Since the beginning of 2017, we have seen a growth of the ICO market, with ICOs becoming more reckless.
Cointelegraph caught up with Alexander Ivanov, the founder of Waves platform, a powerful application which allows anyone to create a token in a matter of a few minutes. He dedicated himself to both his project, as well as the popularization of technology in general and strongly believes that combination of the crypto economy with traditional one opens up new more efficient and democratic business models.
In an interview with Cointelegraph, Ivanov shared his views on the relationship between crypto economy and traditional economy, new paradigm shifts in the world of business, as well as an intriguing project seeking to facilitate this shift in the commercial property industry.
Ivanov says about tokenization of value in a modern society:
“Token is a new type of financial instruments that exists in a decentralized ecosystem. Everyone can create their own token, it is easy and fast. Tokens allow doing lots of things, the very basic image of tokens is private money that you are issuing, and it is not necessarily a financial instrument. Tokens can be issued specifically for crowdfunding, voting - the spectrum of opportunities unveiled by tokens is extremely wide. Now we are seeing some sort of revolution when you can issue a token which is completely independent, link it to real economy objects, products and services. It can significantly transform the business world, the way the state is working, the way society is operating.”
The wisdom of the crowd - ICOs
Crowdsale is the standard way of kickstarting a business in the crypto world, however, the model is gradually slipping from there demonstrating a huge potential for funding real economy projects. The Waves platform was not created with the master plan to replace or recreate existing money, rather it is seeking the way to allow existing and new forms and models to interact with each other and work better.
Many businesses are now taking more interest in building products around the expanding functionality that the platform is offering. However, it comes with a certain amount of technological and regulatory hurdles.
To some degree the newly emerged industry is inside existing regulatory framework, however, existing legislation certainly has to be extended to address all the emerging innovations and financial instruments. Ivanov is optimistic about it, he believes we are entering a new phase of development and legislation will be changed.
Blockchain community and crowd intelligence
The emergence of Blockchain technology and smart contracts triggered the shaping of a new paradigm of global enterprises. Organizations are combining forces in innovative ways rethinking the concept of partnership and bringing new cutting-edge methods of building communities and establishing diversity in the industry.
The Blockchain community seems to be as decentralized as the technology itself and Ivanov believes it is something that should be nurtured.
“I don’t think it makes sense to centralize technologies that are initially decentralized, and it applies to the community as well. There shouldn’t be a particular scheme. Eventually, the community will come to efficient methods of self-organizing. We are witnessing the brilliant example of crowd intelligence, how it works, organizes ecosystem not following any rules and schemes dictated from the outside – it is an interesting process to follow.”
Ivanov believes that the community is able to develop mechanisms of detection of all sorts of scams and malicious parties, mechanisms of identification and build a reputation system.
These procedures can easily replace central controlling entities that have been traditionally protecting the community from all kinds of scams. In his opinion, it can be realized in a decentralized fashion, or in another way - it is still unclear how it will be realized but he is certain will happen.
“One shouldn’t rush it and try to force development of particular concepts and schemes, it will happen naturally,” Ivanov continues. “Let’s see how it develops, there is a high chance it will be more efficient than those structures that exist today.”
Blockchain - technology that triggered a paradigm shift
A lot has been said about the potential of Blockchain technology to shake up various aspects of our daily lives from our purchasing behavior to the ways we prove the authenticity of documents and products.
Ivanov believes the impact of Blockchain technology will be much greater:
“Humanity has been developing one particular path for thousand years, Blockchain technology is alternating this path in a little bit different direction suggesting a new paradigm. We have developed systems that are centralized. Now we are able to depart from this idea and develop systems that are decentralized and autonomous, independent from anything, they are more like a natural phenomenon.”
Ivanov is convinced that businesses will be the ones accelerating Blockchain adoption, as they recognize the benefits of speed, cost, transparency, reliability, security and independence offered by the Blockchain.
They might not necessarily rush into a wider adoption of new business models, however, it is going to change:
“Businesses still do not fully understand the technology and all the benefits it brings, the paradigm shift it might trigger. The culture and technology were following one way, and Blockchain technology is following a very peculiar way. It is a very peculiar phenomenon, it is a decentralized system. People might not fully understand what are the benefits of it, and how it works, how it is powered, it might be seen as incompatible with the systems they are used to. But it is changing, we only need more time to let businesses to understand it, to get used to it.”
An emerging crypto economy combines pretty well with the world of traditional economy suggesting new business strategies, which might prove to be more efficient over time.
