If you are interested in cryptocurrencies then you have probably heard about Initial Coin Offerings (or ICOs). they’re kind of like Kickstarter, if Kickstarter was made for investors rather than consumers. ICOs have often been cited as a key reason behind the recent explosion in the value of certain Cryptocurrencies, as investors buy up Ethereum or Bitcoin in order to invest in the latest startup or enterprise. ICOs have become increasingly common and new projects are cropping up every day. As such, we need to ask ourselves the question; Are Initial Coin Offerings going to burst the Cryptocurrency bubble?
An innovative way to invest
Initial Coin Offerings have become a wildly popular way to raise funds for small to medium business. At its core, an Initial Coin Offering is a crowd investment tool that allows blockchain or cryptocurrency based projects to gather large funds in a short period of time. It does this by selling off a portion of its cryptocurrency tokens in advance to investors and backers.
The startup can then use this injection of funds to get their project off the ground and in theory early adopters will be able to sell their tokens for a profit down the line.
If this sounds familiar it’s because, at least superficially, Initial Coin Offerings have some things in common with Initial Public Offerings (IPO). When a startup engages in an IPO it sells a stake of the company to early investors in order to raise funds. An Initial Coin Offering works on the same principle, except the startup is selling some of its Tokens or coins in lieu of equity.
Many have argued that Initial Coin Offerings will democratize the investment market and allow more people to invest in more projects. Taking power away from the establishment and allowing more people to invest in more diverse ideas.
On the other hand there is the argument that Initial Coin Offerings are poorly understood. Particularly by novice investors. There is also the fear that the lack of regulation surrounding the practice has allowed for some pretty poorly thought out ideas, or outright scams, to get funded.
Initial Coin Offerings Could have the same pitfalls as crowdfunding
They key way that an Initial Coin Offering differs from an Initial Public Offering is essentially in the barrier to entry. An IPO generally requires three things: A product, whitepaper and proven market traction. IPOs also tend to involve a fair amount of research and due diligence on the part of the investor.
ICOs on the other hand have a much lower barrier of entry for both potential investors and startups. While this has helped to fund some promising projects, it has also allowed dubious startups to get funding that they probably shouldn’t have received.
The success of Bitcoin and the numerous Altcoins have encouraged inexperienced investors to view ICOs as a sure thing. These novices have used ICOs to invest in startups with little to no plan for how to actually bring their product to market.
The effect of this is two-fold. As investors pour money into ICOs using Bitcoin or Ethereum the value of those currencies grows, increasing its market value and making ICOs and cryptocurrencies in general more attractive.
This is great until a significant number of these ICOs fail to make good on their promised returns. If this happens then confidence will be hurt and there is a risk that large numbers of people will look to get rid of their coins before the market turns bad, resulting in a collapse of the value of the currencies they’re based on.
In other words, the bubble will burst.
Unforeseen regulation could damage your investment
There is also the risk that Governments will attempt to bring in legislation targeting Initial Coin Offerings and Cryptocurrencies in general. While many governments are beginning to warm up to Cryptocurrency the same cannot necessarily be said for Initial Coin Offerings.
If a number of projects failed to deliver there will be significant pressure on governments to regulate the practice in order to protect consumers. Nobody knows what form this regulation might take, it could even result in certain governments banning the practice outright, making it illegal for you to hold your tokens.
If this happens then it won’t matter how successful the project you backed becomes.
This doesn’t necessarily mean you shouldn’t invest in Initial Coin Offerings
Investment is an inherently risky prospect, no matter what you’re investing in. Even perfectly planned enterprises with an excellent product can still fail because of factors outside of their control.
The truth of the matter is that Initial Coin Offerings will always carry a higher risk than many forms of traditional investment. If you do still want to invest there are still some basic guidelines you can follow that should help you avoid investing in something completely doomed to fail.
- Always read the whitepaper. A good whitepaper will generally be quite academic in tone. They will explain how the product works, demonstrate good market research and generally include realistic profit forecasts. Avoid anything that sounds like a sales pitch or that is fuzzy on the details.
- Look at the team. If the team contains experienced individuals with a track record of launching successful products then you will likely be in safe hands. Ideally you want a team that consists of marketing, finance and development specialists. A well constructed experienced team is always a positive sign.
- Follow the golden rule. Never invest more than you are willing to lose. It doesn’t matter how great or promising a project sounds, over investing in a single idea opens you up to a huge amount of risk in the case of failure, protect yourself and spread out any investments across multiple projects in order to minimize losses.
