RE: Blockchain technology needs deregulation and a hands off approach from state and federal regulators
An ICO and a DCO are not to be compared. I am not sure you are understanding the mechanism of a DCO.
A DCO should be compared to a DAO, not an ICO.
ICOs are like light versions of IPOs.
A DCO structure would be something that concerns operations and management, not initial funding.
Again, you are speaking from a very anecdotal point of view, and it is that of an ideologue even if you believe you are being objective.
I am a developer in the space, and have first hand experience with risk assessment.
I also have a master's degree in cyber-security for enterprise scale organizations. Risk assessment training is part of that.
I understand your positions, and I think you have conflated a few things, and that is what is leading to your disdain for ICOs. They are not meant to function anything like a DCO, and in fact that is something VERY different altogether.
My sources are cited. My sources cited are not ideological but are legal experts. My examples (Steemit, Swarm) could be used in an academic paper as case studies. Steemit seems to in my opinion meet the criteria to be considered a DCO. Steemit did not have an ICO, it did not launch like most other projects. Membership in Steemit is represented by the amount of Steem Power. Steemit can raise funds for projects simply by having members vote up or down (collaborative filtering). This to me is a lot lower risk than any ICO, or crowd funding.
Yes there could be scams on Steemit but when you upvote on Steemit you're not suffering the cognitive risks of having spent your money to give them money. This is a key difference between Steemit and The DAO, and a big difference between Steemit and Swarm, or between Steemit and a Kickstarter style CrowdFunding platform.
If you don't believe I'm being objective then you'd be able to point it out with sources and evidence rather than just to claim it. Show me I'm not being objective by offering superior evidence.
I have some of the same training you have and a similar background. That being said, I am not a lawyer. So anything regarding legal I have to say is based on what I see from my sources and I cite them.
So the function of the ICO for The DAO was what exactly? And The DAO failed entirely, and nearly got the entire development team for Ethereum caught up in lawsuits. The hard fork was the escape hatch out of the potential SEC interference and lawsuits. My point is that we need to reduce the risks so developers can raise funds without having to fear lawsuits. I use Steemit as an example of a DCO, which can raise funds. My point is the ICO template is not for everyone, it's got unknown risks, and if we don't have to deal with those risks why should we as developers?
My point being that if I can raise the same money from donors as I could from an ICO then why would I bother with an ICO? If I could follow the model used by Dan Larimer and team, why would I bother following the ICO model? I see no additional benefit, but I see unknown risks. So where we differ is you don't believe the risks are unknown, so perhaps you believe the risks are known and low.
Based on your background you know how the risk assessments and risk matrices work. If the level of risk is known you can determine a course of action. I could say the risk is low for setting up an unregulated exchange, because not all unregulated exchanges got shut down, and many operators are getting very rich, but it doesn't change the fact that this might not continue for much longer and it's really leaving it up to the mood of regulators.
Just as we are seeing with unregulated exchanges a slow building crackdown. I would not be surprised if we start seeing a slow yet increasing crackdown on ICOs. Do I know this will happen? No I don't. Do I know this won't happen? No I don't. The fact that I cannot know which way it will go is why I would decide if I can get the same benefits without that uncertainty I would take the benefits from another means.
BTW:
Primavera de Filippi, Harvard / LOVE
I know Primavera very well, as I have spoken at multiple conferences with her. She is one of the premiere lawyers in the blockchain space, and she is very active in DAOs/DCOs space. It is great to see the concepts evolving :)
In that pic i am on the right end and Primavera is third from right.
Steemit absolutely DOES meet the criteria to be a DCO, but it is also built on top of a DCO...
So again, this is where ICOs have nothing to do with DCO
I posted my white paper. You should take a look when you get a chance. It discusses everything that we have discussed in this thread with sources. I am not arguing for the sake of arguing. I am offering counterpoints that have been thoroughly researched and I presented my accumulated research in the form of a white paper.
I am saying, Steemit is nothing like the platform that the DAO was meant to be, and further I am not sure if you are understanding what the difference is concerning the protocols, and what can be done on steemit vs. what was meant to be done on THEDAO or what is meant to be a DAO protocol.
Steemit was not DAO ready right out the gate, but the community built tools to make it function as such post release.
Steemit was meant to be a social network and reputation system.
The tools that were built afterwards are what gave it the DCO ish status.
That was organic evolution.
The only way to resolve our disagreement is for a formal paper to conduct an actual risk assessment for development in the crypto space. Until such a paper exists, we both are relying on very limited approaches.
If you'd like to take certain risks you can, if you don't like to take those risks you don't have to, but my point is until the actual risks are known we cannot have a definitive answer. With the current very limited information atmosphere I'm not confident the risks are known.
No, I am an actual developer in the space.
It is not hypothetical from my perspective.
Are you a developer?
That is not meant to be a confrontational question.
You'll find out when you see what I'm developing, when I choose to reveal it. But I can say I will avoid the ICO route in favor of a lower risk approach for myself if I find I can raise the same funds from another approach.
I would also say, the experiences of one developer cannot be extrapolated to give an indication for the experience of every developer. Your experiences probably wont be mine.
Crowdfunding is 100% risk for the person investing, and 0 Risk for the people receiving the funds until the crowdfunding crosses $1million threshold. Crowdfunding has specific rules.
This is not anecdotal.
Again...if a developer is receiving crowdfunding in the form of gifts with no equity, no debt, no promise of returns, there is NO RISK ATTACHED for developer.
The angel investor goes into an investment assuming 100% loss, i.e. the highest risk possible.
This is why crowdfunding models are superior for prototyping from the perspective of developers. IPOs are for products and services that are already profitable.
