Speaking with Universa community, we see the same misunderstandings (and sometimes even myths) very often. Let’s cover them in more details, and also understand Universa a little bit better.
Myth 1. Universa’s “ICO”
In Universa, we don’t often use the word “ICO” (though we used it initially – before the actual token sale have even started, while the word was on the hype and everybody thought of all the processes like this as “ICO”s no matter of the internal details). When someone applies it to Universa, we try to correct them and use “Token Sale” terminology.
But why? Why so insistent? Isn’t that basically just… the same?
In fact, no, and here’s the story why.
Even though the “ICO” word is so understandable by many, it fits us too bad. For the simple reason: it is an abbreviation of three words, and two words of them are not applicable to Universa.
Not a coin
First, Universa (obviously – to anyone who is aware of the Universa internal architecture) doesn’t have a “coin” (and our UTN token is “a token” rather than “a coin”). The terminology may vary and may be rather subjective, of course (as everything in the blockchain world; as even the word “blockchain” itself); but as for me, I think that the “coin”, or “cryptocurrency” in a blockchain, is some special first-level entity. First-class citizen in the architecture. Heritage of the Bitcoin network, which was designed solely to “transfer coins”.
In Bitcoin (network), the Bitcoin (coin) is obviously a first-class citizen. The whole blockchain is centered around passing the Bitcoins as a currency. It’s like that hammer from the “if you have a hammer, every problem looks like a nail” saying – and many projects fell under the delusion of “let’s try to think of every people interaction as a money transfer”.
And even in Ethereum (network), the ether (coin) is first-class too.
- In the blocks of blockchain, you can register new dApps/execute dApp calls,… as well as transfer the value of ethers. If the system was made in a way that ethers are just some one more ERC20 dApp, that wouldn’t be the case; but the operations with transferring ethers are first-class operations. You, technically, have two subsystems in Ethereum (or two kinds of data in the Ethereum block): one for ETH transferring and another one for dApps running.
- The gas fee amounts paid to the miner (and obviously, the whole mining fees) are calculated in ethers (or weis, which are just the subdivisions of Ethers anyway).
In our case,
- UTN is nowhere a first-class citizen in the architecture, there is nothing special with transferring UTNs; they are just a rather regular “URC20” token. Anyone can clone its code and register “another UTN” (except with very different registration dates – and with a different hash id therefore). That won’t be compatible with a real UTN, of course; but that will be a very similar token.
- (In Mainnetwork) the primary fee unit is U,… and only U. The nodes calculate how many Us you need to consume for a transaction, and you must have the “U consumption” contract attached. There is nothing else in the blocks/transaction packs/parcels besides Us, there are no UTNs there. Of course, if that’s not the “transfer actually the UTNs” transaction.
Well, that’s it for the “coin” part. Or no?
There is also actually quite a different purpose of UTN, compared to the coins.
During the sweet times of Bitcoin getting its popularity, everybody spoke about “how money it is”. Making the world with decentralized money where everyone can pay with them and every transaction is immediate and cheap… Paying with Bitcoins in the groceries, first web-stores supporting the bitcoins as a payment method… and yes, you still remember those two pizzas each worth 5000 BTC.
The whole utilization of Bitcoin, from the day one, was “to pay for everything”, a general-purpose payment method.
While the whole purpose of UTN, from its day one, was “to pay for the Universa network utilization”. What makes it a definite utility token.
The “general-purposity” of Universa is not that “our UTN tries to be a worldwide money”. Quite not like that.
It’s the whole Universa blockchain that tries to be “the world wide smart contract validation solution”.
And UTN is quite happy to be merely a payment method for it.
(But isn’t it actually the “U”? No; stay tuned and learn why).
But most interesting of all in the “ICO” acronym, is the word “initial”.
Not an initial
The whole boom of ICOs has started when people found out how cool it is to launch new blockchains, and to pre-sell “the first block” ownerships.
But when it started, the PoW/mining was on the top of the hype. You just could not make a blockchain which doesn’t take into account the interests of the mining/hashrates/mining pools, and all that stuff. Every blockchain was mineable, and it was characterized by something like “uses an algorithm AAA; does BBB GHashes/sec on some reference hardware”. And everyone loved to mine the new altcoins, because it was a simple way to “exchange your CPU/GPU time to money”. “Get rich fast”, having just a modern GPU.
Without the mining fees to the miners, there wouldn’t be a lot of node owners in all those altcoins to support the networks.
But that leads us to some extremely obvious outcome: every new blockchain/network would make a presale of the coin,… and then, when the network is launched, it would start mining newer and newer coins for that blockchain. The stability of the network was based on how does the blockchain “creates the new coins from thin air” and distributes them over the miners/node owners.
That is, every blockchain would be noticeably two-phased:
- Pre-selling the “initial” coins (which may even sometimes be assumed “more quality” ones, like, letting the buyers vote for some decisions or something);
- Mining the “subsequent” coins.
The “initial” coins are called “initial” in ICO, because it was assumed to have the “subsequent” coins as well. Most people never thought of that, maybe, just getting used to these three words at once – but that’s why it is precisely the “initial” word there, not the “last coin offer”, or “one-time coin offer”, or “sole coin offer”. Initial coin offer, because there would be more coins (mined) later.
And what is in Universa case?… yes, you know the drill: no mining, therefore no subsequent coins/tokens. All the UTNs ever possible were calculated and premade right after the token sale end, and the total supply – total-ever-possible-supply – is capped at that amount.
Therefore, the word “initial” just loses any sense.
So, in our “ICO”, there are no “coins”, and the offer was “one and only” rather than “initial”. That’s it, it is this easy. No matter how hype-y was the ICO term, but if two of three words from this abbreviation do not fit for our reality, the whole abbreviation is not a best term for it, either. Much more correct to call it just “a token sale”.
But on the other hand, some people may naively think that “Universa just changed the title of ICO to TGE”.
That is not the fact, either. Even though we used the word TGE, it is not a direct replacement for the word ICO. The “ICO” term could be more directly replaced with “token sale”, though.
Because both “ICO” and “token sale” are processes. Our token sale process took 5 weeks or so.
The “TGE” instead refers to an event, Token Generation Event.
And here, finally, goes the true, factually correct terminology:
- Token sale (or, as someone would improperly call it – and now you know why it is improper – ICO) lasted from 2017-10-28 to 2017-12-09.
- TGE happened (!) on 2017-12-09, when the total sale counts were fixed and calculated.
Hope that clears the “ICO/token sale” terminology now and forever.
Stay tuned and, in the next article, learn more about U – how it is different from UTN; how are the “tokens” different from “smarts contracts”; and what is actually an utility token for Universa network.