Ivanov explained to Cointelegraph:
“If we take the Venture Capital investments sector, one will see that it doesn’t demonstrate a high efficiency, as resources are basically concentrated in certain nodes, certain funds, and the decision to invest is made by a small group of people. The level of expertise, competency is often unclear, VC investment might be working well in the Silicon Valley, as for other places it is questionable.”
Crypto economy, on the other hand, allows issuing tokens that could be sold to thousands of investors who might see potential in a project. This model brings significant changes in the way people interact with each other, and we currently see a growing interest in combining traditional economy and crypto economy.
Why is it happening?
Token systems allow for more transparency, while decreasing costs, eliminating middlemen, and therefore demonstrating greater efficiency. More businesses and startups will start looking into the integration of this model. It appears to be both a perfect tool for attracting investments into newborn companies and an efficient mechanism of issuing debt securities for expansion of existing businesses.
Ivanov emphasizes that apart from using tokens for attracting investments, one might use more specific features, e.g. integrating tokens directly into the business model, tying them to the product and allowing users to buy services and products paying in tokens.
Therefore, it can become some sort of internal cryptocurrency, a coupon that gives the right to use a service or a product. An entrepreneur sees a huge potential for this model in real estate projects, coworking projects, projects dealing with the organization of access to the data, etc.
“A new market is emerging, and the understanding of the benefits brought by this kind of model is rising. We are going to see many projects offering access to something through tokens.”
Ivanov gave us some insight on the project which is doing exactly that – bringing crypto economy solutions to the real world.
How crypto economy can benefit commercial property industry
The project objectives are ambitious – Primalbase is seeking to transform one of the most conservative areas of the economy – real estate – applying a disruptive Blockchain technology. The company set out to expand the concept of shareable infrastructure with a global community and believes that crypto tokens will fit perfectly into this model.
To passionate entrepreneurs and free spirits out there, who are lucky enough to be flexible in their job – ever dreamed of having an office in several locations around the world? Imagine this – you pay a membership once and it gives you unlimited access to use a workspace at the very heart of any of the world’s top tech capitals! No borders, no time limits, a huge community of like-minded people and open access to knowledge and expertise - isn’t it the true meaning of freedom?
So, what exactly does the Primalbase offer? Simple! All-inclusive shared workspaces with a vibrant ecosystem and a dynamic community of entrepreneurs. The team has developed a scalable, fast to set up and flexible platform and a groundbreaking membership scheme based on crypto tokens with only one-time fee granting the right to use or rent out available workspaces.
The first workspace is already running in the very heart of Amsterdam hosting passionate teams of entrepreneurs, including Just Sports Marketing, Första and Quiqup. I heard they found this model of co-working as really valuable for their businesses. In addition to the location in Amsterdam, Primalbase is planning to open co-working spaces in a number of other locations which were found as the most beneficial for tech entrepreneurs – Berlin, London, New York, and Singapore.
Primalbase ecosystem allows for more active interaction and encourages collaboration. It makes the core of Primalbase business model as well – infrastructure is divided into rentable offices, based on classic real estate relations, and non-rentable co-working spaces, based on crypto-economic relations, which are reserved only for Primalbase community members.
The latter, however, can be released by community members for a temporary ownership through a rental of Primalbase token.
Ivanov comments to Cointelegraph:
“Primalbase is a real estate project, while it is also a Blockchain community project. It offers a rather unique product - on the one hand, it is an access to co-working, on the other hand, it is a financial instrument, which can be traded on the market. There hasn’t been anything like this before. It can unite many startups within the community. Many cryptocurrency startups are getting interested in sharing Primalbase co-working spaces, soon we might see the development of a new environment for cryptocurrency businesses, that will go out of the virtual world into the real one, in particular, geographical locations, it will be interesting.”
For more flexible economic structure
The mission of Primalbase project is indeed twofold – the team is creating a new type of financial tool for the industry that has been there for a long time, while also moving emerging industry. The industry so far has been existing in the digital world, out to the real one into particular locations, world capitals, setting to create new innovative hubs.
Primalbase tokens have some very intriguing features. They are connected to one’s membership, and it gives an opportunity to transfer this membership to someone else for a limited time without losing it while getting profit. These schemes allow creating a new and very flexible economic structure, which will certainly look interesting for investors.
“Integration of tokens into this model allows for greater simplicity and transparency. You can, of course, agree with a person without a token but with a token, it is easier. This is going to be the very first project which will be pushing leasing of financial instruments through Blockchain, it is a very interesting scheme.”
Ivanov thinks that the Primalbase project is going to demonstrate a fast expansion, triggering the development of a new business ecosystem and creation of a new economy.