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ICOs at the End of 2017: What We Think We Know and What We Don't Know

124 points by chollida1 9y ago

Alex3917 9y ago
> When do tokens that are securities stop being securities? This is a central question in the token community right now. Our current view is that once the value of the tokens is primarily driven by their commercial usage, rather than by the efforts of the token sponsor or other developers, the tokens should no longer be deemed to be securities. The SEC has not yet addressed this question. This has been settled law for 70+ years. When one of the biggest law firms feels the need to preemptively issue a public statement pretending they don't understand how the law works, you know shit is about to get crazy.
- olivermarks 9y ago
  That 70 year old law is based on financial models that have been settled for far longer though. I hate to use the overhawked term 'disruption' but ICO's appear to be causing major issues amongst the status quo.
  - Alex3917 9y ago
    The only innovation that tokens bring to securities is reducing the cost of recording who owns what shares. Which is certainly important, in fact one of the most important innovations since the 1400s, but the idea that this new feature would have any impact whatsoever on the interpretation of our existing securities laws is insane.
    - KasianFranks 9y ago
      No it is not. I ran an OTC co and saw the manipulation first hand. You are incorrect. https://news.ycombinator.com/threads?id=KasianFranks&next=14181080 https://news.ycombinator.com/threads?id=KasianFranks&next=14...
      - Alex3917 9y ago
        I didn't say it eliminates the need for third-party auditing, which it doesn't, only that it reduces the cost.
        KasianFranks 9y ago
        It not only reduces the cost, it keeps people honest, which is what humans like Jamie Dimon and some investors do not like.
        JumpCrisscross 9y ago
        > which is what humans like Jamie Dimon and some investors do not like There are plenty of people on this thread (myself included) who believe regulators are overdue in cracking down on this space. No need to invoke a bogeyman.
        KasianFranks 9y ago
        They should have cracked down on banks (too big to fail, if you remember) before ICOs and crypto. Lesson learned.
  - dragonwriter 9y ago
    > That 70 year old law is based on financial models that have been settled for far longer though No, it's based on the language of a statute that's about a decade older. Now, the statute may be based on older financial models, but that doesn't control the case law, and disrupting the financial model doesn't, in and of itself, amend the statute underlying the case law.
- drcode 9y ago
  I was saying the same thing when Uber launched- "An Uber is just a Taxi and if they don't follow taxi regulations they will be shut down quickly." I'm still not sure exactly why this didn't happen, but if people can agree that Uber isn't a Taxi, then I think they can also come to the conclusion that an ICO token isn't a traditional security... the world just isn't as black-and-white as we often like to think, and legislators are human beings that have a lot more flexibility around enforcement than people imagine.
  - kenbaylor 9y ago
    Funnily enough UberX wasn't the first. Uber was only using licensed Taxi drives for UberBlack, and wanted to do UberX, but knew they'd be shut down immediately. Then Lyft did it....normal people accepting rides. Uber waited for the Lyft shutdown. Didn't happen. Then the city of SF proposed giving Lyft a licence. At that point, Uber pulled out the brakes and that changed their view on regulations permanently. Source---straight from Travis (TK) himself.
  - Alex3917 9y ago
    The difference is that Uber wasn't a taxi because they didn't (and still don't) accept street hails. The question around Uber was whether the laws would be changed to make them a taxi, which after much lobbying they weren't, but they were already fine under the existing laws. As kenbaylor says below, Uber themselves thought the laws would quickly be changed to make their business illegal, so they didn't even get into that market until Lyft forced them to do so.
  - notyourday 9y ago
    > I was saying the same thing when Uber launched- "An Uber is just a Taxi and if they don't follow taxi regulations they will be shut down quickly." The difference is that Uber was not created to fleece the masses via investment pump and dump scheme. As of now, ICOs are purely pump and dump. They are modern day unregistered securities, promoted via modern day version of faxes
    - iblaine 9y ago
- empath75 9y ago
  It seems pretty simple: "Is this token being marketed as an investment opportunity?"
  - Alex3917 9y ago
    > "Is this token being marketed as an investment opportunity?" Wrong. What matters is whether the person buying the token is doing so because they think it's going to go up in price. The person selling it could explicitly say that it will never be listed on an exchange or go up in value, but if the person buying it thinks it will go up in value, then the person selling it has committed securities fraud. (That's slightly simplified, but that's the general idea.)
    - TaylorGood 9y ago
      More or less, everyone participating in an ICO expects gains. It's not for philanthropic reasons.
      - Alex3917 9y ago
        Sure, which is why basically all of the people running ICOs are now risking prison time.
