DNotes 2.0 - Staking, CRISP Interest, DNotes Pay

[DNotes]

Can ICOs Escape Economic Reality?

https://dcebrief.com/op-ed-can-icos-escape-economic-reality/

Thanks for the article, Tim. It brings up a question. Here's a quote from the article:

If it does have intrinsic value (read: profit share), real equity investors in the ICO-born company will watch on as the ICO token proves a permanent drag on the company’s long-term prospects – which, given the general spending on intangible business activities, aren’t good to begin with. The token goes to zero.

Could you explain further how that works? The only reason I would or have ever bought into ICOs is because of the promise of recurring and permanent profit sharing. You say that actually delivering on this promise drags down the company and I can see how having to allocate 10% to token holders and such would represent an opportunity cost for the company. But how is that different from dividend paying stocks?

Please educate me

Thanks for the question wiser! I had to delete two words in the article and replace another to clear up some of the meaning.

The first part to say about your question, is that there are a wide range of ICO structures, so i'll just answer for probably the most common (which do sometimes vary depending on the application being built - say exchange or retail businesses etc).

The second part is that most ICO tokens that I've seen are not actually 'profit sharing', but rather 'income sharing' -- I'll explain.

In a profit-sharing scenario, the ICO would need to be generating significant revenue, and be running an operational surplus for ICO tokens to ever receive a 'dividend equivalent' payout. The business that ran the ICO would take their total income for the year, subtract all their expenses, then decide how much they want to reinvest back into their business for improvements, and the leftover is the 'profit'. Dividends to equity owners in traditional businesses are paid based on profit, which is determined after the company decides how much it wants to hold onto (retained earnings) for business upkeep / growth. If the company wants to grow, it just holds onto all the earnings for the year. This is a luxury it wouldn't have when it comes to ICO payments that are generally based on gross income, rather than profit (i'll get to this).

So in a hypothetical example, say my ICO business turned over 10m for the year, had 8m of expenses for the year, and I decided to reinvest 1m of the remaining 2m into the company to improve its services. That would leave 1m in profit. If my ICO token promised a 10% return from all profits, there would be 100 thousand dollars paid out to the ICO token holders, and then the equity owners would get the rest in dividends (as they are lower than ICO tokens in the capital structure).

But the way that many ICOs I've seen are set up, is the token is used as a voucher to pay the fees to use the ICO's network, where a certain percentage is paid back to token holders -- which functionally makes them a drain on total income. The funds are automatically forwarded to the token holders, so they are potentially never recorded on the ICO's income statement, but the final resting places of all funds involved in the transaction remain the same. Me giving you $20, and then you giving 10 of it to someone else is exactly the same as me giving you $20, and your software automatically giving that $10 to that other person.

So with Tim's ICO of 10m turnover with a 10% return of network fee to token holders, there would be 1 million dollars paid out to token holders, rather than just 100k in the above 'profit' model. One of the 'payment processing' coins out there has a functional draw from its network equivalent to ~25% of what would be considered its 'net income' from fees. That would be a draw of 2.5m out of the 10m turnover in Tim's ICO, which would suddenly see Tim's ICO making a loss: remember that regardless of the way you play trick accounting, a 10m turnover, less 2.5m ICO dividend, less 8m expenses = 0.5m loss, is exactly the same as a 7.5m turnover, less 8m expenses = 0.5m loss (not accounting for ICO income in turnover, nor as a dividend drain).

There are four main ways that I can see this potentially hurt an ICO business:

Firstly, the drain from income occurs regardless of whether the ICO company is making an operational surplus -- meaning it could make it stay in the red longer, and at worst accelearate losses that force it to go broke if it can't turn profitable by the time the ICO money runs out.

Secondly, The above scenario could scare investors away from putting their money into the ICO business (or save one) that had such an automatic drain on its turnover, because:

Thirdly, sustainable operational surpluses are required to reinvest surplus capital back into the business that allow it to grow (and equity investors care about growth). Investors only tolerate perpetual losses for so long. Once a business runs out of money,  and nobody wants to invest, it dies.

Fourthly, and last, the fee structure places the startup at a competitive disadvantage to other projects that don't have, say, a 25% income drain sent to token holders. A hypothetically otherwise 'identical' competitor (No ICO) could eliminate some of this margin to attract new customers, yet still remain profitable and grow.

i.e. Baseline (using everything recorded accounting, and assuming expenses are fixed):

Tim's ICO  = 12.5m turnover, less 3.75m ICo dividend (25% of network fee), less 8m expenses = 0.75m operating profit to reinvest.
Competitor = 12.5m turnover, less 8m expenses = 4.5m operating profit to reinvest and grow.

And if engaged in a price battle:

Tim's ICO = 10m turnover, less 2.5m ICO dividend (25% of network fee), less 8m expenses = 0.5m loss, disgruntled equity investors.
Competitor = 10m turnover, less 8m expenses = 2m operating profit to reinvest for growth.


As you can see, an equally competent competitor without income-based ICO will easily win a price war. While the ICO model will see greatly reduced growth in the business even as turnover rises. The ICO token in this model anyway, becomes a parasite on the economy that constrains its growth. And the only way to draw more investment in to remedy the situation is to attract more investors -- but again, why would they want to bail out a business where they get reduced growth, and where ICO token holders still get paid even when the busienss is making a loss? That investment could be the difference between many ICO businesses surviving or failing. And as each ICO business dies, so too does its token.

Note: there are lots of different ways ICO's can look, and not all ICOs are prone to all the downsides in ever case. Models are illustrative only.  




      

Great explanation Tim! Conflating this concept to company shares traded on the stock market: Profit sharing is often not the most effective way to increase shareholder value. I know it sounds exciting, but what if that 10% profit equates to less than 1% return on investment for the shareholder that year. Or what if the company could have used that money to grow the company's value by 10% instead and make the shares worth 10% more that year.

