6 ms·

I don't think I'm stupid, but I still just don't get it... I give you money, and in return I get...a token. I can't eat a token. I can't live in it. I can't

by JackFr 9y ago

I don't think I'm stupid, but I still just don't get it... I give you money, and in return I get...a token. I can't eat a token. I can't live in it. I can't wear it. I can't buy Starbucks with it. It doesn't promise to return me more dollars or tokens if I hang onto it. It doesn't offer me any right to the governance or management of the money raised. It doesn't offer me a claim of ownership of some portion of an enterprise. I read the article closely and its really just a lot nonsense. There is a lot of handwaving and 'community blah blah' but it lacks a simple, straightforward explanation of how these tokens are to be used. I don't think I'm a stupid person, and I'm not trying to be obtuse. This just doesn't make any sense to me. As best I can tell, the transaction which best resembles an ICO is buying chips from a casino. They have all of the qualities I describe above -- that is they're not good for anything. They can be used to gamble in a casino however. That is their sole usefulness. So I guess maybe that's how I should be thinking about it.

Jonnax 9y ago
I'm under the impression. That the idea of the token is that it would the method for which to use the service they claim to have built or will build. For example if you're ICOing a distributed data store. The tokens will be what you spend d to store your data and you earn tokens by being a data store. What makes it also speculative and gives it value is that these tokens get traded on exchanges.
- joosters 9y ago
  We've already got tokens that do this job just fine. They go by different names, like dollars, euros or pounds. Want to be even more amazed? Your potential customers already possess these tokens! That means they could pay you for your service right now, without having to jump through lots of hoops obtaining the tokens through some unregulated, probably-illegal exchange. But no, go ahead and make your product more difficult for everyone to pay for. I'm sure that'll work out great.
  - kaffeemitsahne 9y ago
    The point is that these services work via e.g. the ethereum blockchain (and the best of them will actually have something to gain by being decentralized and trustless). Good luck sending euros to an ethereum address.. Of course it's still up for debate whether it's necessary to have a separate ERC20 (standard ethereum token protocol) token, instead of simply paying with eth directly. One argument I've heard for this is to have the method of payment decoupled from the price volatility of eth, but I'm not entirely convinced by that.
    - novalis78 9y ago
      As the case of the recent 'whoppercoin' for BurgerKing in Russia exemplifies, tokens also can take on the form of reward points. In a world where all of these various enterprise related token fields are 'shapeshiftable' fascinating economic incentives and dynamics emerge. Your investment in one tech project might thus allow you to eat for free for a year and if Burgers aren't healthy in your ideal world you might soon walk into a farmers market and pay electronically with tokens shifted. If everyone is a bank and investor - capitalist I guess you could say - then all of a sudden (central) banks face their 'internet moment' just like publishers, music, retailers did before them.
      - paublyrne 9y ago
        You're not eating for free if you pay for the privilege ... The future you describe where the value of everything is obfuscated by currency proxies sounds like something we should be trying to avoid. Just like foreign aid restrictions often stipulate that machinery purchased with aid funds needs to come from the donor country, it would be a matter of time before fast food companies tried to pass off partial renumeration in coins redeemable only in the business, as a good thing. Edit:I realise I'm making a leap from what you describe and being speculative. But this is the sort of thing I feel this road leads to.
        novalis78 9y ago
        You'd be eating 'free' in the sense that one of your investments might pay off and as soon as you step into BurgerKing your token will autoexchange to 'Whoopercoin' - purchased by your wallet app refilling your Burger King wallet. In fact there might be subscription services that tell you when the whoppercoin market experienced a pull back allowing you to take advantage and invite your friends. Yes, all speculative but technically absolutely doable.
WikipediasBad 9y ago
>I can't eat a token. I can't live in it. I can't wear it. I can't buy Starbucks with it. It doesn't promise to return me more dollars or tokens if I hang onto it. It doesn't offer me any right to the governance or management of the money raised. It doesn't offer me a claim of ownership of some portion of an enterprise. You can't do any of that with a lot of tech stocks actually either (ex: SNAP). SNAP pays no dividends, offers no guarantee of paying future dividends, you can't vote, you can't get more dollars if you hold on to it aside from the fact that someone else might speculate on it in an exchange. In a certain obtuse sense, newer tech stocks are becoming tokens and tokens are becoming quasi-shitty securities while trying to dance around securities laws. Honestly, I am not trying to troll, but I don't think there's any real difference between SNAP stock and Kik tokens in essence aside from a piece of paper saying that the SNAP stock is "stock" and the Kik token is a "token."
- robbiep 9y ago
  SNAP is a traded equity listed on a regulated exchange that by its very nature has significant liquidity. Very different in practice
  - WikipediasBad 9y ago
    Actually not at all different in practice. It's different in THEORY but actually almost identical in practice. In theory, SNAP stock is legally classified as a security and recognized by the United States government as providing some kind of weird, abstract ownership of the Snap Inc organization (although all classical markers of ownership are not present in the stock). In practice, my post was pointing out it's basically as bad or even worse than a token.
    - alexasmyths 9y ago
      It's not remotely 'identical' in practice. Kik can do whatever they want with their currency, there's no oversight, no transparency, no nothing. ----> The whole point of doing an ICO instead of an IPO is because they can paper over and gloss over issues, avoid regulation and transparency, and take advantage of wide-eyed and under-informed speculators. It's just a way to leverage over individuals keen to make it big on speculative mania. If Kik were in a position to do an IPO - they would. But they can't. Because they are slowly dying, and have almost no revenues. That doesn't sound like a good position to be in. So how could they possibly raise money otherwise without a lot of smoke and mirrors? Why not simply 'raise a bunch of USD' and then 'pay developers' some of that USD - instead of fabricated coins? Because the terms of an ICO to them vis-a-vis 'investors' are incredibly better. Yes - an argument could be made that 'regulations are onerous and limiting and create undue friction' - and that's on some level a good point. But this won't end well in the long run. These ICO's are speculative mania. They'll be a 'good investment' for some, but there's nary any actual value being created. ICO's are 99% a 'net zero gain' scheme whereby a lot of money changes hands - and it will go from 'dumb uniformed people to smart, informed, empowered and slightly greedy' people. The only long-run winner for these things are the Hedge Funds getting in early, backing the ICOs, and then dumping their positions over time. ICO's are not a financial innovation. You can't create value out of thin air.
TomK32 9y ago
I have the same problem. Using the tokens for their service later is a big uncertainty so I rather think of them as shares in the company's service and wonder when those sortof-shares will be regulated like the normal stock market.
- novalis78 9y ago
  I guess at the moment token are 'regulated' by their inherent cryptographic security that paper stock certificates purchased through a broker don't have. Whether the companies that issue them need regulation boils down to whether kickstarter or indigogo needs regulation IMHO. Which I personally think as a grown up and internet user you'd be careful enough to investigate on your own with due diligence and not spend more than you can afford to lose.
deleted 9y ago
[deleted]
cashmonkey85 9y ago
Is unfair to call ISOs a casino. Casino are not outright scams and you know what you are paying for when going to a casino
- dragandj 9y ago
  ICOs are more like a shell game. https://en.wikipedia.org/wiki/Shell_game https://en.wikipedia.org/wiki/Shell_game
- alexasmyths 9y ago
  At a casino, you are paying ~5% on the dollar and getting some entertainment in return. With ICOs, in the long run, you might end up paying ~100% on the dollar and getting nothing in return. The asymmetry between those issuing 'coins' and those buying is considerably greater than the 'average losses' of 5-10% or whatever a gambler might have at a Casino. Also - a lot of Casinos end up losing money because they have to 'give too much away' to consumers in terms of the experience, food, drinks. More wealth-per-dollar will be transferred to investors from ICO's than at Casinos. Which is why Hedge Funds are lining up to back ICOs - and not Casinos - it's a better return for them.
dragandj 9y ago
You forgot the key thing: casino chips are redeemable!
zodiac 9y ago
You can read a bit more about the token's intended use-case in Kin's white paper. Doesn't answer all your questions bit it's better than the article

