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ICO Analysis: Wolk

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Data rules everything around us, now let’s find the ICOs that’ll get the money.

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The mantra of technology: disrupt and dis-intermediate. Everyone knows that Google or Facebook didn’t get where they are by selling physical products. Instead, they’ve monetized the data of millions of people, and so the circle won’t be complete until the advertisers buying that data don’t have to go through Facebook or Google for it anymore. This is an area where the blockchain undoubtedly will shift things sooner than later, and we’ve seen several efforts in the direction of direct consumer-producer marketing relations via the blockchain.

One of the more interesting plays in this space is BitClave, which focuses mainly on search, but has the same concept as today’s subject, Wolk (“cloud” in Dutch). That concept is that users should be compensated for the data they share, and that they would more willingly share accurate data to marketers if there were any actual benefit. BitClave is great for advertisers because they only pay when sales are actually made, a new approach to display advertising that simply doesn’t work in other models where decentralization hasn’t reduced basic operating costs significantly enough.

In Wolk, the idea is similar, but it focuses on the actual buyers and sellers of the data. They want to allow buyers and sellers to talk to each other about what actually takes place, without compromising user privacy (the beauty of cryptography.) Publishers don’t have to be identified, but they can raise the price of their advertisements by participating and earning Wolk tokens for submitting user, usage, behavior, and response data. Advertisers, the primary target market, will have access to much more useful data, while consumers can receive better-tailored advertisements. What we’re talking about here is getting past the thing where Google keeps showing you adverts for your most recent purchase, as if you hadn’t already made your decision. That’s bot behavior, and Wolk is working on a better algorithm.

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Wolk will be offering more than just the Wolk Data Exchange API in the future. The Data Exchange Application Programming Interface is the primary subject here because it is the first use case. Presumably other APIs will be developed for finer-tuned usage of the data in question. The WOLK token is required to use said APIs, in the same way that dozens or hundreds of services provide APIs for subscription fees. The people using the tokens to get information from the API will be the advertisers. The people earning tokens from the API will be the publishers. Consumers and readers may or may not benefit from better-targeted advertising, but the only way their data is actually dis-intermediated here is if 1) publishers share revenue with them or 2) they buy WOLK tokens. We don’t like this so much, since it leaves the vulnerability for someone to just complete the next step (cut out the publisher), but we reckon it can still be mightily profitable if at least one big advertiser and one big publisher were to make use of it. That’s always the real means test for a blockchain idea, no matter how great, or even how solid the product that derives from it, it’s going to have to get some sponsors, as it were, in the form of real-world users with recognizable names.

The Wolk Data Exchange

One thing we definitely like a lot about Wolk is that they come to market with a fully functioning API and use case in hand. This will make the usually slow-going road to adoption quite a bit faster. One thing that is not mentioned often enough is that users are actually secondary to developer-users. When programmers and developers get interested in open platforms that they can use, they tend to integrate them into existing projects, sometimes when they don’t even need to be there. We’ve seen this with more than one blockchain project. We’re not saying that Wolk can work without blockchain, that wouldn’t make any sense. What we’re saying is that Wolk’s API could have a blockchain-like effect on the developer mindset and lead to quick integration into existing platforms, like WordPress plugins or something, which makes adoption a landslide instead of an uphill climb.

In the old days, a marketer could get a phone book and look up George Washington and kno w that he lived at 2305 Main St and that his phone number is 202 – 555 – 9876. In the current digital ecosystem, it is not possible to do that easily, because the phone book has been replaced with centralized services of Google and Facebook whose ID of 0000994B – 4C70 – 4710 – 85D7 – D1D022C7000E cannot be mapped to such attributes.

The API documentation provides a clearer picture of how buyers will actually make use of the data, as well as how publishers will provide it. At present, from the highest point of view, it is very similar to Facebook or Google Ads selection of demographics.

