 Morning guys. It's great to be here at India's only independently curated Vintag conference. I've gotten to know some of the Haskeek folks and glad to be talking about ICOs. Before we start, let me get a sense of who's here actually. So how many people are developers who have, how many of you have heard of ICOs? Everybody's heard of ICOs. How many of you may want to do an ICO at some point in the future? Alright, about half the audience. How many of you have invested in ICOs? Okay, good number. How many of you haven't but would like to invest in ICOs or the rest of the crowd? And just in terms of what you guys are doing, how many of you are developers? Product people? Product focus people? Any business focus people? Got it. Thank you. That gives me a good sense. So clearly everyone in this room is here because you've heard of this thing called initial coin offerings, right? And before I start, let me give you a little bit of a background about myself. I am currently spending most of my time in the blockchain and the crypto world but I actually don't, I'm not an early investor in crypto. I wish I wasn't a miner. I wish I was but I actually come from the traditional world of startups and venture capital. I was a VC in Silicon Valley. I came and helped set up a fund in India in 2013. I was based in Bombay, a fund called Lightbox. So traditional venture capital looking at early stage startups. How many people have worked in startups or are working in startups right now? Okay, got it. So you guys are very familiar with that world, right? And so there is a certain way of doing things, right? And you know, we see we always believe that we are in the business of investing in disruptive companies, right? But I think a lot of people would say that venture capital hasn't disrupted itself, right? If you think about that user experience, right? Think of the VC funding as a UX. It's pretty bad in a lot of ways, right? And so this thing comes along and starts to boom last year and it's really very new, right? So things are changing every day. And so I got really excited about this world of blockchain, right? So we have three things happening in the world of blockchain that the way I see it, right? There is blockchain itself or rather starting with distribution of ledger technologies and then consensus mechanisms. And of course we know that that is changing every sector. Then there is the world of cryptocurrencies, which is really decentralized money, right? And changing the notion of where you store your wealth or how you transfer value from one party to another. And the third thing that I look at is ICOs, which is applying that blockchain concept that distributed ledger concept to the idea of fundraising, right? And so clearly this has been a phenomenon in the last 12 months especially. As you can see what has been going on in the world, different colors represent different countries. It started in 2014. The first ICO was for a project called Mastercoin. Then of course later on Ethereum itself was one of the first real ICOs that raised money and look at the value that Ethereum has created in terms of a community. So I think it's probably the best validation of an ICO that actually led to a community, a developer ecosystem, right? And then something, there was a quiet time for a couple of years and then boom, last year and this is only until November if you actually extrapolate it to now, the numbers have somewhere between 7 or 8 billion dollars has been raised. And to give you a contrast that is more than blockchain funding that's going from VCs in the traditional startup. So ICOs are already more money is being raised in the ICO world than in the startup world for blockchain projects. More money is raised in the ICO world than seed stage financing for the entire universe of seed stage financing, right? So clearly this has become a massive thing and more than that what's crazy is this stuff, right? How quickly some things have happened. So some of these projects look at the fact that they've raised 200 million, 35 million and the more interesting thing is how quickly, look at this one, 35 million in 30 seconds. So on so forth, right? So if you're a developer or somebody who's doing a startup, it's very tempting to ask yourself, how can I get in on this? And if you're used to stories from your friends or your own experience of how long it takes to raise money and I'm just not stereotyping but I'm assuming that most of you in this room will agree that if you're an engineer, a real core, hardcore developer, product person, you don't like that experience of going and selling and raising money that way, right? It doesn't really add any value. Now if you could focus on your project and actually raise you the capital really quickly, of course it's tempting. So what's going on and how did this happen, right? I would argue that just to give you background why I think this has happened is a convergence of two trends or two big things that have happened in the last five or ten years. One is the world of crowdfunding. That already existed. Existed for physical products from Kickstarter. Existed for independent movies and other projects on Indiegogo. Existed for social causes of GoFundMe. Those kinds of things have already existed. So that's not new, right? The thing is that that was never being utilized for startup funding and specifically and why it wasn't being used is I would argue because there was no digital economy, right? So you actually now look at the next part, which is the blockchain world, which came about and created a digital asset economy. So what does that mean, right? So I think blockchain what it introduced to the world and why made ICOs possible is, you know, three things essentially, right? Because you can trust a distributed ledger. You can now think of any digital good as an asset, right? Which means you can also tokenize it so you can now split it. You can trade it. You can always have an immutable, auditable rack of who has owned that asset at what time. So you can create a token that can be exchanged and that can