AMA: Ask Me Anything Session with herocoin.io (14.12.2017)

The project herocoin.io from Vienna was doing the first fully regulated Token Sale in Austria in October and collected around EUR 2m in Ethereum (October prices). The token enables you to join or create games on the Ethereum Blockchain.

After the success of the Cryptokitties this was an interesting story to follow up. In an “Ask Me Anything Session” in our Altcoin Telegram Channel at Thursday 12th December 2017 the CEO and founder of the project Paul Polterauer, the COO Bernhard Blaha and the CMO Johannes Mahler have been one hour available to answer all questions from the community regarding this new project (names of community members are anonymous):

Mr. A, [14.12.17 21:00]

Ladies and Gentlemen, now our AMA session for today. The stage is free for Hero (Play) from Austria. They are here with three people. It would be great if first everyone introduces himself.

COO Bernhard Blaha, [14.12.17 21:01]

Hey guys, COO Bernhard Blaha here. Thanks for the possibility to do our AMA here. I am the COO and co-founder of herocoin.io, responsible for the most boring stuff like taxes, legal, regulations and also - of course - the actual operation of our already existing platform herosphere.gg.

Looking forward to your questions!

CMO Johannes Mahler, [14.12.17 21:01]

Hey guys! Happy to be here and answer your questions. I´m Joe the Head of Marketing of HEROcoin.

CEO Paul Polterauer, [14.12.17 21:02]

Hi,

Happy to be here tonight!

Paul - CEO and Co-Founder of HEROcoin

\@Mr. A thx for the invitation!

Mr. A, [14.12.17 21:02]

Thanks for beeing with us!

Mr. A, [14.12.17 21:03]

So how would you describe Hero in 3-4 sentences. There are a lot of guys in that channel never noticed you.

CEO Paul Polterauer, [14.12.17 21:04]

with HERO we taim to change the way online betting works today.

CEO Paul Polterauer, [14.12.17 21:05]

we enable users for decentralized peer2peer betting

CEO Paul Polterauer, [14.12.17 21:06]

HERO is whole ecosystem and we are working with herosphere.gg on the first use case for this ecosystem

CEO Paul Polterauer, [14.12.17 21:06]

herosphere.gg has already over 250k users and is focused on esports fantasy

Mr. A, [14.12.17 21:07]

So you can use than this Herocoin (Play) to bet there?

COO Bernhard Blaha, [14.12.17 21:09]

Yes, you will be able to use PLAY for betting on herosphere.gg, but this is just the beginning. The goal we had in mind when implementing HEROcoin was to create a technology that wraps around different kinds of online betting and fantasy sports play modes. With that interface included in the basis of HEROcoin we can include any platform that is interested in using PLAY for their usecase.

Mr. A, [14.12.17 21:09]

Would you see FirstBlood and Augur as compeditors of your business model?

COO Bernhard Blaha, [14.12.17 21:10]

But we also allow for a usecase completely without a middleman. So you want to challenge your friends on your favorite game without signing up on any platform? You can do it with PLAY.

CMO Johannes Mahler, [14.12.17 21:12]

We see Augur as kind of a base technology that could be included in PLAY. We do not aim to compete with augurs well developed oracle system, but we offer a way of including their technology in the user experience including many platforms that will be developed on the HEROcoin systems. So Augur is not a competitor but plays perfectly with PLAY😁

CEO Paul Polterauer, [14.12.17 21:13]

firstblood, not really. they operate in the same industry (esports) but have a very different product. at firstblood you have to play against each other in order receive tokens. on herosphere.gg we focus on the esports audience and enthusiasts. so on herosphere you bet on professional players. and we have already a working product

Mr. A, [14.12.17 21:13]

So this Herosphere belongs somehow to you?

