Causam eXchange, an energy trading company with a token offering in progress this month, looks like other blockchain firms -- except for one detail. Its founders are not that keen on the blockchain.

“We’re not a startup, and we’re not all-in onblockchain” said Causam founder and CEO Joe Forbes, even though Causam’s EnergyNet trading platform accepts cryptocurrency payments.

“There are several inherent problems with using blockchain only for purposes of energy settlement,” Forbes said. “Most importantly, the cost.”

Publishing, say, 96 meter readings a day per customer on a public blockchain would not be a trivial affair, Forbes argued. “It’s kind of cost-prohibitive,” he said.

Forbes is also doubtful that energy transactions will move away from established currencies anytime soon. “These blockchain companies are minting coins to represent future payment for goods and services,” he said. “I think that’s mighty ambitious.” 

Because of this, Causam has chosen a business model that is part blockchain but mostly traditional peer-to-peer energy trading platform. A press release described the concept as “like Visa for the electric grid.” 

Raleigh, North Carolina-based Causam’s distrust of much-hyped blockchain business models extends to fundraising.

Although it is seeking to raise $15 million by selling an Ethereum-based token called the Blockchain Instrument for Transferable Equity (BITE), Forbes said the offering is compliant with the Securities and Exchange Commission’s Rule 506(c).

That means BITEs give investors a real equity interest in Causam, with the same rights as preferred stock owners.

The token offering is only open to accredited investors, so participants must comply with anti-money-laundering and know-your-customer rules, and there is a limit of 1,000 backers that will be accepted into the offer.   

Similarly, Forbes said investors will have access to almost as much information about Causam as they would with a public company, including all books and records and a private placement memorandum. 

Causam also boasts having a more detailed prelaunch white paper than many standard blockchain players. (The blockchain industry is filled with companies that love to show off their white papers. GTM read most of them and provided an extensive analysis of their claims.)

Alongside the token offering, which kicks off this month with a 40 percent discounted one-month presale, Causam is looking to raise a further $15 million through a traditional Series A fundraising round for strategic investors in the first half of this year. 

Causam has already pulled in around $10 million in development funding from founders, high net worth individuals and private equity. 

Although Causam has been building its trading platform for quite a while, the company only opted to add blockchain into the mix a couple of years ago. And while Forbes would not specify how many customers were using the platform, it is understood there are fewer than a dozen at present.

They all hail from deregulated markets, except for one behind-the-meter customer in Raleigh, a building owner with a 1-megawatt solar array. The building owner is using the platform to sell the system's solar power to tenants. 

Causam’s approach to blockchain could be a smart move. Last December, the Securities and Exchange Commission (SEC) declared that a utility token issued by restaurant app developer Munchee was actually an unregistered offering of securities.

“On the same day, SEC Chairman Jay Clayton released a cautionary Statement on Cryptocurrencies and Initial Coin Offerings,” reported law firm K&L Gates.

“Together, these releases will serve as important guidance to sponsors of initial coin offerings, their intermediaries and the investing public.”

Forbes, a former telecommunications industry boss who has been developing the Causam concept since 2012, said European utilities had been interested in investing in the platform precisely because “they see the way we use blockchain is responsible.”