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Author Topic: 3 kinds of ICOs — Protect yourself  (Read 13566 times)
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October 17, 2017, 02:49:17 AM
 #161

Great post. This is a must read for newbies. I might not agree with everything you said, but I really liked your explanation regarding what things could work and couldn't work in the blockchain. When I first started learning about ICOs (less than 3 months ago, so I wish this article had been out there), I would focus only on the ones I could understand the language because, why complicate myself even more? So I would always lean towards gaming and gambling oriented projects ... yes, that doesn't make it legitimate on their own, but at least I feel my gut has been leading me in the right direction (before reading your article I hadn't thought of what applications made sense for the blockchain ... everything seemed exciting).
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October 17, 2017, 03:13:56 AM
 #162

Great post. This is a must read for newbies. I might not agree with everything you said, but I really liked your explanation regarding what things could work and couldn't work in the blockchain. When I first started learning about ICOs (less than 3 months ago, so I wish this article had been out there), I would focus only on the ones I could understand the language because, why complicate myself even more? So I would always lean towards gaming and gambling oriented projects ... yes, that doesn't make it legitimate on their own, but at least I feel my gut has been leading me in the right direction (before reading your article I hadn't thought of what applications made sense for the blockchain ... everything seemed exciting).
that's right why making yourself trying to understand things which is new to your ears better to go and proceed with project that you are already aware so it wont complicate your understanding, placing money in an ico is really like risking your money into a gambling games if you don't have any idea but if you
have advantage will be at your side.

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October 17, 2017, 10:50:39 AM
 #163

Thank you good sir for this post. Im new in the bitcoin world and planning on doing some signature campaign work for ICO. Its very informative at the same time makes me worry that i might end up campaigning  the wrong ICO. Hope I don't encounter these scam ICOs.
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October 17, 2017, 11:00:37 AM
 #164


Thank you for sharing this story, it was very useful for me.
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October 17, 2017, 01:26:40 PM
Last edit: October 29, 2017, 01:15:49 AM by jlp
 #165

Great job man. Your attitudes are nicely logic. I can't count the number of useless services given by un-known persons that focuses all their attention to the token and the ICO when they should be spending time making prototypes/products. Would you kindly share your opinions about start-ups on the prediction market using hybrid intelligence into blockchain, i recently saw two projects starting with ICO; Cindicator and Trackr. Also the two famous ICO working on freelance market; Bitjob (freelance for students.ICO just finished) Blocklancer (platform for freelance jobs.ICO sheduled to winter 17/18).
Thanks in advance  

In regards to Cindicator, a prediction market project, I had written the following in a previous post:



PeerGuess is one of those ICOs using the same star constellation animation that I've seen on other sites. Are they using the same graphic designer, or is PeerGuess another ICO put out by the same group of scammers? Even if PeerGuess is not a scam, it is TOO LATE and TOO LITTLE.

TOO LATE: Gnosis, Augur and Stox already had ICOs to get into prediction markets, though Gnosis and Stox still haven't built anything yet and Augur built a beta that is barely usable. This shows that execution is much harder than anything they've done before, including an ICO.

TOO LATE and TOO LITTLE: Stockbet already has built software that lets people bet on crypto currencies (and stocks). PeerGuess has a sales pitch.



According to Cindicator’s Roadmap:

Quote
December 2015

Global public release of 1.0 version of the collective intelligence platform on iOS

I searched on iOS app store and couldn’t find anything for Cindicator. Can you?

Startups at Y Combinator consist of 2 founders each and they build prototypes in 6 months. Cindicator has been working on this for 36 months, since November 2014. They’ve stacked their team with 28 people. They should’ve built 6 to 84 prototypes, or multiple products, by now. This shows that ICOs with large teams mean nothing. They are just blowing smoke. Since Cindicator hasn't built anything significant, it probably means that most members add little to no value, but they included them to make you think that they add value. Most members (assuming that they are real people) probably do no work for the project, but simply agreed to let the founders add their names and photos.

I tried to read their white paper, but the scrolling was slow and jerky, so I gave up. If 28 people cannot fix this, how will they build artificial intelligence?

