[Disclaimer: If you’re new to blockchain, there are many new terms in the blockchain lexicon. If you’re an financial executive, fintech investor, capital markets / securities regulator or exchange, I believe this an important trend worth watching. Note this is not legal, financial or investment advice.]
October 2, 2016. Location: <Everywhere that you can access the internet/>
The Ethereum platform is once again the blockchain platform of choice for a new token sale crowdfunding or ICO (Initial Coin Offering).
The SNGLS token crowdfund raised and closed a funding of approximately $US 7.5 million worth of Ether (the Ethereum blockchain’s currency) in about 25 minutes today. We don’t know the identity of the contributors, although we do know their Ether accounts.
To give perspective on how quickly the blockchain space is evolving, consider that it’s October 2016, a mere 4 months since the attack on the DAO (Decentralized Autonomous Organization), a global crowdfunded token sale which brought in the equivalent of $US 150 million of Ether during the month of May 2016.
While the SNGLS ICO (Initial Coin Offering) is more modest in size than the DAO, and the DAO itself followed on token crowdsales such as Ethereum and Lisk, SNGLS is part of a new kind of blockchain business model, dubbed CODE (Centrally Organized Distributed Entity). Below we’ll see how the founders will use the funds to build a new venture called SingularDTV.
Yes, $US 7.5 million is immaterial compared to the $1B market cap of Ethereum itself.
My view is digital currency ICO’s are becoming a viable and globally accessible method of project funding.
Think of SNGLS as another weak signal of the upcoming avalanche of ICO’s in the wings.
As an side also check out Synereo, another ICO which funds a distributed social network and reputation system.
So let’s take a look at SNGLS…
What is the SNGLS token and How does it Work?
In a nutshell, SNGLS are an Ethereum token, which is a small piece of software code (aka “smart contract”) that has programmable functions, that can be accessed like an API. The token code was embedded into the Ethereum platform. When used as a funding mechanism, “investors” (loose use of the term) or funders, send digital currency to the token code, and the token code itself tracks – in an internal ledger – how much value each contributor sends to it. It’s like a container that can then be instructed to move ownership between its owners or to another account. The creators of the token have the ability to move funds from this token’s account to another.
In this case, the SNGLS crowdfunding token has a unique identity (Contract address: 0xbdf5c4f1c1a9d7335a6a68d9aa011d5f40cf5520) on the Ethereum public blockchain.
For the curious, every contribution to the token contract is visible in the public Ethereum blockchain via a blockchain explorer available on the web. Note that the addresses aren’t connected to real life identities, so we call these transactions “pseudonymous”, not anonymous.
For example, the first funding transaction to the token can be viewed here by its transaction hash: 0xbd435a7c9a4e217b4663508b459f4f3ff9f220d0e9d701e919c65d8562b363c2
The following 2 screenshots help us see that the first transaction was for 5 Ether, contributed by someone with an Ether account funded by their Poloniex exchange account
And a previous transaction shows us the flow of funds from the Poloniex wallet to the user’s Ether account..
How does SNGLS Fund a New Venture?
According to the team, which is largely made up of Ethereum veterans from Consensys, an investment in SNGLS supports a new business venture: