Money Talks

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Nancy Heslin   Editor

Founder and CEO of SonoCoin Leon Afanasyev, at his office in Geneva, believes the recent collapse of the crypto market has cleared the way for innovative virtual payment solutions.

The First Crypto "You Can Hear"

When Kay Van-Petersen told CNBC that bitcoin “could hit $100,000 in 2018” investors went crazy. After all, the analyst at Saxo Bank had successfully predicted the cryptocurrency would reach $2,000 in 2017, and the speculation that blockchain technology could influence financial markets as the internet did from 1995 to 2000 seemed a risk worth taking.

Or not. The 80% volatile peak-to-trough decline of bitcoin and other forms of digital currency from January to September of this year has been declared: “Worse than the Dot-Com Crash.” However, unlike the 2000 bubble, which wiped trillions off the Nasdaq Composite, the cryptocurrency market was only reduced from $640 billion down to $197 billion, as tracked by CoinMarketCap.com. And with limited links to the traditional financial markets, the global economy did not fall back into a meltdown.

The Global Cryptocurrency Market Report released in October by Ibinex, a White Label Solution for Cryptocurrency exchange, claims 80% of bitcoin users are predominantly between the ages of 25-34 (38.2%), male (86.9%) and European (33.9%).

Other takeaways from the report include that while 8% of Americans own cryptocurrency (versus 9% of Europeans and 18% of the Chinese), firms raised $12 billion in Initial Coin Offering (ICO) in Q1 2018 in the U.S. Some three-quarters of digital currency users are located in North America and Europe, with only 18% in Asia. (The WSJ calls Japan “a hotbed for cryptocurrencies.”)

According to CoinMarketCap there are currently over 2,000 virtual coins. Meanwhile, dozens of countries are considering a national cryptocurrency: on October 1, 2018, Venezuelan President Nicolas Maduro announced the launch of the Petro.

Yet Neil Wilson, chief market analyst for Markets.com in London, a foreign-exchange trading platform, told the Financial Post in September: “Until you can pay your taxes in cryptos, it’s just a pointless investment vehicle.”

But what if you could “pay with sound”? This is the catchphrase of SonoCoin, the world’s first audible blockchain-enabled cryptocurrency.

“We’ve taught the blockchain how to speak,” SonoCoin founder and CEO Leonid Afanasyev tells me from his office in Geneva, where the technology was born in 2016.

The company will be launching its ICO—crypto’s equivalent to the investment world’s IPO—in the coming months, which is expected to be one of the biggest fundraisers in the year to come.

“THE RECENT COLLAPSE of the cryptocurrency market has cleared the way for innovative virtual payment solutions,” asserts Afanasyev, who has spent time in Monaco, where in January 2017, the National Council approved Bill 237 to promote the activity of blockchains and to create the Monaco Authority of Blockchains.

“In the new market conditions, SonoCoin has the potential to become the next bitcoin in terms of breakthrough technology and wide range of potential applications,” he says.

“We present a drastically different way of payment processing that is quick, easy and secure.”

Unlike almost all other cryptocurrencies today, including bitcoin and Ethereum, SonoCoin eliminates the need to create a wallet for coin storage. Instead, each SonoCoin “becomes the wallet” that can be stored as a regular file on any device with speakers and a microphone (desktop, smartphone) and transferred through all common digital channels—email, messengers like WhatsApp (see p. 92), social media and even QR codes—with no registration or verification process required.

With a unique digitally encrypted audio file, based on a proprietary blockchain system and using the Proof-of-Stake (PoS) protocol to verify transactions, SonoCoin is password protected, stored safely on a variety of backup media and each SonoCoin .WAV file can be individually encrypted with a password.

Born in Russia, Afanasyev started his professional career at a small brokerage house on Wall Street at the age of 25. Two major steps he counts in the development of his career were getting an offer from Prudential Securities and a position of Investment Advisor at Morgan Stanley, where he learned that “you have to be an expert in various fields: stock market, fixed income securities, mergers and acquisitions.”

In 2004, he moved to Switzerland and three years later founded Crown Capital Group, an asset management company specializing in capital markets, trading and hedging, and funds management.

