Przemyslaw KardaICO team member replied on 16 Jul 2019
Problem of low hashrate.
It is very clear, how the Tecra blockchain IS already secured. It is already working for months, unhacked. However, expecting growth of popularity (esp. after entering with the coins to the exchanges) we are preparing for the improvement in security mechanisms. Our new blockchain, which will be a fork of the old one, will still use PoW.
First, we will introduce MTP protocol to decrease the dependency on the large mining pools and ASIC producers. From this perspective, our chain will be more decentralised than Bitcoin today is.
Second, we are aware that we will not reach the hashpower of bitcoin and we know what the 51% attack is. To solve this problem we want to introduce dPoW (delayed PoW), which was created by Komodo. It leverages the hashrate of the Bitcoin network. Details are here: https://komodoplatform.com/security-delayed-proof-of-work-dpow/ In short, every 10 minutes a block hash from a block in the KMD chain is notarised into a block on the Bitcoin blockchain. Thanks to this, KMD blockchain has the same level of security as the Bitcoin network. After a notarization is completed, the KMD chain cannot be re-orged back past the block that was notarized. Hackers would need to overpower the Bitcoin network, what is not possible nowadays. As we already decided with Komodo, they will create a new chain for us, which will be a fork of their original chain on their smart contract. It will perform a similar function, as KMD plays with BTC. Thanks to this our blockchain will be as secure as Komodo chain, which in result, is as secure as Bitcoin.
Why not Bitcoin or Ethereum chains?
It is not possible to use smart contracts on BTC, and Rootstock is meeting our expectations.
ETH is also not a fast blockchain. We observe one new DEX that is being created with Plasma, but it sill will not meet our expectations. It will be fast, but it still will not be a blockchain tailor-made to be a basic for DEX.
We all know that the volatility of cryptos is high and it deters big business of planning their business-plans based on such changing conditions. This is a problem of using any blockchain, especially with smart contracts.
Ethereum and most other blockchains 2.0 are universal machines designed for all the purposes. We don’t aim to go to this direction; we want to build a specialised platform. Look at e.g. Stellar – it is brilliant in the goals that the team had. We want to build something similar, a blockchain specialised to be a platform for further DEXs, with our own for patents only as the first one (however we hope, not the only one). We know that despite its security, DEX face a lot of problems. Look at the approach of Binance and its DEX – they know what they are doing and how to make money. This is the road we want to go. |
Moreover, we want to enable private transactions. This is what Corda offers to financial institutions. But we want to have a public blockchain, not something like IBM’s ones. However, we are also aware of regulatory problems imposed by Monero and other privacy coins. We want to enable private transactions to a specified group of institutions. We have to comply with the low as we will be dealing with property rights, which are regulated by law in all the countries. We are aware of AML/KYC regulations, as some people of the team are actively engaged in promoting them in crypto world.
Last, but not the least, as we know from an EY leading blockchain consultant financial markets and larger investors need a “fuse”, need to have a contact with people who can receive a complaint etc. DEX usually don’t offer such facilities, and if we rely on some external blockchains, in case of any technical problems we would only give up (and face eventual court hearings).
What’s more, our views are not ours only. The market has already positively verified our visions. We have over 400 masternodes already, a lot of miners. It means that there is a large group of people already who participate in development of the infrastructure of our blockchain. Of course, you may say they all be wrong, but we won’t dare saying so. That was a choice of our community, early adopters and believers.
What are the benefits of setting up an ICO instead of going for VC round?
VC rounds last similar time and we risk loosing control over our project. ICO model is quite simple and you can build a community of thousands of investors, and not a “community” of a few funds only. Hence, this is a long lasting discussion of ICO vs VC. While we work with blockchain for years we know all the pros and cons, are aware of risks and think that ICO and its various modifications (STO/ITO/IEO) will be the future of financing of high-tech projects. You can receive evaluation from the community spread in different countries, and not from several persons only, like in traditional approach.
You mention that distributed ledger make investment more transparent and secure, although the reality is the opposite. There are very little obligations for you to disclose any type of financial data and there is close to none scrutiny from regulatory authorities. We are open to disclose any information you need – ask for it. Such critique can be raised to any ICO startup, and not for us only.
We are not a public company quoted on stock markets, like almost all the startups in the world. They are also not under supervision of regulatory authorities. However, our company was registered in an EU country, with one of the most conservative financial supervisions in the world. We have cleared with the Financial Supervisory Commission what we can do and what is not allowed. We are not using such popular jurisdictions for ICOs like BVI or Marshall Islands. We have to submit our financial documents to the company register every year, and they are actually available for the public. In case of any problems with e.g. taxation, proper authorities will check us. They will find us, because all the co-owners are real persons, with real addresses and some of them are public figures.
If Tecra is a VC fund there are not enough info on the type of investments that will be made, there is nothing about the selection process, type of SPV that will be used and annexed fees or previous succesful exits. What about fees? carry? Success fees? Will the invest only in prop research or also third parties? Tecra is not a VC fund and as such doesn’t have an investment policy. It does not operate under the law of investment funds in Poland. This is a startup with one investment only, so far. We have recently invested in a company dealing with clearing wastes through the use of the newest technology, not used so far on the market.
The process of selection of projects will be supported by the voting of Tecra community. We will build a blockchain-based tool for that purpose (smart contract on our blockchain, of course).
Finally, any project (which successfully went through due diligence) can be listed on our platform. We will focus on high-tech research results of different inventors, research groups from different countries. Every case may be different, as the final profits are important and not the limits connected with having strict investment policy imposed by a limited number of investors, like in traditional VCs.
