The Lockchain ICO has just started, their website stating that they managed to raise 5,300 ETH during just the pre sale.
What is Lockchain?
They're planning on launching a decentralized bookings platform which will allow customers and property owners to deal directly with eachother.
There's been a huge rise in the success of platforms such as Airbnb which offer users the chance to book direct with the property of their choice, however these platforms are centralized and tent to charge a high fee.
The platform will run on the Ethereum network, making it completely decentralized.
The rise of cryptocurrencies
The cryptocurrency market has grown massively this year, the total market cap at the time of writing is now over $175 billion.
Bitcoin still dominates the market which is solely a payment processor. However many people believe the most important part of cryptocurrencies is the use of the decentralized nature, platforms can now be completely decentralized with no actual owner. This creates a trustless environment with all transactions viewable on the blockchain.
Problems with the current short term rental market
The online travel industry is estimated to now be worth $500 billion. There's been a huge rise in the useage of platforms that allow users to book direct with the property owner such as Airbnb.
Airbnb is now estimated to be worth over $30 billion and employees over 3000 people.
The problem with these online booking companies is that there fees they charge are often over 15% and range up to 30%. Ofcourse the user has the option of trying to contract the property owner and going direct, however many booking platforms state in their terms and conditions that the hotel can't charge a lower price elsewhere.
This has made travel more expensive the consumer.
The market is dominated by just a few major companies such as Tripadvisor, Priceline (booking.com owner), Airbnb and Expedia, with many of them owning different platforms that aren't connected.
They have 3 main revenue streams:
Agency revenues: This is the commission that the platform charges hotel/property owners, normally the property owner takes the payment direct and just pays a commission to the platform, meaning that the platform doesn't have any transaction costs.
Merchant revenues: This is when the website is the merchant of record, with the property owner paying the transaction costs. Pricelines 'name your price' feature comes under this category.
Advertising revenue: Some of the main platforms also charge for advertising space. This is the smallest area of revenue for most of the platforms.
The Lockchain Solution
By running on a decentralized platform Lockchain should have far lower expenses.
The decentralized LOC Ledger will keep a record of all transactions by using smart contracts. The LOC ledger will handle: Payment processing, managing bookings and the database.
The new platform won't charge any commission. They state in their whitepaper that they'll either charge a fixed subscription fee or just charge a small amount for additional features, this will make it far cheaper for the property owners who should then pass on the savings to consumers.
How will it work?
The Lockchain.co marketplace will be directly connected to the LOC ledger.
The platform will be designed to be easy to use for property owners and consumers. Property owners will have the option of importing their current platforms on to the Lockchain marketplace with just 1 click. The platform will also support any payment processors that they're already using. By receiving the new LOCK token however they'll have the benefit of paying 0% transactions fees.
Once the user selects a property and makes a booking a smart contract will be released containing the details of their booking.
As with other platforms the property owner will have the option of requiring an additional deposit and charging a fee for any canceled transactions, all of the details will be pre defined and then viewable on the platform, with a smart contract backing it up to create trust on the platform.
The LOC token
The new LOC token will be the utility token used on the platform. Users will initially have fiat options available due to cryptocurrency not being a mainstream currency yet. However when fiat currency is used the amount will first be exchanged into the LOC token.
The property owner will be able to withdraw their LOC tokens from the platform from their dashboard.
Platform Founders
The 2 co founders of the project previously launched a Bitcoin exchange together back in 2011, at the time 'Bitcoin7' was the 3rd most used exchange in terms of volume:
Nikola Alexandrov: Founder of theSEO.com- a digital marketing agency that won the Forbes E-volution award in 2015 for best SEO agency. He also founded E-Cron which is an online retail brand with over 150,000 customers per year.
Hristo Tenchev: Also founded softuni.bg which had 100,000 software engineering students in just 3 years. Also founded 1hub, a coworking space in Sofia, Bulgaria. He's also been featured on the cover of Forbes Bulgaria and was listed in the European Forbes '30 under 30' for being one of the 30 most succesful entrepreneurs in Europe.
ICO Details
Token sale dates: 29th of October until 30th November.
Target amount to raise: 20,000 ETH
Hard cap: 32,000 ETH
Token type: ERC20
Lockchain Conclusion
The online bookings industry looks like a prime target for a decentralized platform to disrupt, the fees being charged are far too high and with the need for so many employees I think they'll struggle to compete with a platform charging 0% fees once it takes off.
The founders both have a strong history in cryptocurrency and digital marketing fields. The project is also backed by the previous President of Bulgaria, Rosen Plevneliev who is their advisor. Not many projects can boast of having a President behind them.
The project also has a lower hard cap than most of the recent ICOs which should hopefully mean the token price will increase in the short term aswell as the long term.
Website: https://lockchain.co
Whitepaper: https://lockchain.co/whitepaper_v1.2_p.pdf
my ETH address: 0xA47772062D4BCBDD331dc351eAc8d6ea5893Ff01