The founder of the ERC20 token, Alex, was born in Kazakhstan in the late 1980s. At the age of six, his father gave him $100. He told the kid always to keep an eye on the exchange rate between the USD and the local currency. Little Alex has listened carefully, and the exchange rate figures became his first taste of the business world.
At the age of 16, Alex decided to move from Kazakhstan to Belarus. With this decision, his long journey began. Alex had to live at the train station, selling books and church calendars.
Now you might know him as the creator of the ERC20 cryptocurrency. Here’s his story.
What is ERC20?
Alex Ovnagez created the ERC20 token in 2017. Yes, his token’s name is also the name for the technical standard on the Ethereum blockchain — and it was a conscious decision. The most considerable success of the ERC20 token came in 2018. Then the coin cost $1.5. According to his words, Alex made good money on commissions and became a dollar millionaire. Now the coin is worth much less than a cent. And if that’s not enough, its development team is located in Ukraine where there’s still a war raging. But the team is already back to work, hoping to increase the token’s price soon.
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How I became a bookseller
I moved to Belarus in secret from my parents in 2006, when I was 16. it’s 3417 miles from my home in Kazakhstan. Before the trip, I collected pocket money for a whole year. But I didn’t want to spend them on housing and decided to live at the train station until I found a job. The police approached me several times, but I explained that I had to live there for some time until I moved to my apartment.
Finding a job wasn’t as easy. Nobody wanted to take a minor. At last, one book company agreed to hire me as a salesman. I learned everything they had to teach about sales in a week and started working. My task was to go to the office in the morning, take the goods, and then go to the offices of various companies and sell books, encyclopedias, and stories for kids. People bought well, and I already taught sales to new employees only a month later.
The only thing that bothered me was the book bag being so hefty. I decided to try to sell books faster. I started going into coffee shops and selling to a larger audience. I said, “Hi! I’m Alex from Kazakhstan. I’m 16. And now I will sell you books.” People immediately turned to me. I left the second or the third cafe without books but with money.
I received a tiny percentage of sales, so my salary was not exorbitant. I got about $400 and spent $200 on housing.
Why church calendars sell well
At some point, someone brought a whole car of church calendars into our warehouse. They cost mere 20–30 cents per unit, and no one wanted to sell them. They lay there for several months until I realized that the rules of price ethics do not apply to them. I could set the price myself. These were fabulous A3 calendars with all the Orthodox holidays, prayers, and several icons on the spread. And I started selling them for $3–5 apiece.
I was not afraid to talk to strangers. I turned to people on the street and started talking about calendars. And they bought them, sometimes in dozens, for the whole family. I began earning $100 daily, but the calendars ran out after two months.
I decided to leave the job and return to Kazakhstan. My stepfather there had a business reselling meat. I helped him for a long time. I gained a lot of experience in sales and learned how to work with big clients.
I began to earn good money, up to $1,500 for a deal. It seemed to me that I had found success. I bought a Mercedes, rented a lovely apartment, and could help my mother and younger brother.
But my stepfather insisted that I get an education. And I went to Moscow University to study as a marketing specialist. In a university hostel, I lived with programmers who made websites. I started learning from them and learned CSS, HTML, and Java. In my third year, I dropped out of university. After that, I moved to Kyiv.
How to make money off an online game
In Kyiv, I started playing Ingress. (An augmented reality multiplayer online game resembling Pokemon Go that was released later. – Note ed.) I liked it and immediately realized what could be improved. Players had the opportunity to exchange various in-game items, but there was no store. And I decided to create it on my website.
I found a minor bug in the game that allowed me to get in-game items quickly. I accumulated a lot of them and sold them on my website, 20–40 items per day. At some point, I ran out of goods. I asked my friends to create software that could extract in-game resources 400% faster than real players. I bought 20 smartphones to generate those resources, earning up to $25,000 per month.
It is difficult to find buyers in such a store; This is a challenging target audience. It can be an eighteen-year-old girl from Ukraine or a forty-five-year-old man from the USA. But I figured out how to find customers. I decided to sell the software that helped me get more in-game items. I installed this software on a phone and put it up for sale for $5,000.
