ICO Analysis: bitJob
As we said in our analysis of Wolk yesterday, the mantra of disruption is to disrupt and dis-intermediate. We can’t stress enough how important the last point is, and yet we fear that many ICOs are missing it, forcing themselves into an intermediary or middleman role that will simply be flipped upside down on the next wave of disruption. The bitJob ICO is going live not long from time of writing, so we must be quick to get to the heart of it and see if it’s a basket for our eggs or not.
Freelance marketplaces are a thing that are ripe for disruption. Fiverr.com, for instance, takes 20% of the revenues that workers earn. Blockchain technologies can drastically reduce costs, and decentralized services can make them more viable. As such, anything which presents itself as a crypto version of Fiverr or Freelancer.com or Upwork or any of them is bound to pique the author’s interest.
In bitJob, the technology’s disposition appears important to the designers. They intend for clients – as in, the people who would be hiring people – to use a centralized server run by them. On the other end, they want a decentralized to be available for everyone using the platform. They believe that maintaining a more standardized, centralized infrastructure at the outset will improve adoption, and on this point they may be right. It’s no secret that many people like to use web wallets despite the risks. The same will be true of decentralized applications – people will prefer the easiest route forward, even if it means using something centralized to eventually transition to something not.
It is very simple: a student looking to provide services online connects to the marketplace, chooses from a list of professionals jobs for relevant work, provides quality delivery, and receives immediate payment of his choice, in cryptocurrency or fiat money.
bitJob addresses a criticism which says that there are no obvious benefits to them using a blockchain, pointing out that the lower cost of moving money on a decentralized ledger is far lower, among other things, like the fact that building a decentralized, blockchain-integrated platform early is better than playing catch-up when it becomes the norm. This is all sensible, but in general, we get the feeling that we’re being distracted from the fundamentals. How exactly do you intend to make money?
We built a fantastic affiliate program tht will strengthen the relationship between bitJob and the students: students’ unions will receive a commission from each transaction their students engage in. We have launched pilot agreements with leading student associations in Israel, in addition to a number of employers who were more than happy to participate. We are also negotiating with several leading job search engines to ensure a continuous flow of quality jobs.
We see. Layers of intermediation. One problem from the top is that these affiliate fees are compensated somehow, we will have a look at the confusing chart in a moment, and some students may be wise enough to view this as an unnecessary expense. Students are free to use the existing centralized marketplaces, after all. The real challenge for any platform which wants to enable freelancers to find clients is that it have enough of said clients. Despite the fact that Fiverr takes 20% of people’s earnings, it’s still likely the best option for many providers, by virtue of the fact that their odds of getting paying customers is much higher. The same is true of Freelancer, and Upwork. A great way to thwart all this is to, as much as possible, be friendly to the idea that clients should be able to use whichever platform has what they need. This is to say that probably the real masterful technology in this space will be one that enables both providers and clients to freely navigate between the various middlemen, and then the thing that would obsolete that would be something which allowed the two parties to directly communicate without any intermediation at all. (Something like OpenBazaar, perhaps?)
bitJob also points out that lower transaction costs mean that people in depressed regions of the world will be able to participate, as both providers and clients. While individually their revenues may be small, collectively the size of that market is functionally unknown until someone like bitJob actually does reach it in an all-encompassing way.
There is no need for bitJob to spend money on hardware, infrastructure, or tech staff. Platforms like Ethereum offer such infrastructure, which has minimal cost only when used. Any new technological advances within the Ethereum community will be available to the platform as soon as they are created. It would be impossible for a business that facilitates freelance jobs to simultaneously invent systems that can be competitive in the global market. Due to the competitive nature of technology in global markets, it is very likely that a new platform similar to Ethereum will someday appear — offering new abilities, gaining market share, and offering competitive pricing — thus creating an environment conducive to experimentation and to inexpensive operation.
