Tai Zen: What’s up guys. This is Tai Zen. Today, I have some very special guests from the cryptocurrency community with me. To my right, I have the honorable grandmaster, legendary LeonFu.com.
In the studio, we also have we have Michael Spruill. He is one of the advisors to the Particl project and also a veteran cryptocurrency investor.
In the video, we have Rhino Mattei. He is the lead developer for the Particl project. He is joining us live from South Africa. Then, joining us from the city of Columbus, Ohio, we have Paul Schmitzer. He’s one of the communications managers for the Particl project.
In part 1, we gave you an introduction to the Particl project, its background and where it came from. In part 2, we talked about technology and the necessity of the Particl project. In part 3, we want to talk about the value of the Particl project. As an investor, we always want to know what the potential value of it is.
Let’s go ahead and talking about the potential of a privacy-focused marketplace. Does Particls marketplace have exponential growth or is it just a niche part of a marketplace like Silk Road?
Can you talk about that Michael?
Michael: Yeah, like anything else, they’re going to start out from niche. You’re going to have kind of the early adopters.
Paul’s written on this in his latest blog article about kind of the growth curve of these networks where you have a small percentage of early people coming on, then eventually it grows up not only as word spread about the platform, but also as the technology improves.
There are hurdles and obstacles all along the way to make it more user-friendly and to get greater adoption. All those issues are addressed.
We expect it not to just be niche, but also to penetrate markets far beyond just a niche markets. Will it be an Amazon size? Maybe or maybe not, but that’s not necessarily what it’s trying to do.
There was a figure I read recently that e-commerce for developing markets was tens and tens of billions. If you’re looking at markets like that, those would also be kind of where we would target. We want it to grow just beyond the niche where, again, people may not have access to Amazon, eBay, and more traditional sides like that.
Those are the markets we would hope to reach into, so there’s a lot of room to expand. You have niche markets where there might be a few hundred million in revenue a year into the $2 billion range. However, as you break out of just the Silk Road types, you start accessing much larger amounts of capital.
Leon Fu: It’s fair to say that at the beginning and the near term, you’re definitely going to be a niche market. Then, hopefully, you hope to build from that niche market to something closer to mainstream
Michael: Not just through word of mouth, but also through offering better and better technology.
Tai Zen: Let’s talk about the vendors that are going to be in the marketplace. The question is who they are and why they would want to be anonymous.
Michael: As we’ve mentioned, I think in one of the other parts before this, there’s a long list of things that are not available on Amazon, eBay or you can’t pay for with Paypal. These may not even be gray market items where they’re legal in some countries, but illegal in others. There are just items that you can’t ……
Tai Zen: For example, right now in the US, the 2 most popular cell phones are iPhone from Apple and Samsung Galaxy from Samsung. in China right now, they have what’s called Xiaomi phones, but they’re not illegal. They’re just not available to be sold in the US.
Michael: Absolutely. Those are the examples of things that you’d find on here, but not only that. Those aren’t things that you would necessarily need the anonymity for, but there are items that you’re not allowed to sell them or buy them for whatever reason. Some of these are totally harmless items. The country just sensors what you can do…
Leon Fu: Can you give us an example of one?
Tai Zen: You mentioned about cigars.
Michael: Yeah. The cigar will be one. Until recently, you weren’t allowed to buy or sell cigars in the United States because of the embargo on Cuba. I see those items pop up on the darkness.
Tai Zen: It was perfectly legal for us to have cigars in America.
Michael: But you just can’t get them getting them from Cuba. Something like that would be illegal.
There are tens of thousands of items on the darknet markets that are not illegal at all. They’re not harmful to humans. They’re not like drugs or anything, but I can go in there and source them freely like sunglasses, shirts, and clothing from China. There’s some clothing from China that’s completely banned. They just don’t allow it in the country.
From that perspective, you could now bridge the gap between US buyer and Chinese seller. For whatever reason, they don’t allow these items to be sold on the mainstream.
Tai Zen: You say that it has nothing to do with it being illegal. It’s perfectly legal product….
Rhino: Chinese solar panels for instance. They are not allowed to be sold in America
Michael: There are all sorts of products you’ll see on the darknet markets. That’s maybe one of the only places they can sell them. There are also Chinese websites that had this stuff.
If you were to throw it on Amazon, it would be pulled off. It would be seen as either a copy or it’s too competitive to something that someone else can’t sell.
There are all sorts of items out there that for one reason or another, the governments or even corporations just say that it’s not allowed.
Paypal has a whole list of items that you can’t buy and sell. There are things on Amazon and eBay that you can’t sell.
If there’s a moonshine that I want to get, they’ll just take it off. It is the same as cigars. You’re not allowed to sell cigars or any tobacco products.
Basically, there’s a whole bunch of products, especially in niche products that you would now be able to sell freely, anonymously and securely.
Tai Zen: Do you have something to add to that Paul
Paul: I would just kind of summarize it up.
There’s a whole list of vendors that have been left behind because companies have decided they can’t use their platform. There’s a whole large group of customers that have also been left behind either by their country putting bans on or whatever. That’s kind of the area we’re focusing on.
