Civic ICO: Tokens Went Fast, but What's in the Future?

Civic is an appealing project, but its token remains relatively invisible. So far, its price remains low, and volumes remain depressed, despite the general buying spree.

If you are buying Civic, keep in mind you are not buying a cryptocurrency of its own, you are buying a token. The Civic token itself is meant as an exchange mechanism for participants in the project. So if you need to buy or sell identity verification services, you will need Civic. But we are dealing with a very young project, only two months past its token sale.

The Civic ICO went fast and furious. The token sale in June gathered up around $33 million in funds to support the project, stored in Bitcoin and Ethereum. Civic was the typical Ethereum-based ICO, which sold out fast, to around 40,000 buyers, with very few "whales" or big buyers, and a queue distribution system. The ICO was even covered by mainstream agencies, Reuters devoting a matter-of-fact article in its business section.

But buyers should think twice before jumping in to mop up some tokens after the sale. Here are five reasons to think well before choosing how much to set aside for Civic.

Market Price as of August 2017 Market Capitalization 24-Hour Trading Volume
$0.206 $70.07 $1.575 million

 

What to Do with Civic? Hold or Sell for Profit?

If you don't have a mind on purchasing identity verification, then all you can do is hold onto your tokens. Immediately, storage issues arise. You have to be confident about using an Ether wallet. The tokens are, for now, compatible with an Ethereum wallet. Luckily, Civic can be bought and sold through Changelly, with the extra step of buying another cryptocurrency to exchange it for the token. But it is still a good alternative to storing and trading on Bittrex. Still, more than 80% of the trading for Civic happens on Bittrex, with all the related risk of pumps, dumps, and volatility.

Hungry Competition

The problem with Civic's idea is that it is too easily discovered by others. So far, at least 21 companies are vying for a spot in the sun to provide a similar service. What is even more confusing, each of those companies has a slightly different definition of what constitutes an "identity." Some are dealing strictly with online identities, while others go so far as to promise passports and marriage certificates issued instead of governments. The idea is similar to that of Humaniq, another recent project and token that went through an ICO in May. Humaniq is at position 100 on the CoinMarketCap chart.

And 2017 will be the year that most of those companies boost their activity with a commercial release. No one can tell which ones will float or sink- but one thing is sure, once a token is tradable, it will see ups and downs. On top of all, Microsoft is building a similar idea, and may be better staffed and rely less on hype. So Civic could very well be blown out of the water.

Too Many Tokens Lying Around

If you buy Civic, you will own some of the 330 million tokens in open circulation. The whole supply of Civic tokens is 1 billion, and the company currently owns one-third. Another 330 million tokens were distributed to companies and partners, through various incentive programs. So there is a glut of tokens, despite the low price. To boost the value, the Civic team would need to show future potential. Otherwise all would be left to speculators, and things may turn south once the company owners are free to sell their holdings three years down the line. And no one knows what would happen to a token within three years, not even when it is in the top 100 of CoinMarketCap. Civic fluctuated between positions 56 and 60 about two months after the ICO.

An ICO is No Guarantee of Price Growth

It is a usual story for ICOs or token sales to lead to a phenomenal growth in price once the token goes out to trade. But a lot of tokens go through a lengthy phase of obscurity and low volume trading, perhaps with the occasional pump initiated by bots. Currently, Civic trades with around $1.5 million volumes in 24 hours. But as we have seen with other coins, the price can be sent upward easily, whenever investors move in. Coins like Monero spiked with volumes just around $10 million. But still, no one knows when Civic would garner similar attention.

The Mind Behind the Coin

No due diligence of a coin is complete without a look at its founder. And he is none other than Vinny Lingham, reality TV star of Shark Tank South Africa and serial internet entrepreneur. Sure, the founder has a serious track record, but some Redditors are a bit worried about some points.

Firstly, according to his Twitter feed and internet presence, Vinny Lingham is a hardcore Bitcoin fan, and there are plans to transform the Civic network and move it out of Ethereum and onto the Bitcoin blockchain through the Rootstock technology. And Ethereum fans may be angered. Otherwise, some see too much flashiness, and the white paper seems formulaic. For a white paper, the main idea should be explained to fit a business card. Instead, the text veers into lengthy explanations of the technology, with little substance. Until then, it is wait-and-see.

Some blame Vinny Lingham on quickly cashing in on the hot ICO trend, using the Ethereum network just for funding, without really liking the technology or supporting it. And some users see danger that the Ethereum-based Civic token may just be wiped out.

For now, Civic remains relatively small and may not do big damage to the Ethereum ecosystem, but nothing is certain. No one knows if Civic sticks around or if the token would die or change into something else.

In any case, buying Civic is relatively easy, and if you have some funds earmarked for that, go for it. But make sure to do your own due diligence and never invest funds you are not ready to lose due to market volatility or technical issues.