Arcblock introduces themselves as “the world’s first blockchain ecosystem for building and deploying decentralised applications”

That’s not entirely accurate. There are many blockchain platform projects who are ecosystems for building and deploying Dapps. Arcblock’s a new kid on the block, it’s not the first one. It is a blockchain platform though.

It does on to describe itself as the third generation blockchain platform, which is true.

1st Generation is bitcoin which introduced the concept of a decentralised ledger/ storage of information. 2nd generation platform was Ethereum who introduced smart contracts.

Smart contracts are to blockchain what Javascript was to the internet. Before Javascript, internet websites were boring, there was very little you could do. But because of Javascript, the internet became vibrant and complex and flexible in its website designs. But ethereum as an early product had many imperfections, and the three main design flaws are scalability, interoperability and sustainability. Scalability deals with speed and data management, interoperability means its ability to interact with other blockchains as well as world systems e.g. swift. Without interoperability, your product can be the best product, but cannot be employed by secular systems. Lastly, sustainability where the bulk funds of the projects are not through the crowd fund raising, but a low cost sustainable system.

So other than bitcoin and ethereum, all other blockchain platforms e.g. NEO, Cardano, Tron, etc… are all 3rd gen Blockchain platforms. So Arcblock is definitely not the first. All 3rd gen platforms aim to address the above 3 weaknesses of the Ethereum network, all their different ways of addressing the weaknesses is what gives them their individual uniqueness as a platform.

The way Arcblock aims to address the weakness of the Ethereum network is through 4 key features:

• Cloud node
• Open Chain Access
• Blocklets
• Incentive for self-evolution

Their use of cloud nodes is an interesting concept. So just as a computer is made up of different hardwares, e.g. CPU, RAM, storage etc… Arcblock uses different cloud systems as the different nodes/ parts of the blockchain. This is really interesting. Cos a cloud is a centralised system, but blockchain is a decentralised system. But they are not using the cloud as the system base, but as a node. So many different centralised cloud systems to build a large decentralised base. They believe this will achieve a much higher level of abstraction, performance and security. We will have to see, but it is definitely a very interesting concept.

The open chain access protocol is the feature of this blockchain that allows projects a language translator that helps projects to live on other blockchains should they wish. Whilst this is a really great feature, it requires Arcblock to be compatible in structure to the existing main platforms. So it is compatible to Ethereum, Bitcoin, Hyperledger, but it is not clear how it will interact with other 3rd generation platforms that have a very different structure, e.g. Iota. I guess what I am trying to say is, it will likely be able to support many blockchain protocols, but not all. This feature address the issue of interoperability.

Now these translation APIs are known as Chain adapters and at the moment is closed source, meaning created only by the team. But in time, they plan to make it a open source, which means other creators can design chain adapters which can then be used by others. Depending on how much their chain adapters are used, the creators will receive ABT tokens as a reward. So this encourages the community to compete amongst themselves to create better and better chain adapters and is part of their sustainability solution.

The next important feature of this project is the blocklets. Think of it this way. Instead of building a big project with multiple features all onsite, I can split the work up to subcontractors to do different bits of the project off site. These smaller portions of divided work is known as blockets. I then combine all of them to form the final project which is stored on the blockchain.

The advantage of doing this is its quicker (its abit like plasma the scalability solution for those who know what that is) and it also allows individual aspects of the project to be stored and shared with others. E.g. if my project has a wallet aspect, I can keep it as a separate file and re-use it or share it with others if another wallet protocol is needed.

Now Arcblock uses a unique concensus algorithm known as Algorand.

So where proof of work requries all the nodes to process all the data and keep a record of it, in Algorand, the system suddenly and randomly selects a small group of nodes to be in charge of the next block, then receives a reward in the form of a percentage of block transaction. It’s a very clever system that was designed by Silvio Micali, winner of the 2012 ACM Turing Award and a well respected pioneer in cryptocurrency and blockchain technology. This is one of the selling points of the Arcblocks tech, which made it so popular. Just keep this in mind, because when we talk about the concerns later, this becomes one of the major concerns.

