Only if you ignore the very large risk of SEC enforcement, given that most ICOs are securities. (and claiming that ICO investments are 'donations', like some have tried, isn't going to cut it!)
But it won't matter - the SEC won't have to do anything.
After the flood of ICO's this year - investor will see how most of them are bust, and will pull their money out.
The market will correct itself on that one.
Sure markets correct, but somehow the ride continued.
I love how Silicon Valley was ridiculing industries like print, brick and mortar commerce and old-media for not adopting to the new future technologies.
But now that something appeared that challenges SVs status quo, they do just the same and dismiss it. I think this shows that legacy thinking is a psychological problem and not an IQ problem.
I basically see the future as being both really dystopic and utopic at the same time:
So (mostly rich) people will be able to invest their money without any friction, but this will destroy the rent-seeking institutions that weren't meant to exist in the first place
=> power to the geeks and the rich, but you won't be able to make any money by just making "deals".
Would love to be convinced otherwise though....
ICOs are challenging nothing.
ICOers are selling 'numbers' for real money - and the value of those 'numbers' is going to zero pretty quickly.
BTC will be around for a while, but these ICO-ers are selling nothing in return for real money, and that won't last. It will end soon.
Nobody has a 'lock' on the 'VC' model. Anyone can invest - including you. The issue relates mostly to regulations, which are there to protect you - and also actual ownership of assets, which is a pretty big deal.
The US stock market is 39% of all publicly traded stocks. The US market is bigger than the next 8 countries put together. Source: https://www.indexmundi.com/facts/indicators/CM.MKT.LCAP.CD/r...
Moreover, countries with successful stock markets tend to follow similar rules because they coordinate with one another. The US is a leader in that.
In other words, it's not really production-ready until the SEC is unable to harass, intimidate, and target.
Don't you think if a better alternative comes up companies could deprecate tokens and relaunch them on another blockchain?
But I’m not nearly as certain as you that a pure digital cash will have no value in that world. Yes, Ethereum’s practical value (as a token redeemable for computation) adds volume and provides a price floor, which could make it a more stable store of value. But it also places it in a competitive landscape with other tokens that can perform the same function.
Bitcoin is a pure finance play, which should make modeling it much easier, which should give it some unique appeal. Plus the first mover advantage is huge.
Even if BTC never works out its transaction rate issues, I think it could solidify as a simple, auditable, modelable store for large value transactions.
Sometimes adding features makes a product worse. Twitter was more than Blogger even though it ostensibly did less. In the same sense, I’m not convinced Bitcoin++ will beat Bitcoin.
I am very intrigued though. The “BTC is Friendster” hypothesis is an ok one.
No - selling a 'fantasy number' in exchange for real currency is not 'solid' model.
ICO's have been big recently because buyers were hoping to get in early on a pyramid-like scheme. (Yes, I know it's not quite pyramid), i.e. it's been hype.
Because ICO's offer no ownership of assets ... well ... in the long run they're not worth much.
And 'ownerhip of an economy' is not saying much if there is no economy.
Kik's Kin coins are down 80% and not only that - Kik has 900 Billion of the Kins they can dilute the 100 Billion in market with, meaning another 90% devaluation is coming.
And Kin's get you a share of what economy exactly? The 'Kik' economy? There is no Kik economy.
Countries like Switzerland and Singapore created and will further create a legal structure to connect the real world transactions to the tokens.
Sure some countries will ban it, just like China has banned free internet access, this doesn't mean that free internet access is bad.
A lot of people will lose a lot of money, and some will come out of it with huge profits. The problem is we don't reliably know which will fail and which will succeed.
And come to think of it, I think Flooz reached better merchant adoption than any blockchain-based digital currency has managed to get.
But here are a two.
Startup that issues you a Mastercard that is backed by your BTC, ETC. So you can shop at any store that accepts CCs, but never hold actual Fiat currencies. You recieve tokens as a form of cashback for your CC revenue. And all tokenholder get a share of all the revenue that happens on all the TenX issued CCs. https://www.tenx.tech/
An online casino that shares it profits with the tokenholders (shareholders) https://www.edgeless.io/#!/index
They're almost all flat.
Why does anyone think that anyone will be interested in buying 'Kin' tokens?
These tokens are magic numbers that someone made up.
You people are buying Monopoly money. Worse - Monopoly money is at least made of paper you could use for something possibly.
Kik's Kin tokens are way down, and they are not coming back up. Why on earth would they?
Billions of people around the world are going to start sinking all their money into thousands of fantasy tokens that have no use, and have no value? I don't think so.
https://www.visa.com/splisting/searchGrsp.do?companyNameCrit...
