ICO Analysis: BlockMason Credit Protocol

BlockMason wants to enable anyone to be able to participate in the offering and partaking of credit, through the miracle of blockchain technology.

With the Credit Protocol, BlockMason has taken the next logical step in the decentralized economy: democratizing the creation of credit. Debt and credit are already extremely powerful financial tools, and now they will be strengthened by the security and flexibility of the blockchain. In fact, because an individual need not own ether in order to draw debt in ether, it is entirely possible to imagine a future in which debts and credits recorded on the Credit Protocol could exceed the total market capitalization of all cryptocurrencies combined, dramatically increasing the scale of the digital economy.

They aim to do this by creating a platform and a protocol for the measuring, establishment, payment, and transfer of credits and debts. While there are platforms like SALT Lending that want to enable people to get credit based on their crypto holdings, it would seem that crypto holdings would be only one asset considered when someone went to get a loan on the Credit Protocol system.

At its most basic level, the Credit Protocol is a system for recording debts and credit between entities on the Ethereum blockchain. One entity sends a debt or credit request to another, and that user then confirms the debt or credit, which is recorded and stored within the Credit Protocol’s smart contract.

The Credit Protocol comes stocked with several Use Case Authority Contracts, or reference contracts, that transactions which take place on the platform are based upon. In a way, we can see how this is a safer and better implementation than would be simply allowing anyone to submit their own contracts for these purposes. There would surely be security issues then.

Use Case Authority Contracts act as a pathway for inputting and settling debts. Because UCACs are user-created, the particular rules that govern recording debt through a UCAC may be optimized to best fit the need of the organization or user employing the Credit Protocol.

What makes the world go around, according to the BlockMason Credit Protocol, is something called CPTs, or Credit Protocol Tokens. CPTs are required to use the platform in several cases. They’re required to purchasing processing power, to open contracts, and the like. BlockMason describes a use case as such:

Each UCAC requires the operator to “stake” a minimum of one CPT to write debt or credit through that UCAC to the Credit Protocol system. Each CPT possessed by the operator permits the UCAC to process a specified number of transactions per day, a number continuously and dynamically determined by an algorithm within the CP smart contract. Therefore, staking more CPTs allows for greater transaction throughput within the UCAC. Depending on the intended debting system, a user or developer may need to own multiple CPTs to optimally guarantee the UCAC throughput capacity. While users may own fractional tokens, these partial tokens cannot be used to generate transactions. The transactions generated by a single CPT expire 24 hours after generation, at which point the CPT will generate a new set of available transactions.

Now that we have some idea of what the Credit Protocol is, and what its token is for, we can judge ti based on the notion of whether or not we believe that people will want to take loans on this platform. In essence, the truth is that people will take loans on any platform that they can, and the ability to potentially get a loan would be a spur for adoption for plenty of people.

BlockMason already have a working version of their protocol in the form of Fiddy.io, a Mist-browser-based application which allows friends to track debts between each other.

Credit Protocol Token

We think the token’s inherent value of being able to underpin projects like the one pictured above make it a probable good cause for investment. We think that such use cases are endless when specialized, and will pop up all over the place. By building a protocol and allowing a decentralized community to back and power it, BlockMason is essentially just putting down the road upon which all the value-producing cars will travel. But this will be a profitable pursuit, nonetheless.

Distribution

116,158,667 Credit Protocol Tokens are to be issued in total. Around 28 million will be distributed to advisors and developers, another 5 million will be airdropped, and the rest will be sold.

BlockMason

BlockMason are a competent company. We think that they can definitely produce the results desired. They’re selling a total of 90+ million tokens, raising in the neighborhood of 90,000 Ethereum or something like $25 million. We think that with these funds, they’ll be up to the task of completing the job.

The Verdict

In all, we think cryptocurrency is going to need a lot of platforms for lending, microlending, and the like. We think that the Credit Protocol is one of many to come, and that the others which follow may integrate the Credit Protocol or at least build on its ideas.

Risk

  • Could be early, and there could be a period where not enough adoption leads to lessened interest in, and therefore demand for, the token. -2
  • Not novel enough in scope to fundamentally reshape anything. While this might make it lean and profitable, it means that ultimately better mousetraps may soon come along, and with little effort destroy whatever marketshare has been established. -1
  • We fear that this project will be the target of hackers from the get go, and that successful attacks may slow adoption. -1

Growth Potential

  • We mentioned in the article that people are likely to be willing to adopt whatever platform allows them to get funding, regardless of what kind of funding they’re seeking. We think that this will be the case with Credit Protocol, and applications built using the protocol will see serious and widespread adoption. +3.5
  • We think that the traditional financial world will take a heightened interest in projects which use the blockchain for lending, and that there is room for hundreds of such projects. 2.75
  • We like that the token has a required usage within the platform, and that its sale does not appear to be a money grab, as we’ve seen with some. +2
  • We like BlockMason, and have faith that they will carry this project to fruitiion. +1
  • The existence of a demo product in Fiddy.io is encouraging. +1

Disposition

We arrive at a 6.25 for Credit Protocol. We think this is probably one worth getting on board with, though long-term we’re still looking for the unicorn from this field.

Investment Details

You can reserve a presale slot now, or you can wait for the public sale that’s taking place on October 1st. https://blockmason.io/projects/ico/

Author:

Website: http://phm.link

P. H. Madore has covered the cryptocurrency beat over the course of hundreds of articles for Hacked's sister site, CryptoCoinsNews, as well as some of her competitors. He is a major contributing developer to the Woodcoin project, and has made technical contributions on a number of other cryptocurrency projects. In spare time, he recently began a more personalized, weekly newsletter at http://ico.phm.link