So the combination of blockets, the unique concensus algorithm and the cloud nodes mentioned above solves scalability for this project. They estimate they will be able to achieve 100k transactions/ sec in the future.

On a whole, this is a nice whitepaper. 28pages, not too long or short, and the level of technical detail was simple enough for a layperson to understand, yet with good detail. The whitepaper wasn’t all tech, it included vision, problems they were trying to solve, token mechanics etc…

Arcblock tokens are used as payments for platform transactions and also to pay the chain adapters creators once it goes opens source. So it’s a norm way a platform would use its tokens. Which is good enough.

Roadmap:

I really like their roadmap. They have 2 roadmaps, the first is from Q1 2017 – Q1 2018.

And they have been on track with this. Every quarter has some meaningful events and Q2 now, they aim to launch the first decentralised consumer application built on Arcblock. The actual launch of the platform is stated as Q4 2018 on their roadmap, but in a recent livestream with Huobi, the CEO stated it would be in Q1 of 2019.

The second roadmap was from 2017-2022, so a 5 year roadmap.

Further long term plans in 2020 including public launch for IOT apps support and 2022 sees Arcblock becoming an open foundational service of the new programmable society, supporting the DAO and their services applications. DAO stands for decentralised autonomous organisations. It just means systems that run by themselves off smart contracts. I love this two roadmap features, it’s the first time, I’ve seen it for a blockchain project and I think this is the way to go. Their roadmaps are simple yet detailed and easy to follow. This is a great example of what a roadmap should be.

So far, the project is sounding really good. And leading up to the ICO in Jan, many people flocked to invest in their ICO. But that’s when things begin to unravel and there have since arisen many concerns about the project. Il try and go through most of these concerns so you are aware of them, and share with you my opinion, and then you can then make your own decision as to what you think of the company.

Their ICO was actually very successful as a fund raiser. The raised their hardcap in less than half an hour. Where it fell through was:

1. Many people who attempted to buy the ICO with ETH weren’t able to do an actual purchase. What was worse is that their ETH tokens were kept in lock up and will only be released 5 weeks after token release which is 9 weeks from the ICO date. So imagine the disappointment and frustration of waiting for the countdown, clicking on it literally 5 seconds after launch and finding out that not only did you not get in on the ICO but you have to wait for 9 weeks in a bear market to get your ETH back.

Now in our NEX ICO review, we talked about how a lot of newer ICOs like NEX are adopting a lottery system to decide who gets to invest in the ICO. This is because of problems of over subscription and interest in ICOs. And Arcblock was a very popular ICO with a huge volume. However, that’s not the only cause for the failure in ICO mechanics.

Apparently in their Terms and conditions at the point of signing up to participate in the ICO, it clearly stated they would be using a smart contract. The seemingly dodgy bit is that when users were sent an email, after accepting the terms and conditions, the file was broken and not opened. It also didn’t seem to be the same file because the attachment was 150kb size, but the original Terms and conditions was meant to be 4.5MB. Someone actually saved a copy of the terms and conditions, and it was a good thing they did because later on Arcblock admitted they did not use smart contracts in their ICO.

No wonder the delay. I’m wondering, if they didn’t use smart contracts, does that mean they are doing manual transferring of fees? An ICO smart contract also isn’t the hardest smart contract to create, cos I mean lots of ICOs have been launched, all successfully using smart contracts. And as a blockchain platform, you are the smart contract experts who help your users develop Dapps using smart contracts!

1. The other thing about the ICO that many people were unhappy about was the 20% penalty.

It’s not uncommon in an ICO that people sometimes invest too much money. And if this is the case, usually the excess money gets returned or in stricter cases, the whole transaction might not happen and your money gets refunded, but you miss out on the ICO.

In this case, there was a rule that people overlooked where there was a penalty of 20%. So if you overinvested $200k, you would lose $40k at least? That’s excessive and many people have expressed that.

The next concern was about the team.