After becoming a father of three, Afanasyev says his focus shifted “from current investments to projects that have the potential to shape the future of my children and children of my clients.” A serial entrepreneur, he also founded the e-commerce platform Govermedia Plus.

Earlier this year, he told Bilan.ch that SonoCoin’s idea evolved from its Russian-based blockchain e-commerce platform. He foun five talented engineers in Russia, and decided, like many financiers converted to blockchain, to embark on cryptocurrency.

“Among the main objectives behind this project,” Afanasyev explains, “was to simplify blockchain- based transactions with regards to verification requirements and interface, as well as to minimize transaction fees, giving anyone the power to utilize blockchain-based payments via a simple user-friendly platform.”

The idea was easy and straightforward: sound. The end product, a digital currency that you can literally hear, allows users to store and transfer value as audio .WAV files to anyone in possession of a device with speakers and a microphone.

Bitcoin’s complex transaction process involves significantly more time than SonoCoin, which takes less than 20 seconds per transaction.

Moreover, the audible cryptocurrency’s easy-to-implement system and low transaction fees are particularly attractive to the payment processing industry, especially for small businesses.

The high-speed payment transaction with SonoCoin safeguards against the possibility of theft or hacking, while each transaction is secured via the creation of new coin with new security keys inside.

AS A KEY TECHNICAL PARTNER, Swisscom Blockchain will provide the infrastructure that delivers security during the ICO process and KYC/AML requirements, as well as auditing SonoCoin protocol to give users additional data protection security.

Swisscom Blockchain, part of 51% state-owned Swisscom AG, is a global leader in blockchain, cryptocurrency and tokenization digital security related services.

“We work on the technical and security aspects,” Daniel Haudenschild, CEO of Swisscom Blockchain and a SonoCoin Advisory Board member, told Bilan.ch. “We will stabilize the protocol, make sure it’s safe and verify that the ICO is made according to ‘Know Your Customer’ rules.”

“We are very fortunate to have Swisscom and EXMO on board,” Afanasyev reveals. EXMO is the number one exchange in Eastern Europe and one of the world’s largest global exchanges in volume and liquidity.

The SonoCoin project, with an ICO soft cap of $14.4 million (€12.5 million) and hard cap of $77.6 million (€67.5 million), was entirely funded by its founders, who will retain 30% of the total token supply in its reserve until Q4 2019.

With protocol and blockchain fully developed and market ready, SonoCoin is hoping to tap into the 300 million global transactions and assets worth $270 billion that are managed by blockchain technology. Some 12,065 merchants worldwide accept cryptocurrency.

To succeed, they have set their sights on mass adaptation, from individual consumers to fundamentally changing entire industries. Advertisers could run regular commercial spots but use SonoCoin’s 

ultrasonic frequency inaudible to humans, thereby transferring coins to viewers’ phones that they could exchange for discounts on goods and services.

SonoCoin is hoping to tap into the 300 million global transactions and assets worth $270 billion that are managed by blockchain technology.

In the gaming industry, bitcoin is the primary cryptocurrency used for investments but SonoCoin would be a quicker and easier payment solution for in-app purchases, without the need for any verification requirements. With a reduced risk of fraud, and as a primary digital currency, it would eliminate the need for secondary conversion into FIAT currencies.

“We’ll make money by finding commercial use and building an ecosystem around the currency, which means the price will increase in value,” Afanasyev told CNN’s TechTalk in July.

Crypto investments remain speculative but a recent Forbesarticle (Decentralized Cryptocurrencies Are The Future) claimed “blockchain and its cryptocurrency could vaporize their entire business model in the same way Amazon has laid waste to retail.”

For Leon Afanasyev, this is right on the money. “Sound and voice commands are the future for technologies.”

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Nancy Heslin   Editor

Nancy (Wilson) Heslin is an established journalist and lifestyle writer.  She has been the Editor-in-Chief of Forbes Monaco magazine (bimonthly in English) , since the magazine's 2nd issue . Launched in November 2018, Forbes Monaco is part of the Forbes family, with its 7 million readers and 71 million monthly website visitors worldwide.