0bsidian

The Venture Capital Working Group isn't claiming they weren't securities at launch. It's claiming that some of these tokens do not qualify as securities any longer.

This is in line with SEC Chairman Clayton's recent statement that tokens can start off as securities but become non-securities and vice versa [1].

In particular, refer to his example:

"If I have a laundry token for washing my clothes, that's not a security. But if I have a set of 10 laundry tokens and the laundromats are to be developed and those are offered to me as something I can use for the future and I'm buying them because I can sell them to next year's incoming class, that's a security. What we find in the regulatory world [is that] the use of a laundry token evolves over time. The use can evolve toward or away from a security."

In general, a solid framework for evaluating tokens that should count as securities vs. non-securities is the one put together by Coincenter, which is available here:

https://coincenter.org/entry/framework-for-securities-regula...

[1]: https://coincenter.org/entry/sec-s-clayton-use-of-a-token-ca...

Is it considered spam because of its substance or because it's repeated verbatim?

E.g. if I take the same exact comment but paraphrase it every time I post it, would that be ok?

The reason I ask is because I see a few accounts post the same tired criticism of bitcoin over and over and see no reprisal for spam.

I would be interested in understanding what the objective rule here is, since I checked the guidelines and could not find references to comment spam definition.

Thanks.

Let me try to make the case for why Bitcoin could be a useful beyond greed.

I can't really think of many reasons why you would use crypto to pay for a coffee or a sandwich if you live in the West (or frankly, even most developing nations).

On the other hand, I can definitely see the utility in a censorship-resistant digital medium to store wealth. To me, this latter use case has much, much more potential to serve the unbanked (as well as the banked).

Some use cases I can think off the top of my head:

(1) You are from Syria and need to flee war and escape into Europe – however bank transfers into Europe are almost impossible if you are a common Syrian. Bitcoin allows you to take your wealth with you, in your brain, as you escape across the border, by just memorising your twelve word private key.

(2) You are from Venezuela or Zimbabwe – The government has issued capital controls and is devaluing currency by the day. You transfer your wealth into Bitcoin in order to offset capital erosion due to hyper-inflation. When the situation stabilises, you transfer your Bitcoin back into fiat.

(3) You are Saudi billionaire Al-Waleed bin Talal. The government freezes all your assets in a political coup. If you have a portion of your wealth in Bitcoin, you could protect them from government expropriation and anonymously transfer them to associates or family members abroad.

(4) You are whistleblower Julian Assance and have been cut off from the financial system as a way to censor your speech. Bitcoin allows you to have an unbreakable digital "Swiss bank account" that the authorities are not able to reach.

This reminds me of Peter Thiel's recent words about Bitcoin [1]: "it's like a reserve form of money, it's like gold, and it's just a store of value. You don't need to use it to make payments."

Reference: [1] https://www.coindesk.com/peter-thiel-bitcoin-like-reserve-fo...

THIS.

Thank you for this.

I will quote your response in the future when this point comes up again, if it's OK?

I was listening to Naval Ravikant who makes exactly the same point about Bitcoin.

You don't even need a smart contract, the CME will be starting to sell cash settled BTC futures in two weeks:

http://www.cmegroup.com/media-room/press-releases/2017/10/31...

I don't want to sound condescending, and if I do I apologise, but anyone who has any familiarity with financial markets knows that the industrial applications of gold account for a negligible percentage of its price.

Have you ever heard of gold?

Are people buying gold "greater fools"?

If so, why?

And if we used blockchain to create a tokenised TOR, we would have something like Orchid Protocol:

www.coindesk.com/tokenized-tor-orchid-blockchain-decentralized-internet/

If it's so obvious, why don't you buy a futures contract to short it and reap your rewards in a year or two?

You can make millions of dollars if you're right.

I respectfully disagree with the idea that Bitcoin's killer-app is to be used as a currency for transactional purposes.

I can't really think of many reasons why you would use crypto to pay for a coffee or a sandwich if you live in the West (or frankly, even most developing nations).

On the other hand, I can definitely see the utility in a censorship-resistant digital medium to store wealth. To me, this latter use case has much, much more potential to serve the unbanked (as well as the banked).

Some use cases I can think off the top of my head:

(1) You are from Syria and need to flee war and escape into Europe – however bank transfers into Europe are almost impossible if you are a common Syrian. Bitcoin allows you to take your wealth with you, in your brain, as you escape across the border, by just memorising your twelve word private key.

(2) You are from Venezuela or Zimbabwe – The government has issued capital controls and is devaluing currency by the day. You transfer your wealth into Bitcoin in order to offset capital erosion due to hyper-inflation. When the situation stabilises, you transfer your Bitcoin back into fiat.

(3) You are Saudi billionaire Al-Waleed bin Talal. The government freezes all your assets in a political coup. If you have a portion of your wealth in Bitcoin, you could protect them from government expropriation and anonymously transfer them to associates or family members abroad.

