Cryptoexchange EtherDelta Officially Lists CrowdstartCoin XSC

As of today, 1 December 2017, our CrowdstartCoin XSC is tradable on EtherDelta, a decentralized cryptoexchange. 

We are very happy that, ten days after having issued the first XSC to IOTA developers at IOTA hackathon, in Gdansk, the tokens have been officially listed on EtherDelta!  From today, blockchain developers can grow the value of their own token that serves as a reward for contributing to the evolution of the blockchain ecosystem!

Don‘t waste your time, developers: Go, claim your XSC – and trade them!

Incentivizing Blockchain Ecosystem Development The CSC Way

The final decision has been made: We will not ICO with Crowdstart Capital. After having worked on the preparation of a token sale based out of Germany several months we’ve reached the conclusion that such an ICO is not advisable at this time.

Two issues have been the decisive factors: First, an ICO based out of Germany would have to be done in the environment of a legal limbo. Other project teams may decide to take the risk of selling a virtual currency to professional and/or individual investors in Germany but we’ve decided that the regulatory uncertainty and risk is too high. With our parent company Datarella, we have built a solid brand reputation within the blockchain ecosystem and we are not willing to put this at risk.

Second, we think that we can better meet our goal of contributing to the blockchain community by giving our Crowdstart Coins away.  Instead of selling tokens to investors and using this cash to provide blockchain-based startups with consulting, services and solutions, we will reward Crowdstart Coins (XSC) to developers who add valuable code to the blockchain ecosystem.

We gained this insight to change our model while working on the cryptoeconomics; i.e. the inventive mechanism within a specific community. Finally, we have come up with a 3-step-process of distributing Crowdstart Coins – “XSC” – to the blockchain community:

A Blockchain Evolution Incentive Scheme

Phase 1 – Initial Token Distribution

In the first phase, we will distribute tokens to developers at conferences, events and hackathons. This activity will occur primarily in Europe and the distribution will be at the discretion of CSC. The goal of this phase is to get tokens into the hand of active developers and blockchain early adopters/enthusiasts.

Phase 2 – Smart-Contract-Based Token Distribution

Developers committing code to key blockchain projects can opt-in to receive XSC tokens for every line of code that is accepted for their respective projects. CSC will set up a smart-contract-based system that will pay out tokens according to the accepted commits. CSC will programmatically monitor the git repos of major projects.

Phase 3 – Liquid Feedback Mechanism

In the third phase, members of the community will be able to suggest projects to be included in the incentive scheme, a model known as liquid feedback. Token-based ballots will be used to enable community voting and determine which blockchain projects should be included.

In this phase, we’ll also be rewarding developers to contribute to our code base. Essentially, over the course of the three phases of the incentive program, it should morph from being a mostly manual process to a fully automated process.

If you’re a developer who committed code to advance Blockchain technology at-large, you’ll be eligible to receive XSC tokens. You can request XSC by filling out the form:

Developer Incentive Program: Claim XSC Rewards

Show us that you’ve got the right stuff!

IOTA Hackathon Kick-off Event For CSC Blockchain Ecosystem Incentive Scheme

Crowdstart Capital (CSC) seeks to support the developer community and the blockchain ecosystem at-large. This document seeks to clarify specifically what these terms mean as well as outline several options for supporting our goals in this area. First, we define the target audience:

Developer Community: We define the developer community broadly including:

  • Active professional developers
  • Computer science and university STEM students
  • Potential future developers
  • Software companies
  • Open source software development organizations
  • Software startups

Blockchain Ecosystem: This term refers to various blockchain technologies as well as all the technologies that support and connect these projects. Here we are using the word blockchain as a catch-all for all distributed ledger technologies including block-less tech such as the IOTA Tangle:

  • Core Blockchain Protocols: i.e. Ethereum, Monero, Neo, Qtum, Polkadot
  • Selected dApps  (decentralized applications)
  • Supporting and connecting technologies: Atomic swaps,
  • multisig, hardware and lite wallets, governance protocols, etc.
  • Alternative protocols directed at a specific segment, such as IOTA for IoT
  • Exchange and liquidity services
  • Blockchain derivatives
  • CSC = Crowdstart Capital, a brand of Datarella GmbH, Munich
  • XSC = Tokens, originally provided by Crowdstart Capital

After having defined the target audience, we will create the incentive scheme in three consecutive steps:

Phase 1 – Initial Token Distribution

In the first phase, we will distribute tokens to developers at conferences, events and hackathons. This activity will occur primarily in Europe and the distribution will be at the discretion of CSC. The goal of this phase is to get tokens into the hand of active developers and blockchain early adopters/enthusiasts.