be trusted without having a central party. Right? So that's tokenization. Crypto economics. I just did a great talk, I'm sure, and you've learned a lot about crypto economics. But essentially now you have a new type of economics, right? You don't just have the normal supply demand curves, but you also have this notion of, you know, here is going to be a supply for which I already defined the supply curve. This is how much Bitcoin will exist at any time, right? And depending on certain actions, more will be created or this is how it will be consumed. And essentially this idea of, you know, how does that change economics, right? It is something that you already learned about. And finally, I think smart contracts. Now because of smart contracts, primarily on Ethereum to begin with because that's the largest ecosystem, you could now trust a system in which you could send money to a stranger and know that you will get the tokens in return. You will get something of value in return and all of this is publicly available. So there's these three things that blockchain brought in with made possible the concept of ICOs. And what ICO is, as most of you know, is a fundraising tool where you sell a new digital currency that you create and or a token and I'll come to the difference between all coins and tokens in a bit. And it's an exchange for cryptocurrencies or fiat currency, US dollar or Bitcoin ether, which have immediate liquid value because those things are established, right? And the idea is that whatever you created, this will have a purpose in some ecosystem and we'll appreciate in value over time, which is the reason to perhaps get into it. Or if you're really passionate about some project, get in early as a participant in that developer ecosystem. The token does not, why it's different from what traditional startup equities, right? Remember the token that you buy in ICO almost always, it's called what's called a utility token. It does not confer ownership. So you actually don't own anything of any part of that company. You own a token that's issued by the company. You own the currency that's issued by the company. And so why, let's understand from the entrepreneur's perspective, I think this will be relevant to as many of you who raise your hands and then also understand from the investor perspective. And when I say investor, it means the average person, okay? I'm not talking about venture funds or hedge funds. So why, okay? Well, first of all, like I said, compared to the UX of venture capital, right? Long cycles, decision-making and obviously you have a lot of peers in venture capital, but I'd be the first to say that we don't make life easy for the entrepreneur, right? The system's not set up the right way. VCs aren't always the smartest people, right? VCs don't always know the right answer or have the best judgment. And so there is a lot of time that's wasted, I think, in that process, which doesn't really add value to the project or the company, right? So doing this is cheaper. It's faster, certainly in the sense of the opportunity cost of the time, because you can do some of these ideas in a couple of months and versus the entire process of fundraising, which usually takes place after you've created something, after you've shown, you know, what usually you keep getting feedback is, okay, go prove to me that you have more users, and you go back and you get users. Okay, great, prove to me that they are paying. All right, go, you go and get some revenues. Okay, now prove to me that you'll also be profitable, right? See, the cycle keeps repeating and the bar keeps getting higher. But I think in this way, you can actually raise this money before you create something, right? And you don't give up equity. So in the venture world, in the startup world, when you're raising money through venture capital, giving up equity in your company, that's not happening here. It's also unregulated right now, so you don't have the paperwork. Now, that is good and bad, and I'll come to that in a little bit. So essentially, if you think about it, right, the person who's giving money to a project and the business itself, you know, earlier you had many people in the middle, you had a broker of some sort, a banker sometimes, and what you do now is you can trust a smart token, because it's written on the Ethereum public blockchain, and so you can trust that this can happen without the need for other parties in the process. But I think what I like more than anything that I've mentioned so far is this idea that this changes the creation of network effects. So all of you, I'm sure, are familiar with what network effect is, right? You go on Facebook because everybody else is on Facebook. You will not leave because everybody else is on Facebook. All your data is on Facebook. The more people joining that platform, the value of that platform to any given user keeps increasing. That's the idea of a network effect. Now, a lot of businesses when you're trying to create, that's your struggle. If you're trying to find buyers and sellers, let's say if you're doing a marketplace of some sort, right? Or you're trying to find content and users, right? You're trying to make sure that any platform, you know, you can cultivate this thing so that buyers and sellers of whatever you are providing get more value. That's really hard to do, which is why so few companies are real platforms, but if you can crack that, you are worth a lot, right? You change the world. And because it's so hard to do, interestingly now, the idea of ICOs, which I like a lot, is that it changes the equation. So traditionally, if you're doing a network effect, what you're doing is, you know, you will have no value up until a point and then you will have increasing value as your users increase, right? And that's the problem, is that it's very hard to get to this point because it takes a long time. Sometimes it takes capital and it's just really hard to crack. What ICOs do is that they provide a second utility, okay? So while you, before you even started, before you have users, you obviously