by JackFr 9y ago

Jonnax 9y ago

I'm under the impression. That the idea of the token is that it would the method for which to use the service they claim to have built or will build. For example if you're ICOing a distributed data store. The tokens will be what you spend d to store your data and you earn tokens by being a data store. What makes it also speculative and gives it value is that these tokens get traded on exchanges.

joosters 9y ago
We've already got tokens that do this job just fine. They go by different names, like dollars, euros or pounds. Want to be even more amazed? Your potential customers already possess these tokens! That means they could pay you for your service right now, without having to jump through lots of hoops obtaining the tokens through some unregulated, probably-illegal exchange. But no, go ahead and make your product more difficult for everyone to pay for. I'm sure that'll work out great.
- kaffeemitsahne 9y ago
  The point is that these services work via e.g. the ethereum blockchain (and the best of them will actually have something to gain by being decentralized and trustless). Good luck sending euros to an ethereum address.. Of course it's still up for debate whether it's necessary to have a separate ERC20 (standard ethereum token protocol) token, instead of simply paying with eth directly. One argument I've heard for this is to have the method of payment decoupled from the price volatility of eth, but I'm not entirely convinced by that.
  - novalis78 9y ago
    As the case of the recent 'whoppercoin' for BurgerKing in Russia exemplifies, tokens also can take on the form of reward points. In a world where all of these various enterprise related token fields are 'shapeshiftable' fascinating economic incentives and dynamics emerge. Your investment in one tech project might thus allow you to eat for free for a year and if Burgers aren't healthy in your ideal world you might soon walk into a farmers market and pay electronically with tokens shifted. If everyone is a bank and investor - capitalist I guess you could say - then all of a sudden (central) banks face their 'internet moment' just like publishers, music, retailers did before them.
    - paublyrne 9y ago
      You're not eating for free if you pay for the privilege ... The future you describe where the value of everything is obfuscated by currency proxies sounds like something we should be trying to avoid. Just like foreign aid restrictions often stipulate that machinery purchased with aid funds needs to come from the donor country, it would be a matter of time before fast food companies tried to pass off partial renumeration in coins redeemable only in the business, as a good thing. Edit:I realise I'm making a leap from what you describe and being speculative. But this is the sort of thing I feel this road leads to.
      - novalis78 9y ago
        You'd be eating 'free' in the sense that one of your investments might pay off and as soon as you step into BurgerKing your token will autoexchange to 'Whoopercoin' - purchased by your wallet app refilling your Burger King wallet. In fact there might be subscription services that tell you when the whoppercoin market experienced a pull back allowing you to take advantage and invite your friends. Yes, all speculative but technically absolutely doable.

