An Island That Uses Its Own Cryptocurrency

PayPal Alum: How Blockchain Will Change Investing and Why Real Estate Will Be First
This Firm Just Turned a Company's Stock Into Cryptocurrency


What's the story?

  • Both stories talk about "security tokens"
  • David Sacks, former COO of PayPal, discusses how security tokens will change real estate investing
  • Morgan Creek is using security tokens for an equity offering

Why Does This Matter?

Security tokens are just regulatory arbitrage. I do agree that blockchain could be advantageous for equity offerings in the future, but at the moment raising money via a token is just taking advantage of antiquated regulations. If the SEC allowed an inexpensive way for someone to list a home, why would they need a security token? I could do an IPO of an apartment in Manhattan. 1000 people could invest and receive rental income from the ownership. At the moment, this is very difficult to do. There are real estate crowdfunding sites, but they still haven't achieved mainstream status, and many retail and institutional investors avoid them. I don't want to sound pessimistic because I am not. I think many of the publicly traded equities will move to blockchain. But at the moment, security tokens are nothing more than regulatory arbitrage taking advantage of vague US regulations around tokens and how they should be regulated. 


A floating Pacific island is in the works with its own government, cryptocurrency and 300 houses

What's the story?

  • French Polynesia is launching a new island that uses a cryptocurrency
  • The island is intended for people looking to live outside of government regulation
  • The goal is to have hundreds of floating countries

Why Does This Matter?

You don't need a cryptocurrency for this. You can create a fiat currency called "Island Coin," and it would achieve the same goals as the cryptocurrency Varyon (the name of the island's cryptocurrency). Unless the coin is being issued in a decentralized manner, then using the term cryptocurrency is just a buzzword. I looked up the token on Google, and they are doing an ICO on the Ethereum Blockchain backed by a company called, "Blue Frontiers." What if something happens to Blue Frontier? How does the island still run? Can the coin survive? It would make more sense if the coin was using a proof of work model and the mining revenue was used in place of "taxes." Every citizen would be required to run a GPU server. I'm sure there are other variants one could conjure up, but this token is just a marketing ploy.