  • Potential Venues for XSC Distribution
  • Blockchain-related conferences
  • Hackathons
  • Incubator events
  • Blockchain meetups

In all of these contexts, different amounts of tokens will be made available for various levels of community participation. A wide variety of people will be rewarded for their community participation. Some types of participation could be more highly valued than others. The winners of a competition for building a new type of dApps at a hackathon might receive significantly more XSC than the bulk of the participants. However, the idea is that most types of contribution should result in earning some XSC tokens.

Exemplary reasons for being awarded tokens

  • Prizes for the winners of hackathon events
  • Honorarium for development event speakers
  • Bonus for event participants
  • Bonus for webinar participants
  • Bonus for participants travelling long distances to attend events

In order to collect tokens at, for example, an event, all you need is to have an Ethereum wallet which supports ERC20 tokens. During events, we will collect the relevant public keys and distribute tokens live to the participants. After that, participants can trade or hold their tokens or use them to purchase discounted consulting services from CSC. For more information on using XSC tokens to purchase discounted consulting services, please see http://crowdstart.capital.

During Phase 1, tokens may also be awarded outside of events to reward individual contributions to the overall blockchain community. The point here is to get tokens into a wide variety of people’s hands and incentivize participation in building the local development community.

Phase 2 – Smart-Contract-Based Token Distribution

Developers committing code to key blockchain projects can opt-in to receive XSC tokens for every line of code that is accepted for their respective projects. CSC will set up a smart-contract-based system that will pay out tokens according to the accepted commits. CSC will programmatically monitor the git repos of major projects.

The Process

Developers sign up on our website with their GitHub username and a public key for an Ethereum wallet.  In order to ensure that those people actually doing the development work are also the people who get the token rewards, developers will also have to post their public key in their public GitHub profile.

Once registered, developers just need to do what they do best: Code! For every line of code accepted to one of our registered and monitored projects within the blockchain ecosystem, CSC will transfer tokens to the author of the code. CSC also reserves the right to transfer bonus tokens to developers who solve particularly pressing bugs or issues or who contribute significantly to certain features.

  • Additional Actions Earning Tokens
  • Referrals: Developers who refer other developers to the incentive program
  • Commits to documentation/wikis
  • How-to’s or blog posts associated with official project documentation

The exact number of tokens that each action will earn is not determined exactly, yet. Project code will likely be rewarded with more tokens than pure documentation for example, but all accepted commits are eligible for earning tokens. Obviously, good documentation and stability of key blockchain projects needs to be improved in order to bring the blockchain ecosystem closer to enterprise-readiness.

CSC will start with providing incentives for development of Ethereum because it is the biggest and most widely accepted blockchain with a Turing-complete programming language. This said, it is also under-documented and could definitely use further support in order to progress and become an enterprise-ready solution. The second blockchain project whose development will be awarded with XSC tokens is IOTA, because of its assumed aptitude for IoT-related projects.

In Phase 3, CSC will incorporate a mechanism for electing new projects to be supported. This mechanism will be based on a liquid feedback model enabling a contemporary scalable, decentralized decision making.

Phase 3 – Liquid Feedback Mechanism

In the third phase, members of the community will be able to suggest projects to be included in the incentive scheme, a model known as liquid feedback. Token-based ballots will be used to enable community voting and determine which blockchain projects should be included.

In this phase, we’ll also be rewarding developers to contribute to our code base. Essentially, over the course of the three phases of the incentive program it should morph from being a mostly manual process to a fully automated process.

One essential part of this phase is that developers will be incentivized heavily to build the secondary smart contract which will continuously monitor the GitHub accounts for commits and facilitate voting.

A secondary smart contract will enable voting by people who already have some XSC. The community will be able to propose which projects to support in Phase 3. The framework for Phase 3 – a Liquid Democracy, or, Liquid Feedback process – will be described in the next post.