have no utility for them because there's no product right now. In that time frame, you can add a financial utility. You can actually provide them something which has which has some value, right? So what you do is, I want all of you guys on my platform. What if I issue you tokens? What if you believe in my project? You give me some money. It doesn't have to be large sums. I give you these tokens and you buy into my vision. Now, you want that token to increase in value. What will you do? You'll go talk to other people. You'll bring other people in the system. You might bring other developers into the ecosystem. So essentially what you're doing is by adding another type of utility, you are solving the bootstrapping problem, right? So you're allowing an entrepreneur from day one to actually provide some sort of a network effect. So that's why some of these ICOs before they've even created something are worth a lot because a lot of people have bought into their idea, right? Now, it also is interesting because if you think about it currently, if you were to go out and raise money from an angel investor, then you'll create something, then you'll go find your users, right? So many of you are product people, you do A, B testing. You're trying to find who is actually the user that who likes your product the most. And that takes time and it wastes money. So a lot of the marketing money that you spend is wasted because you don't know what's usually called the product market fit, right? You don't know who's actually interested in your offering. Now, what if you could reverse this whole thing? What if you could say, let me first find the people who will like, who will be my users just like in crowdfunding, right? And then I go raise from them and more importantly I create a community and I create this thing that I'm creating in an open source environment where I'm getting their inputs. So that's what ICOs have also enabled, right? Is that you can actually now raise money first and build accordingly. Sure. Oh, yeah. Great question. Great question. Hold on to that thought. I'll come to it. Okay. And now some of you are not going to be interested in being a developer for an ICO project or starting an ICO yourself, but you want to, you're someone who watches great new platforms and new frameworks emerging and so you, you know, think about like React coming out of Facebook or think of anything that has come out of Google, right? You may not have had the opportunity to participate in them, right? But now, conceptually what ICOs can provide is that as an investor, you can access these opportunities. So for the first time in history, the average person who's interested in technology can actually get involved in things very early, right? It's global democratized access. So until now, large companies, most of that value went to the founders, the team, the early employees, the early investors, venture capitalists and the rest of us were just creating the value for them, right? So Facebook, who creates the content? We do. Who consumes the content? We do. Who gets the value? Facebook, right? Have you ever, has anybody ever been paid for their user usage of Facebook? Okay, great. So it's really democratizing the value creation, right? So whatever value is being created in the project can now be distributed among many, many more people. It's also diversification in the sense that let's say you are someone who is into cryptocurrencies, you have Bitcoin and at some point, you have, let's say, gained a fair amount of wealth in Bitcoin, right? Now you're looking for what's next. What are the other things that can be, that are so early right now that it can be 100x or 200x in the next two or three years? So that's why some of these things could be very interesting to someone in the crypto world, or someone who missed the bus, right? You say, next Bitcoin. This is liquid and tradable. So if you invest in a startup in the traditional way, some of you may have, your money is usually locked up for seven, eight years, right? That's because you don't get anything back until the startup is sold or does an IPO or something like that. Now, in the concept of an ICO, you are getting these tokens which are accessing the protocols in this project and the idea is that people will have demand for this. So you will be able to buy and sell this thing at any point. So you're always liquid and this is tradable. And like I said, for the first time, the average person can access really early stage opportunities which they may feel is the next Facebook at a global scale. So another thing is that if you're sitting in India, if you want to invest in startups, you're typically only irrestricted to opportunities in India. The world of crypto and ICOs is global from day one. Now, there are a lot of nuances, regulatory and all which I'll get into, but conceptually this is amazing. And what about the developer specifically? So if you think about it, you know, you guys are more familiar with the blockchain application stack than I am. But the key thing is that the idea is that there is this is a fat protocol, right? Where you have data will be part of the protocol and you have a lot of functionality provided there itself. So the apps sitting on top are just using all of that underlying code. This is very interesting thought that if you compare this to the way the web developed, it's very different. People would argue that in the 90s, 95s, SMTP, HTTP, etc. were being developed, rolled out and what was happening was that there were some researchers, there were some early developers, these were open source communities and they contributed and then what happened? They actually never got any value out of it. And protocol development kind of went dormant. The parties that actually created much more on top are the Google's and Facebook's and Microsoft's and they captured a ton of value. So, you know, the idea is just if you simply think about it, the applications layer is where most of the value got created. That's where all the developers went. Why? Because those companies pay