CEO Paul Polterauer, [14.12.17 21:15]

herosphere will be the first use case of HEROcoin. It's our own project and we are already working since 2014 on it. herosphere solely focuses on esports

COO Bernhard Blaha, [14.12.17 21:16]

Sidenote from the numbers guy: We have 250.000 users registered on there already and it's great fun to challenge your friends there (especially considering it's just a demo for what will come once HEROcoin is implemented). Give it a try: herosphere.gg

CEO Paul Polterauer, [14.12.17 21:16]

but we were already approched by other betting providers who also want to work with the HEROcoin ecosystem

Mr. A, [14.12.17 21:16]

Regarding Play: The Token can be used for betting. Any other benefits owning the Token?

CMO Johannes Mahler, [14.12.17 21:19]

The token will be available for betting as the main usecase. On our platform however it will also be tradeable against skins of various esports games. Another benefit is for people interested just in the investment part of PLAY as the whole community will be rewarded with 1% of all volume played over the network.

Mr. A, [14.12.17 21:20]

Will there be a dividend? Will it remain an ERC20-Token?

COO Bernhard Blaha, [14.12.17 21:22]

No it's not really a dividend as it is not in any way connected to our company (that would make it a security and as some of you probably know you do not want that 😉). We have a reward that is calculated on the blockchain. Every game played using PLAY will automatically spread one percent of the buy-in to all token holders.

And yes: It will remain an ERC20-Token as we are big fans of that blockchain and the development team behind it.

Mr. B, [14.12.17 21:23]

Why do you use a erc20 token? Wouldn't this also be possible with ethereum as the currency? And just using your smartcontract for the betting in ethereum.

COO Bernhard Blaha, [14.12.17 21:26]

Good question and we actually thought about doing it with smart contracts only first. The problem is:

How can you guarantee that the game really uses the actual rules that you as a user rely on? Simply put: You can't if you do not understand how to read smart contracts (which some of you definitely can, but most of the users can't).

So what we did to solve this is include an interface that serves as a scheme for any game using PLAY: For example we have set rules for how the player reward works, how a payout has to be sent to the blockchain and so on.

All this while still allowing the flexibility of implementing any game you can imagine. That makes it futureproof as well 💪

COO Bernhard Blaha, [14.12.17 21:28]

Also: We really wanted to have a reward system included as gamers are used to rewards. We could not really have done that with smart contracts only.

Mr. A, [14.12.17 21:29]

You have had not so lucky with the timing of your ICO. When you started the ICO this was the lowest Bitcoin price since a long time, the Friday Bitcoin dropped for a few hours below 3000 (after the Tony Vays meetup). Do you think that was the reason you just got EUR 2m. instead of much higher numbers? Would you do something different today if you can redo a Token Sale?

Mr. B, [14.12.17 21:29]

[In reply to COO Bernhard Blaha]

Yes that makes sense 👍 not sure I understand the other reason though. Since the hero tokens are also in a smartcontract and therefore the users would also have to read and understand that smartcontract

CEO Paul Polterauer, [14.12.17 21:31]

[In reply to Mr. A]

[ Photo ]

CEO Paul Polterauer, [14.12.17 21:31]

yes the timing was quite bad. thats the screenshot of coinmarketcap 4 days before the start of our ICO

Mr. C, [14.12.17 21:32]

Do you planing on any Age Controll? As far as i can see you can just made an account and bet to whatever you want?

COO Bernhard Blaha, [14.12.17 21:32]

[In reply to Mr. B]

Yes, but it is very easy to check if a smart contract is derived from another one (which in our case is the PLAY token contract), because it will always reference the latter. You do not have to understand the code in the smart contract and we will provide tools for anyone to easily check if a smart contract inherits from our interface. You could not do that programmatically with ethereum smart contracts due to the many ways one could implement rules

CEO Paul Polterauer, [14.12.17 21:33]

[In reply to Mr. A]

and yes i think timing was one of the reasons why our ICO stayed relatively low. but on the other hand we denied every whale request for big discounts - so the ICo was really for the community with an average investment size of 2-3 ETH which will be benefitial for the PLAY exchange rate in future

CMO Johannes Mahler, [14.12.17 21:34]

[In reply to Mr. C]

As far as our free2play version of herosphere, which we will keep it won´t be age restricted. As soon as our Token PLAY is integrated users will have to do a full KYC as required by law and it will be age restricted.