[DNotes]

Wondering what DNotes is all about? Here’s the basics:

What is DNotes?
•   DNotes is a digital currency with a purpose: to serve as a real currency that people can use in their daily lives - unlike other digital currencies that focus on solving niche problems, with no plan to become a real, usable currency.
•   The DNotes goal is simple: achieve mass adoption and become the world’s first accessible, inclusive, and financially empowering digital currency that benefits everyone around the globe.

What are DNotes’ Benefits as a Currency?
•   DNotes is managed as a business – but not controlled as one.
•   DNotes success is driven by a profit-generating company, DNotes Global, created to promote mass adoption, protect the currency, and ensure sustainable growth.
•   DNotes’ unique CRISP savings program rewards DNotes owners with 0.5% interest, every month
•   DNotes offers staking rewards for stakeholders – at 2% a year.
•   DNotes provides blockchain invoicing features to simplify merchant acceptance and adoption of the digital currency.

What Benefits Does DNotes Global Provide?
DNotes Global protects DNotes and its stakeholders, promotes mass adoption, and creates value and utility for the digital currency, including a fully integrated ecosystem.
The company provides a unique cross-ownership model, with DNotes owning 25% of DNotes Global (pre-dilution), while the for-profit business maintains a stake in the digital currency.
DNotes Global generates profit, creating intrinsic value for the DNotes currency to help create a “floor” for the digital currency’s value.
DNotes Global has plans to build a long-term competitive advantage by offering services that utilize DNotes. That strategy will also help to facilitate awareness and adoption of the DNotes currency.
Long term competitive advantage DNotes Global will provide in offering services that utilize DNotes.

What’s Next?
Fully compliant Reg D 506 (c) crowdfunding followed by a Reg A+ Mini-IPO.
DNotes Payment Solution Integration into Existing eCommerce Platforms
Cold Staking Implementation & More

Where can I learn more?  
Pitch Deck - https://dnotesglobal.com/PitchDeck.pptx
Pitch Deck Video - https://www.youtube.com/watch?v=XculeWKdbbE
White Paper - https://dnotesglobal.com/white-paper/
Website - http://dnotescoin.com/
Blog - http://dnotescoin.com/blog-main-hub/

[DNotes]

DNotes 2.0 Frequently Asked Questions:

Q: What is new with DNotes 2.0?

A: DNotes 2.0 is a major improvement on the original DNotes blockchain. The new blockchain will allow DNotes and its partner company DNotes Global to achieve its objective to connect DNotes to the modern world of finance and commerce. The new blockchain is faster, more secure, and consumes only a fraction of the electricity. It also allows custom invoices to be created and attached to transactions, and changes the economic incentives of the network to one that encourages savings with the switch to the Proof-Of-Stake algorithm, and paying 0.5% interest on balances that haven’t moved from a wallet address in a 30 day period (~6% per annum).

Specifications

POS
2% Annualized Staking Reward
Individual blocks reward will be Current Total Coins / 525,600 * 0.02
60 Second Block Target
0.005 Transaction Fee
Source: https://github.com/DNotesCoin/DNotes2.0
Download Wallet: http://dnotescoin.com/#Download
Directory DNotes2 (C:\Users\USERNAME\AppData\Roaming\DNotes2 on Windows)
CONF dnotes.conf (all lower case)

DNotes 2.0 Features
Switch to PoS
CRISP Reward - 0.5% interest every 30 days. Awarded by address. Calculated on a 30 day cycle.
Automated Invoicing (First Phase) - Integrated blockchain invoice number

There will be a soft deadline where DNotes mined after that block will not be redeemable for 2.0 coins:
4/16/2018
Block# 2180897
133,574,552 Will be the total swappable amount of DNotes we create
+20,000,000 Allocated to DNotes Global, Inc for Development & Growth Fund
153,574,552 Total DNotes 2.0 Created

The next update (TBD) will include:
Deferred Staking

Q: How do I swap my coins? (after April 16th)

A: Please fill out the following form: https://goo.gl/forms/MlbfqvAQilLglnHZ2

We will be performing post April 16th swap investigations beginning May 16th. Please do not send your DNotes anywhere after April 16th unless it is your own desktop wallet.

Please note DNotes v1.x mined or purchased after April 16, 2018 will not be eligible for the swap.

Q: I have a paper wallet. How do I turn them into the new coins?

A: You will need to download the DNotes v1.2 software (email us at contact@dnotescoin.com), and then use the importprivkey command in the debug console.

https://bitcoin.stackexchange.com/questions/5941/how-do-i-import-a-private-key-into-bitcoin-core

Once your wallet is updated, you will be able to send out your DNotes.

Q: What is the cutoff date for mined DNotes that can be swapped to the new DNotes blockchain?

A: We have set April 16th as the soft deadline. No DNotes mined after this date will be eligible to be swapped to DNotes running on the new blockchain. We will continue swap DNotes after that date, however the process will not be as easy and will take more time. Any DNotes 1.x purchased on exchanges after the 16th will not be eligible for the swap.

Q: Will DNotes 2.0 be listed on new exchanges?

A: The DNotes team are working to get DNotes listed on new and larger exchanges.
Here are a few DNtes 2.0 listings:
https://bitebtc.com/trade/note_btc
https://www.nlexch.com/markets/notebtc

Q: When will Cryptopia relist DNotes 2.0?

A: Cryptopia was scheduled for relisting DNotes 2.0 on May 12, 2018. However has been delayed:
https://bitcointalk.org/index.php?topic=1924858.msg36988814#msg36988814

Q: Are the new DNotes 2.0 coins worth the same as the old coins?

A: Yes, they are worth exactly the same. However we can not predict what price movements will occur at exchanges once DNotes is relisted using the new coins.

Q: I have DNotes on the exchange, do I need to remove them from the exchange?

A: Yes, as soon as possible. Please see “How do I swap my coins?”

Q: I have Mac or Specific Linux OS, will there be wallets for these?  

A: Yes!
We currently have Windows / Mac / Linux Mint / Ubuntu Desktop wallets at DNotesCoin.com. If you need something else, please let us know.