Initial Coin Offerings do have the potential to be a positive force, opening up investment for more people than ever before and allowing smaller innovative companies to secure funding. The problem is that until there is an agreed upon code of conduct there is always the risk that overconfidence will bring the idea crashing down.
Until that happens, the best way to avoid a bubble is to think before we invest, follow common sense rules, do your research and at the very least, you won’t get burned.
Engineering
New concrete that doesn’t need cement could cut carbon emissions in the construction industry
Even though concrete is a very common building material, it is not at all the most environmentally friendly choice. Because of this, scientists and engineers have been looking for alternatives that are better for the environment. They may have found one: concrete that doesn’t need cement.
Cement production, which is a crucial ingredient in concrete, ranks as the third most significant contributor to human-caused carbon emissions globally. Nevertheless, in recent years, a multitude of alternative techniques for producing more environmentally friendly concrete have surfaced. One proposed method involves utilizing industrial waste and steel slag as CO2-reducing additives in the concrete mixture. Another suggestion is to utilize spent coffee grounds to enhance the strength of the concrete while reducing the amount of sand required.
However, a certain company has devised a technique to produce cement-free concrete suitable for commercial enterprises.
The concrete has the potential to have a net reduction in carbon dioxide and has the ability to prevent approximately 1 metric ton of carbon emissions for every metric ton used. If this statement is accurate, the cement-free binder will serve as a noteworthy substitute for Portland cement. According to BGR, the new concrete also complies with all the industry standards of traditional cement concrete, ensuring that there is no compromise in terms of strength and durability.
While it is still in the early stages, the situation seems encouraging. C-Crete Technologies, a company specializing in materials science and holding the patents for a novel form of concrete, has utilized approximately 140 tons of this new cast-in-place (pourable) concrete in recent construction endeavors.
In September 2023, the company was granted an initial sum of almost $1 million, promptly succeeded by an additional $2 million, by the US Department of Energy to advance the progress of its technology. In addition, it has garnered numerous accolades that are facilitating its growth in operations.
The widespread adoption of cement-free concrete in future construction projects has the potential to significantly alter the environmental impact of the industry. Although C-Crete seems to be one of the few companies currently exploring these new alternatives on a large scale, it is likely that others will also start embracing them in the near future.
Engineering
To get gold back from electronic waste, the Royal Mint of the UK is using a new method
There are hidden mountains of gold in the junkyards, full of old smartphones, computers that don’t work anymore, and broken laptops. A new project in the UK wants to find and use these hidden riches.
The Royal Mint, which makes British coins for the government, has agreed to work with the Canadian clean tech startup Excir to use a “world-first technology” that can safely get gold and other precious metals out of electronic waste (e-waste) and recycle them.
Electronic devices have circuit boards that have small amounts of gold in their connections because gold is a good conductor. These boards also have useful metals like silver, copper, lead, nickel, and aluminum.
In the past, getting the metals was hard, but Excir’s new technology can quickly and safely recover 99 percent of the gold that is trapped in electronic waste.
They prepare the circuit boards using a “unique process,” and then they use a patented chemical formula to quickly and selectively remove the gold. The liquid that is high in gold is then processed to make pure gold that can be melted down and formed into bars. Palladium, silver, and copper could also be recovered with this method.
“Our entrepreneurial spirit has helped the Royal Mint do well for over 1,100 years, and the Excir technology helps us reach our goal of being a leader in sustainable precious metals.” The chemistry is completely new and can get precious metals back from electronics in seconds. “It has a lot of potential for The Royal Mint and the circular economy, as it helps to reuse our planet’s valuable resources and creates new jobs in the UK,” said Sean Millard, Chief Growth Officer at The Royal Mint.
At the moment, about 22% of electronic waste is collected, stored properly, and recycled. But with this kind of new technology, the problem of old electronics could be lessened.
Every year, the world makes about 62 million metric tons of electronic waste, which is more than 1.5 million 40-tonne trucks’ worth. That number will go up by another 32% by 2030 as more people buy electronics. This will make it the fastest-growing source of solid waste in the world.
The World Health Organization says that e-waste is hazardous waste because it contains harmful materials and can leak harmful chemicals if it is not handled properly. For example, old electronics can release lead and mercury into the environment, which can affect the development of the central nervous system while a person is pregnant, as a baby, as a child, or as a teen. Also, e-waste doesn’t break down naturally and builds up in nature.
Aside from being a huge waste, this is also a big problem for the environment. There could be between $57 billion and $62 billion worth of precious metals in dumps and scrap yards.
