OFFICIAL Etch - payroll that streams wages in real-time - no premine

Introduction

Etch Token Sale runs 18th September - 18th October: Sign up for details: https://etch.work

Token Info

The distribution is anticipated to last for 30 days, commencing on September 18, 2017, at 6 PM BST, and completing on October 18, 2017, at at 6 PM BST.
ETCH will accept contributions only in Ether.
Hard cap of £5m, or 25,000 ETH fixed at £200.
No min cap. - We are committed to delivering regardless of the raise
No Pre-mine
Token name is ETCH
Total amount of ETCH issued is 100m.
Total amount of ETCH distributed in public sale is 40M.
20m ETCH tokens locked by Foundation for 12 months.
1 ETH = 1,600 ETCH Tokens.

Etch have two types of tokens, the ETCH token which companies will pay with in order to run our platform. The second type of token in a “stable” token. One that is pegged to fiat which companies use to pay their employees that avoids the fluctuations of cryptocurrency.

Statement of the problem

Payroll is an antiquated, inefficient system in which a lack of innovation is having a detrimental effect on both businesses and their employees.

Employers - It is subject to time-sensitive compliance requirements. Performing this in-house has a high associated time and cost, outsourcing payroll has a high financial and possible security cost. In either case, getting it wrong is often a source of disputes with employees and creates unnecessary friction around working relationships.

Payroll is an HR issue as well as an accounting one and is an inefficient use of any manager’s time, keeping track of employees hours, performing tax calculations and other data entry tasks. A lack of visibility and workforce data prevents managers from making the best decisions for their company.

A lack of data and visibility of business operations is an inherent risk for any business. It is also an impediment to their ability to gain front-end financing and receive good access to credit to continue and expand business operations.

Employees - Approximately ⅓ of employees in the UK and ½ of workers in the US and Canada live paycheque to paycheque. That percentage is consistently high even across other developed nations. It is clear that financial security is very low even in “wealthy” countries. This means getting paid late or the wrong amount can be very strenuous for people who are already struggling to make ends meet. The disputes which arise from this can cause further friction at work and lead to a breakdown in working relationships, contributing to reduced productivity for employees and businesses. The cost of finding and training a new employee can cost over 40% of their annual salary, depending on the role.

Many workers are also migrant workers who are supporting families back home. The World Bank reports that global remittances are expected to rise to $444bn in developing countries These families needing support not only have to wait for their primary earner to be paid but also might lose another week and a significant transaction fee to a remittance service.

Employees are paid monthly because that is the most convenient format for the financial institutions processing transactions. In fact, all society has been built up around that format, we pay bills and subscriptions monthly etc. This isn't necessarily the best way to do things. It was the most convenient way to do things based on what was technologically possible. It is clear to see how this model breaks down and is an impediment to the development and prosperity of society.

Our proposed solution

We are building the world’s first blockchain payroll platform which uses smart contracts to stream wages and remittances in real-time.

Employers can use our platform to manage payroll and generate workforce analytics providing new insight into how their organisations are running.

Employees will have wages streamed to them in real-time and be able to access their personal account from their mobile device to manage finances and send remittances to their family.

The blockchain being an accounting technology is excellent to use for payroll. It provides security, immutability and an audit trail, in addition to reducing time and cost of payroll when compared to traditional systems. Etch is built on the ethereum blockchain so we can use smart contracts to stream wages and remittances in real-time.

In addition to reducing time and cost, this extra visibility and improved accounting provided by our platform will give businesses an informational advantage and make them more attractive to potential creditors and investors.

Blockchain technology allows us to improve on the entire working relationship employers have with their employees in a way that has previously been technologically impossible.

Etch have considered the entire value chain of this working relationship and intend for it to become one seamless experience. We have identified that by designing an end to end experience with payroll at its centre, we can provide the greatest value to every business, employee and their family.

Fig 1. below shows how the payroll will work on the blockchain, how taxes are automatically deducted for businesses and how the money then flows to the worker.

