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Honestly, most (if not all with the exception of bitcoin) of the 'crypto' projects function effectively like a startup with the coin as the stock. There are som

Honestly, most (if not all with the exception of bitcoin) of the 'crypto' projects function effectively like a startup with the coin as the stock. There are some differences from securities, but mostly similarities. You are buying something with the hope that the development team will deliver on promised value in the future. This will at least clarify the regulatory landscape going forward.

mjr00 4y ago
Except with a startup or a company's stock, you ostensibly care that what the company is building or doing could potentially have value in the future. With the crypto projects over the past few years, it's purely been about whether or not you hop in early enough in the pyramid to resell your tokens to a greater fool before it collapses.
- Clubber 4y ago
  It's like a company "Stocks, Inc" that just issues their own stocks as a product. When you put it that way, it definitely sounds suspect.
  - mjburgess 4y ago
    Yes: there is no product.
  - wmf 4y ago
    Do not look into SPACs; you may not like what you find.
    - vkou 4y ago
      The product of a SPAC is 'selling' another company the rights to be traded on a stock exchange. That's, in theory, a non-trivial product, given how much IPO underwriters tend to charge.
    - latchkey 4y ago
      SEC changed the rules. SPACs are much more difficult now.
Animats 4y ago
That's more like a Kickstarter. The number of crypto projects that ever turned into a profitable enterprise for the investors by doing something outside the crypto space seems to be near zero.
- vasco 4y ago
  Is there even a single project that qualifies under those requirements?
  - sbierwagen 4y ago
    Filecoin I suppose, in that it actually does something useful, and early adopters could have made a decent profit if they sold during the bubble.
    - vasco 4y ago
      Selling high isn't "a profitable enterprise". I can buy any money losing penny stock and sell it higher than I bought it and I'll pocket some money, but in no way that means I was an investor of a profitable enterprise.
      - sbierwagen 4y ago
        Tell that to, uh, every VC fund? That business model is to invest into an early stage business, (buying low) wait for them to develop a useful product, and then sell high.
    - wmf 4y ago
      Even there the price is probably completely uncorrelated with any usage/profit metrics. If Filecoin never shipped anything, early adopters could have made a decent profit if they sold during the bubble.
      - latchkey 4y ago
        I suspect that is a big reason why the price can't seem to move upwards these days as well. Chinese miners continuously dumping their early gains on the market after getting to the 180 day lockup period.
sneak 4y ago
Stock gives you rights to the company. Tokens do not; there is nothing that links the value of the token to the performance of the company or group, unlike stock.
- javier123454321 4y ago
  That is the ways in which they are different. Both can give yield, even if one is through equity and the other through ownership of the underlying resource. The idea is that the dev teams will deliver the computational platform of choice for future apps, and you are owning some of the fuel that allows you to use that computational platform. It's like AWS raised money through selling credits to use their servers.
anonkogudhyfhhf 4y ago
No rights with tokens. It's Kickstarter. And was designed this way so maybe the scams would get in less legal trouble and avoid being securities. Didn't work out that way it seems

mjr00 4y ago

Except with a startup or a company's stock, you ostensibly care that what the company is building or doing could potentially have value in the future. With the crypto projects over the past few years, it's purely been about whether or not you hop in early enough in the pyramid to resell your tokens to a greater fool before it collapses.

Clubber 4y ago
It's like a company "Stocks, Inc" that just issues their own stocks as a product. When you put it that way, it definitely sounds suspect.
- mjburgess 4y ago
  Yes: there is no product.
- wmf 4y ago
  Do not look into SPACs; you may not like what you find.
  - vkou 4y ago
    The product of a SPAC is 'selling' another company the rights to be traded on a stock exchange. That's, in theory, a non-trivial product, given how much IPO underwriters tend to charge.
  - latchkey 4y ago
    SEC changed the rules. SPACs are much more difficult now.

Animats 4y ago

That's more like a Kickstarter. The number of crypto projects that ever turned into a profitable enterprise for the investors by doing something outside the crypto space seems to be near zero.

vasco 4y ago
Is there even a single project that qualifies under those requirements?
- sbierwagen 4y ago
  Filecoin I suppose, in that it actually does something useful, and early adopters could have made a decent profit if they sold during the bubble.
  - vasco 4y ago
    Selling high isn't "a profitable enterprise". I can buy any money losing penny stock and sell it higher than I bought it and I'll pocket some money, but in no way that means I was an investor of a profitable enterprise.
    - sbierwagen 4y ago
      Tell that to, uh, every VC fund? That business model is to invest into an early stage business, (buying low) wait for them to develop a useful product, and then sell high.
  - wmf 4y ago
    Even there the price is probably completely uncorrelated with any usage/profit metrics. If Filecoin never shipped anything, early adopters could have made a decent profit if they sold during the bubble.
    - latchkey 4y ago
      I suspect that is a big reason why the price can't seem to move upwards these days as well. Chinese miners continuously dumping their early gains on the market after getting to the 180 day lockup period.

sneak 4y ago

Stock gives you rights to the company. Tokens do not; there is nothing that links the value of the token to the performance of the company or group, unlike stock.

javier123454321 4y ago
That is the ways in which they are different. Both can give yield, even if one is through equity and the other through ownership of the underlying resource. The idea is that the dev teams will deliver the computational platform of choice for future apps, and you are owning some of the fuel that allows you to use that computational platform. It's like AWS raised money through selling credits to use their servers.

anonkogudhyfhhf 4y ago

No rights with tokens. It's Kickstarter. And was designed this way so maybe the scams would get in less legal trouble and avoid being securities. Didn't work out that way it seems