[mrwong]

Bitcoin was a good proof of concept, the true value will come from things like Ethereum and others.

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.

[joosters]

...the mechanism behind the ICOs is a solid one...

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!)

[mrwong]

95% of People on this planet are not affected by the SEC. (they live outside of the US)

[alexasmyths]

The same entities in other parts of the world will take similar action, because of the inherent problems with ICOs as a financial instrument.

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.

[mrwong]

just like the market corrected after Bitcoin hit 1$ the first time 10$ the first time 100$ the first time 1000$ the first time. 8000$ the first time.

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.

[guiomie]

I find quite entertaining how you just generalized every company and individual in SV as dismissing crypto. There is no undenying VCs have always been a central part of SV, and tons of them are invested in blockchain companies, their are tons of blockchain startups in SF/SV and some big tech companies like Microsoft are also involved.

[mbaha]

Couldn't agree more. Although to be more precise, ETH/ICOs are threatening the standard financing model proper in Silicon Valley, and not SV as a whole.

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....

[alexasmyths]

"ETH/ICOs are threatening the standard financing model"

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.

[wpietri]

The relevant factor for market regulation is not the number of people but the size of the market.

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.

[madeofpalk]

China has banned ICOs https://techcrunch.com/2017/09/04/chinas-central-bank-has-ba...

[mycall]

Not all https://themerkle.com/can-neo-become-chinas-go-to-platform-f...

[zerostar07]

would you be interested in a bet on what the EU will do ?

[jMyles]

Thwarting, undermining, and ultimately abolishing the violent habits of the heavy-handed and centralized state infrastructure is obviously a part of the vision for this tech.

In other words, it's not really production-ready until the SEC is unable to harass, intimidate, and target.

[xtracto]

One of the things I have heard a lot nowadays in the blockchain scene is that people like to call it "utility tokens" trying get a pass from the SEC and CSA (who also recently ruled that ICO's tokens are securities)

[guiomie]

"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."

Don't you think if a better alternative comes up companies could deprecate tokens and relaunch them on another blockchain?

[erikpukinskis]

I’ve had the same thought—what’s the value of a decentralized ledger when you can trade digital assets just as easily? Why use digital cash when you can pay for your coffee with your Tesla stock or your Linode credits or whatever.

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.

[alexasmyths]

"the mechanism behind the ICOs is a solid 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.

[mrwong]

Dismissing ICO in this early stage is equal to dismissing eCommerce 20years ago because someone got scammed buying something online.

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.

[vidarh]

If you were around 20 years ago, or more like 25 years ago, you might remember any number of micro-payments platforms that are no nowhere to be seen. Believing that most of these ICO's will lead to failures is more akin to believing that most of those would fail than it is to having believed e-commerce overall was set to fail.

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.

[wpietri]

Excellent point. RIP DigiCash, CyberCash, First Virtual, Beenz, Flooz, et cetera, ad nauseam.

And come to think of it, I think Flooz reached better merchant adoption than any blockchain-based digital currency has managed to get.

[EugeneAZ]

That's why I encourage Elon Musk to save us all! https://www.reddit.com/r/elonmusk/comments/7f1utt/em_should_...

[empath75]

Name one ICO that has backed a legitimate, on-going, profit-making business, beyond selling ico tokens.

[mrwong]

ICO sales took of this summer, early stage startups usually, so would be naive to think that most of them should be profitable already.

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

[alexasmyths]

"ICO sales took of this summer"

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.

[52-6F-62]

I'm not sure how it will go in the long run, but TenX is now listed as an agent with VISA. They have their own token called PAY.

https://www.visa.com/splisting/searchGrsp.do?companyNameCrit...

(I don't own any, but I've been watching it since I heard)

[jozzas]

Stellar (https://stellar.org) - is trying to solve real problems: low-cost cross-currency payments, micropayments, enabling mobile bank branches, mobile money and services for the underbanked. Their tooling for integration with FSPs is looking very good.

[xtracto]

I know that OPSkins created DMarket

https://www.prnewswire.com/news-releases/opskins-founders-to...

[asymmetric]

storj.

[gruez]

>Dismissing ICO in this early stage is equal to dismissing eCommerce 20years ago because someone got scammed buying something online.

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.

[mrwong]

I think your opposition is a political one. I would argue that the free market will sort it out.

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.

[gruez]

>I think your opposition is a political one. I would argue that the free market will sort it out.

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.

[CryptoPunk]

>>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.

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.

[wpietri]

The main difference is that 20 years ago, eCommerce was actually good for pretty common use cases. 20 years ago today I'd already had 9 successful orders from Amazon totaling 38 books. I was hardly an early adopter; at that point Amazon had been going more than 2 years.

In contrast, I'd be willing to bet that the bulk of ICOs to date will in 10 years time be seen as failures.

[CryptoPunk]

Token sales using an immutable ledger that guarantees open access to third parties to trade digital assets, and a payment system that is open, censorship resistant and global, have advantages over the prior art. These two features combined reduce financial friction and provide a stable platform for the development of financial technology (e.g. decentralized exchanges like EtherDelta and OasisDEX, and token wallets like MyEtherWallet and Jibrel).

[eru]

> No - selling a 'fantasy number' in exchange for real currency is not 'solid' model.

How are fantasy numbers any worse than fantasy equity of a new startup?

[alexasmyths]

You can buy a piece of a startup, and that has risk, but you take on that risk.

When you buy tokens, you're buying nothing.

So - ownership of something that may have value, vs. ownership of nothing.

[eru]

I don't get it. A company _is_ a fiction, too. And that fictional nature is very close to the surface in a startup. Especially when you add in vesting schedules, dilution, getting squeezed out, etc.

(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.)

[baby]

It'a the same as buying shares for a company

[svennek]

Except that companies have real (and for bigcorp, relatively stable) value, and that you are entitled to a fraction of it's dividend payouts (if it pays out dividends)

[baby]

Legit ICOs work the same way. They have a solid product to support.

[svennek]

I fail to see the value of "legit ico" vs. stocks..

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...

[alexasmyths]

"Legit ICOs work the same way. "

No - they don't.

'Shares' give you ownership of the companies assets.

ICO 'Coins' give you ownership of a made up number - nothing more.

[gruez]

but not "company" like Apple or Google, more like "company" like an anonymous entity that have 0 revenue and can run away at any time with no recourse for you.

[retube]

> Taking out rent seeking institutions private Equity banks, VCs and traditional banks

so people will invest money for free via ICOs?