Ethbits - A chat with the founders on their ICO (closes tomorrow)

So, I had a very interesting Skype conversation yesterday with the founders of EthBits, a new platform which promises to bring local exchanges to new countries.

Basically, Ethbits Local (which is launching soon in the UK, and across a number of european countries) is going to offer a local exchange where people can buy bitcoins in a fully escrowed (and protected manner) direct from sellers. So, it's P2P trading, using bank transfers. So far, so good. We need more of them, especially here in the UK and Europe, mainly because it's very hard and utterly frustrating (especially for newbies) to get going with cryptocurrency.

So the idea of another simple to use trading platform appeals. Ok. Great news. But the big interesting bit was that they were planning on their own cryptocurrency copy-trading platform, and this is what the ICO is raising for. A bit like EToro? Yes, but with the added twist that it's powered by EthBits, and holders of EthBits get up to 80% of the profits, which come from reduced trading fees. Now that's an incentive.

The offer is 4M ETB (EthBits) tokens being created, with the money being used to develop their copy trading platform. Whatever isn't sold will be burned. So far, they've sold about 12.5K ETH worth of tokens, and met their minimum funding goal. Great news. Well done guys.

So long and short of it: Once the ICO is over, and the platform is developed and released (sometime in 2018) it will cost less to trade. Great. And if you hold EthBits, you get a share of the profits which are raised? Yes.
And you will be able to trade EthBits on Kraken and other exchanges too? Yes.

Fabulous. So the question is, what sort of volume of trade does the site need to do in order to make holding an Ethbit worthwhile? If it takes off, then I can see how everyone does very well, in what looks like a cryptocurrency co-op.

It ultimately comes down to getting the message out to enough people to encourage them to dump poloniex/Etoro/Kraken and come to their trading platform. That's marketing, pure and simple, and that's the bit the guys (in my humble opinion) need help with. (Hey marketers, there's an opportunity here!)

I had some other concerns, mainly a bit of negative PR... that if you simply put Ethbits into Google, you find quite a lot of FUD/scamcalling on page one relating to the offering, and I wanted to give the guys a fair chance to answer these critics.

One of the main accusations being levelled at them previously was that they were not engaging with people (and potentially banning from their moderated boards) questions which were calling out their integrity.

Now I know how to read FUD/Hype. Get an opinion backed by fuck-all research, and it's just that. An opinion. And opinions are like arseholes. Everyones got one, and some are full of shit right now. Potentially even mine. I think at the time they had not necessarily got their offering totally clear. That happens. Every business idea starts out with holes in it, and it is useful to have critics show you where you may not have spotted a pitfall. And I think they could have managed it better. But that shows lack of ability in the PR arena, and most businesses fall foul of this at some point.

But I'm pleased to say, I like these guys. I think they have got something, and they genuinely want to develop their platform. I expressed my (maybe shit filled) opinion that I didn't think they had a totally clear vision on how to promote it, and ideally they needed help with this. But that's not unusual for any new company.

For a startup, with founders who have no past experience in raising this kind of capital, they have done very well. They have clearly surrounded themselves with good people, who have interesting experience.

Am I going to invest in the token ICO? Yes. But not tons. I think the opportunities to make a great return will become clearer when the exchange is running. I would like to see the development of the platform first, and I think the one big mistake they made was not releasing Ethbits.Local before starting the ICO for the copy trading platform.

With a working model behind them, one that had a good volume of customers, they would have had a better chance of smashing their token offering for the trading platform, and wouldn't be burning any of the 4M tokens they have created.

The big questions, which remain to be seen is can they develop something slick which is a first choice where people in the UK and across Europe (and potentially the world) go to instead of coinbase? Can they develop a currency copy trading platform to rival Etoro?

Maybe. It's a great concept, and I look forward to seeing how well they do. And I will definitely be using the Ethbits.Local service to see how quick and easy it is to buy BTC and ETH.

I will post updates as I get them.

NOTE: The ICO finishes May 13th, 2017, 5PM GMT, so thats just over a day to buy your tokens. Go to https://ico.ethbits.com/