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The world of cryptocurrencies is officially transitioning onto the mainstream. After years of being in the shadows, the world at large has finally taken notice of the disruptive, scalable and secure nature of the blockchain network. This year alone, close to 4 billion in ICOs are currently on their way to software development.
A litmus test to confirm this movement was when a few days ago my accountant approached me asking if I would be interested in any blockchain opportunities.
Some may regard this mania as a bubble ready to burst, however, conventional outlook on this movement is that the world has finally realized that there is a better solution available to them than the antiquated, regulated banking sectors of the world. Nevertheless, we cannot ignore the ICO frenzy currently underway causing analysis paralysis to many of us and inviting many bad actors into our respective lives.
Let’s analyze the largest ICO ever announced this week, 4NEW Limited, a UK based, Waste to Energy treatment facility, that will be entirely integrated on the blockchain network. The company hopes to revolutionize the Waste and Energy industries by offering services as a wholesaler within the industry that is fully integrated onto the blockchain network. Their ICO aims to raise $350 million, however, does the product check the following boxes in order to validate an investment?
In this post, I will address some of the important questions that could help people decide whether they would like to invest in it or not.
- Is there mass appeal for the core services the ICO offers?
Mass appeal for goods or services often leads to mass acceptance. It also helps project future demand for company’s goods or services. In the case of 4NEW Limited, they convert waste to energy, which has two profound social impacts. As you can observe, clearly the world population is generating more waste and requires more energy, without which our civilization crumbles. Landfills globally are running out of space and land is considered a nonrenewable resource as there is only a limited amount of it available to us. Additionally, landfills pollute the air quality, soil quality and water quality cause a severe carbon footprint. This demonstrates that in the case of 4NEW, there would be a very clear need for both waste and energy, which determines a very clear demand outlook for the company’s services.
- What sector does the ICO operate in?
The sector a company operates in often determines its place within the pyramid of human society.
Primary – At the base, which is our foundation is the primary sector comprising of companies that extract or harvest products from the earth. Agriculture and food-related businesses tend to be examples of this.
Secondary – The secondary sector of the economy produces finished goods from the raw materials extracted from the primary economy. The modern world cannot function without these services. Utilities related businesses tend to be examples of this.
Tertiary, – The tertiary sector of the economy is also known as the service industry. This sector sells the goods produced by the secondary sector and provides commercial services to both the general population and to businesses. Media, advertising, banking would all be considered part of this sector.
Quaternary – Sometimes the Tertiary sector can also be subdivided. This subdivided sector is closely linked with the services of the tertiary sector. In these models, the quaternary sector of the economy consists of intellectual activities often associated with technological innovation. It is sometimes called the knowledge economy. Information Technology and Healthcare are considered part of this sector.
4NEW would be a hybrid member of the Secondary and Quaternary sector. Consequently, human society’s dependence on their services would be great and with the ability to innovate within the knowledge economy, 4NEW would most likely be very well positioned to be a dominant player globally in the future.
- How does the ICO provide price stability and liquidity to its currency?
Price Stability and Liquidity are the most important economic concepts that help facilitate a successful strong currency.
Price Stability is achieved when the marketplace can observe consistency and transparency in future events of a company. In the case of most startups, this is very challenging to achieve, because there is no way to predict the course an enterprise will take in its evolution.
However, in the case of 4NEW, knowing the output capacity of each Waste to Energy treatment plant provides us with a finite amount of output that each facility is capable of producing in any given year. This allows us to quantify the value of its goods and services precisely, as long as 4NEW provides guidance to the marketplace of the forthcoming developments within the company’s operations.
Liquidity in a currency helps drive the demand for the currency which further generates a trading premium. A liquid currency always has more buyers than sellers of it. In the case of 4NEW, as you will observe the global energy shortfalls and waste solution shortfalls will always enable the company to maintain a steady stream of buyers for its services thereby offering liquidity to the marketplace.
- Is there a need for blockchain integration within the business plan of the ICO?
Blockchain integration is not necessary for small or closed end networks. However, in the case of large or open-ended networks, blockchain integration can serve to be a disruptive development. In the case of 4NEW, as you will observe the mass appeal for its goods and services would cause blockchain integration to enable a globally scalable business opportunity.
In conclusion, while there are many other variables and factors one can evaluate in determining an ICO to purchase, these basic guiding principles will serve any reader with ammunition to identify the best opportunities for each person. As we see more ICOs like 4NEW entering the crypto-world, we remain enthusiastic and optimistic that a large population of the world will slowly transition onto the blockchain network.
About the Author: Sam Sharma has over fifteen years of experience in the financial services industry. His tenure started on Wall Street working for AllianceBernstein LP, an asset management company with over 400 Billion in assets under management. After Wall Street, Mr. Sharma worked with Social Media Companies in Silicon Valley and orchestrated over a billion dollars of private securities transactions. Most recently, Mr. Sharma has worked extensively with multi-billion dollar five-star hotels in multiple international domiciles to help improve their profitability and to obtain financing to better extract value from the hotel’s supply chain. Additionally, he serves on the Board of Florida Smart Justice Alliance, a non-profit organization focused to transform Florida’s Criminal Justice system by providing out of the box treatment solutions to current inmates.
