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>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

>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.
  - JackFr 9y ago
    It's not weird or abstract. It's totally concrete -- the markers of ownership (dividend, voting rights) are missing but there is still ownership of the enterprise. If SNAP is sold, they are entitled to their share.
- modeless 9y ago
  Liquidity may not be as different as you think. Volume on SNAP was $360M today; top ICOs are in the same order of magnitude. OMG was $67M, Qtum was $147M. (Bitcoin was $2B)
  - novalis78 9y ago
    And they are traded globally 24/7. That's quite a difference from being traded in one stock exchange during business limited hours via a layer of brokers.
  - robbiep 9y ago
    That's an interesting point re volume. But it still smells too much like 'Disney dollars' or similar - and I mean particularly in the instance of kik where they are looking to create an economy within their app developers. It's the same horse wearing different colours and it's not the sort of thing I would be rushing to get into (and I say this as a BTC participant at the 3c mark)
TomK32 9y ago
Yeah, but the IPO Snap had to go through is heavily regulated to protect investors. ICOs are the wild-west.
- novalis78 9y ago
  I would argue that's a feature not a bug: the ease with which to potentially attract support. Similar to how kickstarter functions there is a lot of community feedback in the crypto world. If you want to you can find a ton of research on various ICO projects. Finally it's up to the investor to decide. The 24/7 liquidity and global aspect helps, in that the price exploration/valuation occurs continuously without opening price gaps.
  - loceng 9y ago
    With human nature people will take advantage of others who won't or can't know better and get excited by and react to hype. I think it's society's responsibility to prevent people from scamming others out of money - which is generally what stable economies do. I'm not saying blockchain doesn't have a great potential in utility, just not structured with how the popular ones (Bitcoin, Ethereum's Ether) have been incentivized - a stable crypto-asset would allow for utility without unreasonable or insane wealth transfer from occurring.
    - novalis78 9y ago
      Absolutely agree. But society has to ways of making sure that there will be a minimum of fraud: let unelected regulators do the job or have a broad range of third party services/companies internationally issue advisories and reviews/audits. The answer to this of course is political/philosophical and crypto in general follows a philosophy of having the market i.e. Private solutions figure it out. That's especially more feasible as it's a global phenomenon.
  - alexasmyths 9y ago
    This has been done before. History repeating itself. The easy ability for corporate entities to dupe smaller investors is the oldest scheme in the book. The 1929 crash was dependent on it. The 2000 crash was dependent on it - it was largely due to the fact that 'online investing' caused a flood of small-time money into the markets pushing up prices. When the 'smart money' decided to end it, they pulled out ahead of the dumb money and left others holding the bag. The housing crisis had elements of this as well. There is definitely an argument to be made that 'regulations hold people back' - surely - but without them there is a 100% guarantee that things will go sour. And when I refer to 1929 - that's not even going back that far. The entire history of economics is about this - the 'quandary' of why supposedly rational markets crash and burn so often. It's seems a rather apparent explanation would be the asymmetry of information (and greed) between some actors, and others.
loceng 9y ago
So you're comparing to Kin being like a stock, why do they call them crypto-currencies then?
- WikipediasBad 9y ago
  I don't think anyone that is well versed and highly accurate in the crypto realm calls these currencies. In fact, the proper term is token or appcoin. Not much except Bitcoin and similar forks/spinoffs (Monero, Dogecoin, Litecoin etc) are currencies.
- alexasmyths 9y ago
  " why do they call them crypto-currencies then?" They call then 'crypto currencies' because they are 'totally cool' and 'trendy' and full of 'hype and future' - to gloss over the actual facts of what they actually are, in financial terms. Where there is undue investor sentiment, and an inability to map the real meaning of the financial instrument - then those issuing whatever-it-is have significant leverage. The biggest story of the 2010's will relate to the fact that most in 'tech' are viewing crypto-currencies from a technological perspective, while not having sufficient background to see their relevance as financial instruments.
simo7 9y ago
There is still a HUGE difference between the two. Owning a stock entitles you to a share of current/future assets/profits of the business. Even in the case the business is not making money you can still hope for future profits or at the very least in the remunerative sale of an asset. And no, you don't necessarily need dividends, cash on the balance sheet is very real and there's plenty of ways it can end up in your pockets other than dividends.
- WikipediasBad 9y ago
  >Owning a stock entitles you to a share of current/future assets/profits of the business. Can you provide me with some concrete examples of famous, high profile tech stocks like facebook and snapchat giving a "share of their current/future assets/profits of the business" to stockholders? As far as I know, there is no promise of current or future assets that they will pay out or distribute to shareholders barring legal actions and demands of liquidation, forfeiture etc all of which are not part of the simple "stock owning experience" that can be used as a counter example here. >And no, you don't necessarily need dividends, cash on the balance sheet is very real and there's plenty of ways it can end up in your pockets other than dividends. Please do tell me how cash on facebook's balance sheet can end up in my pocket if I own FB common stock? What are some concrete examples that could happen. Then, how about some concrete examples that have actually happened?
  - anon1385 9y ago
    >Can you provide me with some concrete examples of famous, high profile tech stocks like facebook and snapchat giving a "share of their current/future assets/profits of the business" to stockholders? https://www.microsoft.com/en-us/Investor/dividends-and-stock-history.aspx https://www.microsoft.com/en-us/Investor/dividends-and-stock...
    - WikipediasBad 9y ago
      I'm not talking about dividends. I made that extremely clear. A lot of companies pay zero dividends and also make it clear they have absolutely no plans of paying future dividends either so there is no expected value of future profits that peg the stock price. There is no rights of voting or any kind of classical definition of "ownership" pegged to the stock. Look at SNAP, hundreds of millions of dollars of volume is traded per day of SNAP on exchanges. If I removed the ticker name from my post, would you think I was talking about a token or stock?
JackFr 9y ago
I agree to some extent -- I think the SNAP offering was a little ridiculous, and serious asset managers seem to agree. But one significant difference is that SNAP shareholders have a residual claim on the assets of enterprise. In the event of a sale of SNAP (takeover or merger), they must be compensated. In the event of a bankruptcy they get whats left after all the other creditors (though that's presumably gonna be 0.)

