Video Of The Week: Unpacking Initial Coin Offerings (ICO) and Token Sales
It’s a travel day for me. We are flying back home today after four weeks away.
William told me to watch this video about ICOs and Token Sales. So I will do that on the flight home. Maybe you all might like to watch it too.
I love how William keeps it ‘real’.A 3am interview?
No, it was recorded last week actually.
Safe flight and welcome back to NYC. Gonna be a nice few days coming up too!!
raining and socked in and humid and ugly today though.
Jason Wright:There are a few of us that work on 5 to 6 hours a day. With two days of nine.How many others are night owls? When a person doesn’t drink, smoke, party the time for studying this blockchain and cryptocurrency as an investment vehicle or not takes large blocks of your time especially when your work is concentrated in a different space. A few of us work for a living. If we had the unlimited resources as a few on AVC we would be positively disruptive.Researching companies, the people beyond it. Writings, tools, etc.
The night has something special: It belongs to us, the night owls.No phones ringing. No rush. Empty streets.The silence.Saludos to you creative.
There was a time when I worked 6 months straight on four hours sleep EVERY single day. When you start with nothing but a kitchen table, a second hand laptop, and a credit card as financing the one resource you have available to max out is yourself. Been there, done that, and while simultaneously caring for a parent (and on my own) with a degenerative neurological condition – ‘grow a pair’ and stop whining.
jason wright:based upon your subject matter your whining will always be accepted on that matter. (Parents, until you have that loss you will not understand, cherish the time you have now)
I’m seeing a broken link. In case, it’s not displaying for some, here is the link:https://epicenter.tv/episod…https://www.youtube.com/emb…
William Mougayar:3:50am MST. When do you sleep?
Nice shirt. Must be hard to iron. (the tessellated one) :)+ It is amazing and telling that the book was first translated to asian languages.
Good job on CNBC yesterday. Andrew actually let you talk.
thanks . he did interrupt a couple of times 🙂 :https://www.cnbc.com/amp/20…
Very interesting snippets.Such as the discussion around “sniper wallets” and trading competition (around 30:00).Reminds a lot of the book “Flash Boys”. I have built such trading systems and tools before and see great opportunity for applying to crypto today.
kenberger:Could you provide a white paper on how you would have taken advantage of the Ethereum drop to .10 with the model you discussed could be applied to crypto….If you have the time. A step by step would be priceless or the tools currently available now that would have helped.Thanks in advance.
no idea if those reports are true, but here’s one (it too references “Flash Boys”):https://medium.freecodecamp…
Could happen that ICOs become a motor for mass adoption of crypto, as there will be many projects/companies raising money. When they do, they would need to spend it on regular stuff, from people to operating expenses. It would be much more convenient to get others to use crypto instead of always change crypto into fiat in order to payout your expenses. This sheer demand will drive more people and companies into accepting these new payment methods and thus turn the tide very quickly. Once you have a worldwide large retailer(s) that will accept crypto and sell you everything you need, you have almost a closed circle. So ICO might be that engine that will convert crypto value into real value and drive mass adoption.
CONTRIBUTORS:Really would like to hear from our dedicated contributors who are well vested in Ethereum and didn’t post one sentence regarding Ethereum drop from $138 to .10 our ideal entry point. Are you kidding us right now. Those who lost their behind hope there is recovery soon. Those auto stops and sells are hurtful.The reason the lack of fundamentals keep us out the cowboy runs.
