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If your escrow is not subject to some basic laws or threat of violence which prevents them from running off with money, then you're no better off than if you ju
by Thriptic 9y ago
If your escrow is not subject to some basic laws or threat of violence which prevents them from running off with money, then you're no better off than if you just gave the money to the devs running the ICO directly. The entire point is to build in external protections for the investor.
The idea that you can have large investments and crypto backed companies without someone in the financial chain being subject to external governance is completely unrealistic. No rational investor would participate in that. Large numbers of people will inevitably commit fraud, and they have, as noted by the article.
- jedberg 9y agoYes, exactly. So how is having an escrow that is subject to US law an answer to "I want to have a trustless network with no government intervention"?
- Thriptic 9y agoIt's not, but this provides a hybrid approach which blends the best of both worlds. It allows companies to raise capital globally without being fully subject to SEC laws (depending on implementation and the SEC's willingness to play ball) while also eliminating much of the fraud and bullshit inherently baked into a trustless system by leveraging existing legal structures. At the end of the day it depends on what the goal is. Is the goal to lower the barrier to entry for new companies to raise money, or is it to create some idealistic free market? The former is possible and useful, the latter is not.