(4) You are whistleblower Julian Assance and have been cut off from the financial system as a way to censor your speech. Bitcoin allows you to have an unbreakable digital "Swiss bank account" that the authorities are not able to reach.

This reminds me of Peter Thiel's recent words about Bitcoin [1]: "it's like a reserve form of money, it's like gold, and it's just a store of value. You don't need to use it to make payments."

Reference:

[1]: https://www.cnbc.com/2017/10/26/bitcoin-underestimated-peter...

I see what you mean, let me take back my previous comment, which was typed hastily.

I actually agree with you on the most part, you really can't prove that Bitcoin is a good store of wealth.

I am making an educated guess that a cryptographically secure way to transfer value for very cheap is probably here to stay, but it's far from provable.

In fact, if it were provable, it would become a very crowded trade and the returns would drop to zero immediately. The fact that it's unknown allows for potential greater returns (and greater losses if people who agree with me are wrong).

It's a good question.

The consensus is that P/E is not a good valuation metric for high growth companies.

I would rather use comparable multiples, DCF or sum of the parts for this type of exercise.

The principle being that you will benefit from stock appreciation rather than dividend payout.

e.g.:

https://www.investors.com/how-to-invest/investors-corner/ign...

https://seekingalpha.com/article/4035706-p-e-ratio-good-metr...

I don't think I claimed that anything is a "guarantor of the future".

I am simply pointing out that networks are valued with reference to their size, not on whether their code base is unique.

Bitcoin and Facebook are two examples of this principle.

>Anyone can fork the codebase, or even the blockchain, or one of the many other blockchains out there. There is absolutely nothing provable about BTC as a store of wealth.

Let's rewrite the above as follows:

>Anyone can copy Facebook's model, or even its code, or one of the many other social networks out there. There is absolutely nothing provable about facebook as a good social network.

This is exactly right.

If you create a company and copy Facebook's code, the resulting company will not be worth as much as Facebook.

Why? Because much of Facebooks' valuation derives from its network.

Bitcoin is the same.

The idea that you can value bitcoin via P/E, utilizing mining fees as the "E" is incorrect. It's akin to valuing gold through P/E, by utilising the cost of extraction as the "E".

This is obviously wrong because holding gold doesn't entitle the bearer to a portion of those mining costs, same with Bitcoin.

The reality is that gold cannot be objectively valued because it doesn't have an objective value (beyond its industrial use, which accounts for less than 10% of its actual current price).

As a society, we collectively agree that gold is worth something because we agree that it is worth something.

With Bitcoin, we are doing the same. But if we had centuries to consolidate our appreciation of gold, we are compressing price discovery for Bitcoin in just a few years.

Interestingly, Bitcoin offers several improvements over gold (being digital, lightweight, cheap to move, proven limited supply). It also has drawbacks.

Lastly: the author's contention that you can take value away from Bitcoin by just copying its code is misguided. It would be akin to saying that you can replicate Facebook's valuation by copying its codebase. Facebook's value comes from its network. The same happens with Bitcoin, since its fundamental properties (censorship-resistance, security) are functions of network size and node-dispersion.

>I mean I get that the laws bitcoin evades quotes here are "unjust". They are still the law, however.

That fact that injustice is the law does not make it moral (e.g. Nazi Germany).

Feel free to continue siding with the dictator, I will be cheering the people trying to fight what's "unjust" (as you admit).

I can definitely see the utility in a censorship-resistant digital medium to store wealth. To me, this latter use case has a lot of potential to serve the unbanked (as well as the banked).

Some use cases I can think off the top of my head:

(1) You are from Syria and need to flee war and escape into Europe – however bank transfers into Europe are almost impossible if you are a common Syrian. Bitcoin allows you to take your wealth with you, in your brain, as you escape across the border, by just memorising your twelve word private key.

(2) You are from Venezuela or Zimbabwe – The government has issued capital controls and is devaluing currency by the day. You transfer your wealth into Bitcoin in order to offset capital erosion due to hyper-inflation. When the situation stabilises, you transfer your Bitcoin back into fiat.

(3) You are Saudi billionaire Al-Waleed bin Talal. The government freezes all your assets in a political coup. If you have a portion of your wealth in Bitcoin, you could protect them from government expropriation and anonymously transfer them to associates or family members abroad.

(4) You are whistleblower Julian Assance and have been cut off from the financial system as a way to censor your speech. Bitcoin allows you to have an unbreakable digital "Swiss bank account" that the authorities are not able to reach.

This reminds me of Peter Thiel's recent words about Bitcoin: "it's like a reserve form of money, it's like gold, and it's just a store of value. You don't need to use it to make payments."

Reference

[1]: https://www.cnbc.com/video/2017/10/26/peter-thiel-says-peopl...

You're preaching to the choir, I love BTC.

I realise that I haven't been clear.

The point I was trying to make is only that you don't need for Bitcoin to be a replacement to visa in order to justify current skyrocketing valuation.

I would venture that Bitcoin's censorship-resistant store of value use case is enough to justify current valuation.

