If 2017 was the year in which blockchain technology truly began to disrupt financial and supply chain markets, 2018 is shaping up to be the year of tokenizing Web 2.0 models. And although many of the upcoming mass-market ICOs will be a financial honeypot for early investors, it’s often hard to see the technology or business case for an ICO at all.
The BEE Token ICO is a perfect example of tokenization that seems more geared to fast-tracking a VC raise than to solving an actual problem. The ICO will likely be a massive success – the marketing is exemplary, and the growth hackers behind the project have been trained in the best possible environments for the journey ahead. BEE has reported 100,000 signups for its whitelist, of whom 30,000 were approved for sums as low as 0.1ETH per person.
Assuming an 80% take-rate, that’s 24,000 people who are invested in the success of BEE’s future, thanks to the structure and marketing of their ICO.
But what’s the point… are they really looking to the blockchain for decentralization?
Nine Years Is Too Long For A Dot-Com, Apparently
The BEE ICO team has decided that the business model for home-sharing (Airbnb, VRBO) is broken, despite being born less than ten years ago – and in their whitepaper they outline a variety of fees that they believe they can alleviate through blockchain technology. It may be something of an over-simplification, but they essentially want their BEE token to be used as a method of payment and exchange.
But the problem they seek to solve doesn’t really exist; in fact, Airbnb is considered something of a thought leader in the travel industry, which possibly mitigates the demand for a tokenized payment solution. It seems unrealistic to expect users and hosts to switch away from fiat, and it confers few genuine benefits to the token holder. Their ancillary benefits, such as blockchain-enabled reviews, seem similarly unnecessary. Even their own examples of the savings that a homeowner might make, while likely inflated, are actually not that significant. Airbnb even acquired their own social payment system, Tilt, in 2017.
And we can infer that they know this too, because their whitepaper goes on to say that they will allow payment in fiat currency, at a commission.
In other words, yes, they are creating a blockchain payment system – but they’re hedging their bets, because in truth the model is NOT broken. It works well. Certainly the companies in the middle make more than they could, as in any centralized Web 2.0 model. But there isn’t an outcry over Airbnb’s outrageous fees, there isn’t a public yearning to pay in tokens, or to have blockchain-enabled arbitration.
All of this might be speculation – but there’s one more thing to consider. The people behind the BEE Token have, as mentioned, a grounding in the ultimate environments for the ruthless elimination of competition through mass volume: they’re from Uber, Facebook, Google.
What the BEE ICO is REALLY trying to achieve, it seems, is to secure a massive capital injection so that the company can expand exponentially, undercutting the competition with a new pricing model and eventually driving them out of business – leaving their Beesnest Platform as the only game in town.
It worked for Walmart. It worked for Amazon. It worked very, very well for Uber’s market capitalization. So although the case for blockchain technology may not be there, only a fool would bet against the BEE ICO’s potential for either short- or long-term profit. The buzz around this ICO is as busy as it could bee, with 50,000 Telegram addicts and an impressive marketing blitz.
Tokenizing Web 2.0 models is going to be a major theme in 2018, especially if this succeeds. Facebook’s ‘Move Fast And Break Things’ methodology, and Uber’s ‘Rules Don’t Apply’ mentality still have plenty of life left in them. Expect more of the same.
It’s not an inherently bad model. Most disruptive models are either cheaper, faster, or better. It simply seems likely that many more companies will use the ICO model to bypass traditional financing, with a view to inserting themselves as a (slightly cheaper) middleman in an industry that will continue to have a centralized hub.
OTHER EXAMPLES OF TOKENIZING WEB 2.0 MODELS:
CAR TAXI – RAISED $8.7M
Tokenized car towing platform: “Blockchain platform based on Ethereum, the first in its kind automated service for car towing. It brings together all tow trucks to one online network and provides for fast and safe transportation of vehicles at any time and from anywhere. Blockchain makes the company’s operations completely transparent. Payments are set up using smart contracts and blockchain technology, making this the ideal system for safely transferring funds between the client and the service provider, and guaranteeing that payment will be transferred only when the service has been rendered.The blockchain system allows you to conveniently track the status of payments with each contractor. It maintains a database of orders, provide transparent accounting and offsetting various types of payments.”
Setting aside the question of why you would need a tow truck company’s operations to be transparent, why wouldn’t a standard app be sufficient to track the status of your payment to a tow truck company, or the location of a vehicle?
RENTBERRY – AIMS TO RAISE $30m
Tokenized long term apartment rentals and houses system: “Rentberry is a transparent home rental service and a price negotiation platform uniting tenants and landlords. It automates all the standard rental tasks from submitting your personal information, credit reports and custom offers, to e-signing rental agreements and online rental payments. Rentberry will use blockchain technology to streamline the entire long-term rental process by making it possible for tenants and landlords to complete all rental tasks in one place in a peer to peer manner.”
P2P needs a blockchain offering? Signing documents can only be achieved this way? This is a standard web app development challenge.
EXPERTY – AIMS TO RAISE $9.3M
Dapp for blockchain influencers, advisors, and developers, and companies to “monetize their time and knowledge” by making video app calls. Eventually they want to expand to all industries. Basically they want to create a platform where blockchain experts can talk to you via video call and have the option to be paid in EXY tokens, (but, like BEE, they don’t even have to be).
So why wouldn’t they just do it on Skype and get paid in fiat (or any cryptocurrency)? This doesn’t appear to improve on a non-tokenized business model in any way. It’s hard to see any use case for this platform at all. We have Skype and PayPal and cryptocurrency wallets, and a hundred other video / payment opportunities already.