The players were shocked by the price and began spreading the word about my product. It got to the point that the developer company Ingress Niantic itself published a post urging you not to buy anything on my site. After their memo, I began to receive 150–200 orders a day — much more than before.
How not to go on vacation
After years of running my Ingress store, I was exhausted. I worked seven days a week and managed all the orders manually. I was making good money but didn’t have time to spend it. I offered my friend to help me in exchange for 50% of the profits, and he agreed. We didn’t formalize the partnership in any way; I was inexperienced, they were my close friend, and I didn’t even think about the paperwork. A few months later, I bought myself a Porsche Cayenne and went on vacation in Europe for a month.
When I returned, I found that the business was finished. My partner copied the database and re-registered the site’s domain name to himself. So I lost both a friend and a business.
I saw no point in suing. I could only win back the domain name, but this wouldn’t help much, and litigation would take time and money. But I had some money left, and it was an excellent opportunity to try something new.
How to create a cryptocurrency
Customers used to ask if they could pay with crypto on my online goods store. I was sure that Bitcoin was just another financial pyramid but always agreed — what was there to lose?
After losing the business, I decided to learn more about crypto, realized that it might just have a future, and thought, why not create my cryptocurrency?
It was 2018, and tokens with eye-catching names caused a stir: Jesus Coin, Marijuana Coin, Dogecoin, and so on. I started thinking about a creative name and came up with ERC20. Of course, this means nothing to the average person. But in the crypto world, it is the name of the Ethereum smart contract standard, on which 95% of the existing cryptocurrencies are based.
Everything turned out to be pretty simple: I wrote the smart contract code on Solidity, paid a $6 commission on the Ethereum network, created a topic on the Bitcoin Talk forum, and went to bed. In the morning, I received 30,000 messages from people who wanted to buy tokens from me. The name helped; thanks to it, I got the attention without investing a dime in advertising.
How to make money off your cryptocurrency
At the heart of any cryptocurrency is a bunch of servers managed by miners that confirm the authenticity of transactions on the network. Someone sends cryptocurrency from one wallet to another. The miners verify these transactions and receive a commission for this, for example, 1% of the transaction amount.
The creator of the currency earns on turnover. You can charge fees ranging from 0.3% to 1% on transactions.
My net earnings for four years of work amounted to $2.5 million — this is the money I withdrew. Let me explain where the money came from. I got $1.4 million in initial sales. Then the coin amounted to $110 million in turnover. About 1% of that was my commission as its creator.
Cryptocurrencies, except stablecoins, do not have a physical reserve. The largest and the smallest cryptocurrencies are based on people’s faith in them. The more people use this or that currency, the more transactions are in the network and the higher its value.
For example, ERC20 holds 2435th place (as of 20 June) in the ranking of cryptocurrencies out of 20,000 officially registered. Our capitalization at the best time was $25 million, and if all our tokens were in circulation, it would be $300 million.
What the future of ERC20 holds
Like my whole team, I used to work from Kyiv, Ukraine. We have planned many activities to develop the token in the past year. But then Russia attacked Ukraine, the war began, and everything stopped.
The war is still going on, but the situation has somewhat stabilized. Part of the team returned to Ukraine and continues to work; another part works from other European countries.
This month we are planning an update, a deflationary smart contract. Deflationary means that with each transaction, tokens are partially burned and partially thrown into the development pool. Then we can spend money from this pool on development. Tokens will become more expensive, which is good for holders. At the same time, the transaction fee becomes higher, too — which is good for the team and me.
With this model, there will be fewer tokens on the ERC20 network, and they will become more expensive. But that’s in theory. No one can get anything in cryptocurrency for sure.
In addition, before the war, we developed a beta version of our own wallet. From it, our team also wants to earn money to build our token.
Of course, the entire cryptocurrency business is at risk of a global financial crisis. And everything can change for better or for worse. But I still see more positives than negatives for crypto. I want the ERC20 token to be in the top 100 cryptocurrencies or the top 50. It’s like the Olympics, and I will be thrilled if we get to the top.