Canadian EDC’s Blockchain Crowdfund Scores $0.5m In Equibits Cryptocurrency Sales

By February 25, 2017Bitcoin Business
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Equibit Development Corporation (EDC), a Canadian-based startup behind the Equibit blockchain and applications that is building a decentralized securities platform, has sold over US$500,000 of equibits since launching its crypto coin offering at the start of February. And, according to Chris Horlacher, EDC’s CEO, “steady interest” from investors has been seen. Primarily investment participation has come from North America, followed by Europe and Asia.

Touted as the world's first ‘peer-to-peer’ (P2P) equity marketplace and a platform for issuers to manage their investor relations without the need of depositories and transfer agents, EDC has so far sold a total of 201,885 equibits (EQB’s) - a new digital currency - to investors.

It meant that as of today (February 25) some 20% of EQB’s were confirmed as having been sold in the initial offer, with the total raised standing at $519,510 - comprising $107,588 and 349.13 bitcoin (BTC).

'Peer-To-Peer' Equity Marketplace

Horlacher, who founded EDC along with a team of blockchain development experts, explained that he conceived the idea for Equibit back in 2010 whilst serving as the Chief Financial Officer (CFO) at a stock brokerage start-up in Toronto, Ontario, which now manages over $4 billion in assets. As such EDC was established with the grand aim to “revolutionize” the securities industry.

“The goal was to disintermediate securities depositories and transfer agents, thus removing several layers of counterparty risk from the industry and increasing the overall efficiency of securities registration, clearing and settlement,” explains Horlacher, who began his career as an auditor with a ‘Big 4’ firm in Canada.

He added: “This in turn would lead to a far better investing experience and make the lives brokers, exchanges and the asset management community much easier.”

On this score, Equibit handles the 'issuer-investors' and 'investor-investor' relationships and includes a blockchain asset register, a communications, and Anti-Money Laundering (AML)/Know Your Client (KYC) compliance system, which prevents securities from being transferred to unauthorized parties.

(Image: Shutterstock).

Crowdfunding EDC

EDC has offered to sell one million equibits out of a total of 22 million equibits potentially available.

One might ask how this will work out exactly. Well, when new blockchains are launched, Horlacher indicated that the companies developing them “will typically divide up the native token/asset into two portions.”

Horlacher, who is certified by the Canadian Securities Institute as a partner, director and CFO, elaborated: “One of these is ‘pre-sold’ to early adopters and people planning on using the system, or those who simply support the idea and want to see it come to fruition - via an “initial coin offering. The other part is reserved for ‘miners’, people who contribute processing power to the network and are compensated by the system for their efforts.”

The offering itself started with an initial batch of 100,000 equibits priced at $2 per coin. And, it is understood that the crowdsale will adhere to a "predetermined schedule", with the price for equibits increasing with each subsequent batch being released.

Specifically, the million equibits - the native token on the blockchain system that they will be launching - have been divided into ten equal segments and will be sold at "increasing price points." These start at $2 each and go up 25% with each inventory segment.

The logic for this is in order that EDC can “gauge the demand for the token” Horlacher said, as well as to reach the venture’s various fundraising targets so as to budget for a range of initiatives going forward.

Genesis Block

All equibits sold in the coin offering will be created in the EDC platform’s genesis block, constituting the inception of the system’s operation. Essentially a ‘genesis block’ is the very first block in a blockchain.

This genesis block is nevertheless described as being 'special' in the sense that the development company can control when it gets created, as well as the size of the reward that comes along with it.

Speaking to Forbes from Toronto, Horlacher explained: “In the case of Equibit, EDC will mine the genesis block and receive the first million equibits, which are being offered up in this pre-sale. And, at that point the software will be released to the public for anyone to inspect the code and start mining as well in order to win a portion of the remaining 21m equibits that will be created over an extended timeframe - just like bitcoins.”

The code release to the public is slated for the end of the second quarter of this year. And, securitization of the Equibit platform is being hailed by the founders as allowing holders of the new digital asset (EQB’s) “to diversify their portfolio by investing in equities in traditional industries like pharmaceuticals, utilities or materials.”

However, as Horlacher pointed out that while there are “more and more coin offerings by the days…there’s very little opportunity for diversification available to crypto investors.”

Roadmap & Business Use Cases

As to the roadmap for EDC, Horlacher indicated that they have hopes to sell $6m in equibits, which would keep the venture going “well through the two-year period and ensure all planned products are launched.” Already the company has sufficient capital to fund the launch of their core products - Equibit, Web Portfolio, Supernode API - which is planned for release this summer.

Equibit allows issuers to use cryptocurrency tokens, called 'equibits', to authorize and disseminate their shares. It also includes a secure, P2P communications system that allows for private messages and polls to be instantly sent to individuals and groups on the network.

A public component of the communications system allows for the announcement of ‘Bid’/‘Ask’ type messages, in the same vein “as an open outcry trading pit but on a global scale” according to EDC’s CEO.

He added: “Investors can designate and revoke proxy rights with a simple click of their mouse. Equibit also includes trading passports, a way of handling the KYC issues currently faced by blockchain technology. Both issuers and investors can quickly join vetted communities on the network, gaining easy access to pools of capital and investment opportunities in an environment that maintains compliance with securities laws over exempt distributions.”

One might also ask why EDC and its founders think this is the right time for a development such as this.

Here the CEO explained: “When I first started working on the idea most people were still completely unaware of Bitcoin or the significance of this new technology. Now 'Blockchain' and 'FinTech' are all the rage.”

Add to that he posited: “Financial institutions are pouring millions into blockchain research and are looking for ways to use it to enhance their service offerings. Already, quite a number of major financial institutions have solicited us to learn more about what we will be introducing and how they can adapt to its use.”

Proceeds from the crowdsale will be used to expand EDC’s team of developers, accelerate product development, support and expand the network of equibit supporters, install enterprise infrastructure such as supernodes, and market the Equibit blockchain.

Purchased equibits will be delivered to user accounts at EDC’s web-wallet service, with any unsold equibits retained by the company. Their coin offering sale runs until March 31 2017, which leaves just over a month remaining.

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