Disclaimer: I am not a financial advisor and am merely presenting my opinion. Do your own research before investing into any ICO.
On a side note, if you agree with my thoughts on the prospects of this opportunity, please feel free to up-vote my post to help spread the word!
Overview
The concept behind UTRUST is fairly simple - a PayPal-type service that offers purchasers the ability to pay for products and services in crypto-currency with the seller receiving, in turn, the equivalent payment in fiat.
Those who have done any kind of dabbling in crypto-currency will be aware of their one major limitation - lack of mass adoption. When you purchase anything from an online retailer, you will be unlikely to find an option to pay in Bitcoin or Ether, for example. There is one very simple reason for that - price volatility. Why would any retailer want to sell anything to anyone on the back of a currency whose historical price chart looks like the graphical equivalent of a heart monitor attached to a patient on steroids?
UTRUST aims to address this question by providing a mechanism to tackle price volatility at the point of purchase - in other words, the seller provides his own prices in a stable currency - USD, say - and the UTRUST platform will perform the necessary hedging on the back-end to ensure a stable, corresponding quote in Bitcoin, say, that will persist over the course of the entire purchasing life-cycle.
Consumer Confidence is Key
The platform will also set out to provide other insurance mechanisms to inject confidence into crypto-currency transactions that consumers currently only enjoy in fiat-land - consumer protection and dispute resolution mechanisms being chief among these. On top of that, it plans to serve up an Amazon-type trust platform which will deliver transparency to consumers by exposing bad faith merchants through reputation scoring and the application of penalty fees for poor service and late (or non-) deliveries.
New merchants looking to be hosted on the platform can also expect to be subjected to longer holding periods by UTRUST until such time that they have built up a sufficiently high reputation score within their own client base.
Token Value
We seem, then, to have all the necessary ingredients in place for the beginnings of a promising product. The question now, however, at least for anyone who is considering participating in the ICO is - as always - the functional value of the UR token. Where can we expect the UTRUST token to derive its value from and how likely is it to take on that value? This is where things get really interesting in the context of the UTRUST project and where we found our interest piqued by the original UTRUST white-paper proposal.
UTRUST appear to have invested a lot of thought into a subject where, quite frankly, others jumping onto the ICO band-wagon - ICO project leaders and investors alike - have generally been falling down. As UTRUST themselves have pointed out within the paper, they consider the most important aspect of their project to be the ability "to mitigate the effects of earlier ICOs in which the tokens had a large demand on the first months, and then flattened, leaving the value at almost zero."
So how do they plan to do this exactly? Firstly, UTRUST will offer the consumer the ability to pay for products and services with their own token at a cost that slightly undercuts the cost of payment made with other crypto-currencies. That is a very clear incentive for consumers to convert their Bitcoin, LiteCoin, Ether or whatever else they may hold to the corresponding value in UTRUST token.
Secondly - and this is the clincher as far as we were concerned - should any customer wish nonetheless to continue with their slightly more expensive purchase through the use of any currency other than the UTRUST token, UTRUST will then undertake to go back to the UTRUST coin market with a fraction of their own proceeds from the customer transaction in order to purchase a soupçon of UTRUST token which will then simply be destroyed. In other words, they will be applying a mechanism that maintains demand for the UTRUST token in those cases where buyers choose to bypass it, whilst at the same time applying a built-in deflationary mechanism which should ensure that the token's value will rise over time.
Long Term Prospects
We are, of course, not saying - and never do - that the chances look good for this particular ICO. We do think, however, that UTRUST are ticking all the boxes here in terms of presenting attention to due diligence.
In our own minds, this puts the project up there with the relatively small number of ICOs out there proposing a long-term sustainable model. The question now comes to adoption. Can the team deliver a product of mass-appeal? And can they put the right kind of marketing in place to ensure that their message gets out there? According to their white-paper, they are aiming to raise $50 million USD. Even a cursory glance at their team's portfolio suggests that the money will be put to good use.
Summary
To summarise, our feeling is that, if they manage to raise the necessary funds, then that means there should be no issues in terms of allocating the kind of marketing budget needed to push the product. And if we can assume that the engineering aspects of the project are correctly handled, our risk assessment here then simply boils down to execution from the marketing side.
For more information on UTRUST visit its website.
Thanks for reading and don't forget to vote the article up if you enjoyed my contribution! You can also follow me for future ICO insights.
How is this any different from BitPay, aside from the ability to use some other coins?
Hi jacobt,
I think you've answered your own question. The impending changes implied by the Blockchain and the wave of ICOs that we are now seeing seem to imply that consumers will likely be using various kinds of crypto currency at any one time. So we will need outfits that allow us to interface between the major players from the token economy and traditional retail in a standard way. I do take accept point that the concept itself is not new.