Q: Where is the block explorer?

A: https://chainz.cryptoid.info/note/

Q: I am trying to swap my coins from Cryptopia and I am getting Invalid Address

A: That address which begins with an "S" is your new DNotes 2.0 address and your coins on Cryptopia currently are DNotes 1.x. If you like to participate in the coin swap, you can click on the "HISTORIC" tab in your DNotesVault account, create an address, and deposit to that address which begins with a "D". We will take care of the rest, and swap your DNotes for you within a few days.

If you have any other queries, please email contact@dnotescoin.com



Staking

Q: What is Staking?

A: Staking your coins helps to support the DNotes network, and the network currently pays out roughly 5 DNotes every minute to one address on the network based on a probability that centers on how many coins the user is staking with as a percentage of the total number of coins being staked on the network. The DNotes network pays out ~2% of the total number of coins per annum. If 100% of DNotes were being used to stake on the network, then by probability each user could expect 2% growth in the number of coins they have. If only 50% of coins are used to stake, then those users could expect approximately 4% growth that year.

Q: Can I stake my coins on the DNotesVault?

A: You cannot currently stake your coins that are on the DNotesVault, you will need to withdraw your DNotes 2.0 to a local wallet and stake your coins from your local wallet. We will in a future release incorporate cold staking, which will allow you stake your coins while they are safely tucked away inside the DNotesVault. However, we do not have an ETA, it will be one of our highest priorities for next upgrades.

Q: How do I stake?

Disclaimer: It is recommended that you properly secure your computer and wallet, as well as make proper backups, before attempting to run your own staking wallet. Failure to properly secure your DNotes may result in loss or theft. If you are not familiar with the process, please start off small and familiarize yourself with the process.

You will need to download the DNotes QT wallet here: https://github.com/DNotesCoin/DNotes2.0/releases/tag/v2.0.0.0

Install the wallet (and we recommend creating a backup)
Go to settings, and then ‘encrypt wallet’. Enter your password twice (and do NOT forget it, or you will not be able to access the wallet and we can not help you).
Go to settings, and then ‘unlock wallet’, enter your password, and select “for staking only”. This will prevent any transfers from being made from your wallet without the password while you stake your coins.
Soon the arrow at the bottom will turn green. This means that your coins are now staking.
   
   You can watch a video of these steps here from our alpha release here:
   https://www.youtube.com/watch?v=2w9r2LoXM6c

Q: How do I get the most out of my staking efforts?

A: There is no trick to staking efficiently. The factors involved are your coin weight versus the network coin weight and coin weight is the number of coins currently staking. The age does not matter, nor does how you divide or move your coins around.

Q: How much can I earn staking?

A: That depends on how many coins you are staking and how many coins are being staked on the network. The blockchain distributes Current Total Coins / 525,600 * 0.02 every block, or every 60 seconds. You may calculate how often you are chosen to receive the block reward by dividing your network weight verse your weight. If network weight is 100, and your weight is 5, then you would be chosen for block reward 5 blocks out of every 100.



CRISP

Q: Can I get CRISP reward AND stake at the same time?

A: Yes, the system is designed to allow you to receive CRISP on a wallet you are staking

Q: What is the CRISP reward structure?

A: CRISP periods are every 43,200 blocks (30 days). Payments start 10,080 blocks (1 week) from the end of the CRISP period.

Q: What do I need to do to earn CRISP?

A: Keep your coins in the same address for the full CRISP period 30 days, set every 43,200 blocks.

Q: When will I receive CRISP payments?

A: The next payouts are as follows:

April 27 - Ends first CRISP period.
May 4 - Payout starts. (Virtually no one will receive this payout)
May 27 - Ends second CRISP period
June 3 - Payout starts

Roughly.

Q: Do I get CRISP payments at the DNotesVault?

A: Yes! You get CRISP inside the DNotesVault, or at any address you control, such as a Desktop wallet. Though I won't suspect you will be able to get CRISP rewards from the exchanges or other online providers.

Q: Where do the CRISP coins come from?

A: The blockchain, these are newly created coins and have now become part of the new coin distribution, just like the staking reward.

Q: How do I earn the interest reward?

A: Our Cryptocurrency Investment Savings Plan (CRISP) payouts occur approximately once per month. All coins that haven’t moved address during that month period will accrue a 0.5% interest, which compounds to roughly 6.17% per annum. If you move your coins during that time, those coins will not receive the interest for that month.

[DNotes]

Wondering what DNotes is all about? Here’s the basics:

What is DNotes?
•   DNotes is a digital currency with a purpose: to serve as a real currency that people can use in their daily lives - unlike other digital currencies that focus on solving niche problems, with no plan to become a real, usable currency.
•   The DNotes goal is simple: achieve mass adoption and become the world’s first accessible, inclusive, and financially empowering digital currency that benefits everyone around the globe.

What are DNotes’ Benefits as a Currency?
•   DNotes is managed as a business – but not controlled as one.
•   DNotes success is driven by a profit-generating company, DNotes Global, created to promote mass adoption, protect the currency, and ensure sustainable growth.
•   DNotes’ unique CRISP savings program rewards DNotes owners with 0.5% interest, every month
•   DNotes offers staking rewards for stakeholders – at 2% a year.
•   DNotes provides blockchain invoicing features to simplify merchant acceptance and adoption of the digital currency.

What Benefits Does DNotes Global Provide?
DNotes Global protects DNotes and its stakeholders, promotes mass adoption, and creates value and utility for the digital currency, including a fully integrated ecosystem.
The company provides a unique cross-ownership model, with DNotes owning 25% of DNotes Global (pre-dilution), while the for-profit business maintains a stake in the digital currency.
DNotes Global generates profit, creating intrinsic value for the DNotes currency to help create a “floor” for the digital currency’s value.
DNotes Global has plans to build a long-term competitive advantage by offering services that utilize DNotes. That strategy will also help to facilitate awareness and adoption of the DNotes currency.
Long term competitive advantage DNotes Global will provide in offering services that utilize DNotes.