        smokeyj 9y ago
        Anyone who's ever touched bitcoin or run a node is risking prison time. It's luck that running a node didn't get your door kicked in by the feds for being an unlicensed money transmitter. At a certain point you just stop caring and hope they can't lock up everyone. Seems to be working so far.
        SlipperySlope 9y ago
        FinCEN addressed that point in guidance years ago. Independent full node operators without sole control of the issuance of the cryptocurrency are not money transmitters.
- Animats 9y ago
  "Primarily driven by commercial usage". Can anyone name an ICO token for which that is really the case? Filecoin is supposed to have "commercial usage". But the insiders extracted 2/3 of the cash already.[1] As far as I can tell, the "Filecoin Storage Network" doesn't exist. There's no software you can download. You can't actually store data yet. If ever. A key point from WSGR is that if the ICO precedes the service becoming active, it's a security. [1] https://tokeneconomy.co/the-analysis-filecoin-doesnt-want-you-to-read-e60d5243f17c https://tokeneconomy.co/the-analysis-filecoin-doesnt-want-yo...
  - Alex3917 9y ago
    > "Primarily driven by commercial usage". Can anyone name an ICO token for which that is really the case? The value of the token can't come primarily from the person or entity promoting the token sale, but whether there is commercial usage or not is largely orthogonal to whether or not something is a security.
    - paulsutter 9y ago
      WSGR disagrees. And where are you finding 70 years of settled law on securities that later become primarily valued via use in commercial transactions? > Our current view is that once the value of the tokens is primarily driven by their commercial usage, rather than by the efforts of the token sponsor or other developers, the tokens should no longer be deemed to be securities. The SEC has not yet addressed this question.
      - Alex3917 9y ago
        The Howey Test, from 1946, is about whether assets that are classified as real estate, currencies, 'utility tokens', etc., can also be classified as securities. http://consumer.findlaw.com/securities-law/what-is-the-howey-test.html http://consumer.findlaw.com/securities-law/what-is-the-howey... The entire point is that you can't get out of going to prison by saying "Our thing is X, therefore it can't also be Y."
        9y ago
grabcocque 9y ago
Regulators move at the speed of government, not the speed of technology. However, if you think financial regulators are at all happy with the nature of ICOs you only have to read between the lines of what they have said.
lawlessone 9y ago
How does buying an ICO link me to a company? does it entitle me to a dividend for investing in them? Are the company under any obligation to share their success with me?
- corysama 9y ago
  Some ICOs effectively did exactly that. Then the SEC started rumbling about how that made them securities and obligationed them to the same restrictions as securities. So, now lots of tokens try to skirt the law by making the dividend more indirect. Ex: you don't just sit back and collect, you must contribute to the system to be rewarded. Of course, the size of the reward scales with the success of the system naturally.
- logicallee 9y ago
  Not only are they not under an obligation to share their success with you, it's illegal to do so. If I get Future_Technology_01 and sell ICO coins with the knowledge that any engineer in the world can understand my white paper and sees the value in it, it's illegal for me to offer to repurchase the coins at a whateverx multiple in 36 months after using the ICO raise to get to market. That's because it's illegal to sell coins if the primary motivation of the buyer is to make money from their increased value. It's literally illegal for the company to let you invest in it via ICO's while providing a mechanism for the money from the ICO to make it back to you after the company has used it to get to market. See all of the responses here: https://news.ycombinator.com/item?id=15293604 https://news.ycombinator.com/item?id=15293604 i.e. there are no responses there.
  - logicallee 9y ago
    This got a downvote but I'm interested in the point of disagreement. Could you elaborate?
- drcode 9y ago
  Speaking as the world's biggest ethereum believer: ICO have pretty much have zero obligation to share their success with you and it seems crazy to me that anyone would buy into an ICO.
TaylorGood 9y ago
Posted this in a different thread: A quick chat with an attorney who is an SEC specialist basically said "if it breathes" i.e. involves money that ICO is seen as a security. The SEC putting together the digital division which covers cryptocurrency tokens is part of what led to him saying this. Basically fish in a barrel. It is in my opinion that any US-based ICO is now in a lottery as to whether they get the SEC visit. Not legal advice at all, just sharing an excerpt from a coffee chat.
- JumpCrisscross 9y ago
  I can second this view, not only at the SEC but also a few attorneys’ general offices around the country. A lot of people see a promotion or Senate seat in bagging (i.e. fining, shutting down and jailing) ICOs and their promoters.
  - Gargoyle 9y ago
