How Token Sales Can Be an Instrument for Social Change
By Dr. Steven Waterhouse (SEVEN)
In 2010, as I watched the 26-year-old Mohamed Bouazizi light himself on fire on YouTube, igniting the people of Tunisia, Egypt, Algeria, and the Middle East to protest against restrictions on freedom of speech and poor living conditions as part of Arab Spring, I was inspired. I thought: the Middle East is leading the way, waking people up, and now the rest of us can collectively fight for human rights and against surveillance and censorship.
I worked for more than 30 years in technology and venture capital, including a Ph.D. in deep learning at Cambridge, and had dedicated my life to finding ways to fund projects that used technology for a greater social good, advocating for human rights. When the Arab Spring was shut down in 2012 and freedom of speech was again stifled, I became even more committed to finding a way to use entrepreneurship as a vehicle for social change.
Bitcoin was a very young cryptocurrency at the time, and Blockchain and Ethereum didn’t exist yet. What excited me about Bitcoin was thinking of it as an alternative funding model that could support companies developing technology that had never existed before. Many of these companies weren’t “disrupting” a space, or actively eliminating jobs, but creating opportunities for the people who needed them the most. I invested in companies like Bit Pase, Brave Browser, and Zcash, all of which were conceived to make a social impact.
But as the “Bitcoin boom” rose to prominence, many companies that couldn’t raise venture capital because they had untenable ideas sought to instead raise capital by creating cryptocurrencies and doing token sales. My gut reaction was: this isn’t what token sales are for; they’re not a replacement for venture funding. This might sound harsh, but some projects deserve to die, and when they die, they inform your future companies to be much more successful, because you learn how to create a sustainable business model.
Instead, token sales were developed for companies that require alternative funding, like open-source projects with no business model that are innovative. Signal, an encrypted private messaging platform, is a good example of a type of app that could benefit from token sales. Another application that could successfully use a token offering, as the programmer Mat Dryhurst has mentioned, is Soundcloud. By using a token sale, the company could decentralize power and “negotiate even more activity and value around the platform over time.”
This is why we chose to launch Orchid Labs, a new open source movement protecting everyone globally from censorship and surveillance on the Internet; and we’re funding it with a token sale.
Orchid Labs Inc. is an open-source project committed to ending surveillance and censorship on the internet. The founders and I had been thinking: why can’t we build an Internet that no one can shut down, so that everyone can use it without fear? To do that, the concept of decentralizing everything made sense, because there’s no single point of failure. The Orchid protocol uses an overlay network built upon the existing internet, which is driven by a peer-to-peer tokenized bandwidth exchange, creating a more inclusive, liberated internet.
Orchid is the realization of many decades of work to use technology and entrepreneurship for social betterment. Token offerings are not for get-rich schemes nor are they a way to raise money when you’ve been rejected by every venture capitalist in town. But they can be a driver for technology that creates change. With Orchid, we’re building a new Internet, one that aims to restore to the internet to a place open and accessible to all, where communication and collaboration may flow freely.