Brickblock: Investing on tokenized real estate assets with cryptocurrency
Brickblock is a blockchain project that attempts to bridge blockchain technology and cryptocurrency with real-world value.
Through its smart contract platform, Brickblock allows users to invest in and sell tokenized assets, or assets represented and backed by Brickblock’s Proof of Asset (PoA) tokens. For example, users can invest in tokenized real estate assets and be entitled to profits, such as rents, dividends, and asset appreciation.
Brickblock aims to revolutionize real-world asset investing with tokens
While some may argue that Brickblock’s idea is unnecessary, tokenizing real-world assets will help crypto investors hedge against volatility in the current crypto economy.
Moreover, by tokenizing assets like real estate, Brickblock wants to revolutionize investing in traditional assets and funds, such as real estate funds (REFs) and exchange-traded funds (ETFs). Through tokenization, Brickblock presents investing options that are fast with low-fees as well as open to individuals from all geographical areas, irrespective of the investment amount.
Thus, the Brickblock team wants to make investing more accessible and inclusive for those who might not be able to participate in the current investing paradigm.
A million tokens to be Airdropped
Brickblock started an Airdrop on April 20, which will run through May 15, with up to a million tokens being up for grabs. To be eligible, one has to sign up on the Brickblock Airdrop app. Then complete a profile, followed by adding their ETH address. The address cannot be from an exchange. The next steps will be to verify a phone number and email if the profile wasn’t completed with a social media account. To earn the tokens, users need to do the following actions:
- Create content (blog, videos, songs, articles, memes) and submit it under the ‘create’ tab.
- For every referral that you invite, $3 worth of tokens will be awarded.
- Promote Brickblock content which includes retweets and comments on Reddit to name a few.
- Follow Brickblock on social media.
Afterward, users can see how many tokens they’ve earned in the Airdrop dashboard.
Brickblock’s initial coin offering
Brickblock’s initial coin offering will be held from May 9, 2018, to May 15, 2018.
The ICO price for one BBK token, Brickblock’s digital currency, will be 60 cents in Ether (ETH). Contributions can be made in ETH, and contributions of more than $1,000 worth of ETH result in bonuses starting at 5 percent. Higher contributions receive higher bonuses. To receive a bonus, Brickblock ICO investors have to apply on the Brickblock website. Bonus applications are open until the ICO start date, where BBK tokens will be for sale. Once bought, the tokens can be stored on any Ethereum wallet that supports custom tokens.
Of the 500 million BBK tokens to be released, 51 percent (255 million tokens) will be sold in the ICO. While 35 percent (175 million tokens) will be kept as company reserves, 13 percent (65 million tokens) will be given to early investors, and 1 percent (5 million tokens) will be given to bounty participants.
Unsold tokens during the token sale will be burned or rendered unusable (potentially increasing the value of the remaining sold tokens).
Investing using the Brickblock token
Brickblock aims to improve and open up investing options to individuals across the world by allowing users to easily invest in various asset classes using the BBK token.
In addition to the aforementioned REFs and ETFs, Brickblock also aims to offer both passive coin-traded funds (CTFs) and active coin managed funds (CMFs). All of these funds will have their own Proof-of-Asset token representative of investor equity and entitle investors to their share of any realized profits.
Instead of having a middleman like a fund manager or group of people disburse profits, profit dividends will be automatically distributed using self-executing smart contracts hosted on the Ethereum network, which is one reason why investing through Brickblock’s platform will be cheaper than through traditional avenues.
To prevent any foul play, loss of data or any other compromise of data integrity, smart contract and PoA token contents will be unchangeable, cryptographically secure, and visible to everyone on the worldwide-distributed Ethereum blockchain.
Brickblock’s native token
Brickblock and its native currency BBK has many uses and can be utilized to address current market issues, such as volatility, counterparty risk, high costs, barriers to entry, and lack safe crypto basket investing options.
While many laud cryptocurrencies for their many revolutionary features like blockchain technology, cryptocurrencies are still in the early stage and their value is often volatile. To help guard against volatility, investors can use Brickblock to purchase real-world, less volatile assets, such as ETFs and REFs, using cryptocurrency.
In today’s financial environment, when one party doesn’t have enough funds to successfully finish a trade or transaction, this is dubbed as “counterparty risk”.
For example, clearing and settling a transaction in traditional asset trades takes three days. On day one, one party makes a deal with the other (counterparty) assuming that the counterparty has enough funds for the transaction to settle, or go through. On day two, the clearinghouse, such as Visa, records the transaction. The following day, the transaction is finally settled, assuming that the counterparty had enough funds to cover the transaction.
