Privatix ICO Review

Privatix ICO Review

Privatix is building a decentralized VPN Network with the first Internet bandwidth marketplace powered by own crypto-economy.

BASIC INFO

Name: Privatix
Symbol: PRIX
Hard Cap: $30,000,000
Token Supply: 10,000,000 (fixed) / 83% sold to public
Presale Date: Presale is finished. (14-Sep-2017 until 28-Sep-2017.)
Presale Price:
1 ETH = 160 PRIXY
Presale Bonus: 60%
ICO Date: 19-Oct-2017 until 16-Nov-2017
ICO Price:
1 ETH = 100 PRIXY

Whitelist: No whitelist. Everyone can participate.
Token distribution date: Immediately after contribution.

Social Interest (21-Oct-2017):
Twitter: 1618
Telegram: 1148
Reddit: 30
Bitcointalk: 2 pages

IDEA

• Privatix Network is a decentralized and 100% autonomous P2P VPN Network on blockchain with the first Internet bandwidth marketplace powered by own crypto-economy.

• Any user can sell his spare or idle Internet broadband to the Network and get paid for it instantly with crypto. The payments come from buyers, who purchase the bandwidth via third-party applications or directly.

• Privatix goal is to totally change the consumer VPN market, enabling people to use VPN for free by sharing their own network, or pay less than $5-10 per year (10-20 times less than current centralized VPN prices).”

• Privatix plans to integrate decentralized CDN (Content Delivery Network) on blockchain based on the Privatix Network exit nodes. The average price for content delivery today is $0.05 – $0.30 per GB. Privatix Network team hope this will allow price slashing 5 or even 10 fold.

• Payments for bandwith (buying/ selling) between Privatix Network participants will be subject to commission fee of up to 1% of transaction price in PRIX. This fee will be used for maintenance and future developments.

Use Example​ ​1:
– Hans, a regular internet user from Germany, has a 100 Mbps channel and he does not use it completely, especially at night.
– He has already paid his ISP so no additional costs are required.
– Hans installs the Privatix Network software and thereby becomes an Agent.
– On the other side of the world is a Chinese internet user, Lee.
– Lee does not have access to many internet sites because internet censorship in China is very strict.
– Lee installs a VPN program based on the Privatix Network and through it buys broadband from Hans. Now he can surf the internet via the encrypted German VPN and get access to all internet sites.
– Hans receives payment in PRIX as Lee using his free bandwidth.

Use Example​ ​2:
– Alex has an internet hosting business. He rents 10 dedicated servers and sells hosting services for his customers, e.g. site owners.
– All servers are already paid for but their bandwidth is significantly underused.
– Alex installs the Privatix Network Agent software on all his servers and starts selling his bandwidth.
– Another user, Ivan, the owner of a video site, has to rent expensive servers so that people can watch HD video content from around the world.
– Ivan, in order to save on data transfer, uses a product based on the Privatix Network – a CDN – which allows him to buy cheap broadband from hundreds of Agents like Alex.
– As a result, Alex fully loads his servers and receives profit while Ivan cuts content delivery costs.

MY THOUGHTS

• They raised 1,608 ETH in the presale with the presale hard cap being 1,875 ETH (3% of total tokens offered to the public). Apparently the presale ended in 3 minutes, so I’m not 100% sure why the hard cap was not reached. I don’t think this tells us a lot since there was only a small number of tokens being sold in the presale. I don’t think there was a cap in the presale, so it would be interesting to see how many investors participated in the presale. It could be that the whole allocation was bought from one or two whales (big investors).

• The crowdsale started on 19-Oct-2017, and for the first 48 hours there is a bonus of 40%. There is no whitelist. Anyone can participate. The 48 hours bonus will expire in about an hour from now and so far they raised 10% of their hard cap. Given that this is the only chance for investors to get a 40% discount, I don’t think this is a good result. It indicates that they might fail to reach the hard cap and that there is no unmet demand for the PRIX tokens.  This might affect the price of the token negatively once it reaches the exchanges.

• Since the tokens can’t be mined and the supply is fixed, the price of the token will only appreciate with the increase in the demand for the service.

Concerns

1) The social interest and the way the crowdsale is unfolding shows no hype about this project.

2) There is no Minimum Viable Product (MVP). Alpha version of the software is planned for Q4 2017. This alone makes it a no-go for me.

3) Potential legal problems for exit nodes owners. Somebody can connect to your computer to do hacking or download movies illegally or worse. The team issued a Medium article which is not comforting at all:
i) They plan to give the node owners legal document which transfers responsibility to the company.
ii) They plan on offering legal insurance and help in the courts.
iii) They will research the local laws in the various countries as a means of avoiding excessive legal interference. If Torrents is banned in Germany, for example, they will switch it off by default on the agent’s software side.

All these “solutions” are actually worrying and just serve as to reassure me that this is a huge issue. None of these solutions stop the sharp reality of police knocking on your doors in the middle of the night or picking you up in the office in front of the colleagues for something you haven’t done.

4) They are planning to introduce a lot of additional services and products. Cheaper CDN service could really be useful for smaller websites that are keen on cost savings. But overall, it just sounds a bit ‘overpromising and underdelivering’, since they don’t even have an MVP currently. In the whitepaper, they are also mentioning too many times how big the market is for industries they plan on serving. Usually the companies do this when they have little to show, hence I usually take this as another red flag.

5) They already have an established business within VPN industry. Their free Privatix VPN service has 750,000 users in total, out of which some are paying for Premium service (faster speeds). In addition to this, they have a Temporary Email Service which is a disposable email service which allows to receive email at a temporary address that self-destructed after a certain time elapses and 5VPN which is an extra secured VPN service for professionals.  They are willing to sell all those businesses after the successful ICO. It makes me ask how valuable those businesses really are and do they just want to cash in via an ICO.

CONCLUSION

• Overall, I like the idea of cheap VPN and CDN services, and that the team has established businesses outside blockchain industry currently. I also do believe that the privacy will be more and more important in the future. However there are too many red flags with this project, with the tree main ones being:
1) No hype. For an ICO investment to have a chance of being successful there should be a hype, and there is no hype about this project, and even that is not a guarantee of success, and especially so in the current market.
2) No Minimum Viable Product going into the ICO. It’s just whitepaper ICO.
3) Huge potential legal issue for the bandwith sellers in their future VPN ecosystem.

• For flipping: NEGATIVE

• For long term holding: NEUTRAL

 

Additional resources:
• Team explanation on why do we need Privatix:
https://medium.com/privatix/why-do-we-need-privatix-1213483c4139

• How the team plans to deal with the legal problems for exit nodes owners:
https://medium.com/privatix/legal-protection-for-exit-nodes-owners-7d7d730b42ac

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One Response to Privatix ICO Review

  1. DENNIS says:

    Hello BT, thanks for the great review and your thoughts on the exit node for bandwidth sharers, this does look like a stumbling block for me and I was looking at Privatix to see if I can see a demo or product for testing but as you said its just a whitepaper – if its such a great product then release it and then do an ICO..anyway.. thanks for the update

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