The traditional IPO model has been a crucial part of modern capitalism. The blockchain ICO model is of course inspired by IPOs, with speculation driving considerably profits for both investors and businesses. Some coins have even started offering dividend-like sharing of profits.
However, until now, almost all ICOs have been purely blockchain based. I'm sure a lot of blockchain purists will find this heresy - but how do we go about powering offline SMBs on the blockchain? This is a question for all blockchain and cryptocurrency experts out there.
Of course, the end goal would be to get all consumers and businesses alike on cryptocurrencies, but today, a vast majority of commerce happens through fiat currencies.
First, there needs to be an established platform for ICOs. I know there are ICO trackers and such, but when Bitcointalk is the defacto platform for announcing ICOs, you know there's serious demand for a platform here. I know some are in the works. We need business management tools for the blockchain. This is why Aragon seems particularly exciting to me. I'm sure we'll see more.
After discussing with a couple of lawyers from three sovereign states, the legal and accounting seems to be a major challenge right now. Businesses based in the USA seem to have found an effective loophole, selling them as securities to Non-US buyers. Things are not so clear in other countries. If you have some insights into the legality of ICOs in your country - do let us know.
We have the perfect example of an offline business ICO coming up - an independent feature film, Braid. https://campaign.braidthemovie.com/
For a while, such projects took to Kickstarter, but it was never a good incentive for the donors - a poster simply isn't as enticing as stakeholding. I believe blockchain ICOs fundamentally have the potential to be a superior solution for fundraising.
It's not a long term business, but a single project they are raising funds for. Besides speculation on markets, they plan to distribute net profits from the project. All revenue will be through offline distribution channels such as theatrical distributors such as Focus Features and SVOD services such as Netflix. These companies will only buy rights for the film in fiat currencies, and pay over a period of time. For example, Netflix typically pays over 3 years in 6 instalments. It'll be very intriguing to see how this project turns out!
Till then - I would love to hear from the blockchain experts out there!
Absolutely. My first ever chat with Dan (it seems like years ago...it was years ago!) was about using the blockchain for offchain businesses. It has much broader potential. As for the ICOs, yes, because this is so much simpler and less regulated than traditional securities. Any offering just needs to be done very carefully so it does not run afoul of securities & related laws in various countries.
You're a bonafide veteran! Yes, there's definitely tremendous potential. I'd like to see a platform or service that'll help SMBs navigate the landmine of laws. It seems more or less settled for some nations like the USA, Japan nd EU, but things are very murky elsewhere in the world, and the lawyers simply don't have an answer.
There's also the issue of stakeholder protection. While traditional securities laws are draconian, on the other hand don't want people losing all their money on scam ICOs etc. Well, I suppose that's become the norm, but that doesn't make it right. Hoping EOS has a solution for that with their smart contracts based dispute resolution system!
What about using ether to create local currencies? If you took the credits($1.00 for example ) from a local barter exchange, and replaced them with a token that contained $0.01 worth of ether and maybe $0.24 worth of Silver. Whoever wanted to put up the silver and ether could be put up by investors in exchange for tokens at the ICO. The holders of the barter credits would get to have external value backing their internal currency. If they want to spend their tokens off exchange, they can still get 1/4 of the value of the token (assuming no inflation) or they can trade it on the exchange for $1.00 worth of in kind services.
Sure, however, offline businesses will still incur expenses and earn revenues in fiat currencies.
Its already happening with zrcoin
Thank you for sharing that! I have seen the ZrCoin ICO pop up, but never bothered looking into it. So many ICOs, it's hard to keep up. Looks very interesting, indeed! I shall be following ZrCoin closely along with Braid.
Nowadays ICO doesn't be supervised so that there are so many scams using ICO for scaming .....
Yeah, that's definitely a concern. Hopefully we have smart contracts type systems to weed out legit ICOs from the scams.
The main concern is that the fonder obtain large amount of the new altcoin, which may cause a large devaluation of the altcoin when they sell the altcoin. The effect is so significant when the volume of the altcoin is low...
Founder need not own any altcoin. In the example I mentioned above, Braid, 100% of tokens are distributed to investors.
So The ICO project also has another concern that whether the token is bening accepted. They choose to bonds with famous altcoin like Eth, which can massively changing the environment of current altcoin market.
IPO => ICO
shares => asset-pegged crypto tokens
stock exchanges => crypto exchanges and trading platforms on the blockchain
Theoretically, you can peg any form of assets to create your own digital tokens to be traded on the blockchain. So, it doesn't matter if it is an online business or offline business. Am I getting the scenario right?
Yes, that's exactly right. Like I mentioned, the only challenge is that offline businesses will have revenues and costs in fiat currency.
Interesting post! An offline focused blockchain is something I never thought about before. I like the idea of this.
A blockchain will always be online, but the businesses using it may sell offline products or services.
What I meant to say was an offline "focused" blockchain is something I never thought about.
(edits original comment)
Aha, makes sense! There's no reason why it can't be done - just need to figure out the fiat to crypto conversions and legal / accounting thereof.
I've tried to come up with a paper newspaper for the crypto currency and few tip for the beginners like me wanna check it out ??
Sure :)
Braid sounds like an interesting project
I could be mistaken, but I believe it's the first of its kind? I'll be participating in the ICO and following it closely.
I follow you, so if you have an update at some point on its progress, please share. I'd really like to see how it develops.
I rarely ever blog about crypto, so don't count on it. That said, if something remarkable happens with Braid, I'll definitely write about it.
Fair enough
Great point about ICOs @liberosist. I haven't participated yet in any ICOs but I have my eye out for Filecoin/IPFS which is quite simply Distributed Web - the alternative to HTML and Internet as we currently know it. Should be much bigger than BAT ICO!
I read about Filecoin a long time ago - doesn't look like they have made much progress. Will definitely keep an eye out though! Meanwhile, Sia has been pumping a lot.
Yup waiting for more updates to be included on https://ipfs.io. In fact, this is the project that the Sia creator is most nervous about as competition - he mentioned it at Token Summit last week.
IPFS hasn't really taken off, but I'm sure if it's backed by a token and storage server hosts are paid it's certainly a viable model. Will keep a close eye out for Filecoin now!
Sure thing, you and me both. Gonna be an exciting summer for cryptos!
very good :) @tantawi
So we are going to replace the deposit bankers and the investment bankers, even better.
VIVA is a small mid-american company that had an ICO earlier.
They have many interesting plans, and have a deeper concept that goes beyond pump and dump..
All pump and dump coins claim to have a "deeper concept". Whether any of the talk is put into action remains to be seen. That said, while it has some unique experimentation, VIVA is still a cryptocurrency. There's no offline goods and services being sold by them.