Fig 2. Demonstrates the relationship between fiat and the EtchPay token.

https://imgur.com/HxNEhRT

Streaming wages and remittance in real-time

Consider how streaming movies, music and other content has changed the world in the past 10 years. Creating a more convenient, customer-centric medium for people to receive services has completely wiped out old industries. The likes of Netflix, Spotify and YouTube have grown rampantly.

Imagine what effect that could have when applied to something more fundamental to our lives like getting paid. For example, you could be broke and hungry on Monday morning but then have money in your account to buy lunch by midday. Or in the middle of the month, your car breaks down, you’re hit with an unexpected bill or school uniforms costs more than you anticipated. How it will benefit people not needing to rely on a payday loan to make ends meet and risk that debt trap. Having the peace of mind that you are getting paid what you're due and you don't have to worry about your employer paying late / the wrong amount / going bankrupt and screwing you for what you're owed.

Benefits of our solution

For Employers

No duplication of data - fill in our smart contract once
No need to sign off payroll
Make money by sharing merchant fees with employees
No need to pay 3rd party to run payroll
Reduce payroll disputes with employees
Comply with HMRC obligations - deductions locked in a smart contract
Save money by reducing administrative burden. Use IoT devices to confirm sign in and location of workers
Improve cash flow by issuing your own credit on the Etch platform (subject to credit rating and underwritten by insurance policy)
Increased visibility and workforce data for managers

For Employees

Money will flow into your Etch wallet every second of your working day
Buy lunch with money earnt that morning
Make money by sharing the merchant fees with your employer.
Budgeting and escrow services for rent, loan repayments etc.
Get second card for a family member home or abroad - a percentage will flow into their account in real-time too.
No need to have a bank account - the Etch Pay Card is accepted in millions of locations worldwide

https://imgur.com/a/LCclC

Technology Roadmap

Phase 1

Blockchain based straight through processing
Smart contract for wage payments
Web interface for employers
Web analytics for employers
Etch Pay card for employees

Phase 1 of Etch will involve getting automatic payroll processing right along with a web interface for our dashboard and then introduce the Etch Pay cards. This will mean employees are not only paid in real-time but, every time an employee spends money with their Etch card, they get paid back a small percentage of the merchants' fee, along with their employer. So employees are effectively paid slightly more than what their wage should be, while employers pay slightly less.

Phase 2

Mobile interface for employees
Web dashboard for employers
IoT beacons

The second phase of this development will involve releasing a mobile app for monitoring payroll and finances, in addition to the introduction of IoT beacons which can measure employees identities and location. These beacons can use movement information from a mobile phone’s accelerometer and connect to their Bluetooth / WiFi. Depending on the nature of the job or site location, these could also be low-cost secure hardware beacons which companies can rent out from us.

We will ensure we can scale customer support as we go about designing a mobile interface that can be intuitively navigated by people of all skill levels. The number of individual people who potentially need to be supported will increase considerably when we introduce the ability for employees to monitor their own finances via an app.

Phase 3

Performance-based contracts

The third step of our technological development involves enabling performance-based contracts in addition to time-based ones. Performance-based contracts are technically possible, however, will greatly increase the complexity of the project. These contracts can encompass a wide variety of criteria for transactions and will require extensive testing, so it is important we deliver a great MVP which is well supported and generating revenue, prior to focusing resources on this objective.

Pilots

We have successfully run our first pilot at a construction site in Oxford using the blockchain logic and web interface for calculating wages to be paid to employees during the project.

A second pilot is being agreed.

Business Model

Etch acquire B2B clients via our payroll platform. We are the only payroll platform built with blockchain technology and offer significant advantages over traditional systems.

Etch acquire B2C customers for our EtchPay card when employees receive their salaries this way. Our B2C customers are the employees and potentially their families who would like to receive real-time remittances.

Many FinTech’s struggle to acquire new customers because they are competing over marginal benefits on financial services when, unfortunately, the majority of people don’t actually have much cash or any savings in the first place.

