed out everything that you need to know about the crypto industry.
What Are Cryptocurrency, Blockchain, and Mining?
Co-founder of Cryptominds Oleg Kundrenko spoke about what a cryptocurrency is and how it works.
Decentralized technology without a legal address;
Immutable technology. The entire protocol is designed so that you cannot find any resources to change any of its components;
Smart contracts help you write the program in a certain environment, which cannot be broken;
Mining: Proof-of-Work vs. Proof-of-Stake.
Vitaly Borshchenko, co-founder of BitCluster, spoke about nine mistaken statements about mining:
Mining is economically unprofitable.
Trading or the usual purchase of coins aimed at their future growth is more profitable than the investment in mining.
It is more economically advantageous to mine using ASIC devices than video cards.
The need for mining in the near future will disappear. The topic that everyone is afraid of, especially for Ether.
It is late to enter into the business.
If the mining ceases to exist, the hardware, such as video cards, can be sold, unlike ASIC devices.
Mining is illegal activity on the territory of the Russian Federation.
If you want to earn on mining, then do it yourself.
Large players have monopolized the market, and there is no place in it for ordinary people.
Borshchenko also pointed out the frequent mistakes that newcomers make in the industry when buying mining equipment:
Purchase at an inflated price during the price hikes;
Purchase of illegally imported equipment.
Accommodation of equipment at home;
Lack of technical support 24/7;
The choice of location for the placement of equipment based on residence and regardless of the cost of resources and the quality of the infrastructure.
Member of the Expert Council on Legislative Support for the Development of Financial Technologies in the Russian Federation under the State Duma Committee for Financial Market Stepan Gershuni spoke about the types of blockchains:
A permissioned is a person who sets the rules. Enforcement is provided by law and trust. The history of transactions is censored and reversible.
A public is the algorithm that manages financial relations.
The economic consensus (Nakamoto Consensus) is a complete lack of trust, or the “currency of enemies.” Mining and transaction fees guarantee stability and non-censorship.
Strategies for Investing and Forming a Cryptocurrency Portfolio
Dmitry Karpilovsky from CryptoNet presented the main strategies for investing in cryptocurrency in 2018:
Strategy 1 “Path of the Samurai”:
Strategy 2 “Trader’s Path”:
Predict what will grow;
Predict where it is profitable to go;
Predict when it stops growing.
Strategy 3 “Follow the money”:
Strategy 4 “Penny stocks”:
Buy the ugliest, crooked, and needless coins;
Hold and watch;
Sell if something moons.
Strategy 5 “Mining”:
Plug it into the outlet;
Money drips every hour.
Strategy 6 “Startups”:
Features of ICO projects;
How to select them correctly;
How to select them for a newcomer.
Strategy 7 “Trust”:
Mining contracts/Cloud mining;
Passive/active cryptocurrency funds;
How to select them.
Sell “shovels” (serve the crypto business);
Combine the seven non-ideal strategies described above.
To select the optimal strategy, it is necessary to form a cryptocurrency portfolio. How to do it correctly was told by Denis Prussky from Cryptonerds:
Be sure to set a financial target;
Purchase cryptocurrency monthly and diversify the portfolio;
Fix profits in more reliable sources (for example, in real estate);
Left part of it in the cryptocurrency to increase profitability and increase the portfolio and increase capital.
In connection with the popularity of this industry, a separate room was dedicated to presentations about it.
Alexey Durnev from Arsenalinvest. vc, SD DATA lab claims that there is a lot of money in the world and investors are looking for projects that they want to invest in.
ICO from the point of view of investors:
Increase the value of the company at the time of the next investors’ exit.
An instrument for the capitalization of the company through the secondary sale of project tokens. Quickly find investment for the development of the project.
Quickly find investment for the development of the project.
Revaluation of the company after raising a large amount of investment.
Complexity in the process of due diligence in the sale to a strategic investor.
The difficulty of foreclosure due to changing circumstances and force majeure.
For the selection and evaluation of projects, Durnev advises to answer key questions about the project and the investor.
What is the history of the project?
How often did the product change? How is Product Development going?
What is the status of product availability?
Road Map for product development?
How long will it take to copy the product of the project? (time reserve)
The size of current project revenue?
What are the growth rates by revenue, users, and customers?
