Being in the world of crypto since several years I can see that we’re facing some kind of a pivotal moment now. With dozens of tokensales running concurrently and billions of dollars invested we have what crypto community has been longing for since years — mainstream adoption, or at least mainstream awareness of cryptocurrency existence and future prospects.
Don’t get me wrong, crypto is gonna win, there’s no way around it. By design the technology is robust and here to stay, no matter what governments and regulators will be doing in the short run. But, as a person who did ICO’s before 99% of people who do them now knew what bitcoin was, I feel quite concerned about the current developments, because there’s clearly a couple things here that may lead to investors getting burned and regulators going after ICO people with all they got.
Let’s highlight a couple points:
- ICO investment is a venture investment “for the people”, investing in start ups at the seed stage, which was not really accessible to retail investor before tokens came to light. That was a prerogative of angels and qualified investors, who understand the risks and can put some pressure on start-up they invest in to help them deliver.
- Most start-ups fail. If they do ICO it does not help them, they still have a high chance of not delivering. If you invest in tokens launched on crypto platforms that grow in value you have the tokens tagging along, but it might not last. You invest in a growing market in general, but your particular investment might make no sense at all.
- Everybody and his dog is doing tokensales now, trying to tap into a liquid market that emerged all of a sudden out of nowhere. it’s purely opportunistic.
This thing is gonna crash, and gonna crash hard. There’s basically no way around it, what we can really influence is how the token market will be developing after the current hype wave is over.
There’s going to be some kind of regulation pretty soon, probably until the end of 2017 we’ll have some more or less clear rules for token sales in major jurisdictions. But it’s just a part of a story; we need some solution that should separate weed from the chaff, even if a token is a utility token, not a security, and SEC is not after it, it does not mean that it’s going to succeed.
I think it’s clearly high time to have some self regulating body, some kind of global advisory committee that can evaluate tokensales and provide some kind of guidance for retail investors. It might be centralized, but it’s a temporary solution that should tide us over to a brave new world of crowdintellingence and AI assessment, and provide a beacon for the regulators scrambling to come up with legal frameworks now. Regulators react to complaints and market best practices, if there’s a successful experience of self-regulation it will matter for the future legal framework a lot.
I really want this new world of fancy magical tokens to prosper, and prosper asap. Waves is a platform with dozens crowdsales, thanks god it’s not hundreds as on Ethereum, that might make things more manageable and we could be a testing ground for this “self-regulation”.
I’m thinking how to do it from technical perspective now, it might be some advisory board, also it might be a decentralized voting solution quite soon. I’m going to get back with some concrete proposals asap, for now I’d like to tell you guys that if you want this market to be 1 trillion within a year you need to help bring some order to it from within, without waiting for regulators to force some rules upon you, helping formulate them instead.
Cheers and stay tuned.