What’s Next?
Fully compliant Reg D 506 (c) crowdfunding followed by a Reg A+ Mini-IPO.
DNotes Payment Solution Integration into Existing eCommerce Platforms
Cold Staking Implementation & More

Where can I learn more?  
Pitch Deck - https://dnotesglobal.com/PitchDeck.pptx
Pitch Deck Video - https://www.youtube.com/watch?v=XculeWKdbbE
White Paper - https://dnotesglobal.com/white-paper/
Website - http://dnotescoin.com/
Blog - http://dnotescoin.com/blog-main-hub/

[Dyna]

Can ICOs Escape Economic Reality?

https://dcebrief.com/op-ed-can-icos-escape-economic-reality/

Thanks for the article, Tim. It brings up a question. Here's a quote from the article:

If it does have intrinsic value (read: profit share), real equity investors in the ICO-born company will watch on as the ICO token proves a permanent drag on the company’s long-term prospects – which, given the general spending on intangible business activities, aren’t good to begin with. The token goes to zero.

Could you explain further how that works? The only reason I would or have ever bought into ICOs is because of the promise of recurring and permanent profit sharing. You say that actually delivering on this promise drags down the company and I can see how having to allocate 10% to token holders and such would represent an opportunity cost for the company. But how is that different from dividend paying stocks?

Please educate me

Thanks for the question wiser! I had to delete two words in the article and replace another to clear up some of the meaning.

The first part to say about your question, is that there are a wide range of ICO structures, so i'll just answer for probably the most common (which do sometimes vary depending on the application being built - say exchange or retail businesses etc).

The second part is that most ICO tokens that I've seen are not actually 'profit sharing', but rather 'income sharing' -- I'll explain.

In a profit-sharing scenario, the ICO would need to be generating significant revenue, and be running an operational surplus for ICO tokens to ever receive a 'dividend equivalent' payout. The business that ran the ICO would take their total income for the year, subtract all their expenses, then decide how much they want to reinvest back into their business for improvements, and the leftover is the 'profit'. Dividends to equity owners in traditional businesses are paid based on profit, which is determined after the company decides how much it wants to hold onto (retained earnings) for business upkeep / growth. If the company wants to grow, it just holds onto all the earnings for the year. This is a luxury it wouldn't have when it comes to ICO payments that are generally based on gross income, rather than profit (i'll get to this).

So in a hypothetical example, say my ICO business turned over 10m for the year, had 8m of expenses for the year, and I decided to reinvest 1m of the remaining 2m into the company to improve its services. That would leave 1m in profit. If my ICO token promised a 10% return from all profits, there would be 100 thousand dollars paid out to the ICO token holders, and then the equity owners would get the rest in dividends (as they are lower than ICO tokens in the capital structure).

But the way that many ICOs I've seen are set up, is the token is used as a voucher to pay the fees to use the ICO's network, where a certain percentage is paid back to token holders -- which functionally makes them a drain on total income. The funds are automatically forwarded to the token holders, so they are potentially never recorded on the ICO's income statement, but the final resting places of all funds involved in the transaction remain the same. Me giving you $20, and then you giving 10 of it to someone else is exactly the same as me giving you $20, and your software automatically giving that $10 to that other person.

So with Tim's ICO of 10m turnover with a 10% return of network fee to token holders, there would be 1 million dollars paid out to token holders, rather than just 100k in the above 'profit' model. One of the 'payment processing' coins out there has a functional draw from its network equivalent to ~25% of what would be considered its 'net income' from fees. That would be a draw of 2.5m out of the 10m turnover in Tim's ICO, which would suddenly see Tim's ICO making a loss: remember that regardless of the way you play trick accounting, a 10m turnover, less 2.5m ICO dividend, less 8m expenses = 0.5m loss, is exactly the same as a 7.5m turnover, less 8m expenses = 0.5m loss (not accounting for ICO income in turnover, nor as a dividend drain).

There are four main ways that I can see this potentially hurt an ICO business:

Firstly, the drain from income occurs regardless of whether the ICO company is making an operational surplus -- meaning it could make it stay in the red longer, and at worst accelearate losses that force it to go broke if it can't turn profitable by the time the ICO money runs out.

Secondly, The above scenario could scare investors away from putting their money into the ICO business (or save one) that had such an automatic drain on its turnover, because:

Thirdly, sustainable operational surpluses are required to reinvest surplus capital back into the business that allow it to grow (and equity investors care about growth). Investors only tolerate perpetual losses for so long. Once a business runs out of money,  and nobody wants to invest, it dies.

Fourthly, and last, the fee structure places the startup at a competitive disadvantage to other projects that don't have, say, a 25% income drain sent to token holders. A hypothetically otherwise 'identical' competitor (No ICO) could eliminate some of this margin to attract new customers, yet still remain profitable and grow.

i.e. Baseline (using everything recorded accounting, and assuming expenses are fixed):

Tim's ICO  = 12.5m turnover, less 3.75m ICo dividend (25% of network fee), less 8m expenses = 0.75m operating profit to reinvest.
Competitor = 12.5m turnover, less 8m expenses = 4.5m operating profit to reinvest and grow.

And if engaged in a price battle:

Tim's ICO = 10m turnover, less 2.5m ICO dividend (25% of network fee), less 8m expenses = 0.5m loss, disgruntled equity investors.
Competitor = 10m turnover, less 8m expenses = 2m operating profit to reinvest for growth.


As you can see, an equally competent competitor without income-based ICO will easily win a price war. While the ICO model will see greatly reduced growth in the business even as turnover rises. The ICO token in this model anyway, becomes a parasite on the economy that constrains its growth. And the only way to draw more investment in to remedy the situation is to attract more investors -- but again, why would they want to bail out a business where they get reduced growth, and where ICO token holders still get paid even when the busienss is making a loss? That investment could be the difference between many ICO businesses surviving or failing. And as each ICO business dies, so too does its token.

