Estimated reading time: 6 minutes, 6 seconds
Looking to get involved with investing in the blockchain, but are worried about the volatility and uncertainty of the crypto market? Then I’ve got some good news for you.
BrickBlock is a platform that is trying to make it as easy as possible to invest in the crypto markets through the use of the Ethereum blockchain and it’s underlying network of smart contracts. In this video, Jeremy goes over what the project is and what market advantages the project is trying to capitalize on. He also points out the noteworthy details about the ICO, any potential concerns, and hopes for the project.
What is the BrickBlock project & what problem is it trying to solve?
Both novice and experienced investors have become very intrigued by the crypto markets, yet many are not willing to make the leap for several reasons. The recent volatility displayed by these markets and lack of general access has made investing through the blockchain more of a difficult sell. Navigating traditional markets is near impossible unless you’ve been taught exactly how to use that platform. This makes it very difficult for the average individual to invest and maintain their own portfolio, having to turn to licensed middle men who, of course, are going to take their cut.
BrickBlock bills itself as first blockchain-based platform where users can seamlessly invest in real estate funds (REFs), exchange-traded funds (ETFs), passive coin-traded funds (CTF), and active coin-managed funds (CMFs) through a streamlined process and with significantly lower costs than traditional investing.
How do they plan to do this? By incorporating blockchain technology and introducing proof-of-asset (PoA) tokens, they hope to making trading activities more efficient by cutting out third parties, all while expediting the trading process. Each fund will have its own corresponding proof-of-asset token, which allows investors to hedge the risk of cryptocurrencies in real assets without needing to convert their cryptocurrency into a fiat currency.
To ensure the safety of the underlying assets represented by the PoA token, a digital trust fund holds the exact same amount of fund shares as tokens issued, so their is something of actual value backing the currency. Clearly, licensing and verifying identity is very important for BrickBlock to do, as they are required to know who they are doing business with based off of anti-money laundering laws. BrickBlock has outlined a process they will use to verify those posting assets and funds. Broker-dealers and fund managers will be able to list their investment opportunities on the platform, after being thoroughly verified by BrickBlock through proof of residence, credit reports, and background checks.
What are the market conditions facing the project?
ETFs have gained popularity over the years as technology has progressed. The investment giants on Wall Street have taken the opportunity to margin trade using programmed bots, making it tougher for the little guy to compete on these ETFs. So much of the investment market is centralized in these big firms, and despite several missteps and a recession, people have still trusted these investment giants. My theory it’s because people realize they need to invest for their futures, and they feel like they have no where to go but these existing giants.
I’ve actually seen some apps come up that are targeted towards Millennials that are specifically trying to make investing easier and accessible. That desire is clearly there, as many young people want to gain control their own finances. BrickBlock is entering this market at the right time, as many have become increasingly more angry with big banks and investment firms.
There are some specific issues with how investments are made that BrickBlock is trying to capitalize upon. The first is the very high volatility that has been displayed in the crypto markets. All of this adds up to risk, something investors are always looking to mitigate.
BrickBlock points out that money has three important properties. Currently, cryptocurrencies are primarily used as a store of value. The use of cryptocurrencies as a medium of exchange and as a unit of accounting is still in a very early stage. This means that there are limited options to escape the volatility of these markets. At present, the only real way out is to reconvert into a fiat currency. PoA tokens are set to change all of that because they are backed by things of actual value.
Another huge issue is counter party risk. The key think to remember when learning about counter party risk, like now, is that traditional investment transactions actually get processed, or cleared immediately. It’s actually a three day process. The first day the deal is made, the next it is sent to the clearing house, on the third day settlement occurs.
Obviously, most investing don’t make one trade, wait three days to clear, then resume their trading activities. This is completely untenable. So people don’t wait for existing trades to clear before they make their ensuing moves based off of their first trade. See the issue? If someone makes a deal that they don’t have the money to cover, they default, and the trade doesn’t go through. Of course, this could effect all trades made after the first, as some may not have sufficient funds to be executed. This triggers a domino effect that can nullify pending trades, screwing up things for everyone.
BrickBlock hopes to solve this problem by using the blockchain to clear trades instantly.
Who is behind the BrickBlock ICO?
And this is a very good question indeed. Because looking through their website and Whitepaper, there really isn’t any listing of their team. Normally on either of those two – website or Whitepaper – there is a little about us section, or a meet the team, who’s behind the project, kind of thing. You’re investing a lot of money in these projects. So I find it a little bit disheartening that the names aren’t just out there up front. It’s not a huge red flag, but it’s something to think about. If I am investing in something, I want the developers to be proud of the project and put their name out there so they can reap the successes, or if it goes south, we know who to blame.
What are the details of the token sale?
The BrickBlock token sale will start on October 11, 2017. However, you must be white listed to be apart of the token sale. All this means is that you have to go and pre-register on their website. I’m seeing this requirement more and more for ICOs, as more countries are exploring ICOs as securities, within that classification. I think it may become a new norm for ICOs.
The crowdsale accepts bitcoin or Ether, and has already set a conversion rate for how the tokens will be distributed. For example, at the start in week one, one Ether will equal 800 PoA tokens. And for each week thereafter, the number of tokens for that exchange rate goes down by 25.
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*Patent Maybe Pending