Cindicator is also from that large country that is east of Europe, with no extradition agreements with much of the world. If they screw you, there’s nothing your government can do to help you.

If I have time later, I’ll look at Trackr, Bitjob and Blocklancer.
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October 17, 2017, 01:37:34 PM
 #166

This is a great thread, I found this as very informative to all the ICO enthusiast out here. Also this serves as a pre-advisory for all the starters, for them to be more aware whats in store when they join campaigns and for them to not even experience these bad scenarios. Thanks for this! In addition, I would just like advise everyone that you must not join/enter any transactions empty handed or having no or even little knowledge. Make sure always that you 'll always feel assured in everything you do, because that only means success will soon come near to you.

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October 17, 2017, 02:08:21 PM
 #167

Thanks for the write-up!
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October 17, 2017, 02:11:28 PM
 #168

Nice thread. Definitely need to do a lot of research before buying into an ICO. When I read the whitepaper of some of the ICOs I just find it ridiculous. No solid idea, no plan for execution, just hype of blockchain. If they can't put what they are going to do on paper, they won't be able to execute it either.
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October 17, 2017, 02:32:25 PM
 #169

I wanna thank you again for your informative response to my request. Am not about to defend any project or any ICO but i just have some notes:
  
According to Cindicator’s Roadmap:

Quote
December 2015

Global public release of 1.0 version of the collective intelligence platform on iOS

I searched on iOS app store and couldn’t find anything for Cindicator. Can you?

Startups at Y Combinator consist of 2 founders each and they build prototypes in 6 months. Cindicator has been working on this for 36 months, since November 2014. They’ve stacked their team with 28 people. They should’ve built 6 to 84 prototypes, or multiple products, by now. This shows that ICOs with large teams mean nothing. They are just blowing smoke. Since Cindicator hasn't built anything significant, it probably means that most members add little to no value, but they included them to make you think that they add value. Most members (assuming that they are real people) probably do no work for the project, but simply agreed to let the founders add their names and photos.

I tried to read their white paper, but the scrolling was slow and jerky, so I gave up. If 28 people cannot fix this, how will they build artificial intelligence?

Cindicator is also from that large country that is east of Europe, with no extradition agreements with much of the world. If they screw you, there’s nothing your government can do to help you.
If I have time later, I’ll look at Trackr, Bitjob and Blocklancer.

I still don't have a smartphone Smiley but when i checked i found that cindicator has an already running application via google play (check this link:  https://play.google.com/store/apps/details?id=com.cindicator  with a good feed back. I agree with you about the complicated whitepaper and the regulations terms in the country where the project has been established but i know a little more about hybrid intelligence and its potentials in the prediction markets (cindicator reached enougn funds to establish such a powerful system) when other projects still seeking their ways to create real values so it's may be not too late nor too little for Cindicator. Indeed i don't know so much about other projects in the prediction markets (unless what you wrote in this fantastic thread about Augur and others) so i really still don't have enough machanisms/knowledge to make such compares or analysis.


Make sure that am not the only who wanna read your opinions about Trackr,Bitjob,and Blocklancer  Smiley



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October 17, 2017, 04:01:08 PM
 #170

Thank you for taking the time to thoroughly break down the validity (or lack thereof) of these ICOs. I'm literally now seeing them pop up everywhere, as if all of a sudden the blockchain is the answer to all of these problems that really don't exist or are just wildly inflated to create an unnecessary solution. Having said that, I also feel that a lot of these scam ICOs exist because people aren't doing their research and just hopelessly investing in something they know nothing about with the mindset of hitting the jackpot. These 'developers' realize that and then just put together a whole bunch of nonsense that sounds good without creating any value whatsoever. ICOs, in and of themselves, are absolutely necessary to help cultivate new ideas that can legitimately help revolutionize or innovate certain segments or industries but, unfortunately, more often than not the majority of them out there currently have very little substance to them and have only one aim in mind.

