Today we will discuss a project which is going to bring Etherum’s blockchain currency — ETH — to masses. It’s called Dether. The most interesting thing about Dether is that it uses already established an infrastructure of Ethereum and do not want to reinvent the wheel. From our point of view, it’s their competitive advantage to other players in the market.
Let’s start with the basic terms regarding their ICO. Token Sale event will start this week on the 7th of February and will be only 7 days long up to the 16th of February or till the Hard Cap is reached. 15 000 ETH (approx. $12 450 000 at a current exchange rate) is the amount declared as a Hard Cap for Dether. Minimum financing (Soft Cap) declared at 3 000 ETH level. Price per token will be calculated at the end of sale using the following formula:
((Total ETH Raised in Public Sale) + (3,956 ETH *1.15) + 490 ETH)/60,000,000
Problem & Solution
As a project which is to provide mass adoption for cryptocurrency usage, Dether identified the following problems:
- Difficulties for an average when buying cryptocurrency. To buy cryptocurrency today, average users must pass a lot of different registration processes. Exchanges are necessary chain links in this process and to deposit money and get verified can take weeks or even more. The volatility of the market could be defined as a problem. But as we’ve seen in the last few weeks, volatility could represent more an opportunity than a problem, especially in cases when the value of ETH may change dramatically within a very short period of time, even in minutes. In order to interact with the Ethereum blockchain, people should have an ability to buy ether as quickly as it is possible, without huge transaction fees and that time when they willing so.
- Intermediaries, such as different types of financial institutions are playing major roles in a process when users are going to buy and sell ETH using crypto exchanges. The easiest way to have cryptocurrency in your pocket is to use any of the existing online exchanges and mostly it requires bank transfers, despite the fact that the main idea of cryptocurrencies is to bypass centralize organizations, like banks.
- The problem of unbanked people is another issue for Dether. If you do not have a bank account or CC or even do not have an ability to get one, you won’t be able to buy cryptocurrencies, except mining a necessary amount (which is expensive or using p2p and personal meetings with cash in hands). This problem addressed to more than 2 billion people in the world.
Dether is building a global ecosystem including everything needed like ETH buyers, sellers and physical stores who want to use cryptocurrency as a payment method. To participate in it you need have purely cash. It will be open system with map where sellers will be marked, so buyers can easily reach them and change cash for significant amount of ETH. Dether will provide an infrastructure for everyone to inject the Ethereum technology into their everyday life. Dether will be available right on the smartphone. No bank account, no credit card needed to buy, sell or spend ether at physical stores.
Some details about Dether solution:
- Sellers (will be called PTM or People Teller Machine) will be placed on the map, pretty similar like Uber service, and will be free to set up their own ETH/fiat rate and their own fees.
- Not only sellers could be on the map but any stores will be there too. As popularity of cryptocurrencies growing more and more companies are accepting it. So you’ll be able to spend your ETH right at the shop or a cafe.
Dether is going to be fully decentralized and p2p system of exchange, regulated by system of smart contracts, so blockchain will held the following operations:
- Trading. When you buy or sell crypto to someone else, you don’t need to use exchange account anymore. Just directly send it from your personal wallet to the buyer’s personal wallet.
- Messaging. All discussion between the involved parties will be written onto blockchain also. It is necessary to make it transparent for any case of arbitrage. By the way, arbitrage will be third party service also based on blockchain, as Dether declared.
- Reputation system. To provide buyers with trusted information about seller. Buyer will be ensured that if its written that he is a good seller, so he is.
As you can see Dether is very ambitious project with clear and transparent goals to make life of the unbanked people easier and “banked”. They’re not doing new cryptocurrency or something special — they just expand what they have.
Few problems which will face this project:
- If we are talking about emerging countries, there will be not much sellers, but demand will be huge. So exchange rate (which rate is totally on the sellers opinion) will be so huge as a demand. It’s like now in Nigeria or Zambia. Few month ago 1 BTC was from 40 to 200 % higher that worldwide. Dether model will work properly only in developed countries, but there a lot of people have bank accounts and CC so they’ll use dether only for any provided specials instead of traditional exchanges.
- When you trying to exchange cash for crypto, its becomes dangerous for the buyer because the probability to be robbed increase a lot. Reputational system won’t guarantee your safety.
So Dether will be good project not for declared goals. Probably their target market will be Europe and USA, but to receive a lot of customers they should make an unique offer for them. We’ll keep an eye on this project and recommend you to check it out and make an investment decision. Because, it has strong perspectives despite of those 2 mentioned problems.