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.
You are viewing a single comment's thread from:
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.