Prologue

From a short term perspective, people who entered the crypto-space between Nov 2017 and January 2018 have gotten burned massively. A lot of them lost their initial interest in crypto, stopped refreshing their Blockfolio or stopped reacting to any good news enthusiastically.

As our reader, you are one of the few who knows that the crypto revolution continues and will be extremely profitable for all those who participated in the right projects early enough.

The fundamentals did not change.

‘I wish I had bought coin X a year ago, I’d be a millionaire by now.’

How many times did you or one of your friends say that?

As the good ol’ Chinese proverb says, ‘The best time to plant a tree was 20 years ago. The second best time is now.’

The bear market like the one we’ve experienced in the last few months is the perfect time to plant your seeds which will flourish during the bull phase. The average crypto enthusiast will lose his mind every time there is a correction, but we want you to stay calm and realise that the cheaper you can invest, the more upside potential there is in the future.

Back in 2013, Bitcoin dropped from over $1100 to around $100 which seemed like a nightmare when you lived in the bubble of that very moment. However, in hindsight it was an amazing opportunity to accumulate, similar to what we’ve experienced in 2018’s bear market.

Whenever we’re in a bear season, instead of burying your head in the sand, look out for the projects that stand out. Plant your seeds before the bulls return and bring back the green euphoria.

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The China Gold Rush

It is 2008 and the global crisis leaves many with their jaws dropped to the floor. The subprime mortgage bubble bursts, negatively impacting economics around the globe and causing a meltdown of trillions of US dollars in consumer wealth.

It was a disaster.

After this major hit for investors, they began to look after another opportunity to recover their losses.

It did not take long for Wall Street to come up with the next way to make a bank. They figured out how to exploit the expanding Chinese market by something called a ‘reverse merger’.

Access to the Chinese stock market is very difficult due to government regulations, especially for Americans.

Some smart people figured out how to bring Chinese companies to US exchanges. This was accomplished by simply assuming the control of defunct American firms that still carry a symbol on the US exchange to these Chinese firms.

Where is the catch?

It is not illegal in China to file fraudulent financial disclosures in the United States.

In short, let’s say you have a company in China worth 2 million USD. You claim false papers in the United States that you’ve made 10 million USD in profits this year and then you merge with some defunct American company.

Voilà!

Another ‘fantastic’ opportunity to invest in a company that just hit U.S. exchanges shows enormous results.

As long as the new method allowed everyone involved to make money, nobody really questioned it.

The short term profit, however, made everyone blind for the inevitable consequences. On the top of that, the boom of the Chinese economy made it easier for people to justify the risky investment.

Between 2008 and 2012, around 500 Chinese companies were listed on US exchanges in this way. A group of people that found this loophole made enormous loads of money by throwing other people’s savings and pension funds into these investments. It goes without saying that we, here at London Letter, condemn such behaviour. Among other reasons, this was the major reason we came to be.

It is not just speculators who were moving money around. Average Joe investors were also participating, completely unaware of the scammy nature of this procedure.

A bunch of people from Muddy Water Research got suspicious and organised a trip to China to get a first-hand overview of these Chinese ‘unicorns’. It turned out that most of the companies that claimed millions of profits were nothing but obscure buildings hiring a few farmers to fake some activity. Soon after these findings came to light the bubble burst, resulting in billions of losses in consumer wealth.

Although the entire process was based upon several loopholes, we believe the key to making it all happen was the ability to fake the profit sheets of the Chinese businesses.

Was all this avoidable?

Maybe. Currently there are no tools that would allow for a more reliable insight into a true financial state of a company. Instead, we have to rely on third party audits, which in this case failed enormously.

However, there is hope on the horizon.

It’s called Request Network.

The regular crypto enthusiasts refer to it as PayPal 2.0.

While this is true and REQ is indeed the new PayPal on the blockchain, the ‘Pay with REQ’ button is just the icing on the cake. The Request Network project goes far beyond a new payment option. Curious on what other innovations it brings to the table? Learn more by reading our following review.

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Accounting is absolutely essential in today’s world and there is no way around it.

Unfortunately, the way we do accounting today is far from perfect. In order to trust each other many businesses have to hire expensive auditing firms which have to go through all the paperwork of the company to verify their records.

This also is open to human failure, which is unavoidable. If it wasn’t, the stories like above would not have happened.

If you have ever had to deal with invoices you know that it can be a huge pain in the ass. Not to mention that all the paperwork is still required to be printed in many countries by law.

On one hand, we’ve got Elon Musk shooting his Tesla to the orbit and other unreal stuff happening in the tech world. On the other hand, the accounting industry still hasn’t adapted to the 21st century even though every business is obligated to fall in line.

This, however, creates an amazing opportunity for Request Network.

What is their solution?

A standardised ecosystem beyond the countries’ borders. Just like the internet has a set of rules and protocols to which developers from all over the world adapt, we believe a similar set of standardised methods for accounting and auditing can be applied using blockchain.

Request Network is on their way to turn this vision into a fully working product.

Imagine a system where a payment itself becomes an invoice. No more need for sending papers back and forth to confirm that the particular transaction has occurred. No more problems with the IRS for missing statements. No more overwhelming work and expenses during the tax season as everything is clearly visible in the public ledger.

Sounds too good to be true?

Request Network recently made the first step to make this a reality.

On 30 March 2018 the Beta Mainnet was launched. This platform enables anyone to issue an invoice on the blockchain. Below, we’ll give you a short overview of the platform because it’s already truly impressive.