well because those companies had the resources to bring the best talent and provide that environment where people want to work. Now, arguably, blockchain can change this. Some people have argued and this is a debate that's being had that blockchain will look different. The protocol layer will actually capture much more of the value. So, as a rough proxy if you look at today, this is a little dated so I know the market is crashed so this is all different now but Bitcoin, Ethereum have bulk of the value that's there right now and the other projects are a small sliver versus the protocols in the traditional web market are very small part of the value. So, you know, for the first time as a developer, if you are excited about an ICO and they have a currency that's being used if you are contributing to the code, you are actually a big participant in the open source environment you could keep earning these tokens and that's not been possible before. So, I think these ideas that I'm sharing are personally the more exciting things that's not the scenario today. Right now it's all very murky and there's a lot of noise but this is why I like the concept of ICOs. Okay, so really quickly some key terms. So people use altcoins tokens interchangeably. The way I like to think about it is cryptocurrencies can be of two types, say altcoins tokens. The main difference is that altcoins are considered alternative to Bitcoin. So all of them have been initially created to say that Bitcoin is lacking in some way, whether it's privacy whether it's speed, whether it's transaction cost and just scalability and so you have many of them and some of them derive their blockchains from Bitcoins who's a fork and others have their own native blockchains and tokens are usually what I what people refer to when they say tokens are being referred to as things issued on top of an existing blockchain. So ERC20, the Ethereum standard you're issuing these tokens on top of Ethereum. So as a developer you're not coming to this blockchain and having you can leverage the existing network of nodes in that blockchain you can leverage the programming language and anything else that it provides. So rough analogy would be the Apple releasing the developer tools for the App Store several years back and how quickly so many developers came in because it became very easy to create these apps. Ethereum has done the same become very easy to create new distributed apps or issue these tokens and raise money as well in a really quick way. Another distinction that I want to highlight much of what I'm talking about is utility tokens where these tokens have some value within a network but they're also security tokens. Now excuse me the key distinction is that utility tokens the idea is that this is something that's valuable within a platform it's not something that is an investment and that's what the people issuing these tokens are saying. So they say this is the only utility token and the reason it will be valuable is because people will want to use it in the future and that might be the reason that it might rise in value. On the other hand a security token is very clearly defined as an investment right so it's linked to owning something or having a claim on dividends etc that the project might. So if I'm doing a fund let's say I say all of you give me money for a fund and I will take this money and invest in other projects and when I get some return I'll pay them pay something back to you right that's a classic security token. Now the reason this becomes interesting is because a lot of the I told you one of the big reasons that I use have have flourished is because there's been no regulation and what's going to happen most likely is that all of these including the utility security tokens might be considered security tokens because there is this thing called the how we test in the US and essentially the idea is that the US law says very clearly if you are doing something which is for an investment of money in a common enterprise expectation of profits from the efforts of others right it is a security token. Now most of what I just described and that goes back to your question most of what is happening right now is people are buying these tokens but they are not going to be the actual users they don't sometimes don't even know what this project is about right so currently all of this is happening with the expectation of profits people are not actually buying them for using this token right so that's why the SEC and many other countries including India, China etc might just look at this and say okay you can do this but you have to follow rules and for example the security tokens a lot of paperwork you have to go through a process and you have you can only be listed on an exchange which is you know endorsed by the government or allowed by the regulatory authority in that like an SEC approved exchange in the US so if that happens it will become much harder to do ICOs but it may not be a bad thing because I think these things should be regulated to some extent so is this allowed currently in India no regulations but you have to be aware of all types of scams that are happening and I'll come to that in a little bit other countries like I said the US has issued some guidelines on what they think will be considered security tokens and I think in the future you will see many countries tracking down on this idea and saying you can do this but you have to follow rules currently most of the ICOs are coming out of places like Singapore and some other destinations like Estonia, Gibraltar, British Virgin Islands etc so if you're someone who's thinking of an ICO that's not something I will cover in this talk because that's a longer discussion you can find me later but essentially the idea is you can be in India but you have to structure it usually from a jurisdiction that is allowing ICOs and so you are if you're in India you're operating as a subsidiary of something that's based outside of India okay quickly what is the process for doing it again not a whole lot of detail I'm going to