Tai Zen: I can also see a very good use case for this Particl marketplace. On the cover of our business, most of the world only see I and Leon. They don’t see the rest of our team in the background.
One of the challenges that our team ran into is that there’s more than just 2 of us. It’s just that everyone else wants to remain private and anonymous and they don’t want to be public.
However, when we establish our business LLC for this channel, our business partners are all in different states. When we go to Chase bank to try to set up the business banking account, they would not allow us to set it up because each of us is in a different city and we is an online business.
Therefore, we run a youtube channel. We don’t need to be in the same city. Nonetheless, there are banking laws will not allow us to set up an account, so we have to fill out an application. Then, other business partners that are in other cities have to set up to request a document to add a member to our business.
It was just a really big hassle. We have to do that and we just can’t go there and set up a merchant account with Chase bank because our business partner is in another city.
It is really difficult for us to get all of us together in one city to sign all the documents and they wouldn’t allow that. I can see a Particl marketplace is a place where if we are not in the same city, we can still go on there and do business and sell our products and services without the need for a central authority such as a banking institution to tell us that we to do.
Even though the majority of our business partners are in the same city and we acknowledged that this other partner is in a different city, they still would not accept that.
Therefore, I can see that’s this is where vendor or merchant would want to do business because I have to go through all that nonsense.
In some of the third world countries, they’re not going to go through all that just to set up a business.
Let’s talk about value. That is probably one of the most important parts of all these videos. Let’s talk about the value of the Particl project so that our investors can see.
This is obviously from your perspective because you’re on the Particl team. We will come out with a later video where we give our perspective. However, in this part, we’re talking about the value from your perspective
Leon Fu: Even though I put this on the fifth one, I think I’d like you to first explain what is Particl before we talk about how much the project’s worth and how much these tokens could be worth.
Why don’t you first say a little bit about what it is? Then, from there, we start to answer other questions such as why we as investors should invest in the Particl projects, what you are charging, what you are asking for from investors, and what’s the valuation.
Tai Zen: Let’s do one at a time. What’re the Particl tokens?
Michael: This was something we focused on a lot when we’re working through the transition from the Shadow project to the Particl and how are you going to structure things. Whether are we going to keep them similar or do away with it as a currency and just have it as a network token? We went back and forth and we’re trying to decide how to actually tackle this issue.
One of the things we wanted to keep as the features of the Particl token was as you own this token, it is essentially like ownership of a piece of the network.
That’s a really big thing for me when I look at platforms and projects. If I can, I want to own a piece of the network where I’m harvesting or receiving fees, not just staking, but also network fees just like I would own stock on eBay or Amazon.
Therefore, I’m a shareholder and all the traffic that goes across the network or all the fees that get extracted from the network are split up to distribute to users. What that does is If Particl token is like owning a share the network, it creates evangelists among all the token holders. As an investor, you are saying: “You should use this token because they’re part of the network.
Overall, what we want to do is tackle it from both angles where you the token pays you as a token holder shares in the network and through staking, but also it is used as fuel.
There are going to be 2 different types of people that are going to be in favor of this structure and wanting to hold the token.
Tai Zen: Just to make it clear for the viewer, you’re saying that when somebody holds Particl token, there are several things they can do with it. If they turn the computer on because it’s a proof of stake system, not a proof of work system, they can let the computer run while it’s holding the token. It secures the network and processes the transactions. In return for that, you get rewarded by the entire network.
Michael: It’s like mining, but way easier. Anyone can do it if you hold tokens
Tai Zen: The next thing is as you said, when new people come into the network and they need these tokens as fuel to process their transactions, it creates more demand for these tokens, which will increase the value of those tokens. That’s how I just want to make clear.
Leon Fu: I’ll just run down the list here. When we contribute to this fundraising around that you currently have, what is this money going to do?
Tai Zen: Okay. We’ll talk about that on another slide. Let’s go down here. What is the value of this whole project? Let’s just go down the questions so that doesn’t confuse the audience
Michael: Startups are hard to value, but what you can do is you can look at other projects similar in their space and kind of extrapolate from there.
Tai Zen: Let’s start with the baseline. When we first researched the Particl project, you’re coming from the Shadow project. They were worth like $1.50 or $1.60.
What do you project as the valuation for the Particl Project once it matures? Not in the seed round, but once…
Michael: …we have the product out and the infrastructure…
It’s definitely being in the $10 range, at least or somewhere higher because what we’ve noticed some of that from speculators and some of that’s from long-term holders.
The prior project was going for a similar thing, but they didn’t even have any product out. We were seeing in the ballpark of $3 to $5 per token and that was with hardly anything out.
Therefore, what we expect with a marketplace is at $10 token. It means you’re looking at about $70,000,000 to $75,000,000 valuation. If you look at other privacy products that are simply just tokens for privacy like Dash, Monero, Zcash, those are $50,000,000 to $700,000,000 coins know with the middle valuation range being probably $100,000,000 and $200,000,000.
Leon Fu: I would argue that in the case of Monero, they actually have some adoption.