With our model, we acquire several types of customer and capture multiple revenue streams with our superior offerings.

Services Etch provide:

1) Companies use our platform to create 1-1 GBP stable payroll tokens.

2) Companies use our Bluetooth digital employee timesheet.

3) Companies pay for our "straight through" payroll system.

4) When employees spend their wages, Etch will share a % of the merchant fee.

5) When employees send remittances back home, we earn a small fee on exchange rates.

6) When employees use our budgeting and escrow services for rent, bills etc.

Etch Team

Management Team

Euros Evans - https://twitter.com/@euros

Euros has spent over 20 years in the construction industry. First as an apprentice builder with his Dad before studying to become an Architect. He built the first real estate website in the world in the spring of 1993. 20 years later, discovered blockchain. In realising its potential, set up NOMAN ventures in 2015 and built a 1000 strong community around it. Over the next two years, Euros forged strong relationships with the people who he would eventually ask to join him on his next project, Etch.

Tomasz Mlodchuwoski - https://www.linkedin.com/in/tomaszmloduchowski/

Tomasz attended MIT from the age of 16 where he studied computational physics and supercomputing. Having worked on a number of defence and technology projects, Tomasz has been involved in the Bitcoin and Blockchain space since 2009. He is a technology consultant for a number of financial institutions and is on the technical committee for the Construction Blockchain Consortium. https://constructionblockchain.org

Joshua Richardson - https://www.linkedin.com/in/josh-richardson/

Joshua has been a blockchain engineer for 1.5 years at a London consultancy, who also deployed his first commercial software age 13. After winning a hackathon in early 2016, Tomasz approached Josh to work with him and they have continued to work together since.

Denis Lukianov - https://www.linkedin.com/in/denis-lukianov-9232834/

In 2013 Denis created a prototype Bitcoin futures exchange in 5000 lines of code. He has also invented Compact Confidential Contracts in 2015 and volunteers at Bitcoin Core to help ensure the security of their code. Denis and Euros bonded as fellow Welshmen in London, of which there are arguably too few.

Ben Whyte - https://www.linkedin.com/in/ben-whyte-b4060145/

Ben is an entrepreneur who has started his first business age 14. He supplemented his income working on building sites, pouring drinks and scrubbing toilets before graduating with a 1st degree. Then becoming cash flow independent between his 4th and 5th businesses. He wrote a paper on The Social Implications of Bitcoin in 2013 and been a friend of Euros and a part of the NOMAN community since 2015.

FAQ’s

1) Who on the general contractor side really wants this? In most places the game of "general contractor" = screw as many people by not paying them as possible (and do a lot of stuff off the books).

We empower the honest general contractors to use their honesty as a competitive advantage. Both in soliciting deals, providing visibility of performance and retaining the most reliable and competent employees.

In a world without Etch, it is rational to screw as many people as possible as there is no way to monetise fair behaviours. Clients assumed that the contractors are all equal, and employees have minimal visibility regarding whom they prefer to work. Both sides are able to provide a premium for that transparency.

2) This assumes the ability to pay upfront and not the 90,120, 180-day net terms that are the industry norm. Where are these contractors going to suddenly get the cash to pay as they go? Do you have a front-end financing service? Or offer an invoice factoring tool?

The contractors get cash from their clients or financing services who are willing to offer better terms due to the additional transparency and security created in the process.

Etch platform lowers the inherent risk present in offering financing services or invoice factoring, by providing visibility into actual contract performance. We currently do not offer financing services, but we are aware that we have the valuable dataset for such an effort, and with the teams’ experience in the Trade Finance segment we’re well positioned to entertain partnerships and retain significant value.

3) One of the lessons everybody learnt early on in construction is that you pay for progress, not for hours. I would lead with the pay by job mechanism... possibly then going to a discussion of how the subcontractors could use this tool to pay labour.