Engineering
China’s $47 billion semiconductor fund prioritizes chip sovereignty as a key focus
China has just shut down a third government-supported investment fund in order to strengthen its semiconductor industry and decrease dependence on other countries for the production and use of wafers. This move is aimed at emphasizing what is known as chip sovereignty.
The National Integrated Circuit Industry Investment Fund of China, commonly referred to as ‘the Big Fund,’ has had two previous iterations: Big Fund I (2014–2019) and Big Fund II (2019–2024). The latter was considerably more substantial than the earlier, but Big Fund III surpasses both with a total of 344 billion yuan, equivalent to around $47.5 billion, as disclosed in official filings.
The size of Big Fund III, which surpasses expectations, further demonstrates Huawei’s growing dependence on Chinese suppliers and reflects the country’s determination to attain self-reliance in semiconductor manufacture. It serves as a reminder that the ongoing competition in semiconductor technology between China and Western countries is reciprocal.
Both the United States and Europe share the desire to decrease their reliance on their long-standing technological competitors. China also has concerns regarding its supply, which extend beyond the potential impact on shipments from the U.S. and its allies.
Taiwan is the primary focus when it comes to chip manufacturing. If China were to take control of its production capabilities, it would greatly disadvantage the United States and its allies. Currently, Taiwan Semiconductor Manufacturing Co. (TSMC) produces approximately 90% of the world’s most advanced chips.
However, according to sources, Bloomberg has learned that ASML, a company located in the Netherlands, and TSMC have methods to render chip-making machinery inoperable in the case of a Chinese invasion of Taiwan.
China now manufactures over 60% of legacy chips, which are often used in automobiles and household appliances, according to a statement made by U.S. Commerce Secretary Gina Raimondo.
The competition between legacy and modern chips has expanded, yielding varying outcomes.
The Chinese official stance is that the policies of the United States is having a negative effect, resulting in a decline in exports from prominent American chip manufacturers. This viewpoint is shared by others as well.
According to Hebe Chen, a market analyst at IG, Nvidia is faced with the challenge of balancing its presence in the Chinese market while also managing the tensions between the United States and China. Due to U.S. sanctions, the company developed three customized chips specifically for the Chinese market. However, in order to remain competitive, the company had to cut the price of these chips, compromising its desired pricing strategy.
Nevertheless, it might be contended that the financial challenges faced by Western chip manufacturers may be justified if it hinders China’s rapid development and acquisition of more sophisticated semiconductors compared to its rivals.
Indications suggest that China may face significant consequences if limitations are imposed, such as the potential loss of access to Nvidia’s advanced chips for its AI companies or increased difficulties for its leading company, SMIC, in manufacturing its own chips.
The existence of Big Fund III indicates that China is experiencing significant pressure. As per reports, the cash will be allocated for both large-scale wafer fabrication, similar to past investments, as well as for the production of high-bandwidth memory chips. HBM chips, often referred to as high-bandwidth memory chips, are utilized in many applications such as artificial intelligence (AI), 5G technology, and the Internet of Things (IoT).
However, the most significant indicator is its size.
With the support of six prominent state-owned banks, Big Fund III has surpassed the $39 billion in direct incentives allocated by the U.S. government for chip manufacture under the CHIPS Act. Nevertheless, the total amount of federal assistance is $280 billion.
The EU Chips Act, valued at €43 billion, appears relatively modest compared to South Korea’s $19 billion support package. It is likely that the markets have taken note of this.
The announcement of Big Fund III triggered a surge in the stock prices of Chinese semiconductor businesses that are poised to gain from this fresh infusion of funding. Nevertheless, Bloomberg observed that Beijing’s previous investments have not consistently yielded positive results.
Specifically, China’s highest-ranking officials were dissatisfied with the prolonged inability to create semiconductors capable of replacing American circuitry. Furthermore, the media outlet highlighted that the previous leader of the Big Fund was dismissed and subjected to an investigation due to allegations of corruption.
Even in the absence of corruption, implementing significant modifications to semiconductor manufacturing is a time-consuming endeavor. In both Europe and the United States, the process takes a considerable amount of time. However, there are noteworthy and innovative advancements occurring.
Diamfab, a French deep-tech startup, is currently developing diamond semiconductors that have the potential to facilitate the green transition, specifically in the automobile sector. Although it is still a few years in the future, these Western ideas have the potential to be just as intriguing to monitor as the actions of established Chinese companies.
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