ICOs and SMTs Are Only A Short-Term Solution

in greed •  4 months ago


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Yesterday I wrote about living in abundance. We should be trying to form communities that give what they can and take what they need. These communities should come to consensus to allocate more resources to the citizens that live by this rule. The most important aspect of this new emergent ecosystem is to find citizens that know how to spend their money responsibly.

The concept of ICOs (ERC-20) and Smart Media Tokens runs contrary to this idealism. We should be trying to create frictionless systems of economy, and ICOs only create friction. When a coin is created like EOS, Tron, any ERC-20, etc, the developers take a huge portion of the genesis coins for themselves. Right out of the gate, these projects are doomed to lose the Race To The Bottom. The point of smart contracts is to eliminate the middle man, but these projects went ahead and foolishly turned the dev team itself into a middle man.

Can you blame them? That money is supposed to fund the project. However, when you look at a coin like EOS, can they really justify four billion dollars seed money? Maybe? If they fund enough projects and airdrop them onto EOS holders then that money would be justified, until you consider that Block.One owns 10% of all EOS and just airdropped 10% of every coin they just funded to themselves.

All this greed creates centralization and an opening for more dev teams to come in and clone these projects for the purpose of better decentralization. The original coins will have to adapt and find new ways to decentralize. More than likely, greed will not allow this decentralization to happen, and the original coins will eventually be phased out. I imagine that most every coin in existence today will eventually lose the Race To The Bottom and be overtaken by a superior project.


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When?

The average person is very ignorant of the technology they use. Considering cryptocurrency is in its infancy Wild-West phase, there is a long long way to go before coins start to go under. In fact, I would argue that big coins like Bitcoin, Ethereum, EOS... ANY coin in the top 100 market cap will have a hard time going bankrupt. Blockchain tech has very little overhead and exists worldwide. This purge of coins that many people expect to happen, can't happen until cryptocurrency is fully mainstream. The path toward mainstream adoption is littered with dumb-money that will fund most projects.

I grade cryptocurrency on a five-point scale:

ApplicationDecentralizationInflationSpeedCommunity

Which one of these variables is most important? Community by far. Community includes the dev team and governance, but more importantly it includes the people who actually use the coin in question. If a coin has a diehard community that can't be lured to another coin then it will be around forever. In truth, we already see this mentality among many coins. As much as I am unimpressed by Bitcoin, that community isn't going away anytime soon.

I don't know if you've browsed the crypto-news websites like I have, but some of the worst coins have the most aggressive community members. I'm talking of course about Ripple's XRP. People have a tendency to latch on to a blockchain like they would a sports team and project competition into the space. Their coin is the one true coin.

XRP has the absolute worst community. It is built on a foundation of greed fueled by the banking sector. XRP is totally centralized because the Ripple foundation can create coins whenever they want. However, don't try to tell an XRP fanboy that, because you will enrage them and be subjected to a never-ending stream of juvenile insults. In the end, Ripple may bring value to the banking sector, but they will never bring value to the decentralization sector.


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For these reasons, it honestly might take decades to weed out these centralized chains. For the most part, I'm talking about a problem that doesn't really exist yet because the biggest community by far is rooted in fiat. Just about every coin is superior to that nonsense.

Ultimate Blockchains

I know if I was responsible for an ultimate blockchain that I would want to distance myself completely from fiat. I won't be surprised if the blockchains of the future punish you for exchanging your coins for fiat currency (or even for a coin that can be bought with fiat currency). Of course, this possible future decades down the road implies that the traditional world economy hasn't already imploded in on itself like a dying star.

Solution?

Okay, I don't want ICOs, and I don't want SMTs, and I don't want an ETF, so what do I want? As stated in my opening paragraph, I want responsible citizens who can spend responsibly. I want philosopher kings who have painstakingly trained themselves in the disciplines required for living in abundance. I want to be able to give someone a billion dollars and be able to trust that they will either hold that money or spend it on behalf of a whole; greater than themselves. It's a big ask, but this is the community I want to be a part of.


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Communism?

A lot of the things I say could be interpreted as communist or socialist ideas. I never use those trigger words because Americans have been properly brainwashed in opposition to them for over fifty years. Instead, I prefer the term cooperative capitalism. In truth, this term is far more accurate in describing what I actually want. I want a return to work-ethic and I want people to stop getting thrown under the bus. There must be more efficient ways of utilizing human potential without having to subject citizens to the corporate rat-race.

Communism has never existed. It's always just totalitarianism or fascism or some other horrible system. In fact, I would make the argument that true communism and currency do not mix. Communism without work-ethic is also extremely flawed.

