Stop me if you have heard this one before. Fiat is NOT a good way to accept ICO payments during a regular ICO period (post- pre-sale). Because security. And chargebacks — while issued tokens are forever. And the SEC. And cooties, too, I’m sure.
You have?
Well, so have we. After all, we have damn good advisors.
But perhaps because we’re coming to blockchains from the publishing background (running Curiosity Quills Press for the past 6 years), the idea of fiat doesn’t scare us as much as it would someone that has been in the cryptocurrency trenches a lot longer than we had. More, we feel it is completely imperative that we do in fact make use of fiat as a way to bridge the gap between the crypto-based economy and the one most folks (especially in the Western world) participate in on a daily basis.
Let’s say you are looking for some dishwasher pills? A book? A dress? A set of power tools? That hot-list toy your kid decided they need this Christmas?
If your go-to destination is: Alibaba Express, Amazon, Jet, Macy’s (I’m consciously excluding Overstock here because it recently announced that Bitcoin is its friend), then not only might you be reluctant to break your HODL on your favorite cryptocurrency — you literally have no way to use it if you did.
Conversely, what if you need to buy something specifically using Bitcoin or Ether (as we have had to do, increasingly) without a ready supply on hand… well, you’re screwed. At least, we were. They WOULD sell it to you — but hardly in the amounts meaningful enough (for marketing purposes), AND make you wait a week after consummating the sale (looking at you, Coinbase), especially if this would constitute your first buy. Considering our token sale (once past the soft cap) will only run another ~96 hours… Yeah, that’d be a case of too little too late.
So, for us to truly achieve what we have set out to do, to fully and organically bring the use of blockchains to your brother, mother, grandfather, 15-year-old niece who’s so good at social media, she could practically make a living off it (don’t we all have one of those annoyingly perky wunderkinds in the family tree?), we needed to find a way to sell WishKnish tokens to… well, anyone. To those that wouldn’t know Coinbase or Cubits from Adam, and would likely only give this whole endeavor a try if the barrier to entry was… oh, about as high as it is on Amazon. Or at worst, those Envato network sites some of our fellow codemonkeys rely on.
Fiat is what people are used to, and if they want to buy our tokens (which we dearly hope they do!), they need to be able to do that from the comfort of their credit card — or even their PayPal account.
Which is why we have specifically requested comment from the SEC’s lawyers about this topic, given they’ve been in a sharing mood lately when it comes to opinions about the ICO craze. Turns out, it simply doesn’t matter: fiat, crypo, Skittles™, whatever. You’re either failing the Howey test, or you’re passing it (thus becoming labeled as a security) — your choice of tender is irrelevant to that decision. In fact, by accepting anything of value (Ether, bananas, Warglaives of Azzinoth, etc.), you’re already passing one of the pillars of the test, edging yourself one step closer to security-hood.
This leaves the parallel issues of fraudulent chargebacks — users buying tokens with stolen credit cards, then having the credit card take the money back since the owner didn’t authorize the purchase — and money laundering. Blockchain transactions are irreversible — this is one of the claims to fame of cryptocurrencies. The ledger is immutable. But credit card transactions are not — so that hard-earned token purchase can be yanked from an unprepared seller without so much as hearing their side of the story.
Having met one of our advisors specifically while dealing with fraud-proofing the token sale and researched the situation to within an inch of its digital life, we are now as confident as we can be that while a bad seed or two may make it into the punch, in general, we can safely and confidently offer fiat as a viable option — and then look towards growing our audience from among those that might not quite know yet just what cryptocurrencies are and what sauce to eat them with, but nonetheless will now have Knish to spend at our storefronts.
Which, to be honest, is the paramount reason for running a token sale for WishKnish in the first place: expanding our user base to where the consumer lives — not just the cryptocurrency fanatics. Of course, the capital raise is nothing to sneeze at, either. So we shan’t.
