Blockchain technology has created an extremely efficient alternative to traditional banking systems. The unique way in which cryptocurrencies function has allowed individuals to effectively “become their own banks” and store value without the need for a centralized third party.
It’s clear that if the adoption rates of cryptocurrency increase and merchants begin accepting high market cap cryptos such as Bitcoin, banks may indeed become a relic of the past. With the development of several blockchain based insurance and peer-to-peer lending platforms, it’s possible that the entire finance industry could be significantly disrupted.
A new initial coin offering, however, appears to be offering investors an opportunity to invest in a traditional bank based on blockchain technology. The Block Bank platform is a strange offering in the world of ICOs, and apparently seems to miss the entire purpose of cryptocurrency in the first place.
In this article, we’ll take a look at the Block Bank platform and try to find out exactly what they’re trying to achieve in order to help you make an informed decision on whether the Block Bank ICO is worth investing in.
What Is Block Bank?
Block Bank is a new initial coin offering that has already raised $3.2 million USD in private investment in order to secure an international banking license. The Block Bank platform promises to be the future of banking, and outlines their project as a traditional bank based on blockchain technology.
Assessing the Block Bank white paper, however, reveals that the Block Bank project is not really bringing anything new to the table. All of the key benefits outlined by the Block Bank platform, such as transparency and immutability, low transaction fees, faster transactions, security, and pseudonymity are all already delivered by solutions such as Bitcoin or Ethereum.
The only point of difference between Block Bank and other basic cryptocurrencies is their focus on providing business loans, but this issue is already solved in a more elegant fashion by initial coin offerings such as Debitum, with far more oversight and documentation.
The Block Bank platform appears to completely miss the point of cryptocurrency and distributed ledger technology entirely. Instead of attempting to decentralize slow-moving incumbent systems and provide individuals with an independent method of managing, storing, and distributing wealth, the Block Bank platform simply wants to create a traditional centralized banking solution in which wallets replace accounts. The platform doesn’t even give users control over their own private wallet keys.
The Block Bank ICO
The only salient feature of the Block Bank ICO is that it appears to be focused on regulatory compliance. All funds generated in the Block Bank ICO will be held by a compliant trustee- in this case, a UK solicitor regulated by the Solicitors Regulation Authority of England and Wales.
The Block Bank pre-ICO is already underway, and runs from the 20th of November 2017 to the 20th of December 2017. Up to 2,000,000 tokens will be released in this period at a price of $0.20 USD each. Block Bank promises BBRT token holders a share in up to 80% of Block Bank profits.
Block Bank Verdict
Ultimately, the concept outlined by Block Bank is a losing horse. There’s no need for a centralized authority in the blockchain environment, and the platform itself doesn’t deliver any features whatsoever that aren’t already provided by successful cryptos. Even the lending services offered by the Block Bank platform are outdone by efforts elsewhere in the industry.
While the idea of sharing Block Bank revenue with token holders may sound appealing, the platform would actually need to generate profit in order for this to be possible. Does the Block Bank ICO deliver any unique, innovative, or disruptive solutions? No. Should you invest in the Block Bank ICO? Probably not.