I'm going to repeat myself here, but please bear with me if you haven't heard this argument before.

I respectfully disagree with the idea that Bitcoin's killer-app is to be used as a currency for transactional purposes.

I can't really think of many reasons why you would use crypto to pay for a coffee or a sandwich if you live in the West (or frankly, even most developing nations).

On the other hand, I can definitely see the utility in a censorship-resistant digital medium to store wealth. To me, this latter use case has much, much more potential to serve the unbanked (as well as the banked).

Some use cases I can think off the top of my head:

(1) You are from Syria and need to flee war and escape into Europe – however bank transfers into Europe are almost impossible if you are a common Syrian. Bitcoin allows you to take your wealth with you, in your brain, as you escape across the border, by just memorising your twelve word private key.

(2) You are from Venezuela or Zimbabwe – The government has issued capital controls and is devaluing currency by the day. You transfer your wealth into Bitcoin in order to offset capital erosion due to hyper-inflation. When the situation stabilises, you transfer your Bitcoin back into fiat.

(3) You are Saudi billionaire Al-Waleed bin Talal. The government freezes all your assets in a political coup. If you have a portion of your wealth in Bitcoin, you could protect them from government expropriation and anonymously transfer them to associates or family members abroad.

(4) You are whistleblower Julian Assance and have been cut off from the financial system as a way to censor your speech. Bitcoin allows you to have an unbreakable digital "Swiss bank account" that the authorities are not able to reach.

This reminds me of Peter Thiel's recent words about Bitcoin: "it's like a reserve form of money, it's like gold, and it's just a store of value. You don't need to use it to make payments."

Reference

[1]: https://www.cnbc.com/2017/10/26/bitcoin-underestimated-peter...

I respectfully disagree with your assertion that "the fundamentals are all wrong".

I can't really think of many reasons why you would use crypto to pay for a coffee or a sandwhich if you live in the West (or frankly, even most developing nations). On the other hand, I can definitely see the utility in a censorship-resistant digital medium to store wealth. To me, this latter use case has much, much more potential to serve the unbanked (as well as the banked).

Some use cases I can think off the top of my head:

(1) You are from Syria and need to flee war and escape into Europe – however bank transfers into Europe are almost impossible if you are a common Syrian. Bitcoin allows you to take your wealth with you, in your brain, as you escape across the border, by just memorising your twelve word private key.

(2) You are from Venezuela or Zimbabwe – The government has issued capital controls and is devaluing currency by the day. You transfer your wealth into Bitcoin in order to offset capital erosion due to hyper-inflation. When the situation stabilises, you transfer your Bitcoin back into fiat.

(3) You are Saudi billionaire Al-Waleed bin Talal. The government freezes all your assets in a political coup. If you have a portion of your wealth in Bitcoin, you could protect them from government expropriation and anonymously transfer them to associates or family members abroad.

(4) You are whistleblower Julian Assance and have been cut off from the financial system as a way to censor your speech. Bitcoin allows you to have an unbreakable digital "Swiss bank account" that the authorities are not able to reach.

This reminds me of Peter Thiel's recent words about Bitcoin: "it's like a reserve form of money, it's like gold, and it's just a store of value. You don't need to use it to make payments."

Reference

[1]: https://www.cnbc.com/2017/10/26/bitcoin-underestimated-peter...

I would buy more Bitcoin.

The world needs a censorship-resistant digital vault to store wealth. Bitcoin is basically a very cheap "Swiss bank account as a service" for the world's unbanked.

Some use cases I can think off the top of my head:

(1) You are from Syria and need to flee war and escape into Europe – however bank transfers into Europe are almost impossible if you are a common Syrian. Bitcoin allows you to take your wealth with you, in your brain, as you escape across the border, by just memorising your twelve word private key.

(2) You are from Venezuela or Zimbabwe – The government has issued capital controls and is devaluing currency by the day. You transfer your wealth into Bitcoin in order to offset capital erosion due to hyper-inflation. When the situation stabilises, you transfer your Bitcoin back into fiat.

(3) You are Saudi billionaire Al-Waleed bin Talal. The government freezes all your assets in a political coup. If you have a portion of your wealth in Bitcoin, you could protect them from government expropriation and anonymously transfer them to associates or family members abroad.

I truly believe that Bitcoin will serve the unbanked of the world. We're not there yet, but these are very early days for crypto.

Sorry for the long winded response, I get excited when talking about BTC.

Agreed, I was just trying to say that currently, one of the most popular investment theses for Bitcoin is "Gold for millennials", not "anonymous paypal" or "decentralised stripe".

I think most of the people putting larger checks into Bitcoin are betting that it will become a store of value asset.

Going from memory, a recent Bloomberg article called Bitcoin: "Gold for millennials".

Or, similarly, Peter Thiel said recently [1]: "it's like a reserve form of money, it's like gold, and it's just a store of value. You don't need to use it to make payments."

[1] https://www.cnbc.com/2017/10/26/bitcoin-underestimated-peter...