That drop wass just a sign that most people holding “millions of $” worth of the crypto-asset are only very slowly collecting a small share of the speculation money going into the ecosystem, and then someone who was having fun – or was clueless – tried to dump and collect millions of $ all at once.Coinbase offering to give those who lost their coins back is a marketing ploy, perhaps a dangerous precedent to set – though I imagine now these platforms will ad a layer of protection to prevent that from happening, to avoid the public signal from shining so brightly again..Does anyone know where there’s regular discussion, daily perhaps, of people who are opposed to the current structure of crypto-“currencies” like Bitcoin and Ethereum’s Ether? Discussion here on AVC has such tunnel vision on crypto-assets and blockchain, barely anyone actually goes into depth of the problem – everyone’s just primed and excited.There should be flair on people’s titles of exactly how much Bitcoin and Ether they own so we know how vested they are in this global, decentralized, Ponzi-like scheme – so we know how much they “are worth” if the value goes up to say $100,000 or even $1mm from their current perceived values.
Matt A. Myers:the main reason we are outside trying to peek in. There are no fundamentals to rely upon just crypto evangelism.If you read Nathaniel Popper’sDigital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money it provides a better view of the king makers motivations beyond making money and legitimizing crypto. The benefits of the blockchain is a result and not the initial factor.DISCLOSURE: No crypto currencies. Traditional stock positions and RE.
very insightful. agreed about the honeymoon period /need to standards….this period is a little nuts but also necessary
I think the problem with ICO is even more serious. Contrary to traditional startup financing, tokens are liquid, which implies that the developers behind a project can easily sell their token. It follows that ICOs do not provide the right incentives to developers. I wrote up a short article (link below), but the bottom line is that most ICOs amount at paying someone BEFORE any work is done. I also provide a possible fix to this problem.http://andreacanidio.com/bl…
Tokens clearly aren’t liquid based on the ‘crash’ to 0.10
Liquidity means that you can sell an no (or very little) cost. Tokens are clearly liquid: you just need to sign up for an exchange, send the tokens and sell them. Compare this with shares in a startup: much, much harder to sell. That is why shares are an effective tool to motivate the founding team, but tokens may not be.
Yes, I think that assessment is correct. Much work needs to be done to design tokens so that incentives of teams/founders align with the long-term interest of the project/contributors
I’m so excited our episode was posted here! I have been diligently reading AVC almost every day for 7 years or so.Thanks @wmoug:disqus & Fred 🙂
After watching and reading several other articles – I am still not sure how these ICOs translate into real money for salaries and snacks? Do the companies immediately sell the crypto they receive? Or is this just a large pyramid scheme where one crypto is traded for another?
(Disclaimer: I’m one of the interviewers. Also work on a project called Cosmos that did a crowdfunding campaign along the lines discussed in the interview.)1. Generally a legal entity is created before the token sale. Most common is a Swiss foundation. Then often there are regular companies that functions as service providers for the Swiss Foundation. The terms DApp and DAO refer to the thing on the blockchain that emerges from this. They aren’t legal entities. It has been said that if there is no legal entity doing the fundraiser, there is an implied legal entity which could be a general partnership. This is something projects generally try to avoid.2. Nobody knows at this point to what extent founders will be liable. Obviously, ~all projects try to structure themselves so there is no/limited liability. Whether cutting ties to the project could provide legal defense I don’t know. An argument for cutting ties could be to demonstrate that the decentralized protocol lives without the founders (as it often should). A bit like what Satoshi did with Bitcoin.3. This totally depends on the project. There are no rules. Even in Bitcoin, people could write a different client that removes the 21m limit and if that gained majority support the cap could be removed. A big trend is toward on-chain governance so that tokenholders can vote on issuing more tokens.4. You could in principle put the money into a smart contract and have some independent auditors only release it upon achieving specific milestones. It’s a good idea and should be done. However, it isn’t currently done. (Probably because it adds complexity and investors aren’t demanding it.) In the common structure with a Swiss Foundation, the Foundation has something akin to a business plan that specifies for what funds can be used. The Foundation is then accountable to the Swiss authorities that funds are used properly. (Whether they are able to assess that is another question…)5. I’m not sure what you are referring to. This doesn’t make sense to me.6. Generally such decisions would be made by the Foundation Council. Or potentially by a for-profit company if they work on the roadmap and get paid by the Foundation on a milestone basis.