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Someone help me here. What do you get if you've 'invested' in this ICO? Some kind of enforceable ownership in the company? Voting rights? Something else?

ryanlol 9y ago
Essentially nothing.
cwkoss 9y ago
I don't think the validity of company ownership based on holding tokens has been tested in the courts yet, so we don't really know. Will be interesting when a company sells tokens, becomes very successful, then decides they want to change the terms of their previous sale. Clearly, billions of dollars could be on the line - eventually some company is going to become very successful, get greedy and smartly raise the ambiguous question of whether they are legally bound by token sale obligations. Have any companies that have ICO'ed reflected their token sales in their company bylaws? I think the 'legal API' between token ownership and enforcement in courts is an interesting problem.
- jMyles 9y ago
  > I don't think the validity of company ownership based on holding tokens has been tested in the courts yet, so we don't really know. Well, I think that if the matter of company ownership comes down to a decision by a court, then the token didn't really function as it was supposed to. The point of (or at least, one of the points of) smart contracts is to be the enforcement agent for the terms of an ERC20 token. Of course, we're not there yet, and for that reason, it's a silly / premature to suppose that an ERC20 token can represent true ownership.
  - vageli 9y ago
    > The point of (or at least, one of the points of) smart contracts is to be the enforcement agent for the terms of an ERC20 token. > Of course, we're not there yet, and for that reason, it's a silly / premature to suppose that an ERC20 token can represent true ownership. When put this way I can't see the future of smart contracts ever being fully realized. Humans rely on humans for final arbitration and take issue with automatic enforcement of rules without opportunity for appeal. The appeal mechanisms I've seen still rely on humans (mechanisms like multi-signature transactions with an escrow user as a signature). Ultimately, unless all of your property is entirely digital or informational in nature, governments will be forever able to use violence or the threat thereof to compel you to relinquish whatever property they wish.
    - jMyles 9y ago
      I mostly agree, but I also think there's a batch size under which things will be fine. A neighborhood food co-op or a pub's fantasy football league will probably actually benefit. A megacorporation is probably just too big to do without human arbitration in the face of violence, as you point out. However, we might be closer than we think to, as you say, property being digital or at least wholly representable digitally. We'll see. I'm both of the belief that smart contracts are awesome and that their usefulness is limited.
gringoDan 9y ago
My favorite explanation of an ICO comes from Kevin Roose [1] > If you’re having trouble picturing it: Imagine that a friend is building a casino and asks you to invest. In exchange, you get chips that can be used at the casino’s tables once it’s finished. Now imagine that the value of the chips isn’t fixed, and will instead fluctuate depending on the popularity of the casino, the number of other gamblers and the regulatory environment for casinos. Oh, and instead of a friend, imagine it’s a stranger on the internet who might be using a fake name, who might not actually know how to build a casino, and whom you probably can’t sue for fraud if he steals your money and uses it to buy a Porsche instead. That’s an I.C.O. [1] https://www.nytimes.com/2017/09/15/business/cryptocurrency-bubble-doge.html https://www.nytimes.com/2017/09/15/business/cryptocurrency-b...
- kolinko 9y ago
  The value of chips may not be fixed, but their amount is. And the more people visit the casino the better. As for the "stranger" part - "stranger" is just a friend you haven't gotten to know yet! :D
Pica_soO 9y ago
A fresh start for the web. And if you look carefully on the toe-stepped-on-tune in this thread - the possibility to be your neighbors dis-raptor, when the whole gold rush starts over - this time decentralized.
wmf 9y ago
If you invest in EUR you don't get any voting rights in the EU, if you invest in a Vanguard mutual fund you probably don't get any rights in Vanguard itself, and if you invest in an ICO you generally don't get any rights over the developers (except in cases like Decred and Tezos). It's probably best to think of TON and Telegram as separate companies; when you invest in TON you get a stake in TON which, by design, will probably never have any assets other than network effect. So the answer is that you're buying into the network effect.
- brokensegue 9y ago
  People don't generally invest in Euros. It's a currency not an investment. Mutual fund holders get indirect voting rights in the held assets. Plus vanguard is owned by its funds so actually your example is bad.
  - wmf 9y ago
    Just to make my analogy extra clear: Currency speculation is definitely a thing and the cryptocurrency world is 99% speculation. So "investing" in Euros or Grams are conceptually the same thing.
    - brokensegue 9y ago
      investing and speculation are different things.
      - TomMarius 9y ago
        All investing is ultimately speculation

ryanlol 9y ago

Essentially nothing.

