The Pros & Cons of the Next Wave of Finance: ICOs


IS IT, or ISN’T it? Or, WHAT is it? Or, what COULD it be? We are talking about the ICO (initial coin offering) debate which we call…..confusion. Let’s be straight; the ICO can be several things BUT, for sure, it is here to stay and it IS changing the way capital is raised. Another thing for certain, with all the regulatory agencies holding committee meetings, discussions and debates trying to figure things out, the rest of the world is way out in front in approving ICOs. Think of it this way, the ultimate disruption is the smaller more adaptable countries that can get regulations (properly) in place which will ultimately replace the U.S. and others as the financial centers of the world. Think Gibraltar, Switzerland, Singapore, Dubai and some others (relax, Fargo, ND is NOT one) as becoming the go to places for financing. So, read on and get in the debate.
(Bill Taylor/CEO)

“On Friday, Crowdfund Insider ran a story entitled “ICOs are Securities: Token Based Offerings Poised for a Rude Awakening as US Regulators May Soon Act”. Raising funds through the sale of digital tokens (commonly known as initial coin offerings or “ICOs”) has garnered tremendous attention recently due in large part to the significant sums raised – nearly $3.3 billion in 2017 alone, according to market tracking site Coinschedule. Friday’s article presented one common perspective on the topic: that such rapid success must be the result of illegal activity that will soon be “stamped out” by regulators. The truth is a bit more complicated

Digital Token Basics

Frequently, we observe overheated dialogue on the topic of ICOs. What is often lacking in these discussions is a comprehensive understanding of what digital tokens are and how blockchain technology works.

The reason tokens and token sales defy easy and across-the-board characterization is simple: digital tokens are no more or less than numbered entries on a blockchain-based electronic ledger. These ledger entries may indeed be structured to look very much like traditional “securities” – representing promises to pay amounts in the future, ownership, or other interests in an entity, etc. However, digital tokens can also represent units of value, which may make them look more like commodities; they can function as property records or warehouse receipts; they can entitle owners to the right to use a software system, which makes them look more like licenses. Some digital tokens simply may represent data points in a larger data structure.  This is what many lawyers and others mean when they caution that there is no single type, nor set of clear categories, of digital tokens. There is tremendous flexibility in how to structure digital tokens and what those digital tokens may represent…”

Full Story at Crowdfundinsider