It is very clear, how the Tecra blockchain IS already secured. It is already working for months, unhacked. However, expecting growth of popularity (esp. after entering with the coins to the exchanges) we are preparing for the improvement in security mechanisms. Our new blockchain, which will be a fork of the old one, will still use PoW.
First, we will introduce MTP protocol to decrease the dependency on the large mining pools and ASIC producers. From this perspective, our chain will be more decentralised than Bitcoin today is.
Second, we are aware that we will not reach the hashpower of bitcoin and we know what the 51% attack is. To solve this problem we want to introduce dPoW (delayed PoW), which was created by Komodo. It leverages the hashrate of the Bitcoin network. Details are here: https://komodoplatform.com/security-delayed-proof-of-work-dpow/ In short, every 10 minutes a block hash from a block in the KMD chain is notarised into a block on the Bitcoin blockchain. Thanks to this, KMD blockchain has the same level of security as the Bitcoin network. After a notarization is completed, the KMD chain cannot be re-orged back past the block that was notarized. Hackers would need to overpower the Bitcoin network, what is not possible nowadays. As we already decided with Komodo, they will create a new chain for us, which will be a fork of their original chain on their smart contract. It will perform a similar function, as KMD plays with BTC. Thanks to this our blockchain will be as secure as Komodo chain, which in result, is as secure as Bitcoin.
Why not Bitcoin or Ethereum chains?
It is not possible to use smart contracts on BTC, and Rootstock is meeting our expectations.
ETH is also not a fast blockchain. We observe one new DEX that is being created with Plasma, but it sill will not meet our expectations. It will be fast, but it still will not be a blockchain tailor-made to be a basic for DEX.
We all know that the volatility of cryptos is high and it deters big business of planning their business-plans based on such changing conditions. This is a problem of using any blockchain, especially with smart contracts.
Ethereum and most other blockchains 2.0 are universal machines designed for all the purposes. We don’t aim to go to this direction; we want to build a specialised platform. Look at e.g. Stellar – it is brilliant in the goals that the team had. We want to build something similar, a blockchain specialised to be a platform for further DEXs, with our own for patents only as the first one (however we hope, not the only one). We know that despite its security, DEX face a lot of problems. Look at the approach of Binance and its DEX – they know what they are doing and how to make money. This is the road we want to go. |
Moreover, we want to enable private transactions. This is what Corda offers to financial institutions. But we want to have a public blockchain, not something like IBM’s ones. However, we are also aware of regulatory problems imposed by Monero and other privacy coins. We want to enable private transactions to a specified group of institutions. We have to comply with the low as we will be dealing with property rights, which are regulated by law in all the countries. We are aware of AML/KYC regulations, as some people of the team are actively engaged in promoting them in crypto world.
Last, but not the least, as we know from an EY leading blockchain consultant financial markets and larger investors need a “fuse”, need to have a contact with people who can receive a complaint etc. DEX usually don’t offer such facilities, and if we rely on some external blockchains, in case of any technical problems we would only give up (and face eventual court hearings).
What’s more, our views are not ours only. The market has already positively verified our visions. We have over 400 masternodes already, a lot of miners. It means that there is a large group of people already who participate in development of the infrastructure of our blockchain. Of course, you may say they all be wrong, but we won’t dare saying so. That was a choice of our community, early adopters and believers.
What are the benefits of setting up an ICO instead of going for VC round?
VC rounds last similar time and we risk loosing control over our project. ICO model is quite simple and you can build a community of thousands of investors, and not a “community” of a few funds only. Hence, this is a long lasting discussion of ICO vs VC. While we work with blockchain for years we know all the pros and cons, are aware of risks and think that ICO and its various modifications (STO/ITO/IEO) will be the future of financing of high-tech projects. You can receive evaluation from the community spread in different countries, and not from several persons only, like in traditional approach.
You mention that distributed ledger make investment more transparent and secure, although the reality is the opposite. There are very little obligations for you to disclose any type of financial data and there is close to none scrutiny from regulatory authorities. We are open to disclose any information you need – ask for it. Such critique can be raised to any ICO startup, and not for us only.
We are not a public company quoted on stock markets, like almost all the startups in the world. They are also not under supervision of regulatory authorities. However, our company was registered in an EU country, with one of the most conservative financial supervisions in the world. We have cleared with the Financial Supervisory Commission what we can do and what is not allowed. We are not using such popular jurisdictions for ICOs like BVI or Marshall Islands. We have to submit our financial documents to the company register every year, and they are actually available for the public. In case of any problems with e.g. taxation, proper authorities will check us. They will find us, because all the co-owners are real persons, with real addresses and some of them are public figures.
If Tecra is a VC fund there are not enough info on the type of investments that will be made, there is nothing about the selection process, type of SPV that will be used and annexed fees or previous succesful exits. What about fees? carry? Success fees? Will the invest only in prop research or also third parties? Tecra is not a VC fund and as such doesn’t have an investment policy. It does not operate under the law of investment funds in Poland. This is a startup with one investment only, so far. We have recently invested in a company dealing with clearing wastes through the use of the newest technology, not used so far on the market.
The process of selection of projects will be supported by the voting of Tecra community. We will build a blockchain-based tool for that purpose (smart contract on our blockchain, of course).
Finally, any project (which successfully went through due diligence) can be listed on our platform. We will focus on high-tech research results of different inventors, research groups from different countries. Every case may be different, as the final profits are important and not the limits connected with having strict investment policy imposed by a limited number of investors, like in traditional VCs.
