Cryptocurrency Investment 101: Interview with Cyber.fund
Last week Cyber.fund announced a crowdfunding round to attract 42 BTC for the project’s development. In return, the supporting investors will obtain 3% of CFUND tokens. Cyber.fund was founded one year ago, and on November 17, 2015, the organization registered in bitcoin’s blockchain by signing the genesis agreement.
ForkLog (FL) talked with the project’s co-founder Dmitri Starodubtsev (CF) about Cyber.fund itself, as well as about cryptocurrency investment.
FL: In a few words, what your product is about?
CF: We want to implement rather simple standards, and a logical framework allowing investors to form a comprehensive view of systems and tokens’ stance. So that investors could just see whether the system is progressing, degrading, or is in stagnation. As it turns out, the market cannot offer any convenient complex solutions therefor.
FL: What is Cyber.fund’s business model? As the organization is registered in bitcoin’s blockchain, how do you provide transparency warranty to the project’s investors?
CF: Our business model is simple. We just sell private accounts to users, and the revenue is distributed to a dedicated bitcoin address. Thus, a shareholder may be sure that if someone visits the site and spends some bitcoins, the whole revenue goes to a dedicated account. Our business model has no need for arbitrators or judges, and so does our project as a whole. There is a signed digital cast related to the site’s executed code, which is stored at github’s depository. This guarantees that the site executes that very code with that very bitcoin address accumulating the project’s revenue. I believe we’ve arranged a pretty transparent scheme, which allows us to do without arbitrators. That’s very simple: if we started deceiving investors, the news would spread right away, and we would lose trust from our users, and, therefore, our business as well.
FL: Are CFUND dividends repayable to the holders?
CF: No, we think that dividends degrade a company’s capital, so we’re not going to pay them. The best example for us in this regard is Google. Shareholders may secure their revenue and their dividends at the expense of the shares’ cost. The more demand there is for tokens, the more expensive they are. Anyhow, people may have not only an interesting investment opportunity, but also a convenient and useful product that our platform is.
FL: What is the platform’s target audience? Can you say it is intended for mass market?
CF: The platform is oriented on people who understand the value of autonomous systems like Augur or BitShares; people who realize that implementation of those systems or some individual tools may make their business more efficient. Generally, they are smart people believing in the potential of distributed systems and cryptotechnologies.
FL: What do you think about the bitcoin audience? The community provides different numbers. What are your assessments?
CF: Currently, I think there are about 10 million people holding bitcoins. Yes, there are estimations of 20, 15, or 7 million, but to my reckoning, bitcoin’s audience is about 10 million.
FL: Is alternate cryptoplatforms’ audience comparable by any means?
CF: We tried to assess intersection of BitShares, NXT, and Ethereum audiences indirectly, but, frankly, the result was rather intuitive. I have no reliable figures, however, I might assume that there are hardly more than 200,000 people holding three or more cryptocurrencies, including Doge and Litecoin. There are about 20,000 people for Ethereum, I think. NXT’s audience is a bit less tech-savvy, I think there are about 5 to 10 thousand people. BitShares have about 15,000 people. It is mostly investors, and people owning respective assets.
FL: The numbers are impressive, though not as impressive considering 10 million of bitcoin holders. What is the main problem with altcoin audience expansion?
CF: The crucial problem might be in the fact, that a person has to go a long way prior to making a decision on investing in those cryptocurrencies. Just recall what you had to do in order to invest in Ethereum. Sending money via console menu is not for the masses.
FL: What metrics and analytic tools are employed by cyber.fund? What is your must-know for a cryptocurrency investor?
CF: The key feature distinguishing blockchain from other existing accountancy system is that blockchain has no debts. For that reason, one cannot just automatically transpose traditional metrics for assessment of potential / attractiveness of a crypto-asset. Our system will introduce some basic things one should know about any blockchain system to understand its operating effectiveness. Currently there are three factors to assess a blockchain system’s potential. They are availability of open source code, presence of block explorer available in the network, and availability of an open source code wallet compiled in at least one open source OS. Those basic things may assure a user that he or she owns the asset. Also important are genesis block and its ID.
FL: It covers mostly blockchain systems. What about tokens?
CF: Token requirements are different. First, they shall be issued on top of systems that meet the abovementioned requirements. Second, a token shall be registered in a renowned protocol. In addition, there shall be a specification and an OP_RETURN byte identifiers. Third, there shall be an agreement describing the asset’s appropriation, a document hash, a short description, or something else. Finally, there shall be dynamics in transaction volume increase.
FL: Are there metrics for assessment of asset risk at Cyber.fund?
CF:Alas, I have no idea as to how to assess such risks so far. Currently, it’s too early to think about such things.
FL: Your hackathon task was to build up a system for balance auto-renewing for several currencies. Is there your own wallet at Cyber.fund?
CF: We lack our own wallet as yet, though we’ve been interested in multicurrency wallets for a long time. It is a complex field where no one has done anything significant so far. Multicurrency wallet is the industry’s Holy Grail. However, our service is useful without it as well.
FL: What else do you consider to determine the rating?
CF: We deem infrastructural support one of the most important rating formers. It incorporates a major set of data, and mainly describes how easy a system might be integrated in a site. It is a very important issue. The easier the integration, the more chances there are for a system to develop and expand. As for cryptocurrency wallets, there is a need for standardization. Another important issue is user loyalty. Users may “like” a token at our platform. User loyalty is trust which matters much more than speculations at Chinese markets.
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