    I find it unlikely an ICO conviction would help anyone electorally. Only tiny proportion of voters would even understand what happened. It's not like high profile corruption or murder or something everyone gets. That's not to say they wouldn't do it to advance themselves internal to the justice system, where that kind of conviction would have forward-looking value.
    - chimeracoder 9y ago
      > I find it unlikely an ICO conviction would help anyone electorally. Only tiny proportion of voters would even understand what happened. It's not like high profile corruption or murder or something everyone gets. It'd be so easy to spin ICOs as a matter of fraud that's taking advantage of uninformed investors, a Ponzi scheme, or any of the other buzzwords that historically work pretty well in convincing voters of criminal financial activity. Whether or not you actually view ICOs as any of these things is incidental to whether or not an AG with career ambitions would be able use that rhetoric to gain votes.
      - 9y ago
woah 9y ago
> Simple Agreements for Future Tokens (SAFTs), as used today, almost always are securities. Does this mean that SAFEs are also securities? I imagine so, and they are usually given to accredited investors. I have also seen them being given to contractors and employees as partial payment in equity. Is paying a non-accredited contractor in SAFE a possible issue with the SEC? If not, how are SAFTs different?
- dragonwriter 9y ago
  > Does this mean that SAFEs are also securities? Well, obviously, stocks and future interests in stocks are the basic textbook examples of securities. On SAFEs specifically, see, e.g., https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_safes https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_sa... “Some issuers have been offering a new type of security as part of some crowdfunding offerings—which they have called the SAFE.”
- owens99 9y ago
  If that non-accredited contractor falls under "friends and family" then no, it's not a problem.
iamleppert 9y ago
Honestly I can't wait until that filecoin ICO thing becomes an epic disaster. Like most of the ICOs I've seen, it is flawed on basic principle and lacks a clear business model, and is ill-positioned for the future. Just because you can make a big splash and raise a bunch of money does not mean you have created anything of value for the world. ICOs seem to be a new way to raise from unsuspecting investors aka a way of separating people who have too much money and not enough common sense from their money. The fact that it is utilizing a blockchain technology has nothing to do with the actual mechanisms at work here, focusing on the use of blockchain in negotiating ownership and value is actually harmful here. The real technology isn't glamorous at all and has been in operation ever since Charles Ponzi "innovated" the concept in the 1920's.
- api 9y ago
  That's one of the least questionable ICOs. Most of them are much more vaporous.
  - TaylorGood 9y ago
    Bancor was also "too big to fail" but has primarily stayed below it's $3.50/token ICO price. Currently $2.19 People paid up to $5/token to participate in Filecoin. Steep starting point to actually increase market cap when there exists two hundred million Filecoin tokens.
    - AgentME 9y ago
      What difference does it make to the Filecoin users and network whether or not their tokens are overpriced right now? Some speculators might burn themselves on it, but speculation isn't the point of Filecoin, and its current price at any time won't affect whether or not the system is usable.
  - hudon 9y ago
    It's the most questionable to me. The ones that are "vaporous", it's obvious to everyone so not many questions need to be asked. But about FileCoin... How can they compete with economies of scale? And how will they prevent data centers of disks being created (centralizing forces)? If they manage to stay decentralized, how will the very public team defend all the illegal and/or illegitimate content that gets hosted on there? How will they defend against the FBI ordering them to shut it down? Why would people pay more for a slower or less reliable storage solution? It's very questionable that they were able to make bold claims and get millions of dollars from people who do not have a clue that FileCoin and "distributed storage on the blockchain" is DOA unless you want to store your 3d printed gun designs in the cloud. But in that case, the team building it should've been anonymous...
noddy1 9y ago
The unintended consequences of the SEC forcing ICOs away from representing equity towards "use tokens" is that investors lose any rights at all. The SEC is fucking up pretty hard at the moment and doing real damage. Their actions in the IPO market, meant to protect advisors, have resulted in only pump-and-dump crap like snapchat and blue apron going public, while all the gains from real growth tech companies are being retained by VCs, sovereign wealth funds and investment banks, while retail investors holding index funds miss out. I think this is a major factor contributing to widening gap between the super-rich and everyone else. There are a lot of ICO scams, however giving vague guidance and forcing ICOs out of their own jurisdiction when clearly people are still investing in tokens as a speculation/profit vehicle is worse than useless. Token-holders need the ability to change management, dissolve companies and reclaim cryptocurrency investment if companies are mismanaged or scammy, and they need to have the right to see how funds invested are being spent.