Having said all that, do you think Electroneum falls into any 3 of those categories?  Undecided
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October 17, 2017, 06:22:41 PM
 #171

Thanks, this is informative..
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October 17, 2017, 07:27:47 PM
 #172

thanks for this nice thread.
yes we have no chance to be certain and sure about investing an ICO but we are able to take some true decisions after good research and we were informed. Reading much more articles like below gives true ideas and knowledges to the investors and also helps about to understand contents of ICOs when we see and read.
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October 17, 2017, 11:37:35 PM
Last edit: October 18, 2017, 12:17:41 AM by jlp
 #173

Having said all that, do you think Electroneum falls into any 3 of those categories?  Undecided

Electroneum has an app, which is very good news. They’re based in a country with lots of extradition agreements, which is very good news. Their business is understandable, which is good news.

They’re probably low risk, with some potential. However, I don’t think they are completely honest. You can read my comments about them in a previous post on page 3 of this thread.

I took a deeper look and found the following:

Electroneum plans to have 21 billion coins with 2 decimal places. This is a mistake as this is not nearly enough (either before or after the decimal place) if they want millions of people to use it.

Bitcoin and Ethereum have scaling issues. As Andreas Antonopoulos said, the reason most altcoins do not have scaling issues is because they do not have as many users yet. Once they do, they will likely face similar issues. Bitcoin’s blockchain is 120 GB in size and growing. You cannot run a full node on a phone.

Their technical white paper says that their blockchain is based on Monero’s and that the phones will not download the blockchain. Computers will. That makes sense. It sounds like the phones will be acting like a mining pool.

But, there are already mining pool apps for phones, such as this one, which mines multiple coins:
https://play.google.com/store/apps/details?id=com.miner&hl=en

Here is an Android app to mine Monero:
https://play.google.com/store/apps/details?id=com.myportablesoftware.minermonero&hl=en

The technical white papers says:

Quote
“These users will be encouraged and likely to take advantage of the significant mining speed and coin emission improvements of mining with the Windows, Mac or Linux GUI miner, which will enable Electroneum to grow to huge user numbers via the app, whilst still retaining a significant mining community running the transactional blockchain by running the intuitive Windows, Mac or Linux application.”

This sounds like the majority of the mining will still be done on computers. So, how much mining will the phones do and how much of the block rewards will the phones get?

Their technical white paper talks a lot about privacy, but this is already provided by Monero, PIVZ, Dash, NEM and Zcash. All of these other altcoins also have mobile wallets.

Therefore, I didn’t read much difference from what Monero already has.

It’s possible that I did not grasp their technical white paper completely. Maybe they’ve invented a way to mine much more efficiently. However, I didn’t see it. They should’ve shown a comparison between their mining and the existing mobile mining apps, and explain clearly how their mining is superior.

As it stands now, there is no evidence or proof that Electroneum's mobile mining is any better than Monero's mobile mining. If you test these two, you'll likely find that Electroneum will run faster, but that is only because its blockchain is so small and they have so few users relative to Monero. So, users who download Electroneum will think it is fantastic. Several years ago, Bitcoin's transactions confirmed in less than a minute. Now, you can wait for more than an hour.
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October 18, 2017, 12:03:42 AM
 #174

Great advice. Especially now that there are more ICO scams than ever.
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October 18, 2017, 02:36:13 AM
 #175

I feel like the best way to figure out which ICO's to believe is in the whitepaper. Start to familiarize yourself with what to look for and red flags that present themselves to you. Always ask yourself is it a better investment than just putting it in btc and watching it grow slowly and consistently.
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October 18, 2017, 05:50:59 AM
 #176

There are 3 kinds of ICOs:

1)  SCAMS

There have always been a lot of scammers, hackers and thieves in the crypto space since day one. Think of Mount Gox. According to Business Insider:

Quote
“…one out of every 16-17 Bitcoins belongs to someone who stole it”

If you don’t think that these thieves are trying to steal money through ICOs or from ICOs, you are kidding yourself. You just need to see the Bitcointalk forum dedicated to scams, or to participate in a Slack channel and you will see the never-ending phishing e-mails trying to lure you to their sites, in order to empty your wallet.

In addition to thieves and scammers, there are those who lie or exaggerate. Many users on Bitcointalk are pump and dumpers.