Mr. A, [14.12.17 21:34]

Are you able to deliver with the just 2 Million you have received. Do you need to scale down?

Mr. B, [14.12.17 21:35]

[In reply to CEO Paul Polterauer]

That is very cool 👍 for curiosity. How much discount did the whales typically want and how many offers did you get? Would love to get some insight into how the whales bargain on ico prices

CEO Paul Polterauer, [14.12.17 21:36]

we will focus at the most important milestones. but we are confident to deliver our mvp on time. also we are quite lucky since ETH is picking up and we still have most of the ICO funds in ETH and did not exchange it into fiat

COO Bernhard Blaha, [14.12.17 21:36]

[In reply to CMO Johannes Mahler]

By the way, an interesting fact about our ICO is that we are actually the first one in Austria (and to our knowledge in all of the EU so far) that was done according to regulations. We put lots (and I mean LOTS) of effort into working together with authorities and getting the most out of existing regulations.

CEO Paul Polterauer, [14.12.17 21:36]

we alss manage to pay a lot of the costs in HEROcoins...

Mr. A, [14.12.17 21:37]

Was it a good idea to pay out the bounties before official listing, so that this guys are now dumping at Etheredelta?

Mr. A, [14.12.17 21:37]

https://etherdelta.com/\#0xe477292f1b3268687a29376116b0ed27a9c76170-ETH

Mr. A, [14.12.17 21:38]

(currently around 50% below ICO Price of 0.00008 ETH)

CEO Paul Polterauer, [14.12.17 21:38]

[In reply to Mr. B]

quite often they asked for high discount if they would put in like 500k+ or 1m+

Mr. B, [14.12.17 21:39]

How are bets decided? Who tells the smartcontract who won? Will Herocoin also use something like REP from Augur?

CMO Johannes Mahler, [14.12.17 21:41]

[In reply to Mr. B]

Bet´s will be decided through official tournament data, for example from our esports data provider abios.

CMO Johannes Mahler, [14.12.17 21:41]

Later on we plan to use an oracle system, but only for the non live betting.

COO Bernhard Blaha, [14.12.17 21:43]

[In reply to Mr. A]

Yes and no.

It was a bad idea as they are now dumping the price on ED (which I urge you to not take too seriously, as its way of calculating prices does not really make sense in the real world). However the price did not go down too much and is supported quite well by our community who is happily buying more PLAY.

However it was not a bad idea since we got lots of attention on the important platforms and wanted to continue to use it. We did not want to give the users the impression that we were hesitant to pay out the bounties.

Since I also like to talk about mistakes we made, there was something we would definitely change: Just a couple of days before we wanted to pay out the bounties we were informed that we could not do so (do to us sticking to regulations) without issuing credit notes for each bounty claim. That was on pretty short notice and there were some people that did not like giving their data to a company. However: Get used to it, because soon all ICOs who want to stay within the legal limits will have to use similar systems. I wrote a blog article regarding that if you are interested in more details:

medium.com/\@HEROCoin/why-we-had-supporters-actually-claim-their-bounties-8e065517439a

Mr. A, [14.12.17 21:47]

To be honest, the campaign failed. No bounties should be paid out. Next time set some conditions = Bounties paid out if ICO target is reached by half.

COO Bernhard Blaha, [14.12.17 21:48]

Btw sorry for my long replies, but I just can't stop short of some details 😅

Mr. A, [14.12.17 21:48]

You advisors haven't done a great job here.

Mr. A, [14.12.17 21:49]

So when there will come real Exchanges, are there plans to list the Tokens outside of Etherdelta?