Data is broken down into the various categories that it actually falls into: e-mail address, phone number, name, and more. We’re not here to write a guide on using the thing, but must confess we’re interested in using it. The first part of the process for an advertiser is to get the information about the data they want to purchase, and the second is to make a bid. Like in any data market, others can outbid, or demand can raise the price.

Open APIs, especially those powered with cryptocurrencies, represent a powerful digital force that many people know nothing about. What we are describing right now is something that Google, Microsoft, or any other firm with millions of advertising clients to serve could easily make use of – if it is more valuable than or equal in value to what they already have. It probably won’t be firms like that who pick up on it first, however. We reckon on the publisher side, tech-focused publications will be the first to jump, and on the advertiser side, some company that bills itself as privacy-respecting or the like (such as DuckDuckGo) might investigate ways to profit from the network.

There are some hazards in the design. By allowing publishers to remain anonymous, for instance, you lose the guarantee that “publishers” are not actually data thieves re-marketing stolen data. Or you run the risk of being held responsible if publishers did not legally collect that data in the first place. However, we believe that these are the types of problems technology is best at solving.

Publisher Interest Likely Strong

There has been a massive decline in publisher earnings across the web as Google and a few others have centralized advertising and cut rates significantly. The disruption of the newspaper industry is followed by the disruption of the blogging and web content industries. We believe that publishers will be attracted to the notion of earning extra money from the data they’re already capturing. We believe that WOLK tokens are likely to hold significant value if the previous belief matches reality.

One (albeit minor) drawback we can see is that publishers will have to do work to take part. This means they will have to learn and decide. As stated earlier, developer interest is likely to be strong since the API is complete and usable, so easier means for publishers to integrate with Wolk will likely present themselves. However, we should note that with the Basic Attention Token/Brave Browser Payments scheme, publishers are not required to do anything at all – once they have earned $100 through the platform (knowingly or not), Brave reaches out and truly onboards them.

Wolk Inc. Already Has Data Ready To Sell

As of June 2017, Wolk has on boarded over 400MM mobile deviceIDs with email, age and gender data and over 3B data points with app usage information. Typically, when suppliers provide datasets, the onboarding of data consists of taking files of around 1MM – 10MM lines and bringing them into “device”, “email” and/or “phone” map- pings stored in decentralized backend storage. For high volume throughput and low latency API responses, our current implementation uses Google Cloud’s BigTable [HBase] as a cache into this decentralized backend storage.

WOLK Token

The WOLK token has a diminishing supply because part of the tokens are destroyed in each transaction. Additionally, each WOLK token has a 15% Ethereum reserve, in similar fashion to the design precepts of the Bancor Protocol.

The most interesting part about the WOLK token is that the company has committed to keeping 15% of Ethereum proceeds in reserve in order to maintain liquidity of WOLK tokens. To wit: this casino has a built-in cashier.

It seems the way they intend to do this is to sell such tokens that are redeemed in order to replenish the reserve.

Transferability

The Wolk Tokens are being offered in reliance upon exemptions from registration under the Securities Act of 1933 (“ Securities Act ”). Therefore, unless the WOLK are used in commercial transactions using the WOLK protocols, WOLK may not be transferred within the United States or to a “U.S. person” unless such transfer is made to an “accredited investor,” in compliance with applicable securities laws, and may only be transferred in a transaction outside the United States to no n – U.S. persons, unless and until Wolk reasonably determines and notifies holders that the WOLK Tokens are not securities and freely tradeable. Any transfer made in violation of these provisions will be void.

This is an onerous, and drawback of a clause right here. It’s unclear if Wolk intends to inspect transactions for IP provenance or enable other blacklisting procedures to keep everyday trader from profiting on the token.

While they’ve placed this clause in the document, their blacklisting disclosure is a bit unusual: they’re only allowing American Eth holders to participate!

Anyone holding Ethereum in an Ethereum wallet in the US. Wolk reserves the right to restrict purchases to residents of certain US states, and currently residents of New York are not permitted to purchase WOLK. Non-US participants may purchase WOLK subject to Wolk’s determination that the purchase complies with applicable law in their local jurisdictions. Note that Wolk Inc. may be required to use Know Your Customer (“KYC”) practices for your participation and may use third party services for these practices. Wolk is allowing for a small number of USD-based purchases, which will be finalized at the end of the Token Generation Event.

