Another ICO failure

Now, in the latest sign that the $3 billion ICO market is imploding, Bloomberg report’s that the value of formerly high flying Bancor, the world’s fifth-largest ICO by funds raised, has plunged by more than 50% since the company’s June ICO as investors have become disillusioned with its obscure product.Bancor attracted big name venture capitalists like Tim Draper this year when it published a white paper proposing to create a kind of decentralized digital currency exchange that would allow holders of the Bancor tokens to exchange them for other digital currencies listed on their market-making platform - a functionality, its creators insisted, that would one day render digital currency exchanges obsolete.

Somehow the technology was using an intermediate coin, the Bancor, the Bancor being the universal coin that carries liquidity.  What does the white paper say?

This autonomous price-setting function works by constantly readjusting the current price toward an equilibrium between the purchase and sale volumes. While in the classic exchange model price is determined by two matched orders in real-time, Smart Token™ prices are calculated over-time, following every order. 

They have a problem in that current exchanges may be matching order by order but they will soon crash unless they manage queues.   But they know how to do that, the Bancor formula is not better than the matching algorithm to the right on this blog.

So the ICO here was simply the executives trying to earn a coin from the optimum matching algorithm.  But we don't need a new coin to capture the algorithm.  Instead, what Bancor wants  is to implement the matching algorithm while meeting all the rules needed for fair, autotrading with the algorithm.  Then sell their technology to existing exchanges so they can get a clue.

The proper model is not connectors, here, but trading bots which directly access the trade book. The Bancor coin concept is replaced by the pit boss performing the matching process and taking currency risk.  All of this must be included, and generally do not trust what John Keynes might have said.

We have a name for the proper business model, an  initial stock offering for the general provision of advanced trading pits. The ICO concept here really fouled their business model.  Suggest Tim Draper pay me my million and I can go fix the problem and Bancor will be successful.

Their competitors are Microsoft COCO and Google Tensor Flow.   Both of these are the general products for using the advanced algorithm, which is really what has gotten the Fintech world excited.

Notice that Bancor trademarks everything.  There is a reason, I have successfully eliminated most of the patent possibilities, my job as thankless as it is.