If you have been following Luxuo’s new finance section with the latest alt-coin – the Estcoin, a sovereign “bitcoin” proposed by the Republic of Estonia, and you’re wondering what an Initial Coin Offering (ICO) is and what the hype is all about, we have Kristjan Kangro the CEO of Change Bank, a new cryptocurrency project scheduled to launch with an Initial Coin Offering  this September.

With so many alt-coins and an equal number of ICOs, Luxuo met with Kangro to talk about the hype surrounding crypto-currency and what it means for Change Bank going forward.

Kristjan Kangro, Change Bank CEO

Initial Coin Offering: New Crypto-currency Change Bank to Launch in September

Luxuo: How would you explain Blockchain and cryptocurrency to a person who knows nothing about the subject or even heard of bitcoin? 

Kristjan Kangro, Change Bank CEO: Blockchain and cryptocurrency are difficult to understand without a more lengthy explanation but the easiest way to think about it is in the context of decentralization.

At the moment a lot of political power and financial power is centralized in one point or in a group of people – for example the richest 100 people in the world have more wealth than the rest 50% of the people in the world.  This is due to the way the current financial system is structured, inevitably, wealth gets concentrated at the top.

Facebook is a good example of the structure of the current financial system – if you were an early investor in Facebook you would be a millionaire now but to be an early investor in Facebook you had to be part of an elite circle – which is would be impossible for 99.9999% of the people in the world.

With Initial Coin Offerings or ICOs this is no longer the case – anyone essentially has the potential to be an early investor in the next Facebook and gain a piece of the pie. This is why there is so much hype now – people have equal access to opportunity in this case; Essentially anyone can be a venture capital investor and choose projects they want to invest in. It’s gone to the extent that traditional venture capital firms have been forced to follow the trend – in case of a recent ICO Filecoin, investors could co-invest together with Sequoia capital, a leading venture-capital firm.

Ofcourse not all projects will be Facebook but at least now you have the chance to participate.

Ok, so if I was smart enough or lucky enough to tell which team had potential – I could invest in the next Facebook, or Uber or AirBnB ?

Yes, this is now possible because of Initial Coin Offerings like the one Change Bank is launching in September.

What is the process which makes a cryptocurrency investment possible?

What happens is each project releases their own cryptocurrency to the public through something called an initial coin offering (ICO) which is a new way of venture funding. The purpose of this cryptocurrency in our case – Change Coin – is to be used on the Change Bank Platform. Essentially in the future if people want to use the Change Bank Platform – they have to use Change Coin.  However, when we do the initial coin offering – the number of Change Coins we create will be final and finite. There will never be more Change Coins – so let’s say you buy 1000 Change Coins (CAG) at the start of the platform in the ICO and they are worth around 100 dollars (for example), as the platform grows and there are more people interested in using the platform – the demand for change coin is going to increase – however because it is impossible for us to make any more change coins  – new users have to buy change coin from the owners of Change Coin. The more demand the higher the Chance Coin price goes up according to simple demand and supply principles.  You may have bought at for 100$ but as the demand increases it will be potential $1000 or more. Bitcoin for example was $10 at a point now it’s $4500 – as more people want to get it but there is a finite number of Bitcoin out here.

There’s no downside? A coin asset appreciates with time ?

Yes but please be mindful that it can also depreciate if the team doesn’t deliver or if there are new events which negatively affect the company .

Why do you think about ICOs – is there a bubble developing? 

As a new method of funding, ICOs are an amazing innovation in my opinion. It used to be that there were two traditional ways of getting investments: through loans or Venture Capital – in both cases you have to ask permission to be innovative – you have to ask permission from people that don’t necessarily have the best interest of the project in mind or necessarily care about success of the project and care more about returns.

With ICOs the need to ask someone who “holds the capital” goes away – as long as you can find a community that understands your vision and supports you, you can go ahead with their support. This new breed of investors are not located in one place – they are everywhere in the world and because they get a piece of the early pie, these individuals are motivated to see you succeed, if you succeed, so do they. In a way, they have become part of the project – they spread the word and they convert more people to your cause.

Each project has an apple effect where people become hardcore followers and go out of their way to help you solve problems and make sure you do indeed succeed. What you have is something that has never happened before you have a company better yet a team working together with their customers and investors where all of them benefit financially.

Change Bank is essentially an application or App

How can we decide if Change Bank and Change Coin will benefit us financially?

Change Bank is the vision we have at the moment for a Truly Decentralized Crypto Bank. What we are essentially is an application or App that functions like a wallet where you can store crypto currencies, the wallet is linked to a card which you can then use to purchase things as a normal card in the real world.

At the same time, this app also allows you to connect to a marketplace where you can decide to invest in a series of financial services products such as ETFs managed by a robo advisor Smartly, or you can fund micro loans in Indonesia via Danabijak  or you can invest in property in Singapore and Estonia via BitofProperty.

There are the first 3 partners on the marketplace and as we move along we will and more and more. What we are doing is we are onboarding already existent FinTech Business and giving you access to them through a seamless experience– so it also acts as a discovery portal into different investment vehicles.

Many different payment options with Change Bank’s card

Do you think people will be open to spending and using cryptocurrency by way of card ?

The response so far has been amazing – there 2 other companies doing the card part of the business in Asia and they have grown at an immense speed – they came on the market 3 months ago and the value of their coins has already gone up by more than 10 times. We are confident that the size of the pie here is massive and we are aiming to be number 1. So far the market seems to have massive appetite for this type of business and with our early marketplace advantage we are confident that we will do well.

If someone wanted invest in your upcoming ICO what would be the best way to do it ?

The Change Bank ICO will take place from the 16 SEP to the 16 OCT – we will be exchanging Change Coin for Ethereum. Ethereum is the #2 cryptocurrency at this time after Bitcoin.  The technology at the base of Ethereum is focused on smart contracts and we build our project on top of it, as such you will be able to receive Change Coin (CAG)in exchange for ETH.

If you are new to cryptocurrency please know that you first need to purchase ETH with traditional currency from a website such as CoinBase, CoinHako, CEX.IO or Lykke APP  ( I personally prefer this as there are no exchange fees) and then transfer those coins to My Ether Wallet – from where you will be able to send them to an address we give you at the time of the ICO.

For those interested in Change Bank’s upcoming initial coin offering and are looking for more details and have questions on the process of investing in cryptocurrency, you can visit change-bank.com where you can not only drop them your queries but also sign up for a newsletter and receive a FREE comprehensive guide about the ICO.

There is also an active community on telegram, where Change Bank addresses and answers any questions that potential investors may have. Click here for Telegram access.