Researching ICO’s: A Study of Two Initial Coin Offerings

With more ICO’s being released everyday, it’s becoming increasingly difficult to filter out scams and low-potential coins from influential ideas and high-growth coins. This guide serves to analyze the potential of ICO’s in the long term. It is not meant to find coins that will make you lots of money very quickly. Instead, it relies on the assumption that an influential idea with vast support and a strong team will grow in value over time. This guide is not all encompassing, but will focus on 3 major aspects of an ICO: the whitepaper, the team, and the community. I will guide you through my thought process while looking at two coins drastically differing in quality.

Disclaimer: This is not meant to be taken as any sort of investment advice. Only as a single method for identifying factors in cryptocurrency that need to be taken into consideration. 

White Papers

The Abstract/Introduction

A cryptocurrency’s whitepaper is a great starting place – you will (hopefully) get a detailed understanding of the project, the team, and the underlying technology. We will be placing Soferox’s and Ambrosus’ whitepapers side by side to see drastic differences in quality. Typically enough information can be garnered in the abstract/introduction to determine the quality of the paper.

For me, Soferox’s first sentence was enough to deter me from investing in it.

The main goal of this white paper is to explain the Soferox platform and outline investment opportunities.

My first thought is “We are in trouble if they have to explain why they’re writing the whitepaper.” Immediately followed by, “They’re already mentioning ways for us to invest.” To me, a strong ICO will be technology-first. For instance, Ambrosus starts out their whitepaper with the following quote:

The Ambrosus network is a blockchain-based ecosystem for supply chains, ensuring the origin, quality, compliance and proper handling of items tracked by the network.

Ambrosus has no mention of “investment opportunities,” but instead paints a clear picture of what their product does. The Ambrosus abstract conclusion ends with several references: their open-source Github code, case studies, and other publications – showing some actual work has been done, along with plenty of consideration.

Soferox, on the other hand, ends with some promises and no tangible products: “As the project gets released into the open market we are looking to add and enhance more features of the Soferox system to enhance the accessibility of the crypto markets.”

The Ideas

After getting a general idea of the project/cryptocurrency, we can delve into the idea and issue that the project is attempting to tackle. Always view this from a user’s perspective. At the end of the day, the project will need significant amounts of users to stay alive. All of this information can be gathered from the white papers or accompanying website videos.

Ambrosus – A user can pick up an Ambrosus Certified product at a super market and scan it’s QR code. The user will be presented with every step of the product’s life. Olive oil is a great example. From farm to shelf, the olives are treated with the right chemicals, kept at the right temperatures, and transported correctly.

Soferox – A user deposits his cryptocurrency into his Soferox wallet. Once the currency is in the wallet he can trade and transfer the currencies for zero fees. Soferox serves as a bank, collecting interest on your coins, while you aren’t using them and provides you with services for free.

Both products seem to have a definite market to sell to, but when we look at how the ideas compare to the themes of blockchain and cryptocurrency, we begin to see some issues arise. For example, Soferox is acting as a bank for the currencies that are attempting to blindside banks – extremely antithetical to the entire idea of blockchain. Soferox is attempting to centralize a decentralized technology, which to me is an attempt to swim upstream. Ambrosus takes the opposite approach. They’re leveraging the decentralized nature of blockchain to provide fully disclosed information to consumers – an ideal application for blockchain technologies.

The Teams

After assessing the ideas, one must analyze who is accountable for executing these projects, in turn providing a return on your money.

Ambrosus Team Key Points

  • Core team of 8, with 12 advisors.
  • Core team has a range of disciplines with multiple, honorable PhD’s.
  • Ex-Storj Developer, Legal Member, and Gavin Wood (Ethereum Co-Founder).
  • Full disclosure; links to each one’s Linkedin, Facebook, Twitter, etc.

Soferox Team Key Points

  • Core team of 3, no specific advisors mentioned in whitepaper (2 on website).
  • 1 PhD, and others with self-proclaimed expertise (including ex-semi-pro hockey player).
  • Full disclosure; links to each one’s Linkedin, Facebook, Twitter, etc.

After delving in, it seems as though Ambrosus’ team is larger, more qualified, and more project specific. Soferox seems to be stretching their experiences and leaving them fairly ambiguous. E.g. “With an extensive background in computer science coupled with his former semi-pro hockey career, Aaron knows what it takes to lead a team, and overcome any challenges that may arise.”

The Communities

As critical as the team, ideas, and technologies are to the success of a blockchain project, there needs to be a community behind it. Using the current community as a metric can be tricky; it may just be a representation of how much hype there is or how undervalued the currency is. Nonetheless it’s necessary to look at how active the community is.

Ambrosus Community Facts

  • 575 Facebook Likes
  • 2,100 Twitter Followers
  • Active BitcoinTalk Thread
  • Mild Reddit Activity
  • 3 Videos, 166 Subscribers
  • Active blog, several publications
  • Open-source Github repository

Soferox Community Facts

  • 73 Facebook Likes
  • 46 Twitter Followers
  • Month-old BitcoinTalk Thread
  • No Reddit Activity
  • 1 Youtube video, 1 subscriber

From the information above, it’s clear to see that Ambrosus has the upper hand when it comes to relying on their community for support, marketing, and a userbase.

The Conclusion

Each step of the process has been an additional piece of evidence that Ambrosus is of higher quality than Soferox. This is not to say one is a guaranteed, lucrative investment over the other, but only a method for pointing out weaknesses and strengths within ICO’s.

If you want to find additional information on coins, or want to see if someone else has done the research for you I suggest checking out the following resources and searching them for the coin(s) you need.

  • Has ICOrating.com rated it?
  • Has ICOreport.com compiled a report?
  • Is there an ICOAlert.com report?
  • Smith and Crown support?
  • Is there a TokenMarket.net entry?

Best of luck! And please comment if you have any questions.

Also, be on the look out for quantifiable metrics for analyzing new ICO’s!

Citations

Soferox White Paper. Soferox, LLC. www.soferox.com. 17 July 2017.

Ambrosus White Paper. Ambrosus Technologies GmbH. www.ambrosus.com.

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