Bitcoin uses increasingly complex calculations to "extract" new currencies, consuming huge amounts of electricity and server time to create a digital currency that people are willing to own.
A Denver area startup wants to transform the entire equation in its head, taking the money raised by a crypt to finance oil and gas wells, precious metal mines, clean energy technologies and development of blockchain software. The revenue generated by the investments in turn generate the value of the new cryptocurrency.
"A lot of people question what the bitcoin gives to its value," said Alan Forbes, co-founder and president of Denver. Blockchain global activities. "Bitcoin and ethereum are legal currencies, there is nothing to support them."
At the beginning of this month, GBA launched a first token offering of its Xscrip token. The goal is to raise $ 45 million for its parent company, Blockchain Holdings Inc., so that it can invest in a mix of manufacturing activities, mainly those of Parker's independent energy partners.
Forbes is also president and CEO of the company, which has developed a geothermal fuel cell technology that claims to be able to produce electricity more efficiently to power the drilling sites and create the huge amount of steam needed to increase production in bituminous shale formations.
The company also has manufacturing rights on the equivalent of more than 1 billion barrels of oil and gas on privately owned mining rights in the Rio Blanco county. Most of Western Colorado's oil production looks like natural gas, which has been affected by falling commodity prices since 2008.
Blockchain Holdings also has the rights to buy an interest in a gold mine in Alaska and has investments in a blockchain application developer called Iperium, said Forbes. Those are designed to provide further diversification for XScrip token holders.
"Is it synergistic and will support the increase in the value of money?" It is the question that the founders of XScrip have and will continue to ask, said Gary Sumihiro, founder of Sumihiro Investments, a management consulting firm and executive vice president of global strategic planning at GBA.
Digital currencies have been on a wild ride this year. Bitcoin, which skyrocketed at the end of last year to reach a maximum of $ 19,783 in December, is now trading for around $ 6,300. These types of oscillations make it difficult to use cryptocurrencies as a means of exchange, and much less a store of value.
To address this volatility, some advocates of digital currency have proposed tokens backed with gold or other products. This could reduce volatility, assuming that the gold bar is actually in the vault, but does not offer much of an upside.
XScrip supporters want to use the money collected from the sales of tokens to buy the gold mine or the mining company rather than the physical gold, the production of oil and gas rather than the barrel of oil .
Because investments financed by money that offers cash change, Blockchain Holdings will retain 40 percent to finance future investments and pass 60 percent to token holders in the form of a dividend, Forbes said.
But instead of adding other tokens, holders will receive an increase in the symbolic value equivalent to the dividend. That "dividend deposit" should postpone taxes until the tokens are sold, Forbes said.
The regulators have blocked several initial offers of coins in the last few months, arguing that they were securities offerings in disguise. GBA fully recognizes that it is offering security and has filed a registration D for national investors and an S registration for foreign investors, Forbes said.
"We had a high level legal guide, and we knew without a doubt that we would become a security token, and we took the time to do all the work to be fully compliant," Forbes said.
Investors must be credited in the sense that they have a net worth of $ 1 million, not counting the value of their homes, or income of $ 200,000 a year in the last two years. GBA is aimed at institutional investors, high-net-worth investors and family offices,
. After a one-year holding period, token owners should have much greater liquidity than they would in a private equity offering. The company will use the Bancor Liquidity Protocol to automatically quote XScrip tokens and instantly convert them to other currencies, without transaction costs, Forbes said.
Tokens behave more like common shares that way. But there will be some important safeguards available for owners of public companies, such as the possibility to vote for the directors, a point on the salaries of the managers and the possibility to ratify the offers of acquisition.
Jillian Sarmo, spokesman for the Colorado Securities Division, after a review, it appears that GBA is offering tokens under the rules set for private placement of securities and revealed the risk associated with that type of offering.
"From our point of view, there is currently nothing to indicate that they are in violation of state or federal securities laws," he said.
But he added that much uncertainty still surrounds cryptocurrencies and people should not invest without a full understanding of the risks involved, including the potential for losses.
"Generally, the Division would not recommend investing in an (initial money supply) unless the investor is in a position to risk losing his entire investment," s
Collins Brown, co-founder of the Denver Market Protocol, which provides exposure to derivative markets using cryptocurrency, said that experimentation with tokens exploded in the last year.
They can be connected to almost all assets. But traditional investors may feel more comfortable with a currency supported by something they already understand and can put a price tag.
"Key evaluation methods are still under development for cryptographic resources, so in the meantime tokens representing traditional resources will be easier for markets to evaluate efficiently," he said.