Three days is a long time to make trades based on trusting that someone paid you with funds that they actually had. If they didn’t, then you’re out of luck and out of whatever value the counterparty got from you (e.g. a product or service that you provided) as well as any funds that you spent that you never actually had (counterparty didn’t actually have funds to pay you) in the first place.
Using Ethereum’s blockchain, Brickblock reduces this counterparty risk from a few days to less than a minute, or the time it takes for a few Ethereum blocks in the Ethereum blockchain to be confirmed.
When buying real-world assets outside of a blockchain-based system, investors can be hit with a barrage of fees like trading fees, broker fees, account maintenance fees, account transfer fees, selling fees, and so on. Thanks to smart contracts, which eliminate middlemen, Brickblock users can benefit from very low fees when investing.
Barriers to Entry
Brickblock can also be used to open up investing opportunities. Unlike traditional investing, which may require minimum investments or a bank account from a certain country, Brickblock is open to investors big and small and from all parts of the world.
Lack of Safe Crypto Basket Investing Options
There is currently no easy and safe way to invest in a basket of cryptocurrencies with total market exposure using a single token. Investors have to trust that fund managers will allocate their assets appropriately and not take advantage of their positions. To combat this, Brickblock will get fund managers to sign legally binding contracts for their managed coin funds. Managers will also be verified and periodically audited.
Tokenized assets on the blockchain
Brickblock is hosted on Ethereum and through tokenization of assets, will allow for cheap, easy, and quick investing in various asset classes. For example, tokenized real estate assets are assets, such as this tokenized building, which is represented by Proof-of-Asset tokens on Brickblock’s platform.
Users use BBK tokens to invest in assets and receive Proof-of-Asset tokens proportional to their investment in return. Access tokens (ACT) are needed to operate Proof-of-Asset smart contracts and keep them “alive”. Users can acquire ACT tokens by locking up their BBK tokens. The longer BBK tokens are locked up, the higher the rate of ACT token generation.
Founded by real estate investors and entrepreneurs
Brickblock was founded by Co-Founders Jakob Drzazga and Martin Mischke.
Jacob has experience as an entrepreneur and real estate investor while Martin has been involved with blockchain since 2010 and was former CEO and CFO at Bitwala, the largest blockchain-based remittance and international payments services provider in Europe.
By combining Jacob’s real estate background and Martin’s blockchain expertise, the duo founded Brickblock with the mission of revolutionizing investing.
In addition to the co-founders, Brickblock has a large team of product managers, engineers, marketers, community managers, designers, developers, researchers, and more.
Brickblock on the internet
Twitter – Follow Brickblock on Twitter for project-relevant updates.
Reddit – Follow Brickblock’s subreddit to interact with the rest of the Brickblock community on one of the world’s biggest social networking sites.
Telegram – Brickblock’s Telegram is more suitable for quick messaging.
Medium – Follow Brickblock on Medium for regular blog post style updates.
Bitcointalk – Bitcointalk is great for discussing Brickblock in a traditional forum format.
Brickblock’s potential uphill battle
Brickblock provides an interesting use case for cryptocurrency users that want to use cryptocurrency to invest in more “traditional” asset classes. Moreover, blockchain technology will help cut a lot of costs, transaction times, and otherwise make investing better.
However, one can only imagine the regulatory loopholes that Brickblock will have to jump through — which can feel like they’re trying to solve a Rubik’s cube — in order to offer traditional investment options to cryptocurrency investors. Currently, there are already a lot of regulations in place for traditional investing, on top of the generally neutral or hostile stance that regulatory bodies take towards cryptocurrency.
All in all, Brickblock is an interesting ICO that sounds great on paper but it remains to be seen whether or not Brickblock can gain real momentum. For example, the first “tokenized building” that they wish to sell by June 2018 is far from being funded. At the time of writing this, only 2 percent funded as of April 27th, 2018.
Moreover, onboarding investment funds and other players from the traditional finance world will be harder than it sounds due to regulatory pressures from governments.
Danny knew about Bitcoin when it was $4. Unfortunately, he didn’t buy enough. Ever since witnessing the $35 million Basic Attention Token ICO selling out in 30 seconds, Danny realized how serious crypto was and has been staying on top of all the latest blockchain and crypto developments and seeing what implications this could all have for our everyday lives.