Note: there are lots of different ways ICO's can look, and not all ICOs are prone to all the downsides in ever case. Models are illustrative only.  




      

Great explanation Tim! Conflating this concept to company shares traded on the stock market: Profit sharing is often not the most effective way to increase shareholder value. I know it sounds exciting, but what if that 10% profit equates to less than 1% return on investment for the shareholder that year. Or what if the company could have used that money to grow the company's value by 10% instead and make the shares worth 10% more that year.

I am sure that there are great projects and legitimate ICOs, though I must confess that I cannot cite specific examples without doing further research.

There also are broader issues of concern. Is the capital raised fully and accurately accounted for? Who are accountable if the funds are squandered or blatantly misused? And much more, if I want to go on.

Additionally, I am concern that, in some cases, the payout, if any, is from the capital raised and not from real gain generated from the project represented. If party “A’ raised $40 million and paid out $4 million, it could create a temporary period of excitement until such time when the payment stopped, project abandoned, and the balance of the remaining $36 million unaccounted for. These are serious issues hurting our industry leading to enforcement actions.  

[Chase]

Interview with Alan Booth, CEO of Cryptopia (very long read):


Cryptopia CEO Alan Booth on the Cryptocurrency Exchange Realm

What is the coin listing process for you guys? What’s the process for someone who wants to get their coin listed on Cryptopia?

We’re just reviewing that and we’re being very focused on changing the way we list coins and who we list. We’re very conscious to gain trust. We are actually your first port of call for particularly those people who don’t know much about coin, so they have to trust their exchange partner. Therefore, we have to make sure that if we list a coin, it’s a viable trusted, honest coin that’s going to give value.

Not just to us as an exchange but it’s not a scam coin. It’s not something just to raise money, pump and dump thing. We have coin listing teams who are very tough. I have introduced people as the CEO to my coin listing team and I can’t get it through them. I’ve said, but these are great guys and I have a great story and I met them in Vancouver and boy, they’ve convinced me.

My coin listing technical team does all the due diligence. Everything from GitHub, Facebook pages, normal stuff like that. If it doesn’t look like a viable product to us on many levels, then it doesn’t get listed. That’s the end of it.

If [the coin] gets past that, we do further due diligence. We’ll actually interview the company. We’ll ask why do you want to list? Why do you want to list with Cryptopia? What’s your plan for the coin? What do you want us to tell customers because they’re going to be relying on us? So, we’d like to do more than just have a coin called 21 Million sitting on the exchange. How about if we had a link to that with some of the criteria we use to judge whether that was a good opportunity. Whether it was a good coin. We might have a 10-point plan and we might say, hey, this coin passed at 9.7. This coin is in, but it only got in at 2.4. Whereas the negative coins, the coins that have gotten negative plans, negative equity in our mindset, they just don’t get on the exchange.

We have a very large number of coins at the moment. We want to remain in that space, be the leader. That means that clearly, we’re not going to get it right all the time because we make mistakes and actually, so do the some of the honest and reliable coin generators. Their plans might not just happen, so they get the benefit of the doubt for a while.

As long as we see that they’re not doing something deliberately to disrupt the market or just to take money, then we’ll support them until they get their business model right. But we’re very focused on a coin listing to us is actually a business partnership. We’re not just going to throw coins up there.

I think 2018 is the year of reckoning, wherein 2017, pretty much anything got listed anywhere. It didn’t really matter how functional the coin was or whether it was legitimate or not. So, it’s really cool to see the trend in exchanges making a stance against that because if the ax falls, it doesn’t fall on the anonymous coin team that could be in Switzerland and Ethiopia. It’s falling on the CEOs and the exchange teams that are allowing access.

Full article  -  https://coincentral.com/interview-cryptopia-alan-booth/

       

"My coin listing technical team does all the due diligence. Everything from GitHub, Facebook pages, normal stuff like that." I wish people would stop using GitHub and Facebook in the same sentence as due diligence.

"I think 2018 is the year of reckoning, wherein 2017, pretty much anything got listed anywhere." We can all agree with that. It's not just about saying no to new ICO token-security listings or outright scams, it's about cleaning up what was listed in 2017 - that is going to be the toughest job.

There is a lot of money being made by exchanges listing ICOs (very few operating legally), which can make it tough for credible projects that haven't raised $100 million (investor's money) to promote, create volume and the appearance of a large 'community', etc.

In my opinion the number one criteria that should be looked at is reputation, and reputation has to be earned over time.

Suggested reading before buying, listing, believing, etc...

Why Coin Age Matters in Cryptocurrency  -  https://dnotesedu.com/2018/04/why-coin-age-matters-in-cryptocurrency/

To find out more on due diligence as it relates to the cryptocurrency industry:

Cryptocurrency & ICO Screening Guide For Investors - https://dnotesedu.com/2018/02/cryptocurrency-ico-screening-guide-for-investors/

[The Chezzz]

DNotes,

Even with all of the education you are bestowing upon us it still comes down to being listed and watching us grow. The only concern I have with Cryptopia is that they knew all that was happening during the delisting was that DNotes was upgrading to DNotes 2.0. When they decided to stop the process for the listing of 2.0 because they needed to look into everyone that is trying to be listed is ridiculous. I understand checking all of there current coins and tokens but stopping DNotes after giving us a start date to me means they didn't look into us to begin with. If they had done what they were supposed to do in the first place and researched our changes we wouldn't have been put on the back burner. We all have read the news and knows what happened with MT Gox, and Korean exchanges, but it has nothing to do with DNotes upgrading and being put back on the market. They already know us!!! So it's hard for all of us on the outside to understand why DNotes 2.0 is not listed on any of the big exchanges and/or what is taking so long to be listed somewhere so we can grow. We know that exchanges are charging outrageous amounts of money to be listed, but to not be on any of the top 30 exchanges is concerning. If we were in a board meeting I would have brought this to everyone's attention and not hide behind a keyboard. Not too long ago we were getting updates on where we stood with other exchanges, can we get more of those and how we can assist with convincing them. I know I have sent messages to different ones and asked for DNotes 2.0 to be put on but probably to deaf ears. This is NO way an attack on anyone just voicing my concerns that I'm sure others are feeling. I am also praying that some good news will come our way in bunches as the bad news normally does in the cryptocurreny world.

