Dubai based Adam Schneider aka Seccour, Founder and CEO of Kitsune Security talks to Arabian Gazette about the ICOs, how to avoid getting scammed by ICOs, Cryptocurrencies, Bitcoin and more
Have you watched “The Wolf of the Wall Street?” we might be in for another such flick given the Initial Coin Offering (ICO) scenario!
While for startups, ICO is about funding, identifying and acquiring your first customers/users and ensuring a solid user base who are involved in your project – investors need to be careful.
Here’s our interview with Adam.
Hello, please tell us a bit about yourself?
Adam: My name is Adam Schneider, also know as Seccour on the Internet. Founder and CEO of Kitsune Security, a cyber-security company. I discovered Bitcoin in December 2012 and been in this space since then. I am also a cypherpunk and a crypto-anarchist, which make me a privacy advocate and a strong supporter of tools that can make us more anonymous for us to be able to speak freely.
Note: Adam also organizes meetups in Dubai on Blockchain and Cryptocurrencies.
How do you explain cryptocurrency, bitcoin and blockchain to a fifth-grader?
Adam: I would say, stay as simple as possible. Bitcoin is a currency controlled by everyone and blockchain is just an online record-keeping book shared by everyone.
Here’s an easy to understand explanation of Bitcoin from CNN money.
What is an ICO and what’s the big deal about it?
Adam: An ICO is an Initial Coin Offering which is the initial sale of a token that can represent a variety of things such as: shares of a company, utility token (to pay for a service), ownership of items in games, in-game currency, etc. ICO is something that did take huge proportion because it allows anyone with a good idea to be able to raise funds easily and directly from the public instead of going through traditional investors.
Also, the huge benefits of an ICO is that generally, people who invest in your ICO will end up being your first customers/users which allows you to start with a solid user base – and who would actually be involved in your project.
For stats: as of 9th August this year, ICO’s have raised $1.2 billion and now surpass early stage VC funding.
Can you name some of the biggest ICOs so far?
Adam: There are multiple reasons on why some ICOs such as EOS, Filecoin, Tezos did raise very large amounts of money. For some, it’s because the project was related to something useful and innovative for which there is demand for. There are also other factors such as the hype around the project, the quality of the team, etc. But, there is no real magic recipe for having a successful ICO.
MORE: The Biggest ICOs Overview (via Coin Telegraph)
Where does one look for if they are interested in learning more on ICOs?
Adam: If you are interested in ICOs, you could look at multiple sources such as bitcointalk which is the first and biggest bitcoin and cryptocurrency forum where you will find ICOs announcements or you could go on specialized websites that list current and upcoming ICOs with a review of them. But you should be aware that some of theses websites are paid to list ICOs so their review might not be 100% objective.
What are the legal issues surrounding ICOs?
Adam: There are a lot of issues regarding ICOs such as the fact that most don’t verify who their investors are, which can be an issue since ICOs could be used for money laundering. Also, other ICOs may fit under the description of a security which may lead to different problems with the authorities since securities are a very regulated asset class in most, if not all, countries.
What are some of the traits of an ICO scam?
Adam: I can’t really enumerate all traits that a scam ICO can have but here are a few that i think are the most common: communication, feasibility, and numbers of the project.
For example, an ICO that promote more of their advisors (If they have famous one) instead of promoting their team to investors is already a red flag, since it’s not the advisors who will work on the project but the team. So if the team is bad, no matter who their advisors are, the team will still be bad and there is a low chance that the project will be successful.
Next is feasibility of the project. Currently, a lot of project launch their ICO because they want to do fancy products that will use the blockchain technology or smart contracts. But, the fact is that most of theses projects don’t need either a blockchain or a smart contract. This is why before investing in an ICO you should really try to see if a project really need a blockchain or smart contracts, and if it would be more practical and cheaper to use that rather than a centralized service.
Last but not least, the numbers. You will see that a lot of ICOs did raise millions of USD or have relatively high goals. However, not all of them do need that much money. Which is why you should always questions the numbers related to the amount they want to raise or the limit they did set.
And finally, just a reminder that just looking at these 3 traits isn’t always enough to see if an ICO is a scam or not. You should also look at other things such as the github activity of the project, the legality of the project and the ICO itself, the term and conditions, etc.
What according to you is the future of Cryptocurrencies like Bitcoin and Litecoin?
Adam: I think Bitcoin will have a great future since, currently, we are seeing a growth of the ecosystem as a whole and a lot of great innovation that will, in the long term, make Bitcoin be able to have the same performance as some centralized payment services, while staying secure and decentralized. This will make Bitcoin a great currency and payment system which will bring more people and services to it.
How does the legislation in the region affect the bitcoin market?
In the UAE for example, since the government seem to be relatively open to the blockchain technology, they haven’t taken any direct stance against Bitcoin. Other countries in the region didn’t take any measure yet against Bitcoin or cryptocurrencies in general, which makes it relatively easy to transact or develop things related to Bitcoin.
The only problem in this region is that since no government did either officially legalized, or ban, Bitcoin yet, it’s sometime hard to open a bank account for a Bitcoin related business or if you want to trade Bitcoin on online exchanges, since banks are unwilling to take any risks.
In ICO markets can some players artificially inflate/deflate the prices for their benefit. Your thoughts?
Adam: It depends. In all markets, not only ICO markets, if there isn’t enough volume in that market, it will be easily manipulated by some rich manipulators. But since, in traditional market with low volume there are regulators who watch for any manipulation, theses markets are relatively protected from it.
In ICO market since there is a big lack of regulation and tools for existing regulators to watch and controlled theses markets, big players can easily game the market and take undue advantage of it.
Bitcoin has a stigma of being a currency for illegal trade. What is your take on that? How does it affect regular people? Do they need to be worried?
Adam: This come mostly from traditional media that did, and for some continue, to have a wrong understanding of Bitcoin, the Web, and the criminal space. It’s true that, in the early days of Bitcoin, a large part (even if we can’t really have any very accurate statistics on that) of the transactions were because of illegal activity.
But with the growth and popularity of Bitcoin, the percentage of transactions that were related to illegal activity did decrease in proportion which is kind of logical when you think about it. Regular people should not be worried at all about illegal transactions happening on the Bitcoin network like they should not be worried about illegal transactions being done in USD, EUR, AED or in other currencies.
Or, to compare it with the internet: regular people should not be worried about the internet being used by criminals.
What is the best channel of education for the common public?
Adam: There isn’t one best source for the common public to learn about Bitcoin. The best way to learn about it would be to check multiple sources such as bitcoin.org or the Bitcoin wiki and to directly ask questions to people who are experienced dealing with Bitcoin.
What are the chances of countries illegalizing bitcoin trade and the holders losing money? Is it truly transnational and apolitical?
Adam: The chances of countries making Bitcoin illegal is high, but that doesn’t necessarily mean that holders will lose money as long as it is restricted to only a few countries and not a global ban. In my opinion only those countries seeking a total control on their people and holdings, such as dictatorships, will be interested in banning Bitcoin.
Bitcoin is designed in a such a way that we don’t exclusively need the internet to use it but any kind of network that allow people to transfer data between each other like satellites for example. So, even if a country try to ban Bitcoin and block people from connecting to the network over the internet, they will not be able to block all possible ways people will use to communicate with the Bitcoin network, making it truly a transactional currency.
Regarding it’s apolitical nature, we could consider it apolitical because of the fact that since nobody on the network can be fully censored, anyone, no matter who they are and what their views are, is able to use the network to transact freely.
(With additional inputs by Lavanya Singhal)
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