First Bitcoin Corp has put out a couple of new releases . The first relates to an expansion on the hard fork offerings. There’s a lot of uncertainty in the bitcoin spec right now as to whether a hard fork will be implemented, and if it is what it will look like and what impact it might have on the respective value of the resulting assets. First Bitcoin has basically taken every potential outcome and created an altcoin that represents each. Traders that bet one one outcome can buy the outcome that represents their expectations and then cash in when/if a hard fork happens in line with their (and it’s nothing more than this right now) guess.
The second, and the more interesting in our view, is the company’s decision to set up as an underwriter of initial coin offerings (ICOs). As their name suggests, the concept of an ICO is similar to an IPO, but coins are issued in place of shares. A company holds an ICO to raise development capital, and as the company matures and increases in value, so does its representative coin. It’s a nice idea, and one that’s taking off, but as with anything, it’s ripe for neglect.
First Bitcoin is offering to underwrite ICOs, and basing its decision as to whether it will underwrite a particular ICO on a vetting process. The idea is that the company’s vetting process will add a degree of reliability to the company’s that are ICOing, and that this should help coin traders differentiate between the real deal and a scam.
Again, this is a pretty smart idea, but at this stage, it’s nothing more than a(nother) marketing soundbite. We’re going to have to wait until the company serves up some more information as to what the vetting process involves, and develops a track record of underwriting reliable ICOs, before we can speculate as to what long term impact this move will have on the company’s valuation.