[Dyna]

DNotes,

Even with all of the education you are bestowing upon us it still comes down to being listed and watching us grow. The only concern I have with Cryptopia is that they knew all that was happening during the delisting was that DNotes was upgrading to DNotes 2.0. When they decided to stop the process for the listing of 2.0 because they needed to look into everyone that is trying to be listed is ridiculous. We all have read the news and knows what happened with MT Gox, and Korean exchanges, but it has nothing to do with DNotes upgrading and being put back on the market. They already know us!!! So it's hard for all of us on the outside to understand why DNotes 2.0 is not listed on any of the big exchanges and/or what is taking so long to be listed somewhere so we can grow. We know that exchanges are charging outrageous amounts of money to be listed, but to not be on any of the top 30 exchanges is concerning. If we were in a board meeting I would have brought this to everyone's attention and not hide behind a keyboard. Not too long ago we were getting updates on where we stood with other exchanges, can we get more of those and how we can assist with convincing them. I know I have sent messages to different ones and asked for DNotes 2.0 to be put on but probably to deaf ears. This is NO way an attack on anyone just voicing my concerns that I'm sure others are feeling. I am also praying that some good news will come our way in bunches as the bad news normally does in the cryptocurreny world.

Thank you, The Cheezzz. Great comments. I share your frustration and can assure you with certainty that we have been reaching out to every single exchange that trades cryptocurrencies multi times. After doing our due diligence, there are a few (some among the largest) we prefer not to do business with but most have not responsive. Further, it is not uncommon to see an asking price of 5 BTC to 15 BTC to get listed. I have heard about significantly higher amount involving ICO coins. Nonetheless, getting DNotes listed on some major exchanges is among my highest priorities. As promised, Cryptopia will get back to us by this Friday and we will share the information immediately.

There are a lot of questionable conducts in our industry that don't always match up with public statements. All exchanges in our industry are under law enforcement scrutiny for trading security as an unregulated exchange. When the dust settled the pure token coins like Bitcoin, Litecoin, and DNotes are among the minority and limited few. When trust, integrity, mission, and purposeful vision are added to the mix, DNotes is a  rare breed. We are verifiable with massive amount of published information.

[DNotes]

DNotes,

Even with all of the education you are bestowing upon us it still comes down to being listed and watching us grow. The only concern I have with Cryptopia is that they knew all that was happening during the delisting was that DNotes was upgrading to DNotes 2.0. When they decided to stop the process for the listing of 2.0 because they needed to look into everyone that is trying to be listed is ridiculous. We all have read the news and knows what happened with MT Gox, and Korean exchanges, but it has nothing to do with DNotes upgrading and being put back on the market. They already know us!!! So it's hard for all of us on the outside to understand why DNotes 2.0 is not listed on any of the big exchanges and/or what is taking so long to be listed somewhere so we can grow. We know that exchanges are charging outrageous amounts of money to be listed, but to not be on any of the top 30 exchanges is concerning. If we were in a board meeting I would have brought this to everyone's attention and not hide behind a keyboard. Not too long ago we were getting updates on where we stood with other exchanges, can we get more of those and how we can assist with convincing them. I know I have sent messages to different ones and asked for DNotes 2.0 to be put on but probably to deaf ears. This is NO way an attack on anyone just voicing my concerns that I'm sure others are feeling. I am also praying that some good news will come our way in bunches as the bad news normally does in the cryptocurreny world.

Thank you, The Cheezzz. Great comments. I share your frustration and can assure you with certainty that we have been reaching out to every single exchange that trades cryptocurrencies multi times. After doing our due diligence, there are a few (some among the largest) we prefer not to do business with but most have not responsive. Further, it is not uncommon to see an asking price of 5 BTC to 15 BTC to get listed. I have heard about significantly higher amount involving ICO coins. Nonetheless, getting DNotes listed on some major exchanges is among my highest priorities. As promised, Cryptopia will get back to us by this Friday and we will share the information immediately.

There are a lot of questionable conducts in our industry that don't always match up with public statements. All exchanges in our industry are under law enforcement scrutiny for trading security as an unregulated exchange. When the dust settled the pure token coins like Bitcoin, Litecoin, and DNotes are among the minority and limited few. When trust, integrity, mission, and purposeful vision are added to the mix, DNotes is a  rare breed. We are verifiable with massive amount of published information.

As Alan mentioned most are not responsive, some have only acknowledged our request after more than a month and most are asking for $50,000 to $150,000+ worth of bitcoin or other digital currencies as a fee. It's not going to be easy or quick, it is going to a challenge. We will provide information when we are able to.

We are listed on:
https://www.nlexch.com/markets/notebtc
https://bitebtc.com/trade/note_btc

We are actively working with:
https://blockbid.io/
https://www.cryptopia.co.nz/

[The Chezzz]

DNotes,

Even with all of the education you are bestowing upon us it still comes down to being listed and watching us grow. The only concern I have with Cryptopia is that they knew all that was happening during the delisting was that DNotes was upgrading to DNotes 2.0. When they decided to stop the process for the listing of 2.0 because they needed to look into everyone that is trying to be listed is ridiculous. We all have read the news and knows what happened with MT Gox, and Korean exchanges, but it has nothing to do with DNotes upgrading and being put back on the market. They already know us!!! So it's hard for all of us on the outside to understand why DNotes 2.0 is not listed on any of the big exchanges and/or what is taking so long to be listed somewhere so we can grow. We know that exchanges are charging outrageous amounts of money to be listed, but to not be on any of the top 30 exchanges is concerning. If we were in a board meeting I would have brought this to everyone's attention and not hide behind a keyboard. Not too long ago we were getting updates on where we stood with other exchanges, can we get more of those and how we can assist with convincing them. I know I have sent messages to different ones and asked for DNotes 2.0 to be put on but probably to deaf ears. This is NO way an attack on anyone just voicing my concerns that I'm sure others are feeling. I am also praying that some good news will come our way in bunches as the bad news normally does in the cryptocurreny world.