go into but essentially what happens is you start with a white paper you describe what you want to create you should answer why does decentralization help how are you using blockchain ideally right and you go into topics like what is this token going to actually do why is it needed versus just using ether if you're building on Ethereum let's say and you describe your roadmap it's usually anywhere from 5 pages to 30 pages you talk about your team advisors if you have a product you talk about your prototypes products but it's not even necessary to be at that stage after you've done that you start to do what's called a presale you go and find some investors who are believing in your project initially and you give them a discount so usually how these things work is if I come in early I get a certain discount that could be 20% that could be 50% so if a normal person will pay $1 for this token I might get it at 50 cents right and that is to get some initial momentum so that you can then go and give other people confidence that hey somebody's already come in now I go to the crowd sales there's a presale and then there's the crowd sale in the crowd sale you go out to the general public and you also come up with what's called a smart contract which is essentially going to describe how the ICO will work when money is wired into a certain wallet how the tokens will be dispersed in return and what the various things like how what will be the amount of tokens the soft cap which is the minimum that is needed for the ICO to be successful the hard cap which is the maximum that the project owner says they will raise and they would say that won't want to raise anything more than that so on so forth and then you actually go out and you know there's a lot of PR so that's why the big part of doing this is actually digital marketing and some of these things initially had crazy conversion rates some of these things were were getting 5% to 10% conversion which is crazy if you think about if you are from the digital advertising world and Facebook and a lot of other channels were being used because people had wealth in crypto and they just wanted to diversify so they were just blindly getting into new ICOs and people are still doing that you also have telegram Slack being used in a big way because that's where you try to create the community so you try to explain what your project is and people ask questions and in the ideal scenario you have some high quality discussions and then you have a timeline for doing the crowd sale and people like we discussed wire there or send their bitcoin or ether whatever you have described sometimes even US dollars and at the same time as soon as a smart contract is executed they get their ERC-20 compatible tokens in their wallet so that's essentially how you have them and usually they're readable after a certain time so you can even go and sell them on exchange and that's what a lot of people have been doing is just making some quick money now let me give you an example of an ICO which I liked and which would give you a flavor for what kind of project that at least from my perspective is very interesting so like we discussed Facebook is a good example right we create the content we consume the content we get no value so from a user's perspective plus your data is being used in ways you don't know and their algorithms are manipulating your behavior all the time you don't know that I'm actually not against Facebook I think it's a great company I'm just pointing out the case for why something else could also exist now also from the advertiser perspective today you have to be on you know if you're an advertiser and you need to reach audiences digitally all of the growth is Facebook and Google for the last few years so you have to be on Facebook but they even they are not sometimes happy because they see some conversion but they have no idea how people are engaging right because Facebook is not giving them that all visibility so there comes along a project called rave browser basic attention token how many of you heard of it okay a few and it says okay what about you decentralize this whole thing and make it peer to peer so there's a user there's a publisher and advertiser what if we could make their interactions peer to peer okay which means that and they started with the product itself so it's a new browser which is decentralized so it comes with a wallet and essentially tracks your behavior but the data is never passed without your permission at least that's the concept and so now if you are someone that reads a lot of NDTV or click info both sites could actually reward you for your loyalty in terms of some tokens okay if you are an advertiser that needs to reach a specific type of audience you could reach them directly with their permission so I could just say I watch no ads but if I am open to watching some ads for payment and I could say I'm open to watching ads from I don't know fashion sites but I get tokens from them okay you could now pay for specific pieces of content micro payments directly through this browser so instead of a subscription to the whole magazine or site I can buy certain articles blogs etc so essentially you think of direct peer to peer interactions rather than a central party which existed before like a Microsoft or a Google or a Facebook so that's a really interesting idea in my opinion because if it works it could change the entire game and this is a good ICO because you had a good team the founders were the same people who created Mozilla this was they talked about in their white paper they laid out what I just described to you and then they also designed a token economy right so you have to actually describe the value flow from advertiser to publisher and you know you actually I'm going to go into details on this but essentially you are metering every piece of attention so on the user side you have thresholds or based on attention time spent on something you keep increasing, you keep rewarding the user with some tokens and then you also define how that token flow will go from