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> “Do I think ICOs are silly, bordering on scams? Yes, they are,” he continued. “But, there are a few that are important, and the blockchain is more important t

by pfraze 9y ago

> “Do I think ICOs are silly, bordering on scams? Yes, they are,” he continued. “But, there are a few that are important, and the blockchain is more important than not… ICOs need to be regulated.” > At the same time, it could mean working, for the first time, with investors who are not “accredited,” meaning high-net-worth investors — an idea that appeals to Altman. I guess he sees blockchains as a vehicle to getting the regulatory framework he wants for securities, and (I assume) doesn't feel he can get for traditional stock. > Added Altman of the appeal of ICOs in particular, “People are watching their friends get really rich and it’s making them [frustrated and wanting to get rich, too].” > “One of the trends that bothers me about Silicon Valley,” he continued, is that “more and more of the wealth creation here is not available to most people, and I think that’s very bad in a society with already so much wealth inequality. If there’s a way that new technology can make it practical and possible to democratize this, I think that’d be great.” I mean, he just said he recognizes it's a bubble. Doesn't a bubble usually suggest wealth transfer instead of creation? Of course it's frustrating to not get in on that money. It's even more frustrating when you see the situation as ethically gray, and here's Sam signaling that YC should jump on board.

pfraze 9y ago
I guess I'd ask this question: Is it ethical to want to bring in unaccredited investors to a market that's known for being scammy and overhyped?
- twalla 9y ago
  Fundamentally, I see it as democratizing investment and removing arbitrary hurdles for those without millions in the bank to seek higher risk/reward investments. In practice, I'm seeing teams doing ICOs do shady things like change the terms halfway through raising capital, leaving early contributors with a diluted stake or teams that straight up don't deliver with no way for share(token?)holders to hold the team accountable - basically this kind of behavior seems a whole lot easier when you took small sums from thousands of nobodies instead of millions from a handful of deep-pocketed somebodies.
  - JumpCrisscross 9y ago
    > for those without millions in the bank to seek higher risk/reward investments I question whether those risk-reward blends are appropriate for those without substantial excess capital. The current limits are somewhat arbitrarily placed, I agree, but someone with $50,000 in savings probably shouldn't be investing in start-ups.
    - redial 9y ago
      Isn't that up to them?
- Fomite 9y ago
  The worried part of me thinks this is the build up for just another example of "In which cryptocurrencies discover that banking and securities regulations were created for a reason".
- relyio 9y ago
  It doesn't bother the government when the middle class spend its hard earned money in gambling, sport events or entertainment. Somehow, there's suddenly a moral imperative to protect those poor sheep from doing as they please with their property. But, wait, only if their capital inflow will dilute the returns of established investors. It's to protect the middle class of course, though one can only wonder why the blatant double standard. I have no idea! The "accredited investor" regulations are a sham, an unfair and artificial barrier to entry that ought to be removed. Yes, some people will get abused. This might even create local instability. But, that is clearly the long-term optima. Those who lose money to scams can leave it to law enforcement to do their job. Others who invest more they can afford to lose into bad apples will learn that you should always hedge risk. As a whole, society gets smarter when it is allowed to make mistakes, even costly ones. Smarter and less fragile.
  - JumpCrisscross 9y ago
    > Those who lose money to scams can leave it to law enforcement to do their job Law enforcement rarely resolves securities disputes. It requires lawyers teeing up the evidence for courts and regulators. Disclaimer: I am not a lawyer. Don’t do mean things with securities.
    - relyio 9y ago
      I guess it would depend how sophisticated the scam is. When I wrote that, I had outright thievery in mind.
      - exelius 9y ago
        Any *coin fiasco would take the government years to figure out. Nobody is even sure if the laws on the books would cover some of the scenarios that are popping up. A lot of it would be solved if people really understood what they're buying with these ICOs, but many just see it as "magical Internet money that's making cash obsolete".
