Japan Crypto Currency markets

Japan crypto market places

On the 29 September 2017 Japan Financial Services Authority gave licenses to 11 companies to run cryptocurrency exchanges.

The exchanges that go the licenses are:

This is making many people question whether or not Japan will be the next ICO boom market.

Currently the licenses allow these markets to trade the following digital currencies:

BCH – Bitcoin Cash
BCY – Bitcrystal
BTC – Bitcoin
CICC – Caica Coin
ETC – Classic Ether
ETH – Ether
FSCC – Fisco Coin
LTC – Litecoin
MONA – Monacoin
NCXC – NCXX Coin
PEPECASH – Pepe Cash
SJCX – Storjcoin X
XCP – Counterparty
XEM – Nem
XRP – Ripple
ZAIF – Zaif
ZEN – ZenCash

Not every exchange can trade in all the currencies, however this is a very interesting and positive step for the Japanese crypto currency market places.

JP-crypto-exchanges

Source: https://www.techinasia.com/japan-approved-crypto-exchanges

 

What tokens to accept as part of your ICO

In the beginning of the ICO craze there was some uncertainty over which tokens to accept as part of the sale. It turns out that while it is possible to accept many different crypto currencies the easiest one to use is Ethereum (ETH).

The reason for this is because the ETH has programmable contracts for doing an ICO. This allows users to send ETH to the contract and automatically be given tokens for their purchase.

The problem with this is that there is no KYC (Know your client) restrictions and therefore governments don’t like this kind of thing. The way around this is through doing a whitelisted ETH account setup that will allow only wallets that have been approved to be automatically issued tokens and the deposits made from unauthorised wallets automatically returned.

This is the perfect setup and obviously if you accept multiple digital currencies this is very hard to manage. Hence the reason for limiting the token offerings to only accept ETH.

The other reason for doing only ETH vs multiple currencies is the fluctuations around the value of your token in different digital currencies. Imagine that if you had Bitcoins (BTC) and ETH being accepted. How are you going to set the token sale price when the BTC and ETH prices fluctuate all the time.

You could set the price of the tokens in only ETH and then accept the BTC but issuing the tokens automatically is hard as you need to keep the BTC vs ETH flat or have a dynamic pricing done automatically through an exchange.

This becomes very complicated and therefore its a lot cleaner and simpler to just do the ICO in ETH.

btc

 

How ICO’s raise money

We read about ICO’s raising huge amount of money and wonder where the money comes from.

Lets have a look at some of the prominent big ICO raises:

Money Raised Number of Token Holders Average Investment
FILECOIN $257,000,000 2100 $122,381
EOS $185,000,000 89,306 $2,072
BANCOR $153,000,000 12,832 $11,923
STATUS $90,000,000 41,264 $2,181
TENX $80,000,000 36,242 $2,207

The Filecoin ICO seems like a bit of an anomaly with the average investment being much higher than other ICO’s. Much of this was due to the fact that it had backing from large venture capital investors like, Sequoia Capital, Union Square, Andreessen Horowitz and Winklevoss Capital.

However most ICO’s don’t get support from traditional venture capital and therefore rely on smaller buyers for their funding.

Even though this could lead us to believe that ICO’s could be funded by small buyers, the reality is that ICO’s need to build momentum in their ETH wallets when they open their ICO sales. This is why Pre-ICO sales are so important as a way to build momentum for the  token sales.

The next thing to look at is what an average buyer would actually purchase. In our experience the average buyer is around $200 therefore the $2000 average is really pulled up by “whales” (large buyers) that buy much larger amounts of tokens.

So if you wish to do a successful ICO you need to not overlook Pre-ICO sales and make sure you build momentum going into the public sale.

Why we started Blocks Ventures

Having been serial entrepreneurs we realised that the advent of initial token offerings otherwise known as “initial coin offerings” (ICO) have the ability to shift the way startups raise capital.

There are huge benefits for investors and entrepreneurs in this new funding option.

Investors Benefits:

  • Access to liquidity with tokens vs traditional equity investments
  • Smart token contracts that make tracking business performance transparent
  • Initial token valuations are not as important due to the fact that these are tokens and not equity

Entrepreneurs Benefits:

  • Not having to give away control in order to get capital
  • Raising money without having to worry about valuations

We want to help entrepreneurs with funding, information, networks and our experience in this new and every growing field. In our opinion there is not enough information, experience or guidance in the crypto currency world. We believe that many people are naive about the legal implications around this as well and don’t spend enough time looking at the legal structures, token offerings and legal documentation that is required to do an ICO properly.

Apart from this help we believe that there is significant cost to doing an ICO properly and many businesses have not adequately funded themselves for the costs involved. This is why we would like to provide financing for this and help entrepreneurs get the best results for their ICO’s.

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