Thoughts on Tokens

Completely agree with everything you're saying. I hope the SEC prosecutes any criminal activity that is found to be intended to take advantage of unsophisticated investors, but I don't think its appropriate to characterize ICOs as a cash grab as some have in this thread. I participated in the Ethereum pre-sale in 2013 and think ICOs in conjunction with the relatively new SEC regulation surrounding crowdsales (https://www.sec.gov/news/pressrelease/2015-249.html) could potentially facilitate new, organically-grown companies that reward individuals for their independent analysis of a project that they believe has value, irrespective of how much capital they have - people should be able to measure the risks they are willing to take, and exercise the judgment call accordingly. Currently regulatory limitations force potential investors with less capital to limit their participation in projects that they may want to have a stake in - I don't think that's fair.

I do think that there are some projects that have tremendous promise (more specifically in the Ethereum ICO space, since Bitcoin smart contracts are basically dead in the water at this time).

For example, Swarm City markets itself as a sharing economy platform (after the rebranding from Arcade City due to one of the founder's shady dealings), and intends to compete with the class of organizations with business models like Uber and Airbnb. While they have a ways to go in terms of developing the intended product to a level that could be acceptably called production-quality, this is exactly what decentralized applications could be used to build. The fact that Swarm City is trying to work through its earlier issues and still has active development/plans to release a real project is very promising, and shows that small-scale decentralized development can work in the real world. Whether a real product can be released remains to be seen, but I'm cautiously optimistic and advising my peers to just be really, really careful - especially as new highs are tested every single day.

Aeternity is another interesting project that builds on top of Ethereum but is focused on scaling and the issue of oracles right off the bat, which is something that is kind of brushed off as a trivial and minor detail, but that will really make or break these decentralized application platforms on the whole. The technical lead, Zack Hess, has experience working on cryptocurrency projects (@zack-bitcoin on GitHub) and I think its amazing that all this cryptoasset technology is enabling people to raise money easier than before.

While abuses need to be dealt with as swiftly and dramatically as the scale of the crimes deserves, it does seem a little hostile to characterize the class of these projects as completely fraudulent. But the valuations for some of these projects is just insane. People don't need two prediction markets valued at >$300m and a variety of distributed supercomputing platforms with no real-world use-cases this badly...

I guess for Open Source projects Tokens can be used as a way to filter support queries (position in the queue determined by the tokens you hold) and give voting rights (who have the power to drive the feature roadmap).

If the only reason to buy a token is because you expect to sell it later at a greater price, then this is known as a pyramid scheme, not investment. This will end the same way as all other schemes that rely on continual capital gains: collapse when people want to withdraw their profits, turning capital gains into capital losses, and thus revealing that there was never any future profit to be had (unless you were lucky to exit early).

Investment differs from speculation in that it offers a yield on capital, not just a capital gain. When a company pays dividends to shareholders, all holders gain. When a company's stock increases in price, the profits of those who gain are taken from those who've lost. Speculation is zero-sum, investment is not.

A yield on capital is fundamentally different from a capital gain, because a yield is a flow of profit paid out right now, as opposed to an alleged gain that will only be realized in the future (at which point the whole thing collapses, because the system depends on continual appreciation). Importantly, a yield on USD is paid in USD, a yield on bitcoins is paid in bitcoins, etc. Paying a yield in a scarce currency is a challenge, while bidding up the price, as measured by some other currency, is relatively simple.

So let's try this. Basically you are not "wrong" it's just about Belief and fiction.

Have you read the "sapiens" book? There is a good narrative in that book in that: religion, money and legal institutions are just fictions.

So I guess the question with tokens is : can we make up new fictions?

I think we can.

If you insist on "there is a reason why Regulator exist" , well I think it's not that reason you think it is.

The point is yes there is scam , see posts above. But yes there is also opportunity to find people who share similar ideas and values and express their common goals using tokens.

Does that make sense?

Claiming that adults making their own decision to buy the equivalent of a digital collectible, is a scam, and should be prohibited with long stretches of time in prison for those who take part, is why income disparity continues increasing [1], why the financial sector is dominated by a handful of corporate giants, and why it costs $6 million to do an IPO [2].

Attitudes like yours are not consistent with the principles of liberal democracy, which rest on the idea that we should be free to do with our body and property whatever we wish, as long as it violates no one's right to the same.

I've never touched a digital token, and I wouldn't touch one unless the landscape drastically changed, but I would never dream of wishing prison, or worse [3], for those who buy or sell tokens. Their money, their lives. What should the government create statutes to dictate how people spend their own money?

PS: bubble != scam

Calling something a scam is a very serious allegation should not be done lightly.

[1] https://www.brookings.edu/research/make-elites-compete-why-t...

[2] https://www.quora.com/How-much-does-it-cost-to-IPO

[3] https://www.theatlantic.com/politics/archive/2016/06/enforci...