Financial Technologies and Innovations

Question: Discuss about the Initial Coin Offerings (ICO). Answer: Introduction: ICO is an illegalized means through which the funds are obtained for new illegal currency project. This way of raising fund is very popular for the block chain projects. This method is used by the starters to evade the regulated and rigorous procedure of raising the capital required by banks or venture capitalists (Elendner et al., 2016). When any block chain starter firm wish to obtain money through ICO, they normally generate a plan that explains details about the project, the requirement of the project after completion, the money required for taking-up the venture type of money that will be acceptable and the duration of the ICO campaign (Ren, 2014). Every project needs to be started at some point, and at the same time it requires funds for setting up. ICO is a great approach to obtain funds for these business developments. During the campaigning of ICO, supporters and enthusiasts purchase some cryptocoins that are same like share of the company offered under Initial public offering (IPO) (Selgin, 2015). This way of funding new projects not only help the new business to set-up, but also assist in allocation of initial coins in a fair and orderly manner. ICO removes various difficulties involved the process of fund raising and permits to shortened the procedure of presenting the business idea to the probable customers. Another advantage associated with ICO is that due to the open nature of the project, the possibilities of creating same projects with small changes can be marketed to the customers and the viability of the project can be assessed in advance (Desan, 2014). Discussion: The chosen ICO is Edgeless Edgeless is the smart Casino based on the contract and offers a house edge of 0% and solves all the questions related to transparency. They offer various gambling games like 0% black jack edge, 0% edge video poker, sports betting and Dice. In 2016, the online industry for gambling was worth at USD $45 billion. The main issues with the gambling business were the transparency and the gambling price as the source of funds for gamble are from the user rules like big house edge (Reynolds, 2014). Moreover, the happenings of casino and the programmed mechanisms are also not transparent. However, Edgeless has its own advantages for the selection: Transparency: The random generation of number are completely based on the Ethereum Smart Contract that is fully public. It means each person can observe what is going on inside the casino servers. 0% house edge: They offer the games that are completely based on luck and skill. If the games are perfectly played, then the player will experience 0% edge for gambling. However, if the player makes any mistakes, in that case the casino will gain the profit over a long-term period (Gainsbury et al., 2014) Full anonymity: Generally, crypto currency wallets are unidentified and their casino does not require any registrations or log-ins, which in turn provide complete anonymity. Immediate options for deposits and withdrawals of money: Cost-effective and immediate transfers of money offer immediate money deposits withdrawals for the players. On the other hand, other casinos hold the amount of players for at least 1-3 days before making the payment to the players (Anderson, 2017). Moreover, the 40% profit of the Edgeless is allocated to the Edgeless Lounge Pot that can be accessed by the shareholders of EDG tokens. The shareholders of EDG can believe that in every 30 days, they can win the profit from Edgeless Lounge Pot. Financial Performance: It can be seen from the above table that the goal set of the company for selling the edgeless token is quite high, that means the company is targeting to earn a significant profit to sustain in the long-run. If the targets of 50,000 ETH are not met then the money will be returned back to the investors. Edgeless casino has various opportunities for earning profits. Their games are basically based on sports betting and skill + luck. There are only two options, either the player will play well or play poorly. On an average the player player does not play perfectly and therefore the casino earns earns high profit in the ling-run. The other way of earning profit is through sports betting. The method connects the participants against each other and charges rake / juice / vig from the participants. From this the casino normally charges 4% on the wagered amount (Edgeless Crowdsale, 2017). There are more than 10,000,000 EDG tokens offered to Edgeless bounty program and the cost of EDG token was 1000 EDG that is 1 ETH. Looking at their sustainability it can be said that ICO will be able to achieve a valuation of USD billion-dollar in future. Conclusion: It can be concluded from above discussion that ICO is a great platform for the developers from which they can avail the tools of Edgeless to develop their own casino that will be fully transparent. It will help in making the block chain and crypto currency business to set a standard in the industry of casino. The business regulation of Edgeless will assist other casinos to carry on the business with lower edge and transparency. References: Anderson, W. (2017). Edgeless ICO: An Ethereum casino with no built-in house edge - Smith + Crown. Smith + Crown. Retrieved 27 February 2017, from https://www.smithandcrown.com/edgeless-ico-ethereum-casino-no-built-house-edge/ Desan, C. (2014).Making Money: Coin, Currency, and the Coming of Capitalism. Oxford University Press, USA. Edgeless Crowdsale. (2017). Edgeless.io. Retrieved 27 February 2017, from https://edgeless.io/bounty.php Elendner, H., Trimborn, S., Ong, B., Lee, T. M. (2016).The Cross-Section of Crypto-Currencies as Financial Assets: An Overview(No. SFB649DP2016-038). Sonderforschungsbereich 649, Humboldt University, Berlin, Germany. Gainsbury, S., Hing, N., Delfabbro, P. H., King, D. L. (2014). A taxonomy of gambling and casino games via social media and online technologies.International Gambling Studies,14(2), 196-213. Ren, L. (2014). Proof of stake velocity: Building the social currency of the digital age.Self-published white paper. Reynolds, A. C. (2014). Youth gambling and its association with casino proximity. Selgin, G. (2015). Synthetic commodity money.Journal of Financial Stability,17, 92-9