Kick-off at IOTA Hackathon, Gdansk

The kick-off event for this blockchain ecosystem incentive scheme will be the IOTA Hackathon in Gdansk, Poland, 17-19 November, 2017. There, we will award IOTA developers XSC tokens for committing code to the main branch and for other valuable inputs. The IOTA hackathon provides the ideal event for the initial distribution of XSC since during this 2,5-day get-together the Crowdstart Capital team and the hackathoe’s participants can perfectly define and decide on the value of the inputs to the blockchain and, henceforth, on the   amount of to-be-earbned XSC tokens.

A Guided Tour To Exit – Bridging The Gap Between Startups And Corporations

During the last 20 years, I have co-founded (and sold) several companies, among them the online travel portal travelgate , the social news community YiGG,  the app development agency AppAdvisors and the blockchain solutions provider Datarella. Most of these businesses have been positioned in the digital sphere which means that although they have been active in different markets they faced similar challenges regarding their transformational processes from 0 to 1.

If, as an entrepreneur, you have been working in different industries, you always start as a complete newbie in the next new industry. Your initial lack of expertise, network and experience in that respective market, makes you essentially start from 0. This is tough one the one hand, since you are used to work in a market with well-known processes and entities, but on the other hand, this fresh start provides you with a very steep learning curve that always is one of the sexiest aspects of an entrepreneur’s life.

Why Startups Fail
From a startup’s position, a steep learning curve is essential for bridging the gap between the creative, often naïve startup world and the dry, down-to-earth, hard reality of a corporation, the asset sale, the exit. The ostensibly most prominent reason for startup failures is illiquidity. You can apply this very reason for any kind of company. But, what are the underlying reasons for illiquidity? Simply put, it’s the startup’s inability to match the needs of either their potential customers or their potential corporate exit channels. They don’t offer what their targets need.

When, being in my twenties, I pitched my first startup to investors, I was struck by their seemingly strange, old-fashioned and outdated requirements. Then, I was absolutely convinced of my and my team’s superior creativity and our ability to supersede old legacy systems with our outstandingly innovative and paradigm-changing approach. Nowadays, often working closely together with market leading big corporations, I see a clear gap between the offerings and expectations on the startup side and the needs and expectations on the corporate side. And I can understand both sides pretty well.

Mentoring startups with SUPERDRIVE
Having engaged in mentoring in the startup scene for some years I have developed mixed feelings in regard to the typical approaches of matching startups with corporations, such as incubators, accelerators, etc. I don’t know of one that could boast about success stories. I order to come up with a better approach, together with my partners at Datarella and Prof. Oliver Szasz from Macromedia University, we launched SUPERDRIVE, a light version of our idea of bridging the gap between startups and corporations: on a universitary level, we worked ourselves through the process of actively supporting amd forming a (student) startup project in order to get acquired by a corporation. The SUPERDRIVE project was designed a s proof-of-concept: together with student startup teams we developed projects that would have been acquired by companies if it hadn’.t been carried out by students whose plans were to finish their studies.

CrowdStart Capital
In early 2017, faced with huge opportunities arisen from the cryptocurrency boom, I decided to bring the PoC to the next level and launched CrowdStart Capital, a blockchain technology accelerator. CrowdStart Capital will invest in blockchain-related startups that are selected on the basis of their matching with and adaptability to the needs of corporations Datarella has been working with. CrowdStart Capital’s investment hypothesis is based on its ability to close the gap between blockchain startups and potential corporate targets with a short timeframe of about 12 months.

A Guided Tour To Exit
This guided tour to exit is what we see as the potentially most successful approach of startup incubation. If you are working in the venture capital industry or in a family office, don’t hesitate to get in contact with me – I’d be more than happy discussing the CrowdStart Capital approach with you.

The Top 10 Cryptocurrency Trading Platforms and Exchanges

Since the inception of blockchain technology, digital tokens have been issued alongside the respective blockchains. Many of them have evolved into veritable cryptocurrencies that are traded on specific exchanges.

A brief look at the cryptocurrency market reveals a huge money influx especially in the last 6 months. Only six months ago, the total market value was about $15B. Today, about 830 different tokens represent a total market capitalization of just under $90B with the Top 10 currencies representing around 90%, or more than $80B, as of this writing.

The list below shows the Top 10 Crypto Exchanges as of this writing and their key characteristics. The daily trading volume of each platform can be found here.

Top 10 Crypto Trading Platforms

World’s Largest Initial Coin Offerings ICOs

In June 2017, blockchain project teams have raised more money through Initial Coin Offerings than through traditional venture capital firms. Has one of the key aspects of applied blockchains – the elimination of the middle-man – unexpectedly come upon the venture capital industry?

It might be too early to confirm this assumption but some VCs have supposedly decided not to wait any longer but to start using ICOs as an instrument to leverage their traditional businesses.

Since we have been asked the question: “What are the largest ICOs?” again and again, we assembled a list of the latest most successful token sales. Due to the nature of the cryptocurrency token landscape this list has to be continuously updated. If you stumble upon even larger ICOs or you have other suggestions to optimize this ICO list, please contact us.

List of the Largest Initial Coin Offerings ICOs

 

Blockchains And Cryptocurrencies – A Disconnect In Cryptoland

Coming from blockchain technology and its use cases in various industries as diverse as manufacturing, energy, automotive, healthcare and finance, looking at the cryptocurrency market is quite interesting. 

Whilst blockchain plays the role of a foundational technology when using it to simplify legacy database infrastructures and adding a lean ‘singleton-ish’ transactional layer to formerly stale and complex technology stacks, most participants in cryptocurrencies don’t seem to be interested at all in the technology behind the tokens. Here, the token’s currency aspects dominate, which isn’t necessarily a bad thing, but…

A brief look at the market shows a huge money influx especially in the last 6 months. About 830 different tokens represent a total market capitalization of just under $90B with the Top 10 currencies representing around 90%, or more than $80B, as of this writing. Six months ago, the total market value was about $15B.

In order to get a better understanding of this phenomenon, we started listening to crypto market’s participants. Since Twitter and Reddit are two major channels of choice, it’s quite easy to get a feeling for the market in a short time. Here is what we have learned so far:

Learnings

  • If you come from the technology side of blockchain, you should put your expertise aside, unless you don’t want to go mad: in cryptocurrencies, blockchain does not matter at all – it’s the currency, stupid!
  • This aspect alone makes you think again: Bitcoin’s CPU-based PoW vs Ethereum’s RAM PoW? Who cares? Single-currency-purpose Monero vs financial settlement network Ripple? Cryptocurrencies, application-specific tokens or meta-protocols, mostly based on Bitcoin? Nothing’s easier than comparing “valuations” of contenders representing totally different asset categories or applications.
  • Then: valuations. What, exactly, does it mean when Ethereum “is worth” $19B?  In its 2014 launch, the Ethereum foundation issued 72m ETH – after three years of mining there’s a total ETH supply of 92m, as of this writing. Mining means, there is a certain inflation built in the currency’s protocol. Is it priced in?
  • Ok, there are certain tokens, especially the application-specific ones, that could be modeled as economic entities rather than currencies. This allows us to use some of the valuation methods we apply to securities, such as well-established economic and cash-flow models used in equity research. However, investors should be aware that the market price of tokens can differ significantly from the underlying valuation models: a large component of price is speculative in nature and will probably decrease with time, as the ecosystem matures.
  • Next, there is a strikingly outspoken communications behavior in cryptoland. Many self-appointed crypto investors, crypto traders or, more generically, crypto experts (!), seem to possess some finite knowledge about individual tokens, the crypto market in general, and – which is no differentiator versus the stock markets – they know the future. In other words: the cryptocurrency market is dominated by the same group of traders and investors as any other financial market in its espective infancy. And, as a side note, some occasional Nonviolent Communication training for market participants wouldn’t do any harm.

Disconnect between asset and its value

Our most relevant learning? Blockchain lies at the heart of crypto tokens, but the cryptocurrency market is dominated by people and their strategies without any connection to blockchain technology. Cryptocurrencies are treated as random assets. From the financial market’s perspective, this should not be much of a surprise. However, this disconnect between the value of an asset and its application could lead to major distortions in the future. The very first of these, the fact that blockchain transactions become more expensive the more the asset price increases, are already visible and have significant impacts on the respective blockchains.

In Germany, there existed a segment of the stock market called ‘Neuer Markt‘. From 1997 to 2003, the Neuer Markt created many success stories and many more bankruptcies. The originally 30, later 50, listed companies represented a total market capitalization of more than 200B EUR. And, today exactly, we saw  the impact of a 1.6 minute sarcastic video presented by Monero developer Riccardo Spagni during the Monero meetup prior to Token Summit.

Evil to him who evil thinks.