Thank you, The Cheezzz. Great comments. I share your frustration and can assure you with certainty that we have been reaching out to every single exchange that trades cryptocurrencies multi times. After doing our due diligence, there are a few (some among the largest) we prefer not to do business with but most have not responsive. Further, it is not uncommon to see an asking price of 5 BTC to 15 BTC to get listed. I have heard about significantly higher amount involving ICO coins. Nonetheless, getting DNotes listed on some major exchanges is among my highest priorities. As promised, Cryptopia will get back to us by this Friday and we will share the information immediately.

There are a lot of questionable conducts in our industry that don't always match up with public statements. All exchanges in our industry are under law enforcement scrutiny for trading security as an unregulated exchange. When the dust settled the pure token coins like Bitcoin, Litecoin, and DNotes are among the minority and limited few. When trust, integrity, mission, and purposeful vision are added to the mix, DNotes is a  rare breed. We are verifiable with massive amount of published information.

As Alan mentioned most are not responsive, some have only acknowledged our request after more than a month and most are asking for $50,000 to $150,000+ worth of bitcoin or other digital currencies as a fee. It's not going to be easy or quick, it is going to a challenge. We will provide information when we are able to.

We are listed on:
https://www.nlexch.com/markets/notebtc
https://bitebtc.com/trade/note_btc

We are actively working with:
https://blockbid.io/
https://www.cryptopia.co.nz/

Thanks for your quick response. I'm very sure you have big plans for an exchange of your own in the future and avoiding all of this. When the masses refuse to pay to be listed on those exchanges then it will change, but as long as desperate Developers continue to give them what they want thinking and hoping they will make it back on sales then it will continue. Well, I guess we just sit and wait. So contacting us by Friday doesn't mean listing by Friday. If we get another delay with that notification that would be devastating.

[BTCWise]

DNotes,

Even with all of the education you are bestowing upon us it still comes down to being listed and watching us grow. The only concern I have with Cryptopia is that they knew all that was happening during the delisting was that DNotes was upgrading to DNotes 2.0. When they decided to stop the process for the listing of 2.0 because they needed to look into everyone that is trying to be listed is ridiculous. We all have read the news and knows what happened with MT Gox, and Korean exchanges, but it has nothing to do with DNotes upgrading and being put back on the market. They already know us!!! So it's hard for all of us on the outside to understand why DNotes 2.0 is not listed on any of the big exchanges and/or what is taking so long to be listed somewhere so we can grow. We know that exchanges are charging outrageous amounts of money to be listed, but to not be on any of the top 30 exchanges is concerning. If we were in a board meeting I would have brought this to everyone's attention and not hide behind a keyboard. Not too long ago we were getting updates on where we stood with other exchanges, can we get more of those and how we can assist with convincing them. I know I have sent messages to different ones and asked for DNotes 2.0 to be put on but probably to deaf ears. This is NO way an attack on anyone just voicing my concerns that I'm sure others are feeling. I am also praying that some good news will come our way in bunches as the bad news normally does in the cryptocurreny world.

Thank you, The Cheezzz. Great comments. I share your frustration and can assure you with certainty that we have been reaching out to every single exchange that trades cryptocurrencies multi times. After doing our due diligence, there are a few (some among the largest) we prefer not to do business with but most have not responsive. Further, it is not uncommon to see an asking price of 5 BTC to 15 BTC to get listed. I have heard about significantly higher amount involving ICO coins. Nonetheless, getting DNotes listed on some major exchanges is among my highest priorities. As promised, Cryptopia will get back to us by this Friday and we will share the information immediately.

There are a lot of questionable conducts in our industry that don't always match up with public statements. All exchanges in our industry are under law enforcement scrutiny for trading security as an unregulated exchange. When the dust settled the pure token coins like Bitcoin, Litecoin, and DNotes are among the minority and limited few. When trust, integrity, mission, and purposeful vision are added to the mix, DNotes is a  rare breed. We are verifiable with massive amount of published information.

This sounds very promising Dyna. Those are some hefty fees just to get a coin listed. Perhaps its time to think about developing an in-house exchange for DNotes where users will be able to exchange multiple coins against NOTE!

[DCEBrief]

NYDFS Grants Approval for Gemini Exchange to Add Zcash Support

https://dcebrief.com/nydfs-grants-approval-for-gemini-exchange-to-add-zcash-support/

[wiser]

Thanks for answering my question. I had not considered that there is a difference between paying out based on income (fees) vs. paying out based on profits after all expenses and reinvestment has been subtracted out.

Since I didn't know this distinction, I'm guessing lots of others out there don't know either. This is a great subject for an educational piece, either on DCE Brief, or DNotesEDU.

Can ICOs Escape Economic Reality?

https://dcebrief.com/op-ed-can-icos-escape-economic-reality/

Thanks for the article, Tim. It brings up a question. Here's a quote from the article:

If it does have intrinsic value (read: profit share), real equity investors in the ICO-born company will watch on as the ICO token proves a permanent drag on the company’s long-term prospects – which, given the general spending on intangible business activities, aren’t good to begin with. The token goes to zero.

Could you explain further how that works? The only reason I would or have ever bought into ICOs is because of the promise of recurring and permanent profit sharing. You say that actually delivering on this promise drags down the company and I can see how having to allocate 10% to token holders and such would represent an opportunity cost for the company. But how is that different from dividend paying stocks?

Please educate me

Thanks for the question wiser! I had to delete two words in the article and replace another to clear up some of the meaning.

The first part to say about your question, is that there are a wide range of ICO structures, so i'll just answer for probably the most common (which do sometimes vary depending on the application being built - say exchange or retail businesses etc).

