Crowd Machine: a Gem of an ICO Gone Wrong

In an interview with Ivan on Tech, Charlie Shrem and Craig Sproule, CEO of Crowd Machine,  highlighted some of the current difficulties involved in writing smart contracts on a platform such as Ethereum. They discussed how writing smart contracts can easily break other parts of a decentralized application in a smart contract programming language such as Ethereum’s Solidity.

What is Crowd Machine?

Crowd Machine was built to solve some of these difficulties by making it easier for anyone to create a decentralized application without knowing how to code, similar to how WordPress makes it easy for anyone to create a website without knowing how to code. Crowd Machine incorporates drag and drop features to make it easy for users to create any application they want.

Does Drag and Drop Limit Application Complexity?

Crowd Machine’s technology won’t enable users to build something as complex as an operating system, but it will allow users to create very sophisticated applications. Users who do not know how to write code will be able to choose from a repository of existing plugins called Crowd Share. The CMCT token is built on Ethereum as an ERC20 token and its purpose is to incentivize users to create content and upload it to Crowd Share. Content creators are paid every time their plugin is used in other applications.

For example, if a content creator were to create a meteorological application to predict the weather, an agricultural company could incorporate part of the meteorological app into their own application. The creator of the meteorological application would, in turn, be paid in CMCT tokens because their content was consumed by another user. Every time a plugin is used on the network the creator is rewarded, so if the user base grows there will be large incentives for developers to create useful content and upload it to Crowd Share.

Additionally, all of the code is open source so users will be able to identify if the code is legitimate or malicious. Crowd Share is essentially Github for Crowd Machine, it is an open source repository of any kind of plugin that can be coded by developers in most programming languages.

One of the most interesting aspects of Crowd Machine is that it is block chain agnostic. Therefore, it allows builders to utilize any block chain they want. In the future, competition may lead some block chains to become less valuable than others which poses a risk to developers building on a specific chain. For instance, if a developer is building an application on Ethereum and Ether becomes obsolete, that poses a risk for any developer building on its block chain. Crowd Machine allows developers to use different block chains for different aspects of their application. One block chain can be used for security, while another can be used for speed and so on. Crowd Machine is entirely cloud-based and no downloading of software is required. Overall, Crowd Machine attempts to lower the learning curve when it comes to deploying smart contracts and decentralized applications.

What Will the ICO Funds be Used for?

Crowd Machine raised 20 million dollars in their ICO and they already have a working product, so how will the remaining funds be used? Crowd Machine’s ICO funds will be used primarily for marketing and advertising in an attempt to spread awareness and onboard more users. When asked this question Sproule responded,

“Building a product is one thing, taking a product to market is an entirely different question. Marketing is very expensive.”

How Does Crowd Machine Generate its Income?

Crowd Machine allows users to build apps for free, then run them on a Testnet for free, but when a builder wants to deploy their application to the production network they will have to pay a token fee for execution. This is very similar to how Ethereum requires gas fees for transactions. Furthermore, a user will only pay tokens for the execution time their app utilizes.

Is There an Incentive to Hold the Tokens?

CMCT is not a token that represents a security or promises future profit, it is similar to native gas that powers the Ethereum network as a whole. As the project develops and gains more users, builders will have to buy the token to use the network resulting in an increase in demand. With a fixed supply, more demand will only force the value of the token to increase. The greater the demand for the technology, the more valuable the technology becomes.

Theft of Crowd Machine Tokens

While Crowd Machine has a promising use case, the validity of the team and project are still in question. In September of 2018, a hacker stole $14 Million from Crowd Machine’s ICO funds. CMCT trading was frozen across multiple exchanges forcing the token price to drop by roughly 90%. Crowd Machine’s vision has a lot of potential but this theft is a testament to how immature the cryptocurrency industry really is. In September of 2018, Sproule stated,

“It is highly recommended that no one purchase CMCTs until the criminal investigations have ceased, at which time, we expect closed exchanges to re-open. Purchases of stolen tokens by those not involved with the theft will be honored. We will let the community know when temporary trading suspensions are lifted.”

Although the criminal investigation is still ongoing, CMCT tokens are currently trading on UPbit and Bittrex. Moving forward, Crowd Machine is focused on launching their new website in the coming weeks and working to add more users to the platform.

Disclaimer: I am not a financial advisor. This is not financial advice. Please do your research independently and make objective decisions. This article is intended to educate readers on the recent state of the Crowd Machine ICO. The author of the article holds 0 CMCT.