Mikko is the cofounder and CTO of TokenMarket Ltd, one of the leading token sale and blockchain crowdfunding platform at Gibraltar. Mikko has advised dozens of blockchain startups. He is also the former co-founder and CTO of LocalBitcoins, a peer-to-peer cryptocurrency exchange. Mikko holds MSc. in industrial engineering and management from University of Oulu. Mikko actively engages in open source communities and speaks in conferences. He is a cofounder of Pycon Finland, a Python programming conference. Mikko is also a member of Plone Foundation, the oldest of open source non-profit foundations.
AT: You’ve been in the crypto space since 2011. Could you share with us how you first became involved with cryptocurrency and blockchain?
Mikko: Back in my mobile software development days, I was asked to develop the first and original Bitcoin mobile wallet back in 2011 compensated by $10,000 worth of Bitcoin. I rejected it as I thought fiat would suffice at that point in my life. In hindsight, taking this offer might have been the last project I needed to do. Later I got involved in building out LocalBitcoins and from there I moved to establish TokenMarket.
AT: You’re listed as one of the original co-Founders of TokenMarket. What inspired you to launch this marketplace?
Mikko: The original goal of TokenMarket was to tokenise company shares. However, back in 2016, it was way too early for that. The term “token” had just been invented, many referred to tokens as ‘coloured coins’ looking at new digital assets as bitcoin with different ‘flavours’ and ‘colours representing different token attributes and purposes’.
We saw the ICO boom coming a little bit earlier than others in late 2016 when FirstBlood, Gnosis and other Ethereum based ICOs started to roll out. The catalyst was that the Ethereum technology had matured to the point that it was realistic to launch custom tokens with it. And oh boy, a lot of tokens were launched.
TokenMarket had the first tokenisation platform in the world and suddenly there was a spike in customer demand.
AT: When inspired TokenMarket to pivot from ICOs to STOs?
Mikko: I would not use a word pivot here. Security tokens are a natural continuum for unregulated token offerings. It is always better for investors themselves to get something with stronger investor rights. Securities offerings give investors rights which utility tokens never legally could, such as receiving dividends, yields and voting rights in the company you purchase a security from. For the investors, receiving passive income with security tokens becomes so much easier rather than moving toward a largely unstable and volatile utility token dragged up and down by bitcoin price.
Since 2016, it took some time for the global audience to learn about the benefits of tokenisation, including financial regulators. Now we are seeing interest from regulators worldwide on how to apply DLT and blockchain technology to regulated securities markets.
AT: TokenMarket recently announced a partnership with Loopring which is a protocol for decentralised token exchanges. Could you tell us more about this and what we should expect from this partnership?
Mikko: Loopring is one of the industry leading projects developing layer two scalability for decentralised exchanges and we will use Loopring’s technology to scale our own DEX.
As you might know, at the moment, decentralised exchanges have scalability issues and cannot match the volumes of exchange giants such as your Bitmexe’s and Binance’s. But from other aspects, decentralised exchanges are more secure and fair. Bitcoin exchanges get hacked every two weeks. Some exchanges are accused to trade with insider information and against their own users. Regulators like the decentralised aspects, as they guarantee that all the investors and traders can access the post trade data in equal manner, there cannot be irregularities with accounting and trading with something that is merely fabricated.
The good news is that the security tokens will have low liquidity, like Bitcoin back in 2012, when they start to roll out for trading. But for the future exchange technology, we want to build it better and more bulletproof what both traditional trading and crypto trading has today. We see the academic research and theory that allows us to get there, now it is just engineering over the next few years to fulfill this promise.
AT: Can you tell us what the listing requirements are for companies who wish to crowdfund via the TokenMarket platform?
Mikko: There are many crowdfunding platforms out there which operate on a ‘cater for all’ thesis, TokenMarket operates on an industry specific focus. We mainly look for global growth companies in sectors such as fintech, gaming and software services as this is what our investor audience has looked for in the last two years.
We mainly look for companies which are close to, or already have, some substantial revenue generated with a key commercial focus on B2C businesses.
AT:TokenMarket is current raising their own STO. Are you happy so far with the progress of this raise?
Mikko: This is a pilot raise under the UK’s regulator, FCA, sandbox. We need to demonstrate them that tokenised equity crowdfunding works: payments goes in, people get their tokens and are properly registered in Companies House as shareholders.
We do not expect huge intake of money for our pilot project due to the UK’s FCA’s Sandbox test limitations. Awaiting regulatory approval we will be able to raise up to €8M from self-accredited investors for all our STOs with no private funding cap restrictions.
AT: Are there any STOs that are launching on TokenMarket that have you personally excited?
Mikko: Yes there are! But at the risk of publicly endorsing or soliciting a securities investment go check out our pipeline of projects here.
AT: Where do you see the marketplace in 10 years?
Mikko: The change and transformation is not just about the technology or blockchain. There is an ongoing process of how new investors, millennials behave. There is an ongoing process to dial down the regulation for SME listings since the last financial bubble, especially in Europe. Then there is a change in globalisation as the future powerhouse economies of the world may come from countries like Brazil, Indonesia and Nigeria.
The future investing is going to be more “marketplace driven” and less about relationships and network centric models. We are going to replace Silicon Valley and their venture capital networks with a website like Amazon did for retail commerce. Ironic, is it?
AT: Is there anything else that you would like to share about TokenMarket?
Mikko: If you are a high tech company looking for funding, contact us. If you are a fund, a family office or similar looking for alternative investments, contact us. We do not care which part of the world you come from. We want to create an equal playing field for opportunities and investors all around the world.