  - lazyasciiart 9y ago
    > It doesn't bother the government when the middle class spend its hard earned money in gambling Isn't gambling heavily regulated in the US to the point of being barely legal in many states? Isn't that basically how many Indian tribes make money - by being outside this regulation?
- fgjjgutjvnu 9y ago
  I understand the reasoning behind such regulation. On the other hand, for example doing a startup is also highly risky. Should it therefore also be regulated, only people with enough savings (and perhaps education) should be allowed to do startups? I don't think it is easy to answer, clearly not allowing people to take risks is also taking away there freedom and chances for making a better living. Not allowing people to take risks (and consequently, start businesses) ultimately leads towards a communist worlds were people can only pick from a selection of government ordained jobs.
csomar 9y ago
Silicon Valley created lots of "valuation" in the last few years. This made lots of people rich on "paper". Now if we can only get other people jealous of them, and sell them these on paper gains for real money. Transfer it through the blockchain just to be safe.
- untilHellbanned 9y ago
  Keeping it 100%.
notyourday 9y ago
> “One of the trends that bothers me about Silicon Valley,” he continued, is that “more and more of the wealth creation here is not available to most people, and I think that’s very bad in a society with already so much wealth inequality. If there’s a way that new technology can make it practical and possible to democratize this, I think that’d be great.” Wow. Just wow. Looks like 2017 is the year when VCs publicly started adopting the pump-and-dump positions.
- quuquuquu 9y ago
  "Remember 1999? Yeah, those companies were 'bad companies'. And the banks that brought them to IPO are 'bad people'. They knowingly peddled their stock to the public market. Grandma lost her 401k because of them. But you see us? We're 'good people'. Our companies are 'good companies'. We 'generate wealth'. And an ICO is a great way to facilitate sales of stock a large, global, but ahem 'private' market."
- smokeyj 9y ago
  I think the people who laughed at blockchain tech for years now are having a cognitive dissonance moment, when they slowly see this technology seeping into traditional spaces. "It must be a bubble! It's a tulip scheme!" they proclaim, clinging to their last shred of dignity, as they fail to predict the inevitable future one more time.
  - notyourday 9y ago
    I think you have a fundamental misunderstanding of a difference between " a blockchain " (the technology) and "Let people who see others making money hands over fist on a blockchain participate. I have this thing" (the fraud).
    - smokeyj 9y ago
      Blockchain the currency and blockchain the equity/bond/token were inevitable. The crypto world isn't concerned with traditional finance and their legacy rules. The future is decentralized companies financed with decentralized currency. It seems the people most offended by this realization are those with authoritarian complexes with a desire to control the voluntary spending habits of their peers. Which is exactly why there's demand for this new freedom money. Stop telling me how to spend and how to invest. I'm not your child and this isn't your money.
exelius 9y ago
I'm divided over the whole ICO thing. On one hand, I don't think that Bitcoin, et al are ever going to replace fiat currency. But shares of stock are a perfect analog to what he's trying to do; and I think the SEC will see right through it. On the other hand, blockchain tech is very useful for distributed asset tracking; specifically corporate bonds and equity. It makes an incredible amount of sense for things like stock certificates and even shareholder voting. Having a tokenized, open ledger that is able to be analyzed by anyone is nothing but good for shareholders. I think that as long as shareholders are aware that they are buying equity in a company, cryptocurrency should be a viable way to do so. What I do not think, however, is that these corporate cryptocurrencies should be exempt from all existing laws governing equity finance. It should be 1 share = 1 coin and leave it at that. The market can determine the value of the shares, and the company can create new ones whenever it wants (since it would control the "mining" pool).
sjg007 9y ago
The jobs act allows smaller fundraisers from non-accredited investors.. but it’s not very popular. Why?