Has this been tested in court and held up? I'm talking this ICO approach not angel investing.
You're giving precise and absolute percentages. 100 and 0, which to me isn't likely to be accurate. Maybe what you mean to say is most of the risk is on the person investing, but this doesn't mean that it's 100%. And developers do have risk, as evidenced by the recent case where the FBI arrested a developer who created a tool which was useful to hackers.
In terms of sending money to someone in a crowd fund, if that person accepts the money and doesn't deliver, I would doubt they can avoid a lawsuit but again I am not a lawyer. In any case, It's not ever 0% risk if they can be identified in my opinion. If they are completely anonymous then the risk goes way down.
References
They don't seem accurate because I am not sure you are understanding the mechanism of crowdfunding and the legal implications and what that means concerning "risk".
If you are an "angel investor" you are giving away money expecting 0 return on investment.
That is 100% risk effectively.
If we are going to talk about percentages.
Angel investing IS the definition of 100% risk. Legally, you cannot be guaranteed a return. Obviously in science, nothing is 100% due to margin of error in measurement, so yes...it would be on a varying scale of margin of error in an actual regression analysis...but again...we're talking about the extreme end of investment...
and conversely, that would be the most extreme form of capital acquisition with the least amount of risk for a developer. Gifts get "taxed" if they are above a certain amount. The onus to deliver a product comes with no legal ramifications for a crowdfunding project if the developers do not deliver.
There is no debt, no legal recourse, and no loss of ownership.
I.e. least risk possible for developer...
Again, of course NOTHING is 0 or 100%, but i was using the numbers to illustrate that crowdfunding is the least risk scenario for a developer, period concerning capital acquisition.
I will refrain from discussing any intricacies of the law. I know better than to get into that discussion as a non-lawyer. I'll be the first to say I'm not a lawyer and I don't understand the intricacies of the law. But in my sources and posts I always cite people who are lawyers talking about the intricacies of the law and even they have differences of opinion on the legality of ICOs. So why should we assume there is a legal consensus?
No, there is absolutely not legal consensus on EVERYTHING concerning ICOs, but there ARE in fact precedents that we can move forward from.
That is why you get counsel, so you know what precedents exist.
Okay, when you have the time you should make a blog post outlining your perspective on the issue of ICOs, the whole ICO bubble discussion, the risk to developers and investors, the role of regulators, etc. I think if you share your knowledge and experiences on this topic it can be helpful to evolve the discussion. I can only say, my own discussions are from my perspective, but there is no reason why the community should arrive at my perspective as the right one without studying alternative perspectives.
And I'll take a look at your whitepaper, but in general a blog post would definitely be good for promoting discussion on this.
I will definitely make a blog about ICOs at some point.
I will post this here:
https://www.forbes.com/sites/rogeraitken/2016/05/15/bitcoin-exchange-ccedk-relaunching-as-decentralized-conglomerate-with-crowdfund-focus/#7f3403b07a7e
"A white paper to describe the organizational structure and operation flow behind CCDEK’s overhaul is currently in the process of being prepared by Larry Christopher Bates, Bitland Global’s chief security officer based in Indiana, who has Master’s degrees in cyber security and telecommunications.
It is understood that Bates, who has also written about the theoretical application of the blockchain on the global economy, will present a “theoretical construct” for a new model of economic ecosystem that is built on OpenLedger and guided by CCEDK.
Withdrawals from CCDEK will nevertheless unaffected during the upgrade period and possible throughout June 2016 upon request - as well as afterwards.
Thereafter, on 1 July 2016 when the exchange re-opens, CCEDK will serve as a portal for OpenLedger and as what is being described as “an investment knowledge hub” for the so-called Decentralized Conglomerate, which currently includes OpenLedger, Obits, blockchain-advertisting network BitTeaser plus other blockchain-based projects.
The Decentralized Conglomerate
It was back in March 2016 on Forbes that I explored themes around bitcoin, the blockchain and the future of newly coined term the Decentralized Conglomerate (DC). The latter is effectively a new form of partnership and touted as the “cutting-edge” method to building communities and establishing diversity in the marketplace.
The DC development is basically an idea that has existed as far back as last October when BitShares launched on OpenLedger, a universal shared platform based on the BitShares 2.0 MIT-licensed Graphene blockchain technology. The term itself was incidentally conceived by Bates.
A Decentralized Conglomerate enables multiple organizations to team up and join forces on a universal platform and allows them to invest in each other’s success. In theory it should result in the entire network reaping the benefits of cross-promotion. At least that is the theoretical goal."
https://steemit.com/ico/@chris-bates/why-icos-will-revolutionize-crowdfunding
Just because you asked so nicely :)
also, your citation had nothing to do with what you were saying...
i KNOW for a fact nothing can be 0 or 100% when actually "measured", but again, one uses hyperbole to illustrate a point.
completely anonymous ico would be the closest one could get to 0% risk for a developer to acquire funds and start a project. Yes. adding an identity DOES in fact increase the level of risk for a developer, but THAT is only if they do something illegal.
If you do nothing illegal, there is literally no risk.
So again, "risk" is conditional, and risk assessments will be different depending on when they are taken, i.e. how different regulations will be in place.
Right, if a developer does nothing illegal there is no risk. So a developer has to do everything they can to reduce legal risks onto themselves because a lot of activities which seem legal might be illegal.
This is what I mean by we need better templates than just the ICO template. It might be possible to do the ICO correctly, but it's also possible to do it incorrectly, and then it's a matter of how harsh are the penalties. In any case developers having to spend more and more time dealing with legal issues is not good for development.