Blockstack PBC confirmed on January 29, 2020 that it has successfully completed its “Milestone II,” which reportedly unlocked $6.8 million in funding from its token offering (ICO), conducted in 2017.
The Blockstack project developers claim they’ve now onboarded 1 million verified users, which is a milestone that some crypto and blockchain community members are doubting.
Blockstack’s token offering was carried out via the CoinList platform using the Reg A+ exemption – the first token issuer to do so. The token offering was noteworthy because it was US Securities and Exchange Commission (SEC) had to qualify the offering, which means that it had to adhere to stricter reporting requirements to regulatory authorities. This implied that Blockstack’s fundraiser was not at risk from being penalized by the SEC. The offering was open to both retail and accredited investors under Reg A+.
Blockstack’s offering had also been structured in specific result-oriented milestones that were set to unlock fixed amounts of the capital acquired via the project’s offering. The first milestone involved the successful rollout of the Blockstack’s mainnet by January of last year. In order to achieve the project’s second milestone, the initiative had to reach at least 1 million verified users, which would be confirmed by an independent advisory board.
The Blockstack team had promised to give back 80% of the capital locked to the project’s investors by the completion of each milestone if the initiative’s developers failed to deliver on their promises.
Blockstack aims to offer a blockchain-powered verifiable identity system, which may only be used by approved parties. The solution is reportedly being used to develop an ecosystem of decentralized applications (dApps) that will be authenticated with the Blockstack ID.
Whether or not the platform actually has 1 million users might be verified by looking at Blockstack’s blockchain data. The definition of verified users adopted by the independent advisory board includes all verification methods, such as through social media accounts or government IDs. These can be viewed on the platform’s API.
Blockstack uses Bitcoin’s OP_RETURN operation to manage data on its blockchain or DLT network, but Cointelegraph confirms that this is “not immediately readable.”
The news outlet found that only around 400,000 Blockstack users are “actually verifiable in some way through the platform.”
There were a total of 50,885 users that were sampled in the test by the media outlet. It found that from the remaining 400,000 users, “only 1,565 had any mention of a verification,” which means the rate of verified users is about 3%.
This figure of verified Blockstack users comes out to 14%, which is clearly less than the required 50% dictated by its total user count.
Muneeb Ali, CEO at Blockstack PBC, told Cointelegraph that the blockchain doesn’t keep verification data that would reveal private user details, including their phone numbers or government-issued IDs.
Ali added that some users in the system are part of its new customer acquisition strategy that “the company will announce in the coming weeks.” He confirmed that all 1 million users are verified.
Ali clarified that people might be “under the impression we claimed to have one million active users.”
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