(I don't own any, but I've been watching it since I heard)
https://www.prnewswire.com/news-releases/opskins-founders-to...
no, that's dismissing the mechanism (buying stuff over the internet). the problem with ICOs is that they're essentially penny stocks, but worse (at least penny stocks are somewhat regulated). ability to raise funds anonymously + promise of riches + unregulated market = maximum potential for scams.
a more accurate description would be to dismiss online pyramid schemes (not saying all ICOs are pyramid schemes, but bare with me) because their offline counterpart is flawed, and doing it online doesn't address any of the issues.
Sure people will get scammed a ton. But we can't ignore the insane liquidity that those types of fundraises allow. This has huge overall benefits for the society, after the first few waves of mania settle down.
After a while some people will stay away from it, others will benefit.
We have a ton of high variance financial instruments on the market already, like options, and tons of people got burned. We kept the financial instruments because they were overall beneficial for price discovery and liquidity in the market. The people that got burned now stay away and we didn't need to ban anything.
What I always notice is that those discussion tend to be very nationalistic, which means that its usually 95% of the world is excluded from the picture.
There are maybe guys in Israel, Ukraine, Singapore, Japan etc. that want to raise money with an ICO or that fund to fund an ICO with 100$ or 10000$.
I think the next silicon valley will be the jurisdiction that will offer the best legal structure to run serious ICOs. It will be a no-brainer for the founding teams to move to this jurisdictions. Just like many international startups setup offices in Silicon Valley to get better access to capital.
Your point that most ICOs so far were shitty companies actually shows how much potential this mechanism has. Serious founders with a track record will be able to raise billions this way.
that seems like a liberterian cop-out, and it doesn't take into account that it takes time and energy to do due diligence, most people are naive and can't do due diligence, and there's a huge incentive for ICO founders to lie, which creates an asymmetry of information.
>We have a ton of high variance financial instruments on the market already, like options, and tons of people got burned. We kept the financial instruments because they were overall beneficial for price discovery and liquidity in the market. The people that got burned now stay away and we didn't need to ban anything.
at least with those instruments, you know what you were getting into. all of that goes out the window when it comes to unregulated securities, where the seller can outright lie to you.
>What I always notice is that those discussion tend to be very nationalistic, which means that its usually 95% of the world is excluded from the picture.
how? is it the mention of the SEC?
>I think the next silicon valley will be the jurisdiction that will offer the best legal structure to run serious ICOs. It will be a no-brainer for the founding teams to move to this jurisdictions. Just like many international startups setup offices in Silicon Valley to get better access to capital.
SV = in US = SEC jurisdiction. the ideal jurisdiction would be somewhere where banking privacy is high, and securities regulation is low. so probably a random Caribbean island.
People learn surprisingly quickly. A consumer base has a sort of collective wisdom that evolves as it gains experiences. Years ago, people would trust fly by night Bitcoin wallets that store the bitcoin client-side, and numerous scams and hacks cost people hundreds of thousands of bitcoin as a result.
Now everyone stays away, even new users, because only highly secure and reputable wallets that store cryptocurrency client side, or credible exchanges with cold-storage, are recommended on all major information portals, and everyone (including any likely first contact point for a new cryptocurrency user) strongly warns users to avoid storing their cryptocurrency on untrusted websites.
>people would trust fly by night Bitcoin wallets that store the bitcoin client-side,
In contrast, I'd be willing to bet that the bulk of ICOs to date will in 10 years time be seen as failures.
How are fantasy numbers any worse than fantasy equity of a new startup?
When you buy tokens, you're buying nothing.
So - ownership of something that may have value, vs. ownership of nothing.
(For more established companies, their equity's value works more like bitcoin: they might still go bankrupt and be worthless in eg thirty years, but they are unlikely to totally crash in the next few months.)
The only real difference is the lack of oversight and "common rules" - both of which I value when I invest my own money...
Stock (or bonds for that matter) have a long and stable legal history and are mostly standardized and well understood. (Not that investing in them is easy, I primarily buy ETFs).
ICOs are more wild-west anything goes, which just opens up so many cans of worms IMHO.. And if/when it gets too big or to wild-west all financial bodies declares the securities and they are then under the exact same rules...
No - they don't.
'Shares' give you ownership of the companies assets.
ICO 'Coins' give you ownership of a made up number - nothing more.
Even thought the ICOs are in a clear bubble right now, the mechanism behind the ICOs is a solid one and could provide low friction VC funding for the next generation of Start Ups. Taking out rent seeking institutions like Private Equity banks, VCs and traditional banks will create a lot of value.
Ethereums first mover advantage for the ICO market will proof to be of a huge value in the race for the dominating world crypto currency.