First concern here was that there was only 4 members shown,

and the CEO did reply that there were more members, they were only showing the key members. I kind of understand that you don’t need to show all the members, but still I cant understand why people were concerned, is because most blockchain projects display about 10-15 project members. So 4 seems abit few. But look its up to them, you can’t really fault them.

If you click on each pic, there is a link their linkedin, and 3 out of 4 of them have worked in Microsoft before, and that’s where they met.

Another concern was “The team all have a track record for starting businesses that do not go far” So if you click on their linkedin, you can see where this comment is coming from.

The CEO did give kindly reply that “Our team and advisors all have proven track records, yes, there are success and failure in the past for all of us, who doesn't? Almost all my key team members and advisors have years relationship with me. e.g. Flavien was my peer back in Microsoft Europe. Justin was my Microsoft colleague and my co-author for one of the best Bill Gate's Think Week Paper, ... “

To be honest, I thought it was abit harsh. Even in the startups they were involved, there were successes and the CEO Robert Mao hung around for 3 years on average in his startups and it came across as a decent resume, not a superstar, but decent.

There was another post that enquired about blockchain experience, because apparently their experience with Microsoft was before blockchain and none of the team members have actual blockchain experience prior to this project. So far there hasn’t been a reply from the team to that post.

IBM Partner

Another big question that has come up is under their partners list, they listed IBM! So this is huge. Because if IBM believes in them its huge boost to investor’s confidence. But then very quickly the community noted, no announcement had been made on IBM’s behalf. In this reply, the CEO clarified

“Yes for this stage we as a startup team with an ambitious goal is just a standard member of IBM partner world.
Yes, anyone can apply to join this partnership, I am not sure if IBM will approve whoever applied though. We got approved and signed a number of agreements, it took us some time.

We have a pretty good reason to partner with IBM since Hyperledger is one key blockchain we plan to support, and IBM cloud is another cloud platform we plan to support.

As a startup you can’t expect us immediately become a big player’s VIP partner... everything is built from start. I don’t understand why this became a problem at all.

Now, IBM partner world is not IBM. is just a network of business that IBM hosts for companies to receive training and meet other businesses, any business can sign up be a member. And that’s all they are. It is NOT the same as having IBM as a partner. When you put IBM on your website under partners, it gives the impression that IBM believes in your product and is interested to use your service. It is very very misleading to put it up on your website. At least put up IBM partner world, not IBM. People know IBM world is very different from IBM. And the concerning thing is the CEO doesn’t understand why this is a problem.

Anyways, this post by the CEO, subsequently got removed from Reddit and the CEO’s reddit account got deleted. I found it through a link to the archives. Apparently it was explained that the account was hacked.

Now maybe, the account was hacked.

Scam post

There was another post that posted another link for people to deposit Ether for a second token raise and some people actually did. That post has now been locked and the link deleted. So maybe it was actually hacked. But what doesn’t make sense to me is, why did you delete your IBM reply post, and keep the scam post. Shouldn’t you be hiding the scam post to prevent confusion and showing the IBM post reply to explain the situation to your members? Instead the IBM post which states clearly IBM doesn’t see them as a working partner is removed and hidden and the scam post is left for everyone to see. Hmm…. You make of that what you will.

Telegram Bans

Side note, just reading the comments on the post, someone was asking what happened to his payment and why they kept banning people in Telegram for asking the same question.

Now the telegram group which is supposed to be a support network their community can go to for help and answers, has become somewhat of a ban central when people ask questions the admin doesn’t like. Because of the above concerns, many people started asking the admins questions about the ICOS, about partnerships about the missing tech, even about their profile pics being stock pics etc… but apparently instead of replying them, people just kept getting banned from the chat!

The admin had posted “SPAM+FUD+SCAM= Instant Ban”

Which is fair enough if its SPAM and FUD, but reading the many frustrated posts from the community, it seems like it was fair questions that deserved answering, they weren’t FUD. And investors are entitled to accountability and having their questions answered. Especially if the team members or moderators are there, that’s a safe place you should encourage your community to go to for answers, rather than banning them and forcing trying to find out information from less unreliable sources.

