Value of BLOK building a robust blockchain portfolio My thoughts on the value of BLOK.V building a robust blockchain portfolio: For those who don’t currently understand the full value in BLOK investing in blockchain technology start-ups, please see the following breakdown.
As part of its 4-pronged plan, BLOK is targeting investments in blockchain technology companies that are at the development stage. That means that these companies are working on developing their tech (early, mid, or even final stages) and have not yet completed a pre-ICO or ICO round of financing.
Initial Coin Offering (ICO) ? So that brings us to the question of what is an ICO. An Initial Coin Offering (ICO) is a relatively new method used by start-ups to raise capital by issuing coins (cryptocurrency) or tokens rather than shares. This is a cheaper and less regulated method used for raising capital. Essentially, investors pay cash (sometimes bitcoin or ethereum) to buy the company’s new coin, which becomes tradable, with the expectation that the coin will increase in value as the company continues to develop its technology and hit important milestones. The mega win for coin/token holders is the blockchain technology getting adopted and becoming commercial.
These pre ICO blockchain companies are very sought after and actually being able to invest in one with solid technology and a strong chance of adoption is like finding a goldmine. A blockchain company like FINZAT fits that definition to the tee.
Short term & Long term value of FINZAT for BLOK.V ? The reasons why I consider BLOK’s investment in FINZAT like finding a goldmine is as follows:
* First, when BLOK invests in these pre-ICO companies, it gets allocated a portion of the ICO round of financing. For example, in the case of FINZAT, they are planning to complete their ICO round in mid 2018 for an approximate amount of $30M. I personally think a company like FINZAT will get so much interest that it will raise way more than 30M in their ICO.
I have been debating the matter with other investors using recent ICO’s that hit the market and the majority think FINZAT could potentially face so much demand that the raise is up to 10 times the target amount ($200-$300M). But for the sake of this illustration, I will stick with the amounts that are close to what is detailed on BLOK’s website.
https://www.blockonecap.com/wp-content/uploads/2018/01/Block-1-Deck-Release-V2-Jan-11.pdf We currently do not know what is the exact formula that would be used to allocate BLOK’s portion of the coins; however, IMO an educated estimate is that BLOK’s portion of FINZAT’s ICO would be worth approximately 6-12M at the issuance stage. That would be already 10-20 times BLOK’s initial investment in FINZAT. Those coins will increase in value with every milestone achieved by FINZAT. So by 2020, when FINZAT expects to achieve profitability, those coins held by BLOK can be worth 10 times or more.
So basically, BLOK’s initial investment of 600K, could be worth 6-12M at ICO issuance (expected mid 2018), and potentially worth 60-120M by 2020-2021 only based on BLOK’s ownership and retention of FINZAT’s coins.
It is important to note here that for a company to have a solid ICO round, the blockchain technology has to have mass appeal and be well marketed. In Finzat’s case, I do not think there is any better industry for blockchain application than mortgages. The savings in both time and cost are immense and easily understood by almost anyone above the age of 16 years old. So I definitely think they will hit it out of the park on this one.
* Second, in addition to the coins, BLOK also get’s allocated their respective proportion (40%) of the Net Income of the company. So once profitability is achieved, BLOK gets their portion. Thus, BLOK is exposed to the upside when the technology gains traction.
Just hitting the expected 20K loans by 2021 that BLOK has outlined in their investor presentation can achieve the aforementioned returns for BLOK. However, Just imagine, that FINZAT’s blockchain technology disrupts the US mortgage industry which had 8.4M mortgage originations in 2016 and you’ll see the possibilities. I am in no way saying that this will happen in the near term. But it definitely gives you an idea of the possibilities by even getting access to a small portion of that mortgage industry.
I personally think that FINZAT is taking the right approach by penetrating the marketplace by partnering with the US housing agencies. These early partnerships will give the company a lot of credibility in the marketplace.
What about BLOK’s second investment in blockchain technology: OMAAT ? As mentioned earlier, it is very important for the blockchain technology to have mass appeal and be well marketed in order for it to get the best bang out of their ICO round. Additionally, an increasing audience of investors also has a strong impact on the value of a company’s coin once it trades.
This point is very important when it comes to BLOK’s second blockchain investment in the London based blockchain company OMAAT. OMAAT's business model is to help preserve the Rainforest through its registered brands 'Cuipo', 'D41M' and 'CuipoCoin'.
The company was recently featured in forbes magazine and is currently planning for summer 2018 with over 30 global festival partners in Croatia, Brazil, Uruguay, Mexico, and more. In the forbes article, the company stated that they we will go live at over 2,000 individual events within the next 12 months.
With just 1,000 tickets sold at these 2,000 events, revenue generated would be approximately $2M (1$/ticket) to OMMAT and with 5k tickets that number goes to $10M. That is only for the events that are currently planned for summer 2018 under just the ‘dance for 1 meter’ brand. When OMAAT actually scales their technology and expands, revenues can go up quite significantly.
It is also, worthy of note that the D41M brand is not in the early stage of just trying to get recognition. OMAAT has definitely made some strides over the past year and has been part of some top-notch events.
Just read the following portion of the forbes article from November 2017: IB: Do you have a favorite artist memory, in regards to the initiative, so far?
RP: "I would have to split that equally between two different events, one being the
opening night of H club in Ibiza with Luciano. It was
most anticipated event of the summer and
the support that the owner, Yann Pissenem, and his team gave D41M was fantastic.
On top of that, the
HRBR Project on Governors Island in New York is one of the most impressive venues in the world. Eddie Dean, the founder, has created something truly mind-blowing. Seeing Tisto play to a
sold-out crowd with the Manhattan skyline behind it was a highlight of the year and knowing D41M was a part of it was a fantastic feeling. We can't wait for what 2018 has in store for us!"
https://www.forbes.com/sites/isisbriones/2017/11/17/dance-for-1-meter-saves-rainforest-founder-interview/#18b0d1555e6b Going back to my earlier point regarding the impact of having mass appeal and a strong marketing strategy on the success of ICO; OMAAT checks all the boxes.
With an idea (conserving the rainforest) that already has mass appeal and with coverage in the likes of forbes, OMAAT has a very strong chance of achieving very strong demand for its ICO.
Which in turn, in my opinion, will give BLOK an estimated 5 to 10 times return ($2.5-5M) on its initial investment at the ICO stage alone. As previously illustrated, as the company scales up, the coins held by BLOK will increase in value and BLOK will also get their portion of the Net Income once it hits profitability.
In Conclusion: While, I personally think that the price of Bitcoin will eventually go up (with some volatility of course) and that BLOK’s mining business will be very profitable. The opportunity at hand with BLOK’s blockchain investments and the access to these pre-ICO opportunities cannot be undermined.