advertiser to a publisher and user and so they came up with the math behind it and had a successful ICO that is 35 million in 30 seconds right so this is an example which I think meets the criteria of use blockchain, decentralization is better they argue has a product has users and fleshed out a token economy in a very comprehensive way what about if you just want to invest so many of you raise your hands so my suggestions are the following right if you are looking at an ICO first of all look at the fundamentals is this solving a problem does the world need this token right because I would argue that most of these things are completely useless right now because people have just gone crazy and issued new ICOs without actually and nobody is actually going into the details of why it's needed will the user find utility can you imagine large numbers of people in this token economy holding this token using this token day to day right will decentralization make something better what is broken right now that will be better with peer to peer decentralization and why do you need a specific token is it is it complex enough that you need a separate token which has its own economy versus just saying hey just use ether and so to your question earlier ideally what you want is that the people who are buying your tokens are the same people who will use your tokens and then they will want to hold the tokens for the long term because they are long term users is this the reality today not at all this is there's very little overlap most people have just bought these tokens because they are investing money they don't understand what they're investing in but they think it will rise in value and many many projects have no token users because they haven't even launched so right now it's just very very early going back to what else should you look at people first of all check that they exist you'll be surprised there have been ICOs when you know it's been fictitious team you go back to people haven't you go on LinkedIn and see yet people don't even exist so just check that they exist their background should be relevant they should ideally have some people with blockchain experience this is not rocket science I think any smart person can figure out do they have some experience which is relevant to this have they run a business before have they built a product before even if it's fine not to have run a business before have they managed enough responsibility because if they're going to now be in charge of 5-10 million dollars can you trust them with confidence team versus advisors a lot of the times you'll see that the teams actually are outnumbered by advisors I feel like those teams just need a lot of advice and that's usually a bad sign and sometimes these advisors are just not even participating in anything they're just taking some money and putting their name on it so you have to be cautious about these kinds of things so that you don't lose money next look at their progress do they have a prototype do they have something in testnet that will go to mainnet have they specified a timeline some of all of you I'm sure are capable of going into github checking commits what is the frequency of updates right what you're really sensing is is this an actual live project which is an open source project where people are contributing is that increasing over time so is there an actual traction people are really good developers believing in this project do they have a prior existing business or customers now sometimes most of the times the people who are doing the ICOs are just launching from scratch sometimes you may also have projects where we had something else but now they are bolting on blockchain now that can be terrible sometimes because they may just be bad businesses and they're like okay you know this ICO thing let's go raise some money there and we'll figure out life after that but sometimes it may be that hey this presents a new way of doing things so we can actually change our current product or introduce a new product and we are raising money for this new product right so you have to just really understand their history and their progress the community what is the quality of discussions so if you go to telegram which is usually where these discussions are had most of the time you'll find that people enter and say hi what is this and I'm like how did you even land here right and it turns out that they just clicked some random links there are these bounty programs you know people just get paid for coming to a group or posting something on facebook and sometimes they're just trying to get all these random tokens they don't even understand now it's like facebook likes you know you can buy them you can have lots of them it may make you feel good about life for some time but they're in the end they're not worth much right so you have to understand are these people who are going to be serious buyers again going to that Venn diagram right are these at least some people believe in this project long term or not are the founders participating themselves it's usually a good idea when you see a founder themselves at least for some time every day coming and engaging with the community on telegram and then let's look at the token sale right so how much money are they raising ah one nice thing about this is you may tell me hey you told me that this is better than we see in many cases so in we see I usually go I raise 1 million then I raise 3 million then I raise 7 million then I raise 15 million it goes on now here people would sometimes argue that you're doing a one time I'm like I need this money and then I will build my platform I will get my community and life will be good so I need 50 million dollars now that's fine in some cases you know if there is a big project like let's say Ethereum today something like that came about and said we will create a platform to distributed apps we need to grow this globally we need to have a developer community all of that we need to have this massive thing globally we need 50 million dollars and the team is excellent