124 points by chollida1 9y ago

> When do tokens that are securities stop being securities? This is a central question in the token community right now. Our current view is that once the value of the tokens is primarily driven by their commercial usage, rather than by the efforts of the token sponsor or other developers, the tokens should no longer be deemed to be securities. The SEC has not yet addressed this question. This has been settled law for 70+ years. When one of the biggest law firms feels the need to preemptively issue a public statement pretending they don't understand how the law works, you know shit is about to get crazy.

olivermarks 9y ago
That 70 year old law is based on financial models that have been settled for far longer though. I hate to use the overhawked term 'disruption' but ICO's appear to be causing major issues amongst the status quo.
- Alex3917 9y ago
  The only innovation that tokens bring to securities is reducing the cost of recording who owns what shares. Which is certainly important, in fact one of the most important innovations since the 1400s, but the idea that this new feature would have any impact whatsoever on the interpretation of our existing securities laws is insane.
  - KasianFranks 9y ago
    No it is not. I ran an OTC co and saw the manipulation first hand. You are incorrect. https://news.ycombinator.com/threads?id=KasianFranks&next=14181080 https://news.ycombinator.com/threads?id=KasianFranks&next=14...
    - Alex3917 9y ago
      I didn't say it eliminates the need for third-party auditing, which it doesn't, only that it reduces the cost.
      - KasianFranks 9y ago
        It not only reduces the cost, it keeps people honest, which is what humans like Jamie Dimon and some investors do not like.
        JumpCrisscross 9y ago
        > which is what humans like Jamie Dimon and some investors do not like There are plenty of people on this thread (myself included) who believe regulators are overdue in cracking down on this space. No need to invoke a bogeyman.
        KasianFranks 9y ago
        They should have cracked down on banks (too big to fail, if you remember) before ICOs and crypto. Lesson learned.
- dragonwriter 9y ago
  > That 70 year old law is based on financial models that have been settled for far longer though No, it's based on the language of a statute that's about a decade older. Now, the statute may be based on older financial models, but that doesn't control the case law, and disrupting the financial model doesn't, in and of itself, amend the statute underlying the case law.
drcode 9y ago
I was saying the same thing when Uber launched- "An Uber is just a Taxi and if they don't follow taxi regulations they will be shut down quickly." I'm still not sure exactly why this didn't happen, but if people can agree that Uber isn't a Taxi, then I think they can also come to the conclusion that an ICO token isn't a traditional security... the world just isn't as black-and-white as we often like to think, and legislators are human beings that have a lot more flexibility around enforcement than people imagine.
- kenbaylor 9y ago
  Funnily enough UberX wasn't the first. Uber was only using licensed Taxi drives for UberBlack, and wanted to do UberX, but knew they'd be shut down immediately. Then Lyft did it....normal people accepting rides. Uber waited for the Lyft shutdown. Didn't happen. Then the city of SF proposed giving Lyft a licence. At that point, Uber pulled out the brakes and that changed their view on regulations permanently. Source---straight from Travis (TK) himself.
- Alex3917 9y ago
  The difference is that Uber wasn't a taxi because they didn't (and still don't) accept street hails. The question around Uber was whether the laws would be changed to make them a taxi, which after much lobbying they weren't, but they were already fine under the existing laws. As kenbaylor says below, Uber themselves thought the laws would quickly be changed to make their business illegal, so they didn't even get into that market until Lyft forced them to do so.
- notyourday 9y ago
  > I was saying the same thing when Uber launched- "An Uber is just a Taxi and if they don't follow taxi regulations they will be shut down quickly." The difference is that Uber was not created to fleece the masses via investment pump and dump scheme. As of now, ICOs are purely pump and dump. They are modern day unregistered securities, promoted via modern day version of faxes
  - iblaine 9y ago
empath75 9y ago
It seems pretty simple: "Is this token being marketed as an investment opportunity?"
- Alex3917 9y ago
  > "Is this token being marketed as an investment opportunity?" Wrong. What matters is whether the person buying the token is doing so because they think it's going to go up in price. The person selling it could explicitly say that it will never be listed on an exchange or go up in value, but if the person buying it thinks it will go up in value, then the person selling it has committed securities fraud. (That's slightly simplified, but that's the general idea.)
  - TaylorGood 9y ago
    More or less, everyone participating in an ICO expects gains. It's not for philanthropic reasons.
    - Alex3917 9y ago
      Sure, which is why basically all of the people running ICOs are now risking prison time.
      - smokeyj 9y ago
        Anyone who's ever touched bitcoin or run a node is risking prison time. It's luck that running a node didn't get your door kicked in by the feds for being an unlicensed money transmitter. At a certain point you just stop caring and hope they can't lock up everyone. Seems to be working so far.
        SlipperySlope 9y ago
        FinCEN addressed that point in guidance years ago. Independent full node operators without sole control of the issuance of the cryptocurrency are not money transmitters.
Animats 9y ago
"Primarily driven by commercial usage". Can anyone name an ICO token for which that is really the case? Filecoin is supposed to have "commercial usage". But the insiders extracted 2/3 of the cash already.[1] As far as I can tell, the "Filecoin Storage Network" doesn't exist. There's no software you can download. You can't actually store data yet. If ever. A key point from WSGR is that if the ICO precedes the service becoming active, it's a security. [1] https://tokeneconomy.co/the-analysis-filecoin-doesnt-want-you-to-read-e60d5243f17c https://tokeneconomy.co/the-analysis-filecoin-doesnt-want-yo...
- Alex3917 9y ago
  > "Primarily driven by commercial usage". Can anyone name an ICO token for which that is really the case? The value of the token can't come primarily from the person or entity promoting the token sale, but whether there is commercial usage or not is largely orthogonal to whether or not something is a security.
  - paulsutter 9y ago
    WSGR disagrees. And where are you finding 70 years of settled law on securities that later become primarily valued via use in commercial transactions? > Our current view is that once the value of the tokens is primarily driven by their commercial usage, rather than by the efforts of the token sponsor or other developers, the tokens should no longer be deemed to be securities. The SEC has not yet addressed this question.
    - Alex3917 9y ago
      The Howey Test, from 1946, is about whether assets that are classified as real estate, currencies, 'utility tokens', etc., can also be classified as securities. http://consumer.findlaw.com/securities-law/what-is-the-howey-test.html http://consumer.findlaw.com/securities-law/what-is-the-howey... The entire point is that you can't get out of going to prison by saying "Our thing is X, therefore it can't also be Y."
      - 9y ago

