How ICO Pumps Crypto Markets And Why It Could be Scare
I believe that the ICOs weren’t born to be a crowdfunding tool, and not as the “IPO crypto-clone”, and even not the tool for social communities economization. They were invented to pump up the Bitcoin and altcoin markets growth to dismantling the system of statehood on the globe and put us to the tribal times again. Here I’ll explain why.
Imagine that you have a hobby: fishing, skiing, sailing or collecting something. Ok, let’s be a fishing. You are the part of the community, and all of these people connected online. They’re living in different parts of a country or even in some countries but Internet shinks the miles and hours between you and your buddies.
One day some activists of your community offer to tokenize the relationships inside of it and issue Fisher’s Brotherhood Coin (FBC is a ticker on crypto exchanges). This looks really good for everybody. Finally, the cost of catching perch is 100 times more expensive than the frozen fish meat and the wife does not get tired of reminding about it. With FBC you can earn value from your hobby, your experience sharing, adisoring etc. The idea spreads around the community and now you look at your community ICO’s landing.
To support ICO you need to get those tokens. You need to perform a double exchange: (1) firstly exchange the usual money for the cryptocurrency, and then (2) exchange this cryptocurrency for FBC.
Let’s say that everything went well and your community buds successfully transferred its savings to FBCs. All with pleasure began to look at their crypto tices and track the increase in tokens from likes in photos with captured trophies.
Then the fun begins. Where did your dollars go? They capitalized Bitcoin. It has become more expensive because your community has led 10,000 people who want to buy a little of this currency. Or another — it does not matter.
And then even more fun. What happened to the bitcoins that you exchanged for tokens? We went back to the stock exchange! That is, the piston has made a cycle and pumped — no, I will not say “bubble” — a portion of air.
The FBC you’ve earned (“private money” according to Hayek) can become as big in capitalization as Bitcoin — for tomorrow, but Bitcoin itself was growhacked for today. By helping of your ICO. It would seem that there is nothing strange here — it just another technological nuance yet. But this is only at first glance.
You can throw stones at me for what I say next. Main cryptocurrencies by itself is not needed to digitalized communities as an asset of funding. They rise it in ICO and convert to fiat after fundraising finished. At least normal people do just that.
Then why is the world needs of bitcoin? The world needs a name that can be referenced and nothing more. Oh, wait, they need a buzz name for mass media.
And what’s wrong with the growing influence of Bitcoin? After all, if I am right and the inflating of its significance occurs, including the described way (enlightening, futuristic, convenient, digital, humanistic — call tokenization as you want), then the significance of which decreases? Obviously, it’s unnecessary to become fiat money, that is … the countries?
This is a very important conclusion.
Let’s go further.
The French economist Thomas Picketti has established in his book that the world history of the last 300+ years convincingly shows a steady trend of a rupture of profitability from capital against profitability from the national income. In other words, money makes money faster than the system of economic relations regulated by the state can provide.
It turns out that the state only hinders making money? But how to remove states without creating chaos and anarchy? Perhaps, it is useful to give to mankind the instrument of the convenient refusal of national money, and there the countries will die by itself?
Why not, just imagine: your digital wallet is full of tokens of different and very effective companies and communities, and one of them is a company called… mmm, ok, “USA”. This company provides services to protect the territorial integrity or the judicial system for tokens called USD. Wait, where there is a lawyer’s token, yesterday I saw ICO of the independent association of lawyers …
Do you understand?
Decentralization does create a lot of … tribes. As you remember, tribes united in the empires to get an access to the resources owned by the other tribes. And then they established borders and began to protect these resources from each other. And they organizing the cross-boarding trade. Thus began the history of modern mankind.
Today humanity has begun dismantling the system of statehood so that tribes bored to suffer to protect their borders or trade. It’s so exhausting. They want to live easier: the tribe of anglers should fish! A tribe of teachers wants to teach, and doctors do the treating. That’s all!
Who said this was in history? Then there was no cryptocurrency and the primary placement of tokens. That’s why it did not work out at that time.