Please keep in mind that the current version is not mainstream-friendly, yet. But early adapters and investors, who can play around in order to understand the core functions of what Request Network is capable of, can get a pretty good idea of what’s in store.

After heading to the main site, we are presented with a neat interface.

Requesting a payment is child’s play. Currently, the system supports only ETH payments whereas other ERC-20 tokens are soon to be added.

Let’s say you sell T-shirts online and someone purchased a white one from you.

By filling out the amount in ETH and the Payer’s ETH address we head over to confirm that with a click on the ‘Create a Request’ button an invoice on the Ethereum blockchain will be created.

This is how the invoice looks from the issuer’s perspective. The options are visible only when you have your Metamask connected throughout the process.

From this point, you can simply copy the url from the box in the top left corner and send it to the person who owes you money for your product. You can also update the requested amount anytime.

The screenshot below presents what the receiver sees after opening the invoice. From there only two clicks separate him from making a payment. Keep in mind the Metamask is active in the background.



After the successful payment, a complete invoice is presented for both sides which looks like this:

The confirmation of the payment for a white T-Shirt between those two addresses will be stored on the blockchain forever. The reason (look at the screen above) for the transaction is stored on the blockchain as well. The invoice has a unique ID (top right corner with an issued date). The history of any changes is clearly visible in the left column.

No one can fake the amount of money that was being transferred during this process.

This is revolutionary.

The invoice turns valid only once the payment has been confirmed and either payee or payer doesn’t have to store the invoice on their own.

Obviously, what was described above was a manual process which will be automatically handled by the apps created upon the Request Network.

And we couldn’t be more excited about what is yet to come.

Request is not an app

It is a layer on top of Ethereum that other developers can utilise for their own dapps. If you read our previous issues, you can observe a pattern. We put a lot of pressure on projects which aim to create their own platform or ecosystem with various branches.

Request Network is no different.

Let’s take a broad view of the mindmap of the Request Network ecosystem created by their phenomenal team.

Click to zoom: https://www.mindmeister.com/991002501?t=R1iofDilV0

There are plenty of use cases, starting from salary softwares, accounting, crowdfunding, lending and many, many more.

Their vision reaches far and beyond general use cases though.

As stated in their roadmap, in the first quarter of 2018 they managed to deliver the Request Mainnet that we just described, a partnership with PwC – which is important and we will touch on that in a moment. Not to mention the ‘Pay with Request’ button that third parties can start implementing on their own sites.

Why then is REQ token price so low?

Besides the heavy bear market we’ve seen, there are two other factors that keep the price low. For now.

Accounting and auditing are the two main things the Request Network focuses on. The truth is that average people don’t bother with these terms on a daily basis. Oftentimes, it’s difficult to explain and the wider audience takes longer to realise the benefit of REQ’s accounting solution on the blockchain.

It is a platform. Due to its wide spread potential use cases, it can be difficult to pitch the concept when compared to a single purpose DAPP you could easily describe in one sentence.

Once DAPPS built around the Request Network start popping up to the wider audience, we expect that the value of the REQ token will increase organically, since they’re being burnt when the participants use the network. We will go into more detailed on that shortly as well.

* * *

In Team We Trust

If you’ve read our previous issues, you know that we pay a lot of attention to the ‘team’ part of every project we recommend. At the end of the day, an idea means nothing without proper execution.

This is why we make sure there’s always a solid team behind any cryptocurrency we invest in. They’re the foundation that’s going to help us survive a potential FUD or bear market that is part of the crypto game.

The team behind REQ is indeed an impressive one. These guys are not just a bunch of random people with a common goal. They actually have worked together in the past for terms ranging up to 6 years.

Knowing that the team has previous accomplishments (e.g. ‘Moneytis.com’ which was backed by ING bank accelerator) and work history gives us more confidence in their ability to reach their goals for REQ.

Furthermore, they come from different backgrounds including finance, pharmaceutical, fintech, consultancy, research and more. Together, they’ve got what it takes to revolutionise the blockchain fintech world.

If the modest recognition from London Letter is not enough for you, then get ready for this giant who decided Request Network is worth their investment.

REQ took part in Y Combinator which is one of the best startup incubators in the world. But don’t take our word for granted. Let us present some of the facts about YC so you can see how important this is.

First of all, their acceptance rate is ridiculously low sitting at 2%.

Additionally, some of their participants include Coinbase, Reddit, Airbnb, Stripe and more. These unicorns we just named probably all sound familiar to you. That’s because they not only dominate their industries but literally change the world. Y Combinator works with the best of the best so for us to see them working with REQ team is an extremely bullish sign.

Request Network is on the right track to change the world just like the big boys above but in this case, you can still get in early.

What we also like about Request guys is their approach to updating the community on progress. It’s very transparent and honest. Their updates are published frequently and include a lot of details and if they didn’t accomplish a milestone as planned, they explain exactly why. It’s not uncommon to see teams trying to hide their failures by hyping some other news. So it’s a relief to see that REQ is the opposite.

Take the implementation of the Bitcoin Oracle as an example – which they planned to release in Q1 this year. The team fully admitted that they did not manage to deliver simply due to not finishing the project. A red flag?

Not really.

Considering the currently delivered work, we see this kind of explanation as a very good move to be completely honest with the investors rather than washing our eyes with big, yet false, promises.