grabcocque 9y ago

Regulators move at the speed of government, not the speed of technology. However, if you think financial regulators are at all happy with the nature of ICOs you only have to read between the lines of what they have said.

lawlessone 9y ago

How does buying an ICO link me to a company? does it entitle me to a dividend for investing in them? Are the company under any obligation to share their success with me?

corysama 9y ago
Some ICOs effectively did exactly that. Then the SEC started rumbling about how that made them securities and obligationed them to the same restrictions as securities. So, now lots of tokens try to skirt the law by making the dividend more indirect. Ex: you don't just sit back and collect, you must contribute to the system to be rewarded. Of course, the size of the reward scales with the success of the system naturally.
logicallee 9y ago
Not only are they not under an obligation to share their success with you, it's illegal to do so. If I get Future_Technology_01 and sell ICO coins with the knowledge that any engineer in the world can understand my white paper and sees the value in it, it's illegal for me to offer to repurchase the coins at a whateverx multiple in 36 months after using the ICO raise to get to market. That's because it's illegal to sell coins if the primary motivation of the buyer is to make money from their increased value. It's literally illegal for the company to let you invest in it via ICO's while providing a mechanism for the money from the ICO to make it back to you after the company has used it to get to market. See all of the responses here: https://news.ycombinator.com/item?id=15293604 https://news.ycombinator.com/item?id=15293604 i.e. there are no responses there.
- logicallee 9y ago
  This got a downvote but I'm interested in the point of disagreement. Could you elaborate?
drcode 9y ago
Speaking as the world's biggest ethereum believer: ICO have pretty much have zero obligation to share their success with you and it seems crazy to me that anyone would buy into an ICO.

TaylorGood 9y ago

Posted this in a different thread: A quick chat with an attorney who is an SEC specialist basically said "if it breathes" i.e. involves money that ICO is seen as a security. The SEC putting together the digital division which covers cryptocurrency tokens is part of what led to him saying this. Basically fish in a barrel. It is in my opinion that any US-based ICO is now in a lottery as to whether they get the SEC visit. Not legal advice at all, just sharing an excerpt from a coffee chat.

