Item — HN Reader

Cryptos serve primarily as a trading vehicle. This is the most important point. It enables startups to raise capital from a global capital marketplace while allowing traders from around the world to participate. This is unlike any other marketplace. You can't do that with Nasdaq or NYSE as you have to be accredited investors with US bank accounts unless you're savvy enough to work through LLCs.

Andreessen and friends see this too https://www.cnbc.com/amp/2019/05/10/sec-approves-new-silicon...

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Companies that raised money through ICOs are not so much startups as boiler room scams.

If you want to raise money by selling stock to non-Americans, there are European crowdfunding platforms that let you do exactly that. Real companies with actual products[1] have raised millions on these platforms, whereas every ICO ever is stuck in "plausible deniability R&D mode" where they pretend to be implementing their magic-powered whitepaper but nobody actually uses any of the stuff.

[1] BrewDog, Monzo, Revolut spring to mind as UK examples.

Ethereum and Cosmos did ICOs and they have been quite successful, delivering on their promises. Maybe 99/100 ICOs fail but the same can be said about VC-backed startups.

No, 99/100 VC-backed startsup don't fail, and the rate of actual scams in them is FAR lower than in crypto.

Ethereum is basically an ICO pyramid scam, since the only use case for it has been to enable more ICOs.

Anything else has failed miserably because the network can't handle the traffic. Of course they're promising a scaling fix Real Soon Now (see above for "plausible deniability R&D mode").

USDC is a stablecoin backed one-for-one with US dollars, audited by Grant Thornton and operated by Circle and Coinbase, which are regulated and above-board legal cryptocurrency exchanges. As of this writing, $327 million has been converted into it, and any amount of money can be transferred globally within seconds. Over 250,000 transactions have occurred since September 2018 when it launched. This is a legitimate use-case that has been enabled by Ethereum. Wiring money or using ACH is more expensive, slower, and more cumbersome than USDC.

https://www.circle.com/en/usdc

https://etherscan.io/token/0xa0b86991c6218b36c1d19d4a2e9eb0c...

> Wiring money or using ACH is more expensive, slower, and more cumbersome that USDC

Wiring is free and instantaneous for anyone sending moderate sums. Fidelity, for example, does this.

> Wiring is free and instantaneous for anyone sending moderate sums. Fidelity, for example, does this.

What counts as a "moderate sum"? Last time I tried to wire money, every option I could find charged a $XX fee no matter how much I sent.

How long and how expensive is it to wire $10,000,000 from Nigeria to South Korea? With USDC, it takes seconds and costs about 2 cents.

How does one convert $10M dollars in a Nigerian bank account into USDC? That seems like a necessary first step.

Define successful.

> It enables startups to raise capital from a global capital marketplace while allowing traders from around the world to participate. This is unlike any other marketplace.

U.S. dollars; forex. Also, not all jurisdictions have accredited investor requirements. For those that do, using a token doesn’t get around them.

A trade vehicle for what though? You're not buying equity or rights to future cash flows. Your investment doesn't reflect the success of the underlying company nor does it even reflect the popularity of the service ("the more people use it the more valuable it will be" argument hasn't been true for any of the increases/dips in price). You're essentially just trading on investor sentiment within unregulated markets with zero consumer protection. Can you make a profit? Sure, but you're not "investing" in startups, you're giving them money.

Or maybe as Buffett said recently "It’s a gambling device... ". Not to knock gambling - it's a huge industry. If the people who play state lotteries bought crypto instead the markets would shoot up.

That is true but at the end all this will be hardly regulated and not an ICO circus. The issue with ICOs was that scammers and unexperienced/naive people came first.

If you raise money through an IPO, do you have any fiduciary responsibility to raise shareholder value? Or can you just fuck off with the money legally?