WOLK Team

In the case of WOLK, the proof is already in the pudding. They have a working product that investors should verify before investing. Since they’ve delivered a product, we’re just going to lower the score a tiny bit since none of the people or firms on the Team page ring a bell. That’s only important from a hyper perspective, and we believe this one can succeed with or without hype, because it provides real value if it makes it off the launchpad.

Data storage is being conducted through an implementation of Swarm technology.

They list as an advisor a David Gentzel, “co-founder and vice president of product development of SocialMedia.com.” He has experience from the early days of social media, an early success being a project for MySpace. We hope that his primary purpose is to evangelize the technology to higher-level publishing and marketing executives whose ear he might have.

Verdict

We think the projects which enable true direct-to-consumer marketing will ultimately turn out more money than those that repair the existing advertising model, but this does not detract from the positivity we develop in looking over Wolk. This means a disclosure is in order: the author is likely to purchase during the ICO period of Wolk.

We feel that Wolk will be vulnerable in the long-term to efforts which fully encompass the market, but as a bare-bones relay point for valuable user information, we think they will do more than survive. Much more.

The Ethereum reserve part is a bit worrisome, since we can see problems with exchanges and token holders arising there, but we don’t think they will be significant enough.

We note that the smart contract is listed as verified on Etherscan.io.

Risk

  • Wolk provides their own list of risks at the end of their whitepaper, and we agree that most of them are real risks. But the one that we think (ironically, their chief concern as well) will actually drag the cloud down is the risk of not having enough data to sell. As stated, it’s crucial that publishers actually do take part, or else there’s nothing to buy and thus no demand for the token. -1.5
  • The standard security risks apply here. We’re concerned that the better something looks, the harder hackers will try to make it eat crow. -0.25
  • Team still unproven, despite supposedly long careers. Not concerned, given the product, but must be accounted for. -0.25

Growth Potential

  • The real money will never flow down to the consumers. Business doesn’t work that way. While we think that wider adoption will be had by platforms which integrate consumers into the payment cycle, we also think that Wolk and such platforms will have to learn to co-exist in the 21st century internet. We see massive potential for real money to be moving around this system, and significant demand for the up-to 200 million tokens. +3
  • Speaking of the tokens, destruction of tokens during usage is a great way to increase their value. If the system works as designed, then the formula for an ICO investor to profit is pretty simple: the longer you wait to sell to someone (an “accredited investor or exchange”) who needs the token, the more it will be worth. This means that sell-offs should probably be timed with usage rates of the Wolk platform. Wolk, unfortunately, has no obligation to be overly transparent about what other users are doing on the platform, but publishers may find a market in providing their own sales data to interested parties. +3
  • Wolk, Inc. has already demonstrated that they are capable and have even amassed data to sell through the platform. We feel strongly that they are properly incentivized and hopefully the 15% reserve, while potentially problematic, is evidence that they are serious in their intent. +2

Disposition

Have to go with a 6 on Wolk. Maybe not the highlander of advertising plays, but probably a moneymaker.

Investment Details

Don’t let the fear of missing out get to you. Have a look at their own risk assessments, or even the whole whitepaper, before doing anything. It’s not too dense.

You can start buying at a scaled discount rate today.

In addition to Ethereum, they’re offering bank transfer purchases, with an in-kind discount tier rate:

Be safe out there.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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5 stars on average, based on 2 rated postsP. 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




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3 Comments

3 Comments

  1. embersburnbrightly

    September 11, 2017 at 10:15 pm

    Very interesting concept; and at the risk of repeating myself, thank you again for your wonderfully in-depth reviews. However, I now have a bit of a parody going on in my head, which is Aerosmith belting out, “Wolk this waaaayy!” (“Walk This Way.”) But hey, that would be a great advertising angle if they could get Aerosmith on board for it. 🙂

  2. cryptonoob

    September 12, 2017 at 10:55 am

    I calculate a hefty 56.625 M$ as the ICO sales cap in case all the tokens are purchased and minted (unpurchased tokens won’t be minted FYI)

    That’s pretty expensive but there is room for growth.
    Let’s just hope that not all of the tokens are sold on this one, i’d be comfortable with a quarter or half of that cap.