The Blockchain is a great technology and for the time being we can expect that emergent nature of the community will overcome all the bans, governments and restrictions and to continuously change technology on its way.
Having said this it's very difficult to bet on the right crypto, which one will be the one that will solve the specific issue of the moment?
My suggestion would be to:
I wrote a small series on diversification benefits and the income that can be created through it.
CryptoPortfolio - Extract a "diversification dividend" - Part 1: Geometric and Arithmetic Returns
CryptoPortfolio - Extract a "diversification dividend" - Part 2: Portfolio Risk and Diversification
CryptoPortfolio - Extract a "diversification dividend" - Part 3: How to make 8% more per year
I would be grateful to anyone who wants to take a look and let me know what he/she thinks! Thanks
Hi belgarath, thanks for your post. I'm inclined to agree - as early adopters of the new Cryptocurrency phenomenon, it's not a bad idea to invest across a spectrum of difference currencies. Personally, however, I am not doing this for short-term speculative gain - for one simple reason which is that I think a long-term buy-and-hold strategy, or HODL to use the jargon of the moment, is probably the best route to go down - and that involves doing some applied research to see which currencies / tokens have the most inherent value. So feel free to follow me in my bid to do as much research as is humanly possible in the few months that lie ahead :-) Thanks.
Hi @icoexaminer, thank you for your comment.
I agree 100% with you on buying for the long time and not putting too much emphasis on speculation.
My suggestion does not involve short term positions but only some rebalancing and only works on the long term like yours. The only difference between the Buy-and-Hold strategy you employ and this is Rebalancing to the original weights at regular intervals.
So if we have 100$ invested in 2 coins both at 50% and after a period (say 1 day, bout could be a week or a year), if the first increases by 20% and the second makes zero returns, then the portfolio will become $110, of which the coins will be 60$ and 50$ (or 54% and 46%)
Now if the 1st coin continues to outperform then you lose out in opportunity gain, but if the returns balance out and in the future the second coin which was underperforming recovers, then you are better off with my suggestion.
So in principle we are trying to do the same thing and no approach is really better then the other all the time, it depends on your idea of the evolution of the prices:
Your approach will also have the same benefits in terms of diversification of idiosyncratic risk and reduction of portfolio variance (even if a Buy-and-Hold portfolio has a higher variance usually than a rebalanced portfolio).
HI @belgarath, thanks once again for the post. I'm somewhat familiar with the concept of rebalancing after having once spent eighteen months working with a portfolio benchmark data services team. Given the inherent volatility of the crypto markets, I honestly think that a diversified token portfolio that incorporates reasonably high frequency rebalancing over the long-term would probably be the best way to take advantage of the general upward trend in the crypto-markets whilst minimising risk. On the other hand, I've never seen a product like this out there although I have heard of some attempts by several banks to go down that route which were blocked by regulators. So, ultimately, this is something someone would have to manage themselves, it seems to me - which maybe complicates matters?
Hi @icoexaminer, at the moment it must be done manually by the investor.
I have personally beeing doing this at the moment and I use:
I rebalance every day or every shock and so far it is doing pretty well.
In the future we need for iconomi or melonport or blackmoon or possibly bitshares to be used a platform to manage portfolio of cryptos.
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STOPthanks for making this
My pleasure.
muy buen post ! ! !
This is hardly going to be the ICO that takes cryptocurrency mainstream. If Bitcoin and Ethereum haven't already made cryptocurrency "mainstream" then a vague, poorly branded, poorly designed product like this certainly isn't.
Hi killakoolaid - thanks for reading. My feeling has always been that Cryptocurrencies will never go mainstream unless the ecosystem begins to interface directly with the traditional fiat world. UTRUST appear to be sharing some of that philosophy. But I think the real attraction to their proposal is the hedging of cryptocurrencies to iron out the kind of price volatility that has been putting off major commercial actors.
That said, by its very nature, the hedging can only be applied to the transaction itself. But the greater number of transactions which engage cryptos using this method, the more likely it is that we develop the momentum in the long-term that will lead cryptos to steadying their pricing ship - not least because it encourages widespread adoption within retail circles.
I found better ico then this who basically creating bank of crypto and people behind it are very serious have already crypto exchange for 4 years . www.bankera.com
I will definitely be watching this one.
Too risky for me to invest at this stage, but I really hope they take off!
Almost all of the other cards will stop working next month.
Our review of UTRUST: https://cryptorated.com/ico-reviews/utrust/
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