2)  CRAP

Everyone is desperate to host an ICO to make money. Therefore, they are throwing anything and everything onto the blockchain, including the kitchen sink. They may not be intentionally trying to scam, but they think that they have a good enough idea for an ICO. But these will fail because the blockchain will not solve anything for them. Examples include ICOs that want to put 3D data (which would equate to hundreds of Terabytes of data) or 153 exabytes of medical data on a blockchain. This shows that they are clueless about the blockchain and have never run Bitcoin’s full node. Bitcoin’s blockchain is 120 GB and Ethereum’s blockhain is 200 GB and they are both having scaling problems.

Even though crypto veterans and fans would like it to be, the blockchain is NOT the panacea to every problem in the world.

ICOs are also throwing any kind of business problem that they can make up, into the ICO. If they cannot make up the business problem, they will exaggerate about it. They will fail because the business problem doesn’t really exist, isn’t significant enough, cannot be solved by a blockchain or they do not really have the solution, though they try to make it sound like they do with lots of technical jargon.

Swarm Fund cites this business problem:

Quote
“You need large amounts of money to buy real estate and your money is tied down for an indefinite amount of time.”

This is a lie and not a business problem. You can buy one share of a REIT, and there are thousands of REITs to choose from, and you can sell it one minute later. If they start off their pitch with a lie, what else are they lying about?

Energi cites this business problem:

Quote
“A small number of large energy companies supply millions of customers who are price takers.”

Therefore, the solution is to create more energy suppliers, especially nuclear power plants, which is the cheapest source of electricity. But the project does not propose this. They propose to enable consumers to sell their solar self-generated electricity directly to other consumers.

To do this, consumers should have BOTH solar panels and batteries. This is a TINY market. Though solar panels are growing, it is still a tiny percent of the market and solar generated electricity is still much more expensive than nuclear generated.

Consumers with solar panels do not have that much surplus electricity to sell anyways. They use most of what they generate. Tesla and Enphase hyped up their batteries for solar panel owners to store their surplus electricity. These batteries are NOT selling. Enphase spent over $100 million to develop their battery and partly because of the lack of battery sales, their stock has plummeted approximately 85%.

Of course, the project’s pitch looks impressive at first glance.

3)  LEGITIMATE

There are only a few applications that make a lot of sense for the blockchain: transfer of value (currency), store of value, remittances (disrupt Western Union and bank wire transfers), smart contracts, gaming and gambling. These applications will disrupt their respective industries, because the blockchain will provide a lot of cost-savings or time-savings to the users. There might be other applications that make sense that I missed, but applications proposed by many ICOs do not make sense. Jesus Coin is an extreme example, but there are applications that fall across the spectrum from Jesus Coin to Bitcoin.



YOU CAN REDUCE THE RISK BY USING 3 FILTERS

1)  The project’s idea should make sense, but do not base your investment decision purely on the idea. Watch:

“Ideas are like assholes - everyone has one, no one cares”
https://www.youtube.com/watch?v=PhJgrEackis

Entrepreneurs typically try to hide their ideas because they think they are the only ones that came up with the ideas. Venture Capitalists tell them to scream their ideas to the public and they’ll see that nobody will steal them. Ideas are a dime a dozen. There are probably 10 other people with the same idea that you have or that the ICO has. The most important factor to success is the ability to execute. This is why Venture Capitalists refuse to sign non-disclosure agreements and rarely invest in startups which haven’t built a prototype or product.

HAS THE ICO TEAM BUILT ANYTHING THAT WE CAN USE TODAY?

If not, take a pass. This is the best evidence that the team can execute. It takes way more skill, time, work and money to build an app than to create a one-page website and video. It shows:

  • The team has proven that they can develop.
  • It is less likely that the team will invest so much and not follow through.

Everything else is useless. Don’t be fooled by big teams, fancy pretentious titles, references, roadmap, video, fancy animations, escrow, blogs, Slack, Telegram, Twitter, Facebook, Reddit and white paper.

One project stacked their team with a dozen people and then lied about them. One member had the title of “Blockchain Expert”, but he worked in Inside Sales until 1.5 months prior. One member had the title “Blockchain Developer”, but he never developed a blockchain before.