This part seems a bit ridiculous. No tech staff? What if something goes wrong in the client system? Who fixes it when it breaks? And therefore, what is the money for? Just build it once and run it forever? We reject this notion off-hand. In terms of our points, this disposition against actually building a product is expensive for bitJob.
bitJob describes its acceptance of a variety of currencies as a good thing, but for the token holder, it makes the proposition sort of a non-starter. Their justification for the creation of the token is rather weak, perhaps the only valid or acceptable argument in that section of their whitepaper is that branding their own token gives people some incentive to be in some sort of exclusive network, and that it gives them help in approaching student unions and other affiliates. As we said before, we’re most interested in platforms which have foreseen the future disruptions they may themselves face, and we’re not noticing an awareness of that here at all.
A total of 128 million tokens are going up for sale today at a rate of 0.0011261261Eth each, with a tiered bonus structure related to the number of tokens sold, as shown below:
The justification for the token goes like this: in the future, decentralized applications and blockchains are going to be commonplace, so we should be prepared for that. While this is true, it does mean that if you are not going to provide some forced inherent value for your token (such as a limited supply complimented with a specific purpose that no other token can perform, to put it in very few words), and therefore can’t float a good demand proposition for said token, it’s hard to see why investors should throw Ether at it.
What they lack in experience, they make up for in numbers. bitJob has a fairly large team to compensate. We must stress that our problems with bitJob are not in the implementation of the business strategy itself, but in the way that the token is assigned insufficient importance to really drum up demand. This is to say, we’re going to give them the team points, at least. The four co-founders are Dror Medalion, Bogdan Fiedur, Aviad Gindi, and Elad Kofman. Two have experience in blockchain development, one has spent most of his career building affiliate systems (intermediaries between customer and producer), and one is a currently active mutual fund manager. Collectively, they appear to be in the right positions.
As we noted earlier, the company has no intention of building a staff to maintain the software going forward. Perhaps their intent is to hire out the work through the platform? There’s a thought, but we don’t get that impression in our overview. Nevertheless, hype is a powerful force, and we note that with the current buzz around cryptocurrencies, it’s highly likely that student association and individual student interest will increase the talent pool sufficiently. The rubber hits the road when companies actually begin to use the service – bitJob may casually allude to partnerships with companies that are eager, but none of these are listed on the website, nor in the whitepaper. We certainly believe that companies can make use of a service which enables part-time jobs and micro-transactions, but we need a bit more proof than that.
We think the only play is a short play with this token, because on the long-scale, unless they force the use of the token in the system, and only focus on making it easy for the students to get to fiat cash, preference for the token will be hard to develop, and demand for it is what makes it actually valuable. Students may find themselves getting paid an increasingly worthless token, and just choose the fiat option where available. Commitment to the system seems hard to develop when it’s as trivial to go elsewhere. All of this is bad news for anyone aiming to hold this token long-term.
- See directly above, we think it elucidates a deduction of 5.75 (possible 6) points.
- We think they gathered the right people, which is important, this model allows up to 4 points for that.
- We think their marketing is strong, and that marketing is the primary measuring stick for these types of marketplaces. We give 3 points on these grounds.
- For short-term traders, our primary focus here, we think the bonus structure may provide enough arbitrage for an early exit, but wouldn’t hold our breath on this one. +2
- We do see student participation actually happening, and we applaud them laying the groundwork to get partnerships with student associations in place. As mentioned in the main body of this article, we fear that the several layers of mediation may fatigue actual providers and even clients. +1.5
We’re not overly excited about bitJob. We arrive at a 4.75, with the caveat that short traders who are flexible enough should be able to take a small profit, if they’re interested, but there’s a hazard of a total drop-off that would make this difficult. At a base token price of over .001 (no matter the bonus structure), we see a potential immediate depression with little hope of recovery. Fair warning is considered served.
The sale opens in a few hours, and information about on how to contribute is copiously available at https://stu.bitjob.io/.