maybe that makes sense because a lot of that money those tokens could be given to incentivize new users right but then if somebody who's not run something before has a weak project comes and says I need 10 million or 15 million it's like red flag for me because the point is anything about 5 or 10 million big problem almost no business should get that money before you prove something right so it's I think the better issues of the ones which are usually like those 5 million or smaller range where the founders are good and they're like we need some money to reach a point when we have a token economy working once that starts working we will have a self-sustaining model anyway so we will not need much more money than that we will find a way to you know monetize those transactions that will happen so we just need money to get there and for almost every project that some does not have to be larger than 5 10 million okay a few things I'll speed up a little bit so softcap hardcap softcap is the minimum that they believe it they need to raise to make the project viable hardcap is the maximum they will raise economics of the team just like in startups if you see teams where a large chunk is held by them big red flag vesting versus and lock-in so if you are in a startup your equity vests over time similarly there should be no reason why core teams of these projects don't have their tokens vests over time because if they're all vested on day one what stops them from running away with your money just telling dumping these tokens in some exchange and running away with the cash inflation versus burning on sold so because this is something where it's a token economy what you want is you want the early investor to believe that they will not keep getting diluted again and again right so if you have a project which says I will I have the right to issue X tokens at any point you just don't know if they'll keep issuing tokens and will I create more wealth for them but it will not create wealth for you because your stake will keep getting diluted usually good idea to burn the so tokens that are not sold so if you said I'll sell 1 billion tokens but only 100 billion got sold usually what the good projects do is they burn the unsold tokens so that the people who invested don't get diluted in the future listing on exchanges if you have something which is listed on exchange at least you know that you can trade like I mentioned the point about being liquid so that's important and good projects usually have one or two really good exchanges but if you see too many exchanges might be a red flag because maybe all they want is trading to happen not people to actually hold this token for the long term lots of scams everywhere lots of jokes these are real things there is a coin called Putin coin which has something to do with Vladimir Putin obviously it's a joke but there are many many such things so be aware there is one called Coinier for Kanye West there's one called Whopper coin from Burger King lots of random things came about and then and you have to be careful with hacks as well a lot of the ICO projects have gotten hacked so another thing you should try to do is make sure their smart contract has a security audit which means that somebody has verified that they've gone through their smart contract and it doesn't have massive security loopholes because you don't want the project to say hey we lost all your money because you don't know who took it maybe they took it in some other way also exchanges themselves can be hacked as you know so to finish it's still early days but the concept is great in my opinion and I hope it survives if you think about the web you had the development of TCPIP SMTP so we were in the protocol layer and at that point whether maybe 1993-95 maybe about 1 million people could understand these things or use these things maybe not even that then what happened over the next few years is you've got fibers were laid everywhere across oceans you had ISPs in every country and the infrastructure for the internet got created and then suddenly you could have 10 million people use it right then finally you know Microsoft was not the first first GUI but first successful browser came about and suddenly you had a way where the average person did not need to understand the complexity of the protocols behind right they could just interact with something which was simple that suddenly made it possible for 100 million people and then of course over time you had social and mobile because you had web 2.0 you had decentralized I'm sorry you had web 2.0 appear and we know that it went to a billion people and now maybe two or three billion people in the world of blockchain I think we are right now at the protocol in an infrastructure stages we don't even have enough infrastructure in terms of secure storage exchanges these things are happening very quickly but it's still going to take some time we barely have crack the you know some protocols and until we have some you know I think the killer thing will be when somebody introduces a really neat decentralized browser or a wallet that is the average person's gateway that will actually take it to the next level and then you could see that this will be relevant to a billion people so to finish powerful concept suddenly creates democratization of whatever value new digital economy new crypto economics right and it separates money from advice so you can raise money from the community and you can get advice from some VC or whoever but you don't have to raise money from the same people right now the problem is that you have to raise money from those people but currently it's low quality projects this year will be very very key to follow because I think sometime in the middle of this year I think a lot of these projects will get killed because it will be one year mark the raise money they haven't done anything and hopefully this will lead to a period of like really a turmoil but after that maybe we'll get this ICO as a concept that works very well alright thanks guys went a little bit over time