I understand where you’re coming from and it’s an avenue we considered. Paying per job isn’t as large a revenue stream as constantly running a payroll service with multiple revenue streams. By taking the payroll route, we can solve business, employee and government problems with greater flexibility around how we can continue building Etch.

Here’s a good clip of Ant Antonopolous discussing the impact streaming wages/remittance could have: https://www.youtube.com/watch?v=gF_ZQ_eijPs&feature=youtu.be&t=1048

4) This looks like a tool that mainly Unions would love.... Are Unions endorsing this tool/token?

Not yet. Improved Employee retention, visibility, reduced impact of payday loans and improved financial security are all issues which unions care about and would like to address. Our PR team are approaching Unions but a lack of understanding of blockchain technology coupled with lack of pre-existing union contacts is a hurdle. We are going through our networks to gain introductions which can open doors.

5) What is the real cost to set up at a job site? Please tell me it is as easy as them labourer snapping a digital picture of him/herself at the job site and then using the geocaching data + facial recognition as proof of presence. Anything costing more than free and off the shelf is going to be a problem.

The real cost varies depending on the size of the payroll department and site managers job. You can see how a site manager would use our platform in the pre-alpha demonstration on our website. That in itself has a reduced time and cost in comparison to traditional payroll systems.

When we introduce the IoT and mobile interface element, employees will have their unique taxpayer reference identify them upon sign in. Then the mobile phone accelerometer/geocaching data will monitor their presence.

This will be free and standardised. One exception will be where a work site warrants secured hardware beacons rented out by us, to provide greater visibility and data in potentially adverse conditions.

6) Better yet, tell me it is free for employers to set up and the labour pays the micropayment fees. Seriously... then as a general contractor, I might start to like it.

It is free for employers to set up however we will not make labour pay the micropayment fees. We have a more mutually beneficial way to reduce their wage cost.

Etch will pay back a portion of card transactions fees which usually goes to the card processor, to both employees and employers.

We are agreeing terms with a card processor so that wages can be spent directly from an Etch pre-paid card to make electronic purchases from merchants worldwide, with the aforementioned terms in place.

7) Understanding exactly who the target customer is.

We realise payroll is industry agnostic and depending on the industry, our target customer could be any site based business or contractor. While we focus on the construction industry, as you rightly pointed out, this needs to be defined better.

Etch creates the scope for contractors to have a competitive advantage by reducing their costs and improving access to and cost of credit lines. It’s another way to keep both clients and unions happy, with improved transparency and visibility, in addition to an improved working contract for employees.

I’m imagining this could even be a neat solution to new legislation like the modern slavery act, so there are many ways this could appeal to various stakeholders in addition to the businesses themselves.

8 ) I don’t see how tokens could come into the equation, and in all honesty, I fail to see how you could convince any tradesman to accept payment in a previously unheard of token. What are your thoughts on this?

Etch has two types of tokens, the ETCH token which companies will pay with in order to run our platform. The second type of token in a “stable” token. One that is pegged to fiat GBP/USD/EUR which companies use to pay their employees.

Etch has agreed on terms with a card processor so we can issue Etch cards that the tokens get paid to. The tokens will appear as GBP or whatever local currency they work in and when they spend the money, the card provider will settle transactions as if they were made in fiat.

So workers won’t really need to know about how to work in tokens or what that means. Just like they won’t have to know how blockchains work in order to use the mobile app. I hope this helps!

https://www.youtube.com/watch?v=9z3k8CbNmvM

Whitepaper: https://etch.work/static/files/Etch_White_Paper.pdf

Etch Team: https://etch.work/team

Ant Antopolous discussing implications of streaming money: https://www.youtube.com/watch?v=gF_ZQ_eijPs&feature=youtu.be&t=1048

Recent Interview discussing Etch: https://www.youtube.com/watch?v=Yo8hbuktWkY

Early interview discussing Etch: https://www.youtube.com/watch?v=DDG-wVT1EP4

Construction Blockchain Consortium Members: https://www.constructionblockchain.org/

Contact ben@etch.work