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Crypto securities don't replace the US dollars. They replace the shares you're buying when you invest in a company. You are welcome to use US dollars for that i

by gomox 8y ago

Crypto securities don't replace the US dollars. They replace the shares you're buying when you invest in a company. You are welcome to use US dollars for that if you want. Chances are depending where the companies are based, getting the money in USD to them could be tricky though. What company people are going to build is anyone's guess, but mine is that there's going to be a lot of them. Silicon Valley is only but a small dot on the face of the Earth. A lof of potential is going to be unlocked.

cinquemb 8y ago
What's exciting to me about this is that it could enable trading of these crypto securities outside of typical brokers/exchanges, as well as derivative securities (ie. hold an index of crypto securities, rebalancing from in/out flows from those who buy/trade on the derivatives). Honestly, I can see an "regulated"[0] crypto securites derivative market being deeper than the underlying crypto securites themselves since they'll trade more OTC. [0] To the same degree that any government can regulate trade of their currency/debt on global markets.
pjc50 8y ago
Shares provide ownership and voting. Tokens provide .. no legal guarantees of anything at all?
- gomox 8y ago
  Not all shares provide voting, as I'm sure you are aware of. But essentially, the paper the shares are printed on doesn't provide any legal guarantees by itself either. The fact that ownership is tokenized doesn't prevent companies from issuing guarantees to token holders. See my comment on the comment next to yours for more: https://news.ycombinator.com/item?id=17255832 https://news.ycombinator.com/item?id=17255832
bjl 8y ago
Explain how crypto-tokens are going to enable the vast amount of rights shareholders get in a company. Can crypto holders vote on the direction of the company, compel changes in the board, etc? If not, there's no reason for them to exist, because those rights are the entire reason one buys stock.
- xur17 8y ago
  There's no technical reason why that can't be the case. Legally, I agree.
  - bjl 8y ago
    My point is, for anything like a crypto-security, you have to integrate with meatspace, which requires the introduction of legal agreements (because there's nothing about 0s and 1s in ledger that can compel company representatives to act in a certain way). At that point you've completely gotten rid of decentralization, and you might as well use a more robust, faster, and environmentally friendly centralized option.
    - gomox 8y ago
      Conventional paper-type legal agreements exist already for this kind of thing, and will mature further as jurisprudence and experience are developed. They don't introduce much centralization that I can think of. They are mostly P2P agreements about the guarantees given to token holders. On top of that, smart contract mediated investments can have much more additional guarantees. Projects like Aragon are creating DAO governance UIs that are on-chain, usable (from a UX perspective) and transparent for token holders. They allow holders to vote on transfers of funds, or monthly capital allocation, with the possibility to withdraw funds if they deem the operation of companies irresponsible. This a programmable financial infrastructure: the tools are there to build whatever you can come up with in terms of governance. Besides DAO governance platforms, what will compel executives, for the cases where this applies, is the same thing that compels them right now: financial incentives, and the threat of prosecution. Are the guarantees comparable to those you get from a CEO on a NYSE traded company? Not by a long shot, this is the wild west right now. But in keeping with the "Internet of Money" metaphor from my other comment, lack of controls and accountability didn't prevent Wikipedia from displacing the Encyclopedia Britannica.
      - root_axis 8y ago
        You're missing the point. Blockchain tokens are worse than centralized alternatives in most ways, so if the integrity of a financial security is codified through law then there is no need to pay the expensive costs to also have it codified as a blockchain token, especially because the law is the ultimate arbiter of the security's qualities and capabilities not a blockchain. A blockchain is useful when it can establish consensus rules around a system that is not controlled by a centralized authority, but if a centralized authority is already necessary to recognize the asset, the cost of decentralized consensus is unnecessary and thus wasted.
s73v3r_ 8y ago
Why would I want a crypto token instead of shares, though? With shares, I have ownership in the company, and I have a number of rights. With a token, I have precisely squat.
- gomox 8y ago
  See my replies to the other 2 comments adjacent to yours.

by gomox 8y ago

cinquemb 8y ago

What's exciting to me about this is that it could enable trading of these crypto securities outside of typical brokers/exchanges, as well as derivative securities (ie. hold an index of crypto securities, rebalancing from in/out flows from those who buy/trade on the derivatives). Honestly, I can see an "regulated"[0] crypto securites derivative market being deeper than the underlying crypto securites themselves since they'll trade more OTC. [0] To the same degree that any government can regulate trade of their currency/debt on global markets.

pjc50 8y ago

Shares provide ownership and voting. Tokens provide .. no legal guarantees of anything at all?

gomox 8y ago
Not all shares provide voting, as I'm sure you are aware of. But essentially, the paper the shares are printed on doesn't provide any legal guarantees by itself either. The fact that ownership is tokenized doesn't prevent companies from issuing guarantees to token holders. See my comment on the comment next to yours for more: https://news.ycombinator.com/item?id=17255832 https://news.ycombinator.com/item?id=17255832

bjl 8y ago

Explain how crypto-tokens are going to enable the vast amount of rights shareholders get in a company. Can crypto holders vote on the direction of the company, compel changes in the board, etc? If not, there's no reason for them to exist, because those rights are the entire reason one buys stock.

xur17 8y ago
There's no technical reason why that can't be the case. Legally, I agree.
- bjl 8y ago
  My point is, for anything like a crypto-security, you have to integrate with meatspace, which requires the introduction of legal agreements (because there's nothing about 0s and 1s in ledger that can compel company representatives to act in a certain way). At that point you've completely gotten rid of decentralization, and you might as well use a more robust, faster, and environmentally friendly centralized option.
  - gomox 8y ago
    Conventional paper-type legal agreements exist already for this kind of thing, and will mature further as jurisprudence and experience are developed. They don't introduce much centralization that I can think of. They are mostly P2P agreements about the guarantees given to token holders. On top of that, smart contract mediated investments can have much more additional guarantees. Projects like Aragon are creating DAO governance UIs that are on-chain, usable (from a UX perspective) and transparent for token holders. They allow holders to vote on transfers of funds, or monthly capital allocation, with the possibility to withdraw funds if they deem the operation of companies irresponsible. This a programmable financial infrastructure: the tools are there to build whatever you can come up with in terms of governance. Besides DAO governance platforms, what will compel executives, for the cases where this applies, is the same thing that compels them right now: financial incentives, and the threat of prosecution. Are the guarantees comparable to those you get from a CEO on a NYSE traded company? Not by a long shot, this is the wild west right now. But in keeping with the "Internet of Money" metaphor from my other comment, lack of controls and accountability didn't prevent Wikipedia from displacing the Encyclopedia Britannica.
    - root_axis 8y ago
      You're missing the point. Blockchain tokens are worse than centralized alternatives in most ways, so if the integrity of a financial security is codified through law then there is no need to pay the expensive costs to also have it codified as a blockchain token, especially because the law is the ultimate arbiter of the security's qualities and capabilities not a blockchain. A blockchain is useful when it can establish consensus rules around a system that is not controlled by a centralized authority, but if a centralized authority is already necessary to recognize the asset, the cost of decentralized consensus is unnecessary and thus wasted.

s73v3r_ 8y ago

Why would I want a crypto token instead of shares, though? With shares, I have ownership in the company, and I have a number of rights. With a token, I have precisely squat.

gomox 8y ago
See my replies to the other 2 comments adjacent to yours.