Becoming rich by buying cryptocurrencies – this is what many dream of. Some have actually managed to do so. As is so often the case, especially those who got in at the beginning and thus triggered a worldwide hype. Among them is Dadvan Yousuf, in his early 20s, founder of the Dohrnii Foundation, a Swiss foundation in Zug.
Dohrnii founder wanted out of poverty
What makes his story special is that he fled Iraq with his family when he was three. Yousuf sold his toys to have any money at all for Bitcoins. But he had desperately wanted to get out of poverty, he said in media such as the “Neue Zürcher Zeitung” (NZZ) or Swiss television (SRF). According to Yousuf, he started buying cryptocurrencies at the age of eleven. In 2011, he bought his first ten Bitcoins for 15 euros. By comparison, anyone who wants to buy a whole Bitcoin today would have to pay around 40,000 euros for it – as of October 2021. Yousuf, the refugee at the time, is now a multimillionaire.
Dadvan Yousuf wants to pass on his crypto knowledge – for free
As a contribution to the fight against global poverty, he now wants to make his accumulated expertise available to the general public. Free of charge, as it says in the NZZ. Users are to use the Dohrnii Coin (DHN), his own cryptocurrency, as a utility token on his platform. For example, to use it to pay for in-app purchases or access to automated tools. With the Dohrnii Foundation, Yousuf also wants to create investment opportunities in cryptocurrencies. To do so, the Dohrnii Foundation has initiated an ICO, an Initial Coin Offering to raise capital.
How the Dohrnii Foundation wants to fight poverty
The Dohrnii website describes what financial education will look like for the financially less well-off: Digital lessons introduce the world of investing. Depending on one’s level of knowledge, one can engage with the corresponding categories. After completed lessons, a quiz awaits the finance student. If it is solved correctly, he gets DHN, which he can use again on the site. At least, that’s what the website promises. So users in America or England are also supposed to learn playfully and build up a fortune at the same time. In the so-called whitepaper of the Dorhnii Foundation, it says that these functions will be unlocked from spring 2022.
I’ve seen what it’s like to be at the bottom. I want to help others get out of it.Dadvan Yousuf, founder of the Dohrnii Foundation in Zug. (Photo: Screenshot SRF)
Dohrnii website only available in English
So far, however, the Dorhnii site is only available in English. Other languages are planned, answers the DHN team on inquiry by Mail. After all, their motto is “Financial Education is a Human Right”. However, educational poverty and financial poverty are often closely linked. Destatis 2020, among others, noted this with reference to the World Bank. So if you haven’t learned English because of your poverty, you can’t read the Dohrnii site and you can’t use it. This is likely to be the case not only in Switzerland and other countries, but also for many people living in poverty. In addition: The English of the financial and technology world often has little to do with what the school teaches.
Real estate ownership, fund shares or tokens?
Real estate ownership
Physical ownership through purchase of home with equity and mortgage loan. Is transferred by a contract. A notary certifies the purchase, entry in the land registry/cadastral office.
Real estate fund
A third party participates in real estate by purchasing a share. When buying a share in a fund, one usually does not participate in one property, but in several buildings in a portfolio. The investor participates in their increase in value
Real estate tokens
Smart contract stored in the blockchain. The contract behind it is freely negotiable. Tokenization makes a value defined in this way tradable. There is no regulation on this.
Do cryptos or tokens suit me?
The approach is good to make financial education accessible to a broader segment of society. Nevertheless, some questions arise. For example, it is unclear whether buying cryptocurrency or investing in tokens suits every investor. “You have to remember that some cryptocurrencies don’t even exist anymore or their trading volume is close to zero,” says Tom Friess, managing director of VZ Vermögenszentrum. These include Bitconnect and Swisscoin, for example. So anyone who invested there is likely to have lost everything.
“There are no institutions behind cryptocurrencies. In principle, anyone can claim to offer an investment in a cryptocurrency. There is no regulation in this area,” clarifies Friess. “And unlike investment funds, for example, cryptos also do not represent special assets.” Deposit insurance as known from more traditional investments also does not exist for cryptocurrencies. Investors are therefore completely unprotected there.
Real estate investment even with little money?
“Those who are aware of the risks and believe in a particular cryptocurrency should invest,” says the financial expert. “But please only a part of his assets. Cryptocurrencies should always be just an admixture to diversify the portfolio.” Dohrnii founder Dadvan Yousuf himself, by the way, has also spread his assets in the meantime, according to NZZ – among other things in shares, gold and real estate. Real estate is also related to another dream project he talks about in a report on Swiss television SRF. His plan: To tokenize real estate to enable people with little money to invest in apartments or houses. “Swiss core value paired with technological progress – very, very interesting,” he says there. However, this is already possible today in a similar form with real estate funds.
Advantages of tokenization
“In principle, a fund share and real estate tokens are quite similar,” says Tom Friess. “I buy shares. However, there are no regulations with tokens. It doesn’t have to be worse. It is different, though.” In principle, the Wealth Center also sees enormous potential in blockchain and tokenization. “How much time would be saved if all cadastral offices were connected to the blockchain,” Friess says. At the same time, the records would be safe from fire and water damage. And, moreover, available for anyone to view – at low cost.
Nevertheless, “The topic of tokenization and token trading is not much on our minds at the moment,” he says. “But that will come. We can also imagine offering corresponding digital solutions for cryptocurrencies, for example. These could enable our customers to implement them securely, at least from a technical point of view.”
Those with less money buy fund shares
However, real estate tokens or funds do not only differ in terms of handling. They also appeal to different target groups in England or the United States. “Those who have enough money prefer to participate in ventures by buying shares,” says the financial expert. This is because, as a shareholder, you still have the greatest influence on the development of the company. Who has less money at the disposal, buys fund portions – in order to get so as fast as possible a broad diversification. “So as a securities investor, you don’t really need tokens – except for investments that just aren’t offered on the stock market or in funds.” These could be vintage tokens or art tokens. Moreover, tokens are conceivable in such small denominations that they are also interesting for investors with very little money. “And let’s change perspective for a moment: a start-up often has a hard time finding investors. With a tokenized investment opportunity, it becomes easier to invest and thus easier for companies to get money,” Friess says.
FAQ – Frequently Asked Questions
Cryptocurrencies are a currency – similar to the Swiss franc or the US dollar. They are bought as a store of value or as a means of payment. Tokens can be used to buy shares in valuable objects such as classic cars, art or real estate. Similar to a fund.
With tokens, a smart contract resides in the blockchain. The contract itself is freely negotiable and there are no regulations. To buy fund shares, you need a financial institution and a securities account. The money invested is held as special assets. It is therefore safe in the event of insolvency of the financial institution.
Buying cryptocurrencies is speculative. Many cryptocurrencies no longer even exist. Others develop positively in the long term, but their value is subject to strong fluctuations. In addition, scammers also get involved in the cryptocurrency market. If you are aware of this and have invested enough money safely, you can buy cryptocurrencies to spread your assets more widely.