[arcticbull]

The definition of a security is found in the application of the Howey test. The SEC has a nice long explanation of how you apply Howey to crypto. Basically every token is a security. Always has been. With the possible exception of Bitcoin due to the way it was initially distributed. [1]

[1] https://www.sec.gov/files/dlt-framework.pdf

[j0hnyl]

How can it be proved that people are buying tokens like Eth/Solana because they expect those tokens to go up in value?

Plenty of people are buying those tokens so that they can participate in their respective ecosystems as developers.

[elliekelly]

And some Howey-in-the-Hills investors may have just wanted to eat their oranges. First and foremost they’ll look to what was said in selling the tokens: “join a crypto community!” vs “start your crypto portfolio”.

[j0hnyl]

You have a point however, I don't think anyone is buying Eth now based on the initial ICO messaging.

[awb]

In that sense, it's more like gold which has investment potential, but also utility outside of its investment potential.

But if you're using gold as a productive asset, then you're modifying it and repurposing it to an extent that its value is no longer tied to its weight.

When you're using a token as a productive asset, its value is still tied to its market value. So in that sense, it's different and probably more closely related to an investment.

[Canada]

By this logic every isn't every kickstarter is also a security? Aren't tickets for concerts are securities too?

Ethereum was like that. You give them bitcoins, and they promised to build this distributed computer that you can run programs on. They did, and when the computer was up and running, they gave the tokens that pay for the running of programs on the computer. They also offered additional tokens to those who participated in running the computer because that was necessary for the computer to run correctly.

If you bought it, were you planning on running programs or selling to other people who want to run programs at a profit?

Should it matter? If you pre-ordered GPUs from nvidia speculating that other people would want to buy them at a higher price later, would that make the GPUs a security too? Are concert tickets a security because scalpers buy them with intention to resell at a profit? Are the GPUs securities because you expect "the efforts of others" to release driver updates for the latest games, thus contributing to the value of the video cards you hold?

[danaris]

You're not backing a Kickstarter with an expectation of profit. Your expectation is, at most, an expectation of product.

[arcticbull]

Yep, exactly. If you were getting equity in the company then it would be a security. Pre-sale of the product isn't. There's no common enterprise.

[deadbolt]

What was unique about the initial distribution of Bitcoin when compared to other cryptocurrencies?

[arcticbull]

No pre-mine, no pre-sale, no original ledger. The software was written, and the 'satoshi wallet' was actually open mined.

[WrtCdEvrydy]

no pre-mine I believe.