The second part is that most ICO tokens that I've seen are not actually 'profit sharing', but rather 'income sharing' -- I'll explain.

In a profit-sharing scenario, the ICO would need to be generating significant revenue, and be running an operational surplus for ICO tokens to ever receive a 'dividend equivalent' payout. The business that ran the ICO would take their total income for the year, subtract all their expenses, then decide how much they want to reinvest back into their business for improvements, and the leftover is the 'profit'. Dividends to equity owners in traditional businesses are paid based on profit, which is determined after the company decides how much it wants to hold onto (retained earnings) for business upkeep / growth. If the company wants to grow, it just holds onto all the earnings for the year. This is a luxury it wouldn't have when it comes to ICO payments that are generally based on gross income, rather than profit (i'll get to this).

So in a hypothetical example, say my ICO business turned over 10m for the year, had 8m of expenses for the year, and I decided to reinvest 1m of the remaining 2m into the company to improve its services. That would leave 1m in profit. If my ICO token promised a 10% return from all profits, there would be 100 thousand dollars paid out to the ICO token holders, and then the equity owners would get the rest in dividends (as they are lower than ICO tokens in the capital structure).

But the way that many ICOs I've seen are set up, is the token is used as a voucher to pay the fees to use the ICO's network, where a certain percentage is paid back to token holders -- which functionally makes them a drain on total income. The funds are automatically forwarded to the token holders, so they are potentially never recorded on the ICO's income statement, but the final resting places of all funds involved in the transaction remain the same. Me giving you $20, and then you giving 10 of it to someone else is exactly the same as me giving you $20, and your software automatically giving that $10 to that other person.

So with Tim's ICO of 10m turnover with a 10% return of network fee to token holders, there would be 1 million dollars paid out to token holders, rather than just 100k in the above 'profit' model. One of the 'payment processing' coins out there has a functional draw from its network equivalent to ~25% of what would be considered its 'net income' from fees. That would be a draw of 2.5m out of the 10m turnover in Tim's ICO, which would suddenly see Tim's ICO making a loss: remember that regardless of the way you play trick accounting, a 10m turnover, less 2.5m ICO dividend, less 8m expenses = 0.5m loss, is exactly the same as a 7.5m turnover, less 8m expenses = 0.5m loss (not accounting for ICO income in turnover, nor as a dividend drain).

There are four main ways that I can see this potentially hurt an ICO business:

Firstly, the drain from income occurs regardless of whether the ICO company is making an operational surplus -- meaning it could make it stay in the red longer, and at worst accelearate losses that force it to go broke if it can't turn profitable by the time the ICO money runs out.

Secondly, The above scenario could scare investors away from putting their money into the ICO business (or save one) that had such an automatic drain on its turnover, because:

Thirdly, sustainable operational surpluses are required to reinvest surplus capital back into the business that allow it to grow (and equity investors care about growth). Investors only tolerate perpetual losses for so long. Once a business runs out of money,  and nobody wants to invest, it dies.

Fourthly, and last, the fee structure places the startup at a competitive disadvantage to other projects that don't have, say, a 25% income drain sent to token holders. A hypothetically otherwise 'identical' competitor (No ICO) could eliminate some of this margin to attract new customers, yet still remain profitable and grow.

i.e. Baseline (using everything recorded accounting, and assuming expenses are fixed):

Tim's ICO  = 12.5m turnover, less 3.75m ICo dividend (25% of network fee), less 8m expenses = 0.75m operating profit to reinvest.
Competitor = 12.5m turnover, less 8m expenses = 4.5m operating profit to reinvest and grow.

And if engaged in a price battle:

Tim's ICO = 10m turnover, less 2.5m ICO dividend (25% of network fee), less 8m expenses = 0.5m loss, disgruntled equity investors.
Competitor = 10m turnover, less 8m expenses = 2m operating profit to reinvest for growth.


As you can see, an equally competent competitor without income-based ICO will easily win a price war. While the ICO model will see greatly reduced growth in the business even as turnover rises. The ICO token in this model anyway, becomes a parasite on the economy that constrains its growth. And the only way to draw more investment in to remedy the situation is to attract more investors -- but again, why would they want to bail out a business where they get reduced growth, and where ICO token holders still get paid even when the busienss is making a loss? That investment could be the difference between many ICO businesses surviving or failing. And as each ICO business dies, so too does its token.

Note: there are lots of different ways ICO's can look, and not all ICOs are prone to all the downsides in ever case. Models are illustrative only.  




      

[DNotes]

Interview with Alan Yong - School for Startups Radio

http://schoolforstartupsradio.com/2018/05/mommy-burnout/

[TeeGee]

Interview with Alan Yong - School for Startups Radio

http://schoolforstartupsradio.com/2018/05/mommy-burnout/

Great stuff Alan. It's great having your wisdom shared on radio to complement the book and video formats available.

[bontol72]

COIN LISTING:

https://www.livecoin.net/en/coin-listing

[Dyna]

Interview with Alan Yong - School for Startups Radio

http://schoolforstartupsradio.com/2018/05/mommy-burnout/

Great stuff Alan. It's great having your wisdom shared on radio to complement the book and video formats available.

I think so too, Tim. That is a good way to reach out beyond our industry to help DNotes gain mass acceptance. I have done a dozen of them with quite a few more to go.

[DNotes]

COIN LISTING:

https://www.livecoin.net/en/coin-listing

Thanks bontol72, we reached out to them about a month ago and received a response that they are not accepting new coins at this time.

[Logain]

Can u tell pls, when will start the pre-ico?

[DNotes]

Can u tell pls, when will start the pre-ico?

Hi Logain,

We are not an ICO. DNotes is a decentralized digital currency. We will be participating in regulatory compliant crowdfunding for DNotes Global, Inc. via a Reg D 506 (c) followed by a Reg A+ Mini-IPO. You can find more information in our white paper here:
http://dnotesglobal.com/white-paper/