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.
- JackFr 9y ago
  It's not weird or abstract. It's totally concrete -- the markers of ownership (dividend, voting rights) are missing but there is still ownership of the enterprise. If SNAP is sold, they are entitled to their share.
modeless 9y ago
Liquidity may not be as different as you think. Volume on SNAP was $360M today; top ICOs are in the same order of magnitude. OMG was $67M, Qtum was $147M. (Bitcoin was $2B)
- novalis78 9y ago
  And they are traded globally 24/7. That's quite a difference from being traded in one stock exchange during business limited hours via a layer of brokers.
- robbiep 9y ago
  That's an interesting point re volume. But it still smells too much like 'Disney dollars' or similar - and I mean particularly in the instance of kik where they are looking to create an economy within their app developers. It's the same horse wearing different colours and it's not the sort of thing I would be rushing to get into (and I say this as a BTC participant at the 3c mark)

TomK32 9y ago

Yeah, but the IPO Snap had to go through is heavily regulated to protect investors. ICOs are the wild-west.

novalis78 9y ago
I would argue that's a feature not a bug: the ease with which to potentially attract support. Similar to how kickstarter functions there is a lot of community feedback in the crypto world. If you want to you can find a ton of research on various ICO projects. Finally it's up to the investor to decide. The 24/7 liquidity and global aspect helps, in that the price exploration/valuation occurs continuously without opening price gaps.
- loceng 9y ago
  With human nature people will take advantage of others who won't or can't know better and get excited by and react to hype. I think it's society's responsibility to prevent people from scamming others out of money - which is generally what stable economies do. I'm not saying blockchain doesn't have a great potential in utility, just not structured with how the popular ones (Bitcoin, Ethereum's Ether) have been incentivized - a stable crypto-asset would allow for utility without unreasonable or insane wealth transfer from occurring.
  - novalis78 9y ago
    Absolutely agree. But society has to ways of making sure that there will be a minimum of fraud: let unelected regulators do the job or have a broad range of third party services/companies internationally issue advisories and reviews/audits. The answer to this of course is political/philosophical and crypto in general follows a philosophy of having the market i.e. Private solutions figure it out. That's especially more feasible as it's a global phenomenon.
- alexasmyths 9y ago
  This has been done before. History repeating itself. The easy ability for corporate entities to dupe smaller investors is the oldest scheme in the book. The 1929 crash was dependent on it. The 2000 crash was dependent on it - it was largely due to the fact that 'online investing' caused a flood of small-time money into the markets pushing up prices. When the 'smart money' decided to end it, they pulled out ahead of the dumb money and left others holding the bag. The housing crisis had elements of this as well. There is definitely an argument to be made that 'regulations hold people back' - surely - but without them there is a 100% guarantee that things will go sour. And when I refer to 1929 - that's not even going back that far. The entire history of economics is about this - the 'quandary' of why supposedly rational markets crash and burn so often. It's seems a rather apparent explanation would be the asymmetry of information (and greed) between some actors, and others.