JumpCrisscross 9y ago
I can second this view, not only at the SEC but also a few attorneys’ general offices around the country. A lot of people see a promotion or Senate seat in bagging (i.e. fining, shutting down and jailing) ICOs and their promoters.
- Gargoyle 9y ago
  I find it unlikely an ICO conviction would help anyone electorally. Only tiny proportion of voters would even understand what happened. It's not like high profile corruption or murder or something everyone gets. That's not to say they wouldn't do it to advance themselves internal to the justice system, where that kind of conviction would have forward-looking value.
  - chimeracoder 9y ago
    > I find it unlikely an ICO conviction would help anyone electorally. Only tiny proportion of voters would even understand what happened. It's not like high profile corruption or murder or something everyone gets. It'd be so easy to spin ICOs as a matter of fraud that's taking advantage of uninformed investors, a Ponzi scheme, or any of the other buzzwords that historically work pretty well in convincing voters of criminal financial activity. Whether or not you actually view ICOs as any of these things is incidental to whether or not an AG with career ambitions would be able use that rhetoric to gain votes.
    - 9y ago

woah 9y ago

> Simple Agreements for Future Tokens (SAFTs), as used today, almost always are securities. Does this mean that SAFEs are also securities? I imagine so, and they are usually given to accredited investors. I have also seen them being given to contractors and employees as partial payment in equity. Is paying a non-accredited contractor in SAFE a possible issue with the SEC? If not, how are SAFTs different?

dragonwriter 9y ago
> Does this mean that SAFEs are also securities? Well, obviously, stocks and future interests in stocks are the basic textbook examples of securities. On SAFEs specifically, see, e.g., https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_safes https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_sa... “Some issuers have been offering a new type of security as part of some crowdfunding offerings—which they have called the SAFE.”
owens99 9y ago
If that non-accredited contractor falls under "friends and family" then no, it's not a problem.

iamleppert 9y ago

Honestly I can't wait until that filecoin ICO thing becomes an epic disaster. Like most of the ICOs I've seen, it is flawed on basic principle and lacks a clear business model, and is ill-positioned for the future. Just because you can make a big splash and raise a bunch of money does not mean you have created anything of value for the world. ICOs seem to be a new way to raise from unsuspecting investors aka a way of separating people who have too much money and not enough common sense from their money. The fact that it is utilizing a blockchain technology has nothing to do with the actual mechanisms at work here, focusing on the use of blockchain in negotiating ownership and value is actually harmful here. The real technology isn't glamorous at all and has been in operation ever since Charles Ponzi "innovated" the concept in the 1920's.

api 9y ago
That's one of the least questionable ICOs. Most of them are much more vaporous.
- TaylorGood 9y ago
  Bancor was also "too big to fail" but has primarily stayed below it's $3.50/token ICO price. Currently $2.19 People paid up to $5/token to participate in Filecoin. Steep starting point to actually increase market cap when there exists two hundred million Filecoin tokens.
  - AgentME 9y ago
    What difference does it make to the Filecoin users and network whether or not their tokens are overpriced right now? Some speculators might burn themselves on it, but speculation isn't the point of Filecoin, and its current price at any time won't affect whether or not the system is usable.
- hudon 9y ago
  It's the most questionable to me. The ones that are "vaporous", it's obvious to everyone so not many questions need to be asked. But about FileCoin... How can they compete with economies of scale? And how will they prevent data centers of disks being created (centralizing forces)? If they manage to stay decentralized, how will the very public team defend all the illegal and/or illegitimate content that gets hosted on there? How will they defend against the FBI ordering them to shut it down? Why would people pay more for a slower or less reliable storage solution? It's very questionable that they were able to make bold claims and get millions of dollars from people who do not have a clue that FileCoin and "distributed storage on the blockchain" is DOA unless you want to store your 3d printed gun designs in the cloud. But in that case, the team building it should've been anonymous...

noddy1 9y ago

The unintended consequences of the SEC forcing ICOs away from representing equity towards "use tokens" is that investors lose any rights at all. The SEC is fucking up pretty hard at the moment and doing real damage. Their actions in the IPO market, meant to protect advisors, have resulted in only pump-and-dump crap like snapchat and blue apron going public, while all the gains from real growth tech companies are being retained by VCs, sovereign wealth funds and investment banks, while retail investors holding index funds miss out. I think this is a major factor contributing to widening gap between the super-rich and everyone else. There are a lot of ICO scams, however giving vague guidance and forcing ICOs out of their own jurisdiction when clearly people are still investing in tokens as a speculation/profit vehicle is worse than useless. Token-holders need the ability to change management, dissolve companies and reclaim cryptocurrency investment if companies are mismanaged or scammy, and they need to have the right to see how funds invested are being spent.