Here is an example of a project team using fake photos and fake names: https://bitcointalk.org/index.php?topic=1949528.msg19485217#msg19485217

Don't rely on Github unless you can verify that they didn't copy the code from someone else and you can run it.

Several high profile projects, with big teams, nice videos, lots of social media activity and hype, raised millions of dollars and still have not produced an app. This number will grow and become more evident in the coming years.

Gnosis raised $12.5 million and their website says:

Quote
“The Hunch Game is nearly ready and can be launched in the first half of 2017 as an example Gnosis app.”

No app yet.

Qtum raised $15.6 million. I don't see anything produced on Qtum's website.

After raising $50 million, Cosmos's website is still pitching its white paper. Come on. What have they produced with that $50 million?

Augur had Vitalik Buterin on their team. After Satoshi Nakamoto, Vitalik is the most desirable person in the universe to have on an ICO team. After raising multiple millions and after two and a half years, all they’ve released is a simple beta that is barely usable.

Don’t be suckered by animations and videos. Satoshi didn’t have any of this and his coin was the most successful. Besides, the animations aren’t that impressive anymore, as I’m beginning to see the same animation on multiple websites. Some of these teams must be using the same graphic designer.

There is no guarantee that any business will not fail. But, when the ICO team has a prototype/product, they have proven that they can develop. That significantly reduces your risk. With many ICOs, you have no idea if they can build anything. You cannot trust the information on the profile of many ICOs. Just because they can hire somebody to make a video, it does not mean they can write thousands of lines of complicated code. It's like you giving money to someone to fix your car, simply because he says he can fix cars but have never fixed one before.

Y Combinator is one of the biggest startup incubators in the world. They provide a small amount of funding (approx. $25k to 50k) to startups, which usually consists of 2 founders each. Then they build prototypes or products. Then the startups give pitches to angel investors or Venture Capitalists. If prototypes or products are unnecessary, then why do they waste so much time and money before pitching to angels and VCs?

Almost all incubators have startups that consist of usually only 2 founders, that are building prototypes and products. ICOs are stacking their team with a dozen people and they still cannot build anything. With 12 people, they should've built 6 prototypes/products by now. This shows that they are simply stacking their teams with useless people, in order to impress you or sucker you in.

2)  IS THE TEAM FROM A CORRUPT COUNTRY?

Check Transparency International's ranking.

If so, take a pass.

The number of ICOs from corrupt countries, especially those that were famous for sending out phishing scams for years, have exploded.

Yes, there are scams from countries that are not corrupt and successful projects from corrupt countries. What is important is the probability and if you are willing to take the extra risk.

In non-corrupt countries, people grow up with lots of regulations and enforcement. Though there are exceptions, the people feel that the way to get ahead is based largely on merit. In corrupt countries, there is less regulation, less enforcement and more people trying to find ways to get ahead by working around the system. In fact, they see that the most successful people in their country, usually in their government, are those who get ahead by lying, cheating or working around the system, instead of based on merit. If you do not think this is a risk, then we will agree to disagree.

Law enforcement is a big deterrent. Hurricanes prove this. After hurricanes Katrina and Irma, there were widespread lootings. Why? Because police are not on the streets and criminals feel immune from punishment.

Law enforcement through extradition is a deterrent. If an Australian defrauds investors in Germany, Germany can extradite the Australian and punish him. This makes the Australian think twice before he defrauds Germans. However, there are many countries without extradition agreements. This provides immunity to ICO teams. Therefore, they can lie, defraud and cheat investors from other countries, and there will be little to no recourse from the other countries. This can bring out the looting mentality.

There are many ICOs enticing investors, by claiming that their token or coin will go up in value or that token holders will get dividends, profits or ownership in other assets. Some tell buyers that they are “investing”. This means that they are selling securities and are breaking security laws.

I watched a video of a conference. ConsenSys was warning about the repercussions of selling securities. Waves’ CEO, who is from a country without extradition agreements with Europe or U.S., debated this, downplayed the concern and shrugged it off. Why should he care? No European or American government is going to be able to punish him if he broke security laws. Even if Europe cannot punish him, if Europe bans his coin, will you suffer?