WikipediasBad 9y ago

>I can't eat a token. I can't live in it. I can't wear it. I can't buy Starbucks with it. It doesn't promise to return me more dollars or tokens if I hang onto it. It doesn't offer me any right to the governance or management of the money raised. It doesn't offer me a claim of ownership of some portion of an enterprise. You can't do any of that with a lot of tech stocks actually either (ex: SNAP). SNAP pays no dividends, offers no guarantee of paying future dividends, you can't vote, you can't get more dollars if you hold on to it aside from the fact that someone else might speculate on it in an exchange. In a certain obtuse sense, newer tech stocks are becoming tokens and tokens are becoming quasi-shitty securities while trying to dance around securities laws. Honestly, I am not trying to troll, but I don't think there's any real difference between SNAP stock and Kik tokens in essence aside from a piece of paper saying that the SNAP stock is "stock" and the Kik token is a "token."

robbiep 9y ago
SNAP is a traded equity listed on a regulated exchange that by its very nature has significant liquidity. Very different in practice
- WikipediasBad 9y ago
  Actually not at all different in practice. It's different in THEORY but actually almost identical in practice. In theory, SNAP stock is legally classified as a security and recognized by the United States government as providing some kind of weird, abstract ownership of the Snap Inc organization (although all classical markers of ownership are not present in the stock). In practice, my post was pointing out it's basically as bad or even worse than a token.
  - alexasmyths 9y ago
    It's not remotely 'identical' in practice. Kik can do whatever they want with their currency, there's no oversight, no transparency, no nothing. ----> The whole point of doing an ICO instead of an IPO is because they can paper over and gloss over issues, avoid regulation and transparency, and take advantage of wide-eyed and under-informed speculators. It's just a way to leverage over individuals keen to make it big on speculative mania. If Kik were in a position to do an IPO - they would. But they can't. Because they are slowly dying, and have almost no revenues. That doesn't sound like a good position to be in. So how could they possibly raise money otherwise without a lot of smoke and mirrors? Why not simply 'raise a bunch of USD' and then 'pay developers' some of that USD - instead of fabricated coins? Because the terms of an ICO to them vis-a-vis 'investors' are incredibly better. Yes - an argument could be made that 'regulations are onerous and limiting and create undue friction' - and that's on some level a good point. But this won't end well in the long run. These ICO's are speculative mania. They'll be a 'good investment' for some, but there's nary any actual value being created. ICO's are 99% a 'net zero gain' scheme whereby a lot of money changes hands - and it will go from 'dumb uniformed people to smart, informed, empowered and slightly greedy' people. The only long-run winner for these things are the Hedge Funds getting in early, backing the ICOs, and then dumping their positions over time. ICO's are not a financial innovation. You can't create value out of thin air.

TomK32 9y ago

I have the same problem. Using the tokens for their service later is a big uncertainty so I rather think of them as shares in the company's service and wonder when those sortof-shares will be regulated like the normal stock market.

novalis78 9y ago
I guess at the moment token are 'regulated' by their inherent cryptographic security that paper stock certificates purchased through a broker don't have. Whether the companies that issue them need regulation boils down to whether kickstarter or indigogo needs regulation IMHO. Which I personally think as a grown up and internet user you'd be careful enough to investigate on your own with due diligence and not spend more than you can afford to lose.

deleted 9y ago

[deleted]

cashmonkey85 9y ago

Is unfair to call ISOs a casino. Casino are not outright scams and you know what you are paying for when going to a casino

dragandj 9y ago
ICOs are more like a shell game. https://en.wikipedia.org/wiki/Shell_game https://en.wikipedia.org/wiki/Shell_game
alexasmyths 9y ago
At a casino, you are paying ~5% on the dollar and getting some entertainment in return. With ICOs, in the long run, you might end up paying ~100% on the dollar and getting nothing in return. The asymmetry between those issuing 'coins' and those buying is considerably greater than the 'average losses' of 5-10% or whatever a gambler might have at a Casino. Also - a lot of Casinos end up losing money because they have to 'give too much away' to consumers in terms of the experience, food, drinks. More wealth-per-dollar will be transferred to investors from ICO's than at Casinos. Which is why Hedge Funds are lining up to back ICOs - and not Casinos - it's a better return for them.

dragandj 9y ago

You forgot the key thing: casino chips are redeemable!

zodiac 9y ago

You can read a bit more about the token's intended use-case in Kin's white paper. Doesn't answer all your questions bit it's better than the article