Artem Popov and Alik Arslanov, creators of the Telegram channel “Buffett’s $10,” shared their experience of investing in ICO projects and presented a basic checklist for ICO analysis:
Does the product solve any real problem?
Is there a global or local problem?
Is it really necessary to have a blockchain and ICO?
What is the token in the project and what is it for?
What will ensure the turnover of the token?
Are the terms of the token sale tightened?
Hard Cap and Soft Cap delta?
What is the Hard Cap? If it is a considerable sum of money, how will the founders ensure the growth of the token?
Is the project made by startups or entrepreneurs with experience?
What percent of the tokens are they going to sell, how much does the team take back, what parts does it receive?
Is there an MVP and is demand tested? Or is the idea behind project akin to “bonnets for raccoons on blockchain?”
What is the action plan after the ICO? Who and how will conduct post-marketing and the formation of the bidding market?
What is the budget for this, and is there any understanding of how this is done?
Hype level around the project? The size and activity of the community?
What will they do with those tokens that they will not sell?
How are marketing campaigns faring to collect the ICO itself, and how diverse is the geography of the audience?
Is there a KYC procedure? How is it organized?
Minimum and maximum entry threshold?
Is there support from people and companies from the sector in which the project is being implemented?
How and who is responsible for legal and financial security?
Andrey Kutyin from Blockchain Investment Solutions cites statistics that fraud in the ICO market has increased over the past months. In order not to counter a fraudster, one must know its signs:
Immediately declares that everything will happen and be available immediately;
Assigns success to projects without confirmation;
Continually refers to an NDA;
Requests more than 50% prepayment;
Refrains from meetings;
Does not have pages on social networks;
Declares experience from two years and the like;
Refuses to draft a contract;
Refuses a test period.
Legal Regulation of Blockchain, Legal Components of Business
In connection with fraud in business, it is necessary to protect rights and interests.
Anna Kirillova, Director of Marketing and PR Finvestech, spoke in detail about the legal side of ICO projects. Here are the basic principles of doing business:
PR and IR work in the framework of a unified communication strategy;
The legal service checks the communication strategy and guidelines for compliance;
All services participate in the development of information messages of Q&A, White paper.
IR strategy under the ICO:
Preliminary work with investors (4 to 6 months before the ICO)—meetings of the company’s management with key investors, participation in conferences;
Sales briefing (4 to 6 weeks before the ICO)—collection and analysis of information on the intentions of buying tokens, obtaining a general picture of the preliminary amount of fees;
Roadshow (3 to 4 weeks before the ICO)—series of personal meetings with investors;
Beginning of sales regular management—communication with investors, publication of materials on the sales progress;
Completion of the ICO—release of the final press release, communication of the IR department with investors.
Who deals with IR?
CEO and all public employees (for example, CTO);
Support service/community managers.
How to Promote Blockchain Projects
In addition to creating projects, you need to take care of their progress. Andrey Shatrov, CEO & Cofounder PMA Crypto Audience, spoke about the marketing of ICO.
Targeted advertising on sites of crypto topics;
Advertising on social networks;
Publications on popular crypto sites;
Community support on social networks and instant messengers. The communities become number one in the sector. Thanks to them, investors see that your intentions are serious;
PR campaign, work with opinion leaders;
Offline promotion, participation in conferences and exhibitions allow you to tell about your project;
Bounty program. Do it and do not listen to others that this program does not work.
The future of Blockchain and Cryptocurrency
The future of the electronic economy was repeatedly discussed at the forum. In particular, many were interested in the issue of state regulation of blockchain. German Klimenko, the adviser to the President of Russia on the Internet development, explained the position of the authorities. “Until the state gets guarantees that cryptocurrencies are really convenient, it will not become a gray business, there will be no progress.”
His position on what awaits us in the future in the crypto market sounded from other speakers as well.
Dmitry Marinichev, CEO of Russian Mining Coin, said that “In the near future we will see a large number of people who will make some money in the crypto economy and become rabid champions of classical capitalism. I am a supporter of the fact that soon tokens will be available absolutely for everyone. We will get a new economy.”
Natalia Zakheim, investor and financial analyst, said that “Soon, our wallets will contain 15 to 20 different cryptocurrencies, which we will use to pay for all products and services.”
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