Cryptocurrency and the New Distribution of Wealth
A Few Facts About the Wealth Gap
- Nearly three-quarters of the world’s adults own under $10,000 in wealth*
- This 71 percent of the world holds only 3 percent of global wealth*
- The world’s wealthiest individuals, those owning over $100,000 in assets, total only 8.1 percent of the global population but own 84.6 percent of global wealth.*
Source: Credit Suisse Research Institute, Global Wealth Databook, 2015
The Cryptocurrency Solution
First, there were ICOs (Initial Coin Offerings) that allowed regular investors instead of only millionaire VCs to invest in ventures that could produce longer-term profitability. ICOs currently have limited regulation and are under global review in several countries, most recently China, due to the possibility of legal ramifications. ICOs, however, are quickly leveling the field when it comes to public funding for businesses and blockchain-based projects alike. Until regulators land decisively on what ICOs are and how they should be handled, the field is wide open; but inventors and investors alike should tread lightly.
Then, on August 7, 2017 the OmiseGO (OMG) team made the announcement that they will be airdropping 5% of their tokens which were previously set aside from the total issuance during their crowd sale. The concept of using the airdrop mechanism is to distribute OMG will support the PoS (Proof of Stake) network which relies on a widely distributed ecosystem of tokens to act a validators.
Finally, on September 5, 2017, nearly one month after OMG announced the airdrop, SingularDTV (SNGLS) announced that it would re-airdrop all the OMG tokens distributed to the SingularDTV account to every SNGLS token holder. SingularDTV has 300K ETH in their reserves and will therefore be giving away a significant amount of money.
What is an Airdrop?
During a defined timeframe every address on the Ethereum blockchain holding a balance over a minimum threshold of 0.1 ETH at a certain block height will receive a share of the previously set aside 5% that is proportionate to their share of ETH. Essentially, free OMG tokens.
The New Distribution of Wealth
OMG has set an interesting precedent with the concept of re-airdropping and spreading “free” money across additional wallets in order to expand the adoption of applications built upon the Ethereum blockchain and provide a fair and transparent method of wealth distribution. If all ICOs raising ETH above a certain threshold provided this additional airdrop feature, not only would this spur real-world adoption of cryptocurrencies but the value of Ethereum would possibly increase because it would turn into a beacon for free wealth distribution.
Scaling to ensure that validators exist should be priority number 1 for any product built upon a blockchain running PoS algorithms and the complimentary effects of ICOs and re/airdropping provides solutions to both problems at once.