cwkoss 9y ago

I don't think the validity of company ownership based on holding tokens has been tested in the courts yet, so we don't really know. Will be interesting when a company sells tokens, becomes very successful, then decides they want to change the terms of their previous sale. Clearly, billions of dollars could be on the line - eventually some company is going to become very successful, get greedy and smartly raise the ambiguous question of whether they are legally bound by token sale obligations. Have any companies that have ICO'ed reflected their token sales in their company bylaws? I think the 'legal API' between token ownership and enforcement in courts is an interesting problem.

jMyles 9y ago
> I don't think the validity of company ownership based on holding tokens has been tested in the courts yet, so we don't really know. Well, I think that if the matter of company ownership comes down to a decision by a court, then the token didn't really function as it was supposed to. The point of (or at least, one of the points of) smart contracts is to be the enforcement agent for the terms of an ERC20 token. Of course, we're not there yet, and for that reason, it's a silly / premature to suppose that an ERC20 token can represent true ownership.
- vageli 9y ago
  > The point of (or at least, one of the points of) smart contracts is to be the enforcement agent for the terms of an ERC20 token. > Of course, we're not there yet, and for that reason, it's a silly / premature to suppose that an ERC20 token can represent true ownership. When put this way I can't see the future of smart contracts ever being fully realized. Humans rely on humans for final arbitration and take issue with automatic enforcement of rules without opportunity for appeal. The appeal mechanisms I've seen still rely on humans (mechanisms like multi-signature transactions with an escrow user as a signature). Ultimately, unless all of your property is entirely digital or informational in nature, governments will be forever able to use violence or the threat thereof to compel you to relinquish whatever property they wish.
  - jMyles 9y ago
    I mostly agree, but I also think there's a batch size under which things will be fine. A neighborhood food co-op or a pub's fantasy football league will probably actually benefit. A megacorporation is probably just too big to do without human arbitration in the face of violence, as you point out. However, we might be closer than we think to, as you say, property being digital or at least wholly representable digitally. We'll see. I'm both of the belief that smart contracts are awesome and that their usefulness is limited.

gringoDan 9y ago

My favorite explanation of an ICO comes from Kevin Roose [1] > If you’re having trouble picturing it: Imagine that a friend is building a casino and asks you to invest. In exchange, you get chips that can be used at the casino’s tables once it’s finished. Now imagine that the value of the chips isn’t fixed, and will instead fluctuate depending on the popularity of the casino, the number of other gamblers and the regulatory environment for casinos. Oh, and instead of a friend, imagine it’s a stranger on the internet who might be using a fake name, who might not actually know how to build a casino, and whom you probably can’t sue for fraud if he steals your money and uses it to buy a Porsche instead. That’s an I.C.O. [1] https://www.nytimes.com/2017/09/15/business/cryptocurrency-bubble-doge.html https://www.nytimes.com/2017/09/15/business/cryptocurrency-b...

kolinko 9y ago
The value of chips may not be fixed, but their amount is. And the more people visit the casino the better. As for the "stranger" part - "stranger" is just a friend you haven't gotten to know yet! :D

Pica_soO 9y ago

A fresh start for the web. And if you look carefully on the toe-stepped-on-tune in this thread - the possibility to be your neighbors dis-raptor, when the whole gold rush starts over - this time decentralized.

wmf 9y ago

If you invest in EUR you don't get any voting rights in the EU, if you invest in a Vanguard mutual fund you probably don't get any rights in Vanguard itself, and if you invest in an ICO you generally don't get any rights over the developers (except in cases like Decred and Tezos). It's probably best to think of TON and Telegram as separate companies; when you invest in TON you get a stake in TON which, by design, will probably never have any assets other than network effect. So the answer is that you're buying into the network effect.

brokensegue 9y ago
People don't generally invest in Euros. It's a currency not an investment. Mutual fund holders get indirect voting rights in the held assets. Plus vanguard is owned by its funds so actually your example is bad.
- wmf 9y ago
  Just to make my analogy extra clear: Currency speculation is definitely a thing and the cryptocurrency world is 99% speculation. So "investing" in Euros or Grams are conceptually the same thing.
  - brokensegue 9y ago
    investing and speculation are different things.
    - TomMarius 9y ago
      All investing is ultimately speculation