Communism is almost impossible to implement. With communism, every little detail of society needs to be regulated. Who's in charge of this regulation? It's not hard to see how corruption starts to roll downhill. I watched a very interesting Ted Talk a while back about micro charges:

https://www.ted.com/talks/jonas_eliasson_how_to_solve_traffic_jams#t-69882

This talk is about fixing traffic problems, but the concept extends far beyond that. With capitalism and micro-charges, we can nudge the masses in the correct direction for the desired result. To reference the video, with communism someone has to control the bread supply. With capitalism the system is self regulating. That's what we want: a system of self-regulation.

Burden of responsible spending

It's actually a lot easier to find people who deserve money in the cryptosphere than in the world of fiat. If you give someone a few million dollars in USD they need to take action. Everyday that investment becomes worth less and less due to the Fed's stranglehold on inflation. With crypto, if you can find someone that will simply hold the money and not spend it, that's all you need. Also, because it's based on a system of transparency, anyone can see what's being done with the money. This keeps the rich honest if they want to maintain their status within the community.

Corporations are doing the job for us.

How are we going to find responsible people to lead the new economy? Well, corporations are already trying to take advantage of the blockchain's transparency. By identifying people on the blockchain and logging their actions, Amazon and friends are already going to do the job for us. Do we really want that guy who spent $25,000 on a cryptokitty to be in charge? Nope! What about that guy who's using privacy coins to hide his activity? Probably not the best pick for a champion of the people.

What's actually going to happen.

Grab some popcorn cause it's gonna be a shit show! LOL. All these new-money millionaires are going to be running around spending their funds on Lambos and god-knows-what. From the chaos rises a new order. Do your best not fall into the trap of glorified Americanized gluttony. You may be rewarded for your superior show of discipline somewhere along the road to freedom.

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Great read!
There are so many good insights here that I don't know which one I'd like to comment on first. I really liked this statement though:

In the end, Ripple may bring value to the banking sector, but they will never bring value to the decentralization sector.

There's certainly a greed element that propels many in the space forward, as you said the 'shit show' is about to happen so strap in and enjoy the show. I'm with you on the notion that that the true path to freedom lies in decentralization and if we truly want that freedom it's important to start building the communities of the future asap.

I especially enjoyed your take on Communism and Socialism, words that cannot be uttered because Americans have been so conditioned to be repelled by the terms and associate both with Nazis and the Soviet Red Scare. This -

Communism has never existed. It's always just totalitarianism or fascism or some other horrible system.

We need to be able to see passed the 'isms' and find sound principles in which to create healthy self-sustaining communities of the future. Whether we call it cooperative capitalism or something else, an open discussion of ideas without exclusion is a good start.

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much appreciated

Okay, I don't want ICOs, and I don't want SMTs, and I don't want an ETF, so what do I want? As stated in my opening paragraph, I want responsible citizens who can spend responsibly. I want philosopher kings who have painstakingly trained themselves in the disciplines required for living in abundance. I want to be able to give someone a billion dollars and be able to trust that they will either hold that money or spend it on behalf of a whole; greater than themselves. It's a big ask, but this is the community I want to be a part of.

Yeah, you and Plato. Maybe it'll take another 2500 years.

The fundamental problem you keep running into is that it is contrary to human nature.

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And yet, with cryptocurrency, we can create whatever rules we want and enforce them. Crypto is an opt-in situation.

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Yes, that's true. The crypto projects that will stand the test of time are the ones that harness human nature and build a more robust and resilient monetary system, not fight against that human nature expecting people to be something they're not.

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You've built a very strong argument on top of being vague and begging the question. How can I argue with you when you haven't defined human nature?

Can't go against human nature because it's human nature... begging the question hard on that one.

My rebuttal to you is that there is no human nature. Everything is human nature, to sacrificing oneself for another to the most vile acts on the planet and everything in between. Diversity, change, and death are the only constant.

You can't make the argument that current social constructs constitute human nature and that they can never change. It only takes a single generation to bring about monumental changes.

thumbs up for you "(Y)."

Hmmm a perspective that has always been there I guess, but i've never really considered

Steemit is all about communities. I agree that we should be focusing on creating frictionless communities if we truly want inclusive growth

Surprised I read to the end. Great points.
I agree that the core values of crypto (community and decentralization) have been deviated from. Too many ICOs these days and over 60% are ridiculous right from first glance. The irony is we need a centralised way of weeding out the fraudulent Decentralized platforms while ensuring that nothing hinders decentralization. Sigh

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I'm surprised I typed to the end 😝.

I'm hoping for a superior decentralized reputation system to pop up to solve such a problem. Steem is already half way there. This site is just littered with information of cryptos of every kind.

I enjoyed the read. I am into crypto as a hobby and a method to hopefully pay off some debt somehow. I don’t need to make millions, I wouldn’t be opposed to it, but it’s not my goal. I am trying to learn about the technology of the future and how I can orient a side business of some sort on it. I would just like to pay off my stupid student loans if I make money in it.
I like your reasonable sentiment though; there is too much sensationalism with introducing the latest and greatest new coin. A lot of them I read are just junk coins with people trying to make money off people who don’t understand.