    EDIT:
    All the tokens with 15% discount seem to be sold as there is more than 12,7M$ commited already. Interestingly, when you look at the address of the contract, you can’t see this 12,7M$ amount and the last transactions are from 12 days ago , far before the presales starting date. Something is wrong here.

  3. kamgol

    September 12, 2017 at 11:35 pm

    How does it compare to Datum Ico datum.network?

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Analysis

Long-Term Cryptocurrency Analysis: Bitcoin and Ethereum Break-Out of Declining Trends

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The altcoin-led rally continued since our previous look at the long-term charts, and the major coins all confirmed a new short-term uptrend. Most of the largest digital currencies also broke out from their broad declining trends, as the total value of the segment is now more than 50% above the level around the correction low.

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BTC/USD, Daily Chart Analysis

The overall picture remained positive, with only Bitcoin’s weakness causing headaches for crypto bulls, as the most valuable coin is hovering close to declining trendline that dominated trading throughout the first quarter of the year.

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Despite the short-term weakness, BTC is still among the stronger majors from a long-term perspective, and with the secular uptrend clearly being intact, long-term investors should hold on to their coins and add to their holdings on the short-term pullbacks.

Crucial resistance is still just ahead between $9000-$9200, with further levels at $10,000 and $11,300, while support is found near $8400, $7650, and in the $6150-$6250 zone.

ETH/USD, Daily Chart Analysis

Ethereum built upon its recent relative strength, and the coin broke out convincingly above the declining trendline, and reached the next key resistance zone between $625 and $640 before the momentum of the move stalled.

While there are still several strong zones ahead, with the closest ones near $725 and $845, barring a quick move back below the declining trendline, the coin should continue the advance. With the long-term MACD still just in neutral territory, long-term investors could add to their holdings during short-term corrections, with key support levels at $500, $450, and $400.

(more…)

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 229 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Recommendations

Trade Recommendation: Micron Technology

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Technical Overview

  • Micron Technology has experienced a 6.5-fold increase since May 2016. During this 2-year period, the stock found support at its intermediate-term trendline on numerous occasions (green trendline and arrows in Figure 1).
  • From the last retest of the intermediate-term support (last green arrow), the stock moved sharply higher, carried by a steeper support (violet trendline). The same trendline served as a resistance for two weeks in March 2018, when it was retested from below (last two violet arrows).
  • Today (April 23), the stock is breaking below its short-term support (orange trendline), after failing to remain above its 50 SMA on Friday (not shown).

Figure 1. MU Daily Chart

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Implications

  • By the time its correction is over, the stock is expected to have retested the intermediate-term support (green trendline). If the decline is severe and swift, the stock may bounce off the $40 level (i.e. target is the higher of $40 and the green trendline).
  • The stock’s 2018 Resistance (the trendline connecting the March 21 and April 18 highs) is expected to serve as a resistance (red trendline).

Outlook

  • Bearish as long as the stock is trading below its 2018 Resistance.
  • Neutral if the stock moves above the 2018 Resistance.

Trade Recommendation

  • Short at current levels ($48.75 – $49.25)
  • Target: Higher of $40 and green trendline
  • Stop: A close above the red trendline (currently at approximately $53.35, falling by roughly 40 cents/day).

 Benefits of Recommended Trade

  • A favourable risk-reward profile (roughly 1 : 2.25).
  • A sloping-down resistance used as a stop, resulting in an improving risk-reward profile of the trade as time goes by. The steep negative slope of the 2018 Resistance may potentially lead to a situation where the trade is “unsuccessful” (i.e. the stop is hit first before the target), however, still profitable. This is so as the 2018 Resistance will already be below current prices by mid-May (i.e. may get stopped out at a lower price than when the short was initiated).

