China ICO hysteria
Will Chinese ICO ban influence global blockchain development?
Yesterday I was finishing my story entitled ICOs are construction machinery of the crypto world, and today we woke up in a world of China’s ICO ban. Makes you wonder: a) Should I publish the piece? b) Was this inevitable?
While I was thinking on how will this reflect the world (and my writing), I remembered all these mobile and computer games offering coins and diamonds for sale. They disrupted classical model of pay for a product. With these coins, you can buy virtual goods in your favorite game. Not long after games made this possible, secondary markets appeared that enabled players to trade these items. And voila.
It’s your tokenized world in action. Already operating for many years. Yet, not decentralized and block-chained, but definitely tokenized. Can you ban tokenization? No, you would first have to ban all casinos and mobile apps and games.
The difference, they never had ICOs. They started offering tokenized service without selling a bunch of coins or items in advance. They had a product and a running service. Coins are actually used for something from the day one.
Maybe Chinese are right? They had so many scams, and something had to be done. Maybe this is useful for tokenized services, as no ICOs mean companies will need to bring products to the market before tokenization. Will I have to rewrite my whole article that praises ICOs?
One thing is sure: This is a gate we had to pass in a crypto marathon. Expected. And it is a chess game, too. We are still in the opening moves. China played their move. Now Chinese entrepreneurs and crypto enthusiasts will need to play the next move. Some speculate that China will reenable ICOs in the near future but with restrictions. We’ll see. Facts are that Chinese hold a significant portion of crypto assets mostly due to extensive mining operations. As ICO doors are now closed, we’ll have to see how the big players will react to this new “crisis.”
ICOs introduced a new paradigm. ICOs are an invention. You can not uninvent an invention. Yes, you can make it illegal, but ideas that work better cannot be forgotten (at least not in the age of the internet). “The lesson from the internet is anything China bans, invest in” is what Fred Wilson once said. China ban will not stop the rest of the crypto community moving forward.
So, yes, there will be more ICOs. I will publish my piece on ICOs. And the world is not stopping today but was given another challenge, and challenges are always good especially when they feel like a white glove in your face.