For any legitimate company, embarking into the world of blockchain is an intimidating process. Given the quickly changing global regulatory climate, ensuring that an ICO is as compliant as possible can be a daunting task.
There is a bit of a ‘gold rush’ for pre-existing technological and financial firms to get in on the blockchain craze. Companies are scrambling to get in on the action before they find themselves competing with other services that offer similar products, but with a blockchain edge.
So far, the results have been mixed. A number of pre-existing firms simply tacked the word ‘blockchain’ onto their company name or added a blockchain sector to their existing operations.
In response to the blockchain boom, a number of consultancies have opened to assist companies with their entries into the blockchain sphere. One such consultancy firm is CryptoGeeks, an EU-based company offering “distributed ledger technology development and consultancy by certified experts.”
Recently, Finance Magnates spoke to Malcolm Cauchi, CEO of CryptoGeeks.
Companies Often Begin Blockchain Projects “Without Fully Understanding the Blockchain”
Malcolm said that CryptoGeeks is “a boutique software house” that specializes in blockchain technology. “We focus on tailor-made products, and we are very, very picky with the products we choose.” He said that this was to ensure that each of the products that his company chooses gets the proper amount of attention. “We are not a mass software house,” he explained.
Based on the company’s position as a consultancy, Malcolm has a bit of a bird’s-eye-view for common industry mistakes and pain points. Malcolm said that one of the most common mistakes that he sees companies making “is starting a project without fully understanding the blockchain in a particular field.”
— Malcolm Cauchi (@MalcolmCauchi) November 4, 2015
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In other words, companies who are hoping to establish themselves as legitimate entities that use blockchain technology are often ill-informed about what blockchain is actually capable of. “We see white papers where certain assumptions are made that technically are still not possible, or they could be done even without [blockchain] technology,” he said.
Of course, “blockchain is an amazing technology,” he noted. “However, not everything needs to be built on it…also, blockchain experimentation can be extremely expensive. Therefore, technical knowledge is extremely important.”
As a company, CryptoGeeks “has to keep in mind that we have a reputation to build and we want to instill trust in our clients. Whoever comes to speak to us, we will tell them that we will guide them on which best route to take in order to make a successful ICO. However, the most important thing is that the client and the investor are both safeguarded.
Pre-ICO Planning is Essential for Post-ICO Success
“So, if we feel that an ICO will not add value, or in some way is not [going to give] investors a good return on their investment,” he continued, “we try to take a step back. If they want to take our consultation, of course, we can amend that and get them in line with what they would like to achieve.”
“Proper planning and budgeting from the very beginning” are also extremely important to seeing a successful ICO through from beginning to end, and beyond. “We see a lot of ICOs that end up with a large amounts of money in their wallets, and no way to transfer [that money], because KYC was not properly conducted with investors, [causing companies] to have some post-ICO issues with the distribution of tokens.”
“On a technical part, this increases the risk of malicious attacks on the wallet,” Malcolm added.
In spite of the way that the world’s regulatory climate around cryptocurrency and blockchain is shifting, Malcolm still believes that blockchain is the way forward. “The principles of blockchain technology are extremely powerful and sound,” he said. “The technology itself is so disruptive–this means that so many solutions are being built” across myriad industries.
In turn, his company is heavily benefitting from the entry of new players into the market. “Right now we are filling a gap where many ‘giants’ approach us–[companies] who are well-funded, who have a solid [product].”
“We are absolutely positive that more serious players–more than we see in the cryptosphere right now–will join the cryptosphere in the future. The giants we are seeing right now are integrating and venturing into the blockchain industry.”
Major companies aren’t the only ones who have the opportunity to get off to a running start in the blockchain industry. “Barriers of entry are still low for entrepreneurs who wish to venture [into blockchain.] Not to mention that now we are seeing governments that are giving grants to [blockchain] startups in order to encourage growth of the industry–Malta and Switzerland, [for example.]” Big or small, it’s a good time to join the blockchain sphere.