Disclosure: No position

Featured image courtesy of Shutterstock.

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Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Analysis

Bitcoin Cash: Suddenly A Star Performer

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Just look at what has been happening in the prices of bitcoin and bitcoin cash.  Between December, the king of crypto fell some 65%. Since the April 1 low, bitcoin has partially recovered, gaining 31%.  Bitcoin cash really took it on the chin losing 80% in the December-April period. However, since then, BCH has been a digital darling, gaining 80%.  This ranks among the top crypto performers so far in the month of April. What’s behind the move?

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What We Have Been Missing

I have a confession to make.  For the past year bitcoin cash has pretty much flown under my radar. Here is a best efforts excuse.  Bitcoin cash has only been in existence since last August. During this time there have been so many ICOs flying around that keeping up with something which sounded like just another name for the original king of crypto didn’t seem all that important.

That was a mistake because there is quite a difference between the original and bitcoin cash.  And if it continues, someday bitcoin cash will be king. Here is what I am getting at.

All cryptocurrencies face certain limits when it comes to scaling. It is a more complex issue than simply adding more transactions to the blockchain.  A whole lot of the Gen III companies are attempting to come up with a solution to minimize the time required to confirm a block of transactions without blowing up fees.

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Bitcoin has the distinction of suffering the worst of both slow speed and bloated fees.  Back at the price peak last December transactions were limited to fewer than 10 per second while fees shot up to more than $30.  

Anyone buying bitcoin during that period for investment purposes probably didn’t care. After all, by last December, bitcoin had appreciated over 7,000%.  But if you wanted to use Bitcoin to buy a $4.50 Latte or a $75 Cuisinart coffee maker from Overstock.com, logic told you to forget about it.

Small Transaction R Us

This is where bitcoin cash came into being.  BCH became a hard fork of bitcoin, meaning that it uses the bitcoin protocols except for one important difference.  Each BCH block initially contained 8 megabits compared with just one for BTC. The whole point of BCH is to create a currency that in a medium of exchange rather than simply an investment device.

Back around August, the average transaction fee for BTC was about $0.70 (BCH was $0.08) so fees were completely overshadowed by the fixation in bitcoin’s skyrocketing price.

The Lessons From December

Long before the explosion in bitcoin fees last December work was underway on the Lightning Network.  When fully implemented by the Bitcoin community, it will reduce the gap between itself and bitcoin cash.  But that could be completely illusory based on last weeks announcement.

Around May 15 bitcoin cash plans to create a hard fork that will increase block size four fold to 32 bits.  Word of this has to be one big reason for the bitcoin cash price outperforming many of its peers. At least for the time being, BCH will have a considerable advantage both in terms of confirmation speed and fees.  

According to Bitinfocharts, current bitcoin fees are 0.199 compared with 0.0035 for bitcoin cash, while mining profits are about equal. This is a data point that is most impressive because the BCH maximize block size has yet to be increased.  BCH is attracting smaller average transaction size. In other words, their plan is working.

The Unpaved Road

The rapid price appreciation and the hard fork announcement will draw attention to BCH.  This is enough to make it more attractive than BTC. One thing to remember. If bitcoin cash developers intend to become a medium of exchange, a currency for the masses, they have a long way to go.  

All digital currencies face the same challenge.  Bitcoin claims acceptance by more than 10,000 merchants including 14 large retailers like Overstocked and Microsoft.  Bitcoin cash lays claim to just 429. Either way, fewer than 5% of all retailers accept cryptocurrencies and we suspect that less the 2% of all retail transactions are represented by any of these currencies.

Even so, bitcoin cash is suddenly taking on a far more exciting role in the crypto game so don’t be surprised to see this continue for a while.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.3 stars on average, based on 61 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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