Without law enforcement, ICOs can lie and get away with it. One project claimed that they will make 400+% return per year for the investor. In countries that enforce securities laws, if you make this claim and do not deliver, investors can sue you. In countries with advertising laws, the police can punish you for false advertising. In countries that are immune from these laws, ICOs can make any claim they want. One of the most egregious claims is when an ICO that tells you that you will be a part owner of a physical company. Good luck in getting a judge in their country to force the company to give you equity because you own some ERC-20 tokens. Good luck to you and your multiple flights to that country.

Few corrupt countries have extradition agreements. For those that do, can you rely on their corrupt governments to fulfill their obligations?

3)  “NEVER INVEST IN A BUSINESS THAT YOU DO NOT UNDERSTAND”

This is a quote from Warren Buffett. It is very applicable because many ICO teams try to impress the audience with technical jargon. Many investors are not tech savvy and are baffled or confused, but they invest because they think that the project team must have come up with a technological break-through.

Last word:

You need to be able to verify that the business problem exists, that the market size is truly as big as the ICO claims and that the solution is possible. Quite often, they exaggerate on most of these. You need to verify that a blockchain or a cryptocurrency actually is needed for the solution. Quite often, they’re not.

Do not rely solely on ICO listing or rating sites. They likely do not know about all of the ICOs. Not all ICOs are willing to pay to be listed. They have methodologies that you may not agree with. Some claim to be experts, but you are likely more of an expert in your own field, whether that is medical, law, engineering or finance, than they are. They will likely have biases, especially for ICOs originating from their country or region. Putin wants to increase the crypto industry in Russia. Is this why there has been an explosion of ICOs from Russia? Even Putin’s Advisor ran an ICO. If Russia took out Facebook ads to disrupt U.S. and European politics, who is to say that they will not pay off ICO listing and ratings sites to favor Russian ICOs?

That was a very good read. Thanks for the post!

Ken
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October 18, 2017, 06:19:56 AM
 #177

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HAS THE ICO TEAM BUILT ANYTHING THAT WE CAN USE TODAY?

I think its biggest proof of the professional capability of the team.
on ICO stage the company must have some previously build product.
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October 18, 2017, 11:11:56 AM
 #178

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HAS THE ICO TEAM BUILT ANYTHING THAT WE CAN USE TODAY?

I think its biggest proof of the professional capability of the team.
on ICO stage the company must have some previously build product.

Could have saved me some bad investments if I had being paying attention to the actual capabilities of the team based on whether they have a working prototype prior to ICO. If they are serious about the project, they should be able to provide a working model to prove the viability of the project prior to asking strangers to give them millions of dollars.
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October 18, 2017, 11:22:17 AM
 #179

In general, there is a reason in your words. I just want to add from my own experience that it is important how the team responds to technical questions and questions about comparing with other projects - do they really know their competitors and their project?
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October 18, 2017, 01:30:42 PM
 #180

Rega Crowdsurance is trying to mislead you.  Their website state:

Quote
“We all heard about shared economy: people sharing cars, home, bikes, even wi-fi. But why can’t we share our risks and protect each other without insurance companies. We have to pay lots of money because only insurance companies have algorithms for risk assessment, technology and resources.”

Currently, few cars and homes are shared. Cars and bikes are parked and unused 90% of the time. Therefore, there is an opportunity to increase utilization by sharing them. This is not applicable to insurance. Risks are already shared with insurance companies. There is no such thing as a risk sitting on your driveway, waiting to be used. When you buy insurance from anyone, you are automatically sharing the risk.

The way to reduce the money you pay, is to increase competition. There are already tens of thousands of insurance companies and there are bankruptcies (insolvencies) every year. Google it. They go bankrupt because they are NOT charging the customers enough to cover the risks that the insurer is taking on. This implies that customers can be paying too little already.

A crypto currency speeds up and lowers cost for bank wire transfers. A crypto currency eliminates the high cost and multi-day withdrawal from gambling sites. The key to success in insurance is not related to the currency. A new currency does NOTHING for the insured nor does it improve an insurer’s operating costs or COMBINED RATIO, which is one factor to profitability.