Michael: Yes, they absolutely do. That would then obviously comes later. However, the cool thing with Particls is that it’s not only functions as a fungible currency for privacy where I could take it and use it like Bitcoin, but it also has a marketplace tied to it. That is essentially equity in the market.
By holding this token, I’m gaining value from it as a privacy token, which I think we go up to agree there’s a large amount of value there, especially when newcomers come in want to use this as a store of value. Furthermore, people come in to use the network or to invest in the network.
If you combine all those features together, I think a $50,000,000 to $75,000,000 valuation is at least the minimum once you get the product out and it matures some. However, we’d certainly expect valuations worth of $100,000,000 once you have everything kind of flushed out, working well and word spreads. I don’t see why it couldn’t be one of the top 3 or 4 anonymous currencies just as a standalone currently.
Tai Zen: Let me make sure that I’m hearing you correctly so that the investors understand this.
As an investor, obviously there are no guarantees in life, but you see this as a $10 token right now. $1.50 is the current project and you can see it fluctuates into a $100,000,000 project to grow to that point where mature…
Michael: If the team delivers and does what they say they’re going to do. I mean we have coins out there that don’t really even have a product yet, but it still reaches to $50,000,000 to $100,000,000
Tai Zen: You’re saying that you see this $10 per token valuations simply because when it was ShadowCash, it didn’t have a lot of features and it got as high as $5, $6.
Now, you have that number because of the marketplace in place and a solid staff team that’s fully paid. It is not like ShadowCash project, which was one bunch of volunteers doing it as part-time project…
Michael: People are valuing it anywhere from $15,000,000 to $30,000,000. However, with this, you’re getting full-time team, which doubles the size. We have professional legal counsel, a professional PR, and marketing that we’ve hired. There are all these professional teams that we’ve brought on board to help such as advisors. Therefore, we have better branding and more mainstream adoption.
I mean with the prior project, it definitely hindered growth. Some people were like unsure if they wanted to invest in or not. With all of these things going in, I mean I’d be shocked if it didn’t at least reach $10.
Tai Zen: You’re saying that with nothing before and a bunch of volunteers, the project on its own was able to grow to $5, $6 per token. Now, you’re projecting $10.
LeonFu: That would be very conservative in my opinion.
Tai Zen: Because it’s got a full-time staff, a professional PR firm, you’ve got funding for it and everything, now…
Michael: We think the market will really like that.
Tai Zen: You’re just saying that based on other successful projects like Monero, Dash, some of them have reached to $200,000,000 or $300,000,000.
Michael: I’m not going to say that we are at that level or we’re not at that level.
Tai Zen: You are looking at the bare minimum.
The next question is why and why not people should give Particl money for this project.
Michael: I think most of the people that have decided to come on board with Particl, if you go in the chat rooms and you talk to the people we know in the team, everyone really believes in the value proposition. If we can get this out there to be basically the first decentralized privacy network for e-commerce, I’m first to market all that.
There’s huge value potential there, but not only that, but you’re also a part of a movement. A lot of people like Bitcoin space, Ethereum and all the cryptocurrency all have this common belief that everyone should have privacy and the right to privacy.
Therefore, when you talk to people that are involved in the project, some people have gone with the ups and downs. The people that are really fans of the project are ones that believe in human rights and privacy. They choose to carry this out with us.
It’s the same reason the developers came on board with hardly any pay. They’re giving their time, their energy, their resources.
There are all sorts of projects you can put your money on. Some that’ll do better. Some will do worse. They’ll kind of go here, go there, but for the people that have come on board with Particl and especially the ones had put most of the resources say: “I agree with what you are trying to do. I want to be a part of it. I want to help get this out to the world.” That’s why people would give money.
Tai Zen: Do you want to talk about the price tag and what we are paying for?
Leon Fu: What is the price tag for us to contribute?
Michael: If you go on to Particl website, there are multiple milestones. The first one was just basically to fund the development so the staff team can work full-time, contribute and move quickly so we can get the minimum viable product out. It also will cover the legal costs of the nonprofit foundation set up and all those types of things.
Then, we have several milestones that we’ve already. We’re nearing in on the third. That is basically at a longer term PR and marketing to bring on an extra dev. We’ve got a one starting here soon. All these new resources are going to allow us to get the product out sooner. Again, trying to be first to market.
Leon Fu: I would say we’re paying salaries for the developers, legal fees, the PR and marketing fees, right?
Michael: That’s what’s getting in.
We set up a roadmap and a budget to see how much money do we need to get us from point A to point B, which means getting the minimum viable product out and getting the legal structure in place so that we can have a professional project. After that, we’ll talk about the primary round that we want to do later. Then, we can tell people this is what that’s going to pay for.
Leon Fu: But for this round, that’s is what this is for, so how much is all that going to cost as what you just described?
Michael: Milestone 1 is $250,000. Milestone 2 is $500,000. Milestone 3 is $750,000.
Leon Fu: Okay. Sure.
Tai Zen: Thank you for joining us on this third part of this video series. For more information, you can visit www.Particl.io.
Thanks for joining us in this video and we’ll look forward to seeing you in a future video.
Learn more at www.Particl.io