With the Hype around ICO-s the investor structure is to be found in a change. Previously only crypto fanatics were investing into the field who were technically competent to master all the challenges of the technology, like private-public key management, or dealing with the blockckahin. Nowadays, there seems to be a shift on the field with having more and more non-professional and industrial investors as well. Considering these parties, classical crypto investment technologies might not be the best fit. It is a general question if crypto investment technologies can be further developed to serve corporate ot non-professional investor groups as well.
Practical notes on Enterprise software systems and the economics of software.
...by Daniel Szego
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"On a long enough timeline we will all become Satoshi Nakamoto.."
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Daniel Szego
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Showing posts with label ICO. Show all posts
Showing posts with label ICO. Show all posts
Tuesday, January 23, 2018
Wednesday, December 20, 2017
A Securities Law Framework for Blockchain Tokens
The most important frameworks for an ICO to evaluate if a token is a security or not:
https://www.coinbase.com/legal/securities-law-framework.pdf
Howey test:
https://docs.google.com/spreadsheets/d/1QxOV2dgxO3C_TyVE0-41ZwLlzPmB-EE1NNshJGuedCU/edit#gid=0
Wednesday, December 6, 2017
On the need of two-stage token systems
Current ICO-s have the fundamental problem that the token system contains only one level. On the one hand, it has some nice characteristics from the investors perspective, like it has a finite token supply that can be sold right at the beginning and the decentralized application van make it sure that no further token will be released so the monetary supply is guaranteed in this sense. Hence, the token is usually traded in some exchanges so it is guaranteed that the liquidity on the market is high and gives the possibility for speculation as well.
On the other hand, these tokens are usually used for some decentralized services, like for buying computational power, or paying for storage. In this sense it is pretty much unpractical that the price of the token is handled indirectly as the valuation of the company or decentralized organisation. It implies that the if the decentralized organisation is evaluated high, the token of the service is high as well, that might make the service not sellable at all comparing with perhaps centralized competitors.
A solution might be to work with two stages of token systems, where the investment and speculation side of the platform is clearly distinguished from the usage price. Certainly it is an open question how such a two tokens should be "cooperated" or issued with each other.
Thursday, November 23, 2017
on ICO price and media news
Considering the whole ICO wild west, the appearance and spread of the news or false news are much more critical than in the traditional industry. The whole ICO and token concept based on the idea that the products are actually not ready, they only exist as a whitepaper at the beginning, and perhaps something will be realized perhaps nothing. For this reason the appearance of the different news can influence the price in a enormous way. Surprisingly, informative news, like a new milestone has been successfully reached are usually too technical to really make a huge influence. However such a news that a given company made a successful partnership with a big company or a potential customer make the prices sky-rocketing. The situation can be even worse if the news are actually fake and are created only to manipulate prices. As the whole area pretty much a wild-west, it is questionable what can be done against such a negative manipulation.
Saturday, October 28, 2017
Notes on Initial Coin Offering
Well, ICO (Initial Coin Offering) it a topic that is pretty much highly discussed at the moment. On the one hand the whole are is basically a wild west, apart from the good intention start-ups, there are a lot of Ponzi schemes, Pump and Dump schemes, or simply tokens that provide nothing in exchange to the value of the token.
On the other hand, the whole ICO market shows that the idea is actually a pretty much working idea, summarizing the advantages in three major points:
1. The area is booming of innovations: there are a lot of experimental initiatives to try out in which fields is it possible to use the decentralized model, how they might work and how they do not.
2. There is pretty huge demand on the market: If I am someone that wants to invest some money into a start-up, it is pretty difficult to do it otherwise. Certainly I can buy some stocks on the finance market, however on the one hand stocks are investments of big companies, not exactly start-ups, on the other hand there is a financial border for most people throughout the world of investing in stocks. ICO on the other hand is available for everyone on a self-service basis.
3. There is a huge supply on the market: for every start-up, there is not necessarily an easy way to collect funds. To get venture capital, is usually not an easy process and the result is pretty much questionable as well. On the other hand, latest news have been demonstrated that raising money with the help of an ICO can be pretty fast and pretty successful.
Does Cryptocurrency mean the end of Fiat money ?
Perhaps the question itself is a little bit provocative, however we might as well consider the appearance of the cryptocurrencies simply from an evolutionary perspective. As barter was replaces by primitive, following coinage, then paper money and fiat currencies, perhaps cryptocurrencies are simple the new stage of the financial technology evolution. Certainly for the first run Bitcoin and other technologies provide rather a simple money transferring technology. However, there not seem to be any reason why the technology could not extend to a broader area, providing general financial services besides money transfer. One example for that is the appearance of cryptograhicaly funding services, like ICO-s that have the chance to replace the whole venture capitaslim. In this sense, we might as well easily imagine that in a twenty years, fiat style currencies will hundred percent replaced by crypto style financial services.
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