Their white paper states:

Quote
“That’s why leveraging our 20 years experience in risk assessment and scoring we are creating REGA Risk Sharing platform - the new standard for insurance market with state-of-art technology that will be available for everyone as a new segment of the shared economy.”

Does Rega Crowdsurance think that their 20 years experience in risk assessment is superior to Berkshire Hathaway’s 60 years experience in risk assessment?  Even though AIG has 100 years of experience in risk assessment, they almost went bankrupt.

What makes Rega Crowdsurance think they know more than anyone else in how much to charge you to insure your car against the next accident?

Even if Rega Crowdsurance thinks they know risk assessment, there is another major factor to profitability:  KNOWING HOW TO INVEST. Let’s say you are an insurer and you collect $100 million of premiums, which is called the PREMIUM POOL. You won’t have any claims until the next hurricane. What you do with the premium pool is critical. You cannot let it sit there to collect dust. You have to invest it. Where and how are you going to invest it? Quite often, insurance companies lose money from underwriting (risk assessment) and make up the loss from their investments. The majority of profits for Berkshire Hathaway comes from how the premium pool is invested. What makes you think Rega Crowdsurance knows how to invest?

Their white paper states:

Quote
“Compared to traditional insurance, in crowdsurance there are no insurers, intermediaries and brokers, all the processes being controlled and managed by programs and algorithms.”

Yes, there are insurers: other users. GEICO has had no intermediaries nor brokers for 70 years. Other insurance companies exist without brokers.

If you are a Rega Crowdsurance user, you will be an insurer or insured. If you are an insurer, are you going to go through the hassle of complying with the multitude of state government regulations on insurers?

If you are an insured, is the state government going to make sure that Rega Crowdsurance is properly capitalized so that they will have enough to fully reimburse you and all of the insured when your cars are destroyed?

Their white paper addresses regulations by stating this:

Quote
“We ensure regulators to comply with all necessary procedures including identification of platform members, working according to current jurisdiction legislation. Internal policies are designated to prevent and mitigate possible risks of the platform being involved in any kind of illegal activity. REGA Risk Sharing adopts risk-based approach to combat money laundering and terrorist financing. The principle is that resources should be directed in accordance with priorities so that the greatest risks receive the highest attention. Upon request of regulating authorities we disclose all information concerning the case, if that information can not be found in public blockchain.”

Most of this is verbose. The rest is misleading. Regulations of insurance is not related to illegal activities or money laundering. They are there to make sure that the insurer has enough money to pay all of the claims.

Rega Crowdsurance is extremely is extremely high risk, unless it is being started by former executives of GEICO, State Farm, etc.

Also, they are in a country without extradition agreements. If they screw you over, they are immune from punishment from your government. This makes them more invulnerable and likely to make any claim they want.

Good day, sir!
I would like to argue with you on that.

1) The sharing economy is a definite trend. Many scientific researches admit that. Car sharing is having a boom currently. AirBnB grows very fast.
2) Sharing economy is a definitely applicable for insurance industry, as Vitalik Buterin mentioned "Decentralized insurance is big if it can succeed"
3) Many insurance people such as Head of the biggest Insurance company in Russia - Sberbank Insurance, Hannes Chopra, Jake Diner professional from insurtech space and Vince Chan from Creta Ventures supported the concept. Team members that doing the project are having MBA from the University of Chicago the famous business school.
4) Many people from Blockchain community are from the same country. Vitalik was born here too.
5) On REGA insured are those who need the coverage for risk, not those who buy policies just to obey the rules. It is a service not an obligation
6) The assets invested by Insurance companies are the source of profit for Insurance company, not for the insured. Those funds have to belong to the community not to corporate structures gaining profit out of those. REGA's concept is not to hold too much funds on the balance sheet to gain profit from those, but actually provide service for insured and repay risk premiums back, if nothing happened with the community members.
7) Crowdsurance platform on Blockchain is more efficient than any insurance company drawning in regulation and corruption.

Thx for your feedback anyway.

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