It seems like we have not been excited about ICOs in a long time, and for good reason. There were few hurts along the way due to ‘scams’ like Titanium (who boasted their individual and company profiles to cheat people and got under SEC scrutiny). Obviously, we ought to be careful in the crypto jungle, especially from the ICO quicksand.
The ICO we are reviewing today, Internet of Things World(IoTW), hopes to convert household and industry IoT devices into Micro Miners.
Dwell on that for a second.
IF successful, this could mean that our IoT devices may pay for their own electricity usage, without needing fancy deafening mining equipment or expensive electric bills.
The rest of this review is going to be analyzing that IF, because it is a big one.
Before we proceed any further, please note that this whole article is an opinion, not a financial advice.
We will look into the following factors to come to a decent basis for our conclusion.
Blockchain use case
What makes IoTW better than IoTA?
Team and vision
Blockchain use case
Most projects in the blockchain and cryptocurrency space fail because there is not a blockchain use case for the project. You can create as much hype as you want using slick marketing methods but eventually you will be called out on your con.
Does IoTW have a blockchain use case?
To understand this, let’s look at their operational model.
IoTW aims to provide an open source Software Development Kit (SDK) that IoT devices can download and use without any need for upgrade of the hardware itself. Once connected, IoT devices start mining IoTW coins without any significant surge in energy consumption.
We believe that to manage the global IoT devices connected to the network, calculate rewards and distribute the rewards in form of IoTW coins automatically without need for an intermediary on an auto-pilot requires Blockchain technology.
In fact, it is one of the most futuristic use cases of Blockchain technology we have come across thus far.
Existing Proof of Work (PoW) and Proof of Stake (PoS) algorithms seem to only benefit those who either have high-end machinery or a lot of tokens to stake, leaving ordinary people without deep pockets out of the race. These models also pose a huge scaling and centralization of processing power issues.
IoTW could help change that.
Instead of relying on heavy computing power or bag loads of tokens, how much IoTW you earn will depend on how many IoT devices you have connected to the network.
There are over 15 Billion IoT devices installed and are expected to reach 75 Billion by 2025. Connecting even fractional percentage of these devices to IoTW network will result in huge scaling capabilities.
IoTW may also have an edge in terms of having MVP, according to their whitepaper, yielding 3000 transactions on long-distance network transactions and 100,000 transactions on local network with a goal to reach 1 million transactions per second. Another advantage that IoTW proposes is creating extra layer of protection by keeping the nodes separate from the ledger layer, thus shielding it from 51% attack.
What makes IoTW better than IoTA?
Once we have established the Blockchain use case, next obvious question is what makes IoTW better than IoTA?
IoTW team may have anticipated this question themselves and have included a comparative chart in their whitepaper, see below:
Obviously, on paper IoTW looks better, however, IOTA has been in the market for longer and has more business connections. An amazing idea in crypto space means nothing these days, it is the execution (like we said before) will what will determine the future success or flat out failure of the projects.
Team and vision
We must say that it is refreshing to see individuals with real world experience of multiple decades coming together.
Fred Leung, CEO, has 30 years of experience in semi-conductor design including creating of world’s first AMD CPU chipset to his fame.
Marcin Dudar, founder, has over 20 years of experience in embedded software for security, Marcin is also the first person to decrypt Nintendo to create gaming DVD.
Peter Chan, CTO, has over 37 years of experience in semiconductor industry including setting up first wafer fab in Hong Kong for Eclap Electronics Ltd.
White paper only lists 6 profiles while the website lists 20 profiles in total, which is a decent size team to begin with. It is pretty impressive as to the patents that the team was able to file and/or getting ready to file.
They do mention about licensing these patents for free for those that help build on the IOTW network ecosystem.
They have 12 advisors listed on their site, including RSM as tax advisor which shows that they are not jumping into this to make a quick buck but have their ducks in a row to ensure the legal and administrative compliance in place.
Team already has a beta testing established with Expressif Wireless LAN chipsets. Expressif has a cumulative sale of 100 million units. If adopted on all devices, this could mean considerable traction toward adoption of IoTW.
Team can also team up with IoT manufacturers and have them promote this as an ‘add on’ since IoT devices can start earning IOTW coins for the owners (which directly contribute to the energy savings factor).
Team already has partnerships in place with Consta Mobile and The California Wine Company. In addition, they have multiple partners listed on their website.
They even had news coverage by popular names in this space including Nasdaq, Financial War Reports, and other popular blogs.
Their Telegram is still under 10,000 at the time of this writing, which will probably get more traction as more and more people become aware of their platform. Their Facebook and Twitter handles will need more strength which at the time of this writing seems low.
A price of 1 ETH for 5000 IOTW is set, although in our opinion, 100,000 ETH for 26% tokens made available for ICO sale is on the high-end.
While 43% tokens will be available for mining through the IoT devices in the future on the blockchain network, the expectation is that the IOTW tokens will grow in demand when companies look to buy user data, goods & services on the network and also to perform micro transactions within the blockchain network.
Unless IOTW adds a layer of utility for holding IOTW Tokens in a wallet (incentivizing the holding by creating an add on staking or creating a tier based rewards system for holding X amount of IOTW tokens), we do not see dramatic shift in demand for the tokens to create multiples in the short-term. If they do create such an incentive system – we can see IOTW soar through and also encourage individuals and companies to join the network.
Existing device usage without adding expenses toward high-end equipment is certainly enticing, however, crypto space is not like traditional markets where people go crazy for a 3% yield per annum or such. Unless we have some kind of compounded reward system that rewards people not only for participating in the network but also for holding the tokens in the long-term – it is difficult to garner interest from the Crypto folks, especially in these bear times.
Owner data collation and trading, from IoT devices, and possible monetization of the user data (for company and the individuals) is definitely the direction that blockchain space, especially the ones involving IoTs, will be heading toward.
100K ETH for 26% pool is on the high end. So short-term multiples may not be great, if that is what you are after.
Protocol detail about wallets or other mechanism that shows how their system avoids exploitation by the bad players from mining IOTW on IoT devices without owner’s knowledge and/or stealing IoTW earned by IoTW devices from the owners of IOT equipment is missing.
Will the minute surge in electricity consumption be covered by IoTW earned by the device? Will adding the IOTW protocol to the device impact IoT device’s performance? These need to be addressed as well, at least with an hypothetical example.
Absent answers to the above raised questions and tokenomics concerns, we are inclined to participate with a minor stake, only because we like the direction and vision of IOTW, this is how blockchain projects should be thinking in terms of vision.
It seems, all great visions somehow fail to address the economics which is what most general public is concerned about. While visions are what matter in the long-term, economics is what keeps the fuel burning to get to the vision, so both vision and economics need to be given equal footing. As such, we believe that team should clarify these questions to gain better traction.
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IMPORTANT DISCLAIMER: Do your own research before investing. Crypto space is very volatile, don’t invest more than what you can afford to lose. Everything in this article is an opinion, not an advice of any kind.
If you would like for us to review an ICO that you are looking into, drop a note in the comments. I cannot promise that I will be able to review all requests but I will try to if our schedule permits. Your comments will also help keep us in the know about the ICOs that we may have missed.