by pfraze 9y ago

pfraze 9y ago

I guess I'd ask this question: Is it ethical to want to bring in unaccredited investors to a market that's known for being scammy and overhyped?

twalla 9y ago
Fundamentally, I see it as democratizing investment and removing arbitrary hurdles for those without millions in the bank to seek higher risk/reward investments. In practice, I'm seeing teams doing ICOs do shady things like change the terms halfway through raising capital, leaving early contributors with a diluted stake or teams that straight up don't deliver with no way for share(token?)holders to hold the team accountable - basically this kind of behavior seems a whole lot easier when you took small sums from thousands of nobodies instead of millions from a handful of deep-pocketed somebodies.
- JumpCrisscross 9y ago
  > for those without millions in the bank to seek higher risk/reward investments I question whether those risk-reward blends are appropriate for those without substantial excess capital. The current limits are somewhat arbitrarily placed, I agree, but someone with $50,000 in savings probably shouldn't be investing in start-ups.
  - redial 9y ago
    Isn't that up to them?
Fomite 9y ago
The worried part of me thinks this is the build up for just another example of "In which cryptocurrencies discover that banking and securities regulations were created for a reason".
relyio 9y ago
It doesn't bother the government when the middle class spend its hard earned money in gambling, sport events or entertainment. Somehow, there's suddenly a moral imperative to protect those poor sheep from doing as they please with their property. But, wait, only if their capital inflow will dilute the returns of established investors. It's to protect the middle class of course, though one can only wonder why the blatant double standard. I have no idea! The "accredited investor" regulations are a sham, an unfair and artificial barrier to entry that ought to be removed. Yes, some people will get abused. This might even create local instability. But, that is clearly the long-term optima. Those who lose money to scams can leave it to law enforcement to do their job. Others who invest more they can afford to lose into bad apples will learn that you should always hedge risk. As a whole, society gets smarter when it is allowed to make mistakes, even costly ones. Smarter and less fragile.
- JumpCrisscross 9y ago
  > Those who lose money to scams can leave it to law enforcement to do their job Law enforcement rarely resolves securities disputes. It requires lawyers teeing up the evidence for courts and regulators. Disclaimer: I am not a lawyer. Don’t do mean things with securities.
  - relyio 9y ago
    I guess it would depend how sophisticated the scam is. When I wrote that, I had outright thievery in mind.
    - exelius 9y ago
      Any *coin fiasco would take the government years to figure out. Nobody is even sure if the laws on the books would cover some of the scenarios that are popping up. A lot of it would be solved if people really understood what they're buying with these ICOs, but many just see it as "magical Internet money that's making cash obsolete".
- lazyasciiart 9y ago
  > It doesn't bother the government when the middle class spend its hard earned money in gambling Isn't gambling heavily regulated in the US to the point of being barely legal in many states? Isn't that basically how many Indian tribes make money - by being outside this regulation?
fgjjgutjvnu 9y ago
I understand the reasoning behind such regulation. On the other hand, for example doing a startup is also highly risky. Should it therefore also be regulated, only people with enough savings (and perhaps education) should be allowed to do startups? I don't think it is easy to answer, clearly not allowing people to take risks is also taking away there freedom and chances for making a better living. Not allowing people to take risks (and consequently, start businesses) ultimately leads towards a communist worlds were people can only pick from a selection of government ordained jobs.

csomar 9y ago

Silicon Valley created lots of "valuation" in the last few years. This made lots of people rich on "paper". Now if we can only get other people jealous of them, and sell them these on paper gains for real money. Transfer it through the blockchain just to be safe.

untilHellbanned 9y ago
Keeping it 100%.

notyourday 9y ago

> “One of the trends that bothers me about Silicon Valley,” he continued, is that “more and more of the wealth creation here is not available to most people, and I think that’s very bad in a society with already so much wealth inequality. If there’s a way that new technology can make it practical and possible to democratize this, I think that’d be great.” Wow. Just wow. Looks like 2017 is the year when VCs publicly started adopting the pump-and-dump positions.

quuquuquu 9y ago
"Remember 1999? Yeah, those companies were 'bad companies'. And the banks that brought them to IPO are 'bad people'. They knowingly peddled their stock to the public market. Grandma lost her 401k because of them. But you see us? We're 'good people'. Our companies are 'good companies'. We 'generate wealth'. And an ICO is a great way to facilitate sales of stock a large, global, but ahem 'private' market."
smokeyj 9y ago
I think the people who laughed at blockchain tech for years now are having a cognitive dissonance moment, when they slowly see this technology seeping into traditional spaces. "It must be a bubble! It's a tulip scheme!" they proclaim, clinging to their last shred of dignity, as they fail to predict the inevitable future one more time.
- notyourday 9y ago
  I think you have a fundamental misunderstanding of a difference between " a blockchain " (the technology) and "Let people who see others making money hands over fist on a blockchain participate. I have this thing" (the fraud).
  - smokeyj 9y ago
    Blockchain the currency and blockchain the equity/bond/token were inevitable. The crypto world isn't concerned with traditional finance and their legacy rules. The future is decentralized companies financed with decentralized currency. It seems the people most offended by this realization are those with authoritarian complexes with a desire to control the voluntary spending habits of their peers. Which is exactly why there's demand for this new freedom money. Stop telling me how to spend and how to invest. I'm not your child and this isn't your money.

exelius 9y ago

I'm divided over the whole ICO thing. On one hand, I don't think that Bitcoin, et al are ever going to replace fiat currency. But shares of stock are a perfect analog to what he's trying to do; and I think the SEC will see right through it. On the other hand, blockchain tech is very useful for distributed asset tracking; specifically corporate bonds and equity. It makes an incredible amount of sense for things like stock certificates and even shareholder voting. Having a tokenized, open ledger that is able to be analyzed by anyone is nothing but good for shareholders. I think that as long as shareholders are aware that they are buying equity in a company, cryptocurrency should be a viable way to do so. What I do not think, however, is that these corporate cryptocurrencies should be exempt from all existing laws governing equity finance. It should be 1 share = 1 coin and leave it at that. The market can determine the value of the shares, and the company can create new ones whenever it wants (since it would control the "mining" pool).

sjg007 9y ago

The jobs act allows smaller fundraisers from non-accredited investors.. but it’s not very popular. Why?