loceng 9y ago

So you're comparing to Kin being like a stock, why do they call them crypto-currencies then?

WikipediasBad 9y ago
I don't think anyone that is well versed and highly accurate in the crypto realm calls these currencies. In fact, the proper term is token or appcoin. Not much except Bitcoin and similar forks/spinoffs (Monero, Dogecoin, Litecoin etc) are currencies.
alexasmyths 9y ago
" why do they call them crypto-currencies then?" They call then 'crypto currencies' because they are 'totally cool' and 'trendy' and full of 'hype and future' - to gloss over the actual facts of what they actually are, in financial terms. Where there is undue investor sentiment, and an inability to map the real meaning of the financial instrument - then those issuing whatever-it-is have significant leverage. The biggest story of the 2010's will relate to the fact that most in 'tech' are viewing crypto-currencies from a technological perspective, while not having sufficient background to see their relevance as financial instruments.

simo7 9y ago

There is still a HUGE difference between the two. Owning a stock entitles you to a share of current/future assets/profits of the business. Even in the case the business is not making money you can still hope for future profits or at the very least in the remunerative sale of an asset. And no, you don't necessarily need dividends, cash on the balance sheet is very real and there's plenty of ways it can end up in your pockets other than dividends.

WikipediasBad 9y ago
>Owning a stock entitles you to a share of current/future assets/profits of the business. Can you provide me with some concrete examples of famous, high profile tech stocks like facebook and snapchat giving a "share of their current/future assets/profits of the business" to stockholders? As far as I know, there is no promise of current or future assets that they will pay out or distribute to shareholders barring legal actions and demands of liquidation, forfeiture etc all of which are not part of the simple "stock owning experience" that can be used as a counter example here. >And no, you don't necessarily need dividends, cash on the balance sheet is very real and there's plenty of ways it can end up in your pockets other than dividends. Please do tell me how cash on facebook's balance sheet can end up in my pocket if I own FB common stock? What are some concrete examples that could happen. Then, how about some concrete examples that have actually happened?
- anon1385 9y ago
  >Can you provide me with some concrete examples of famous, high profile tech stocks like facebook and snapchat giving a "share of their current/future assets/profits of the business" to stockholders? https://www.microsoft.com/en-us/Investor/dividends-and-stock-history.aspx https://www.microsoft.com/en-us/Investor/dividends-and-stock...
  - WikipediasBad 9y ago
    I'm not talking about dividends. I made that extremely clear. A lot of companies pay zero dividends and also make it clear they have absolutely no plans of paying future dividends either so there is no expected value of future profits that peg the stock price. There is no rights of voting or any kind of classical definition of "ownership" pegged to the stock. Look at SNAP, hundreds of millions of dollars of volume is traded per day of SNAP on exchanges. If I removed the ticker name from my post, would you think I was talking about a token or stock?

JackFr 9y ago

I agree to some extent -- I think the SNAP offering was a little ridiculous, and serious asset managers seem to agree. But one significant difference is that SNAP shareholders have a residual claim on the assets of enterprise. In the event of a sale of SNAP (takeover or merger), they must be compensated. In the event of a bankruptcy they get whats left after all the other creditors (though that's presumably gonna be 0.)