Algorand concensus algorithm

Another aspect of the project that raised concern was their concensus algotihm Algorand. Now concensus algorithm is crucial to a blockchain project, because it defines how you use your nodes. In other words it defines what your engine of the blockchain looks like and what makes you special. As mentioned earlier, Arcblock uses Algorand, which is invented by Silvio Micali, winner of the 2012 ACM Turing award.

One of the community members wrote to Silvio Micali to check if this was true. And this was his shocking reply.

Wow this is huge. This is not saying they don’t have a concensus algorithm, but maybe they didn’t get permission and are not allowed to use it, in which case their entire project may fail. Because concensus algorithm is core to the tech of the project, you can’t just change it whenever you want. But also, why don’t they have the permission to use it, surely they should have checked this out before launching a multi-million dollar ICO?
There has been no reply from the team to his email known.

Media Links

Another source of concern included media Links to Bloomberg and Techcrunch, major news source for us

, but when the links couldn’t be found. The CEO’s response was vague and he implied the articles were to be published in the future, and hadn’t been published yet. Oh my goodness. I’m trying not to laugh here guys. You can’t do things like that. You simply can’t claim a media link when the article isn’t posted yet. Anyways, this concern was back in early Jan, in early Feb there was a Bloomberg article on Arcblock, but until now I have not yet seen a techcrunch article on Arcblock. They have taken down the Techcrunch media link, but IBM is still on their listed partners.

Github

The last concern was that their github is empty. So github is where developers load their work, and the community can go to check the progress of the work, or more importantly that work is being done.

Their CEO did reply.

“ArcBlock is essentially like a Amazon AWS but for blockchains, you won't find any core AWS source code anywhere from the github, but Amazon release code samples, some frameworks, APIs etc. in open source license to help developers understand the system better. This is common practice in the industry, and we choose to do it in a similar way.”

Look I think it’s a fair explanation. Not every project wants to put their code details in the open, especially if it’s a novel project that you want to keep certain technical details secret. If you have a github, it definitely proves you are doing work, if you don’t have a github, it doesn’t necessarily mean that you aren’t doing work, but a lot of projects who don’t upload work on github regularly, do at least give regular tech updates to the community about what they are doing. Like weekly or fortnightly blogs or posts. And in this particularly case with so many worried investors, I think that’s at least what Arcblock should do, like a weekly update/ post, which unfortunately has not happened.

So that’s it guys the good and the bad of Arcblock.

The current token price is $0.51. At ICO launch, it was around $0.57- $0.60 value. So its over 10% below ICO price. If you believe in this project, its an attractive buying price. If you’re a sceptic, look elsewhere.

Personally, I am not recommending this project to anyone. I don’t think they the intention to be a scam. Its been over 2 months since ICO and they are still around, trying to put out fires that are happening, so I don’t think they are trying to be a scam. But I don’t think they are a good investment either. I think the many red flags make it too risky an investment for me. At best, even if I believe the good intentions of the team, they are overselling by claiming to be the first blockchain platform to build Dapps and putting up a partnership with IBM etc.. and they are making way too many big mistakes and they are simply not reassuring enough to the token investor. As I mentioned before, I believe in investing in the person not the project. You could have the best project on whitepaper, but can the people behind it deliver? If they are making such big mistakes at such an early stage of the project, projecting forward, the project might take some major hits. So as an investor I want a project I can put my money into and sleep well at night and currently this is not it. Furthermore, there are many other options to invest in at the moment, the crypto market is overflowing with good projects and good investment choices, so I am personally going to look elsewhere.

As always, I am not a professional and this is not financial advice. This video is just me sharing my thoughts on my own crypto journey with you. I am just human and can get things wrong. Always do your own research and make your own decisions.

I do acknowledge, every crypto project is under a lot of stress at the moment, and the competition out there is enormous, I’m sure these guys are doing their best and I wish Arcblock and all their investors the best.

That’s all for this post, thank you so much for joining us, if you found this video helpful or you liked this post, smash that upvote and follow, so you don’t miss out on any of our future content.

Have an awesome day and we will catch you guys soon!