COO Bernhard Blaha, [14.12.17 21:50]

[In reply to Mr. A]

Data actually says otherwise: The bounty program brought loads of new people to the project and was responsible for many investments. We think it would have been WAY harder and a much worse result without the bounty campaign

Mr. B, [14.12.17 21:51]

[In reply to COO Bernhard Blaha]

No problem. I like long answers and I'm sure others do too 👍

CEO Paul Polterauer, [14.12.17 21:51]

[In reply to Mr. A]

we are still in negotiations trying to find the best deal/fit for company and the community. will announce our final decision shortly

Mr. A, [14.12.17 21:52]

I guess Bittrex is not interested try to focus at Bitfinex, Binance or HitBTC.

Mr. A, [14.12.17 21:52]

If none of the the three. Gute Nacht 🤣

CEO Paul Polterauer, [14.12.17 21:52]

[In reply to Mr. A]

thx. we will (are)...

Mr. B, [14.12.17 21:53]

How will you handle that the users of Herocoin also have to have eth on their account? Will you provide them with the eth for transacting? Or will users have to deal with that?

COO Bernhard Blaha, [14.12.17 21:55]

[In reply to Mr. B]

Great question 😄

In the first place, yes, we will provide users with the ETH required for the transactions and will basically just calculate them into the fees.

However, Ethereum is working on an upgrade that will allow the payment of GAS with tokens. Which will of course make the whole process easier and more streamlined

Mr. A, [14.12.17 21:56]

[In reply to COO Bernhard Blaha]

This Upgrade called "Gas-Station" the SwarmCity team developed and introduced at DevCon

Mr. B, [14.12.17 21:57]

[In reply to Mr. A]

But doesn't gas station only give you gas for the first transaction?

Mr. D, [14.12.17 21:59]

Are you regulated under gambling law like Cashpoint or Admiral? Are you only focussing on online? Are you looking to get regulated in ring fenced markets in europe?

Mr. B, [14.12.17 21:59]

How do you at HERO see the fees? Are you guys scared of the blockchain not scaling enough and their for fees being to high to use Herocoin?

COO Bernhard Blaha, [14.12.17 21:59]

[In reply to Mr. B]

TBH I'd have to doublecheck with our CTO Philip for the exact way it will work. Don't want to spread wrong information here 😅 But I can follow-up with that information later if you want

Mr. D, [14.12.17 22:00]

(And fun question - no answer needed - white or brown sugar 🤣)

Mr. B, [14.12.17 22:00]

[In reply to COO Bernhard Blaha]

No problem :) thanks for being so honest👍

CEO Paul Polterauer, [14.12.17 22:03]

[In reply to Mr. B]

one of our advisors is also founding member of gridsingularity. they are working on solution with the claim to support over 1m transactions per second for the energy market. i always try to convince him that they should also open up their alpha for gaming ;)

COO Bernhard Blaha, [14.12.17 22:03]

[In reply to Mr. D]

So the whole regulations topic is very complex and we have been working on it since 2015. In the EU there is the problem of services not being as EU-wide as they should in the gambling market, so we will have to set up the countries step by step. Right now we are focussing on starting from Austria where we are based and quickly extending the paid service to the most important EU countries. At the same time we can already start to offer the service in counttries where regulations are easier to tackle.

For a list of countries we will try to offer PLAY on herosphere.gg ASAP:

Serbia, Croatia, Bosnia, Spain, Poland, Estonia, Brazil, Peru, Argentinia, Philippines.

And: Definitely brown sugar.

Mr. D, [14.12.17 22:04]

Switzerland will be excluded by law in that case.

Mr. C, [14.12.17 22:05]

You created 2 Billion Tokens and gave 600 Milions away by the ICO, what are planing to do with the rest? beside development?

COO Bernhard Blaha, [14.12.17 22:06]

[In reply to Mr. B]

The height of the fees is not so much of a problem. Of course we have to scale it up when it rises (DAMN YOU CRYPTOKITTIES! 😉).

