It’s a revolutionary idea from advertising technology company Social Reality Inc (NASDAQ:SRAX): let people make money off their personal data.
Did you know that the personal data of your preferences, tastes, history, finances, purchases and relationships is often sold and used without your knowledge?
Also, that you give it away for free?
What if someone offered to pay you for it, and that too in digital currency?
That’s exactly what SRAX plans to do through its new BIGtoken digital coin, soon to be launched as an initial token offering. BIG is the acronym for Blockchain Identification Graph.
“We are valuable. We deserve transparency, choice and compensation. We have the right to know who buys our data and the right to know how it is used. When our data is bought, we deserve to be paid.” – SRAX CEO Chris Miglino in the presentation on BIGtoken.
Shares in SRAX have rocketed 268% since mid-October 2017, when the company announced its foray into the BIG ICO.
That’s the hot new trend these days as investors latch onto any company with a hint of ‘blockchain’ and ‘digital currency’ in their business models, having one eye on the stellar gains in the price of Bitcoin, which last week shot north of $8,000.
Social Reality Inc (NASDAQ:SRAX) Leaps Into The Hot New World of ICOs
The main business of SRAX currently is digital advertising and data marketing. The company uses digital technology to identify brands and content owners’ core consumers and their characteristics across marketing channels in ‘verticals’ such as healthcare, social media and sports.
SRAX has reported success with SRAXmd, its offering in the healthcare vertical that makes available verified data on MDs and Healthcare Providers to marketers. Earlier this month, it launched SRAXfan, a digital marketing and data management tool designed to reach and reveal sports fan audiences.
In a surprise move, SRAX announced last month that it was considering “strategic alternatives” for the SRAXmd business including spinning it off as a new public company, strategic acquisitions or a variety of other possible transactions.
In a shift up the technological ladder, SRAX identified its BIGtoken business model, which is still data-set based, but constructed around the blockchain, the decentralized ledger on which digital currencies, and a host of other applications are based.
This is how BIG will work: Basically, a consumer opting in to the blockchain-based BIG platform would signal that his data is available for sale. On purchase of data, he would receive BIGtokens, a digital currency which can be changed for other digital currencies or fiat money. In return, the buyers of the data would receive verified and accurate data.
Will Social Reality Inc (NASDAQ:SRAX)’s New ICO Initiative Work For Investors?
SRAX is certainly onto an interesting concept which should draw investors to its ICO.
What’s in it for you and me? Everyone would like to monetize themselves if they had a modicum of control on the process, which BIG assures they will.
Another interesting point. On an interview, CEO Chris Migiliano (pictured above) said that when a consumer receives BIGtokens for selling his data, they can also hope to gain from an appreciation in the value of these tokens. These profits can be sizable if the platform is a hit – so there’s likely some icing on the cake.
SRAX will make money from various fees charged such as for example for tying-in a prospective purchaser onto the data purchase platform. They will also earn revenue from different kinds of transaction fees. Moreover, SRAX would be holding a large chunk of the tokens and will gain from the rise in their value as more and more users access the platform.
On marketing costs of the ICO, CEO Chris Migiliano said the company’s experience in the industry should help it buy media coverage “very inexpensively.”
Going forward, the company will be able to morph its data experience into a completely disintermediated business model that will cut out big data vendors (“Experian” was a name often used by Migiliano in his SNN interview) and make available reliable data to marketers at significantly low costs. That should be a great USP of the BIG platform and SRAX.
In October, the company made a private placement of convertible debentures and warrants of $5.18 Million with existing shareholders, saying it would use the money to eliminate $3.14 million in liabilities.
The funding would also ease its path as the company moves into the ICO space, and it may not need any additional financing.
According to the company, a couple of the company’s long-term investors were highly experienced in the bitcoin arena, “having made an abundance of money in that space.” These investors are said to be the driving force behind the company’s BIGtoken initiative.
Social Reality Inc (NASDAQ:SRAX)’s BIGtoken ICO Risks
According to the timeline in the BIG presentation, the product is expected to be released for general availability in December 2018.
Between then and now there could be all kinds of technological and regulatory risks. In addition, a collapse in the value of digital currencies, which are often accused these days of being bubbles, could undermine the response to the SRAX ICO.
Given that the recent rise in the price of the SRAX stock is perhaps entirely attributable to the BIGtoken venture, investors should curb their FOMO tendencies and wait for a decent correction before picking up the stock.