The scalability of the blockchain however is definitely a hot topic for us, especially with esports growing as it is. We have three ways of solving that:

  1. Ethereum scales up with our needs (We'd prefer that )

  2. A layer solution (Which I don't like too much for its decentralization effect)

  3. Switching blockchain (Which should only be our last choice if nothing else works)

CEO Paul Polterauer, [14.12.17 22:06]

[In reply to Mr. D]

not necessarily..

CEO Paul Polterauer, [14.12.17 22:08]

[In reply to Mr. C]

we burned all of the unsold tokens. besides the development we will also set up own PLAY fund to accelerate development for PLAY outside our company

Mr. D, [14.12.17 22:09]

[In reply to CEO Paul Polterauer]

Ofc. It will fall under unlawful gambling. If the new „Geldspielgesetz“ passes (referendum outstanding) DNS blockers (a joke yes) will be installed.

CMO Johannes Mahler, [14.12.17 22:09]

[In reply to Mr. C]

As we planned it on our roadmap, we want to onboard existing and newcoming betting providers to use the PLAY technology, a part of the supply will be used in order to provide them with liquidity.

COO Bernhard Blaha, [14.12.17 22:10]

[In reply to Mr. D]

Yeah, true. But where there's a will, there's a way for citizens. However, in that case we cannot support swiss gamers. But there's still a lot of "if"s to be solved before we can say anything for sure

Mr. B, [14.12.17 22:12]

How have the regulators Benn to you? Have they been open and interested in how Blockchain works and how you would use it?

CEO Paul Polterauer, [14.12.17 22:12]

[In reply to Mr. D]

to be honest the number one reason why beeting providers still apply for licenses is because the acquirer (visa etc) demands for it. since we do not really need them. still its a reputation thing to have a license

Mr. A, [14.12.17 22:13]

So any more questions?

Mr. D, [14.12.17 22:13]

[In reply to COO Bernhard Blaha]

I work in the industry. I understand.

CMO Johannes Mahler, [14.12.17 22:13]

[In reply to Mr. B]

I´d have to say Austrian government is really supportive for blockchain technology.

Mr. D, [14.12.17 22:14]

[In reply to CEO Paul Polterauer]

True

CEO Paul Polterauer, [14.12.17 22:14]

[In reply to Mr. B]

we talked a lot to the regulators, since we have been the first ICO in Austria and also complient with Austrian law. but we received "green" lights for everything so far, includind the FMA (financial regulation of Austria)..

Mr. D, [14.12.17 22:15]

[In reply to Nicolas Jacquemart]

60% of value needs to be added in switzerland to be exact. There is a official calculator to do that. Ask Kambly how tricky that is 😂

CEO Paul Polterauer, [14.12.17 22:15]

[In reply to Mr. D]

number one choice is malta atm ...

Mr. D, [14.12.17 22:16]

[In reply to Mr. D]

https://www.ige.ch/de/etwas-schuetzen/herkunftsangaben/herkunftsangabe-schweiz/industrielle-produkte/swissness-kalkulator.html

COO Bernhard Blaha, [14.12.17 22:16]

My opinion on the whole "blocking access to whatever" on the internet thing is: A government should NEVER decide which websites its citizens are allowed to view. I am all for regulations and telling citizens about risks. But a government should never just block a website right away. That has a very negative impact on net neutrality

Mr. D, [14.12.17 22:16]

[In reply to CEO Paul Polterauer]

Yes. The cantons are starting to realize what they miss from the turnover made over there.

Mr. D, [14.12.17 22:17]

[In reply to COO Bernhard Blaha]

😌

Mr. A, [14.12.17 22:19]

So many thanks all!

CEO Paul Polterauer, [14.12.17 22:19]

[In reply to Mr. D]

treu and malta will also add cryptos as a payment pretty soon

COO Bernhard Blaha, [14.12.17 22:19]

Thanks for having us! Was a pleasure. If you have any further questions you can always contact us using our channels listed at herocoin.io

Mr. A, [14.12.17 22:19]

Thanks the Hero team for answering our questions. Good luck with the listing and have success next year