May 29, 2018
Investors Bet $4 Billion on a Cryptocurrency Startup
What's the Story?
- EOS has raised $4B in its ICO
- This is the largest ICO ever
- EOS still has no technology or platform developed
Why Does This Matter?
I have been extremely critical of EOS over the past year. First off, no startup should ever raise $4B. It's an absurd amount of money. Block.one, the company behind EOS, has no plans on how it will spend the money. It doesn't even have to spend the money on developing EOS. Block.one wrote in a statement,
"Since the start of EOSIO development, Block.one has maintained that it would not launch nor operate a public blockchain based upon the ERC20 EOS tokens. This still holds true, and there are already several community driven efforts to utilize our software to launch one or more chains."
In other words, we raised $4B to spend on anything we want. Block.one has pledged $1B to venture funds that will be investing in the EOS ecosystem, but the other $3B is still unpledged. The reason EOS has raised so much money is that it promises to solve problems that Ethereum has encountered. It's well known that Ethereum has significant on-chain scaling problems and EOS promises to use delegated proof of stake to solve this. It's all well and good for them to suggest a solution and try to solve it, but with no evidence that the proposed solution will work, EOS is just vaporware for now. Could EOS succeed? Sure, it's possible. The more likely answer is that EOS will slowly drain the $4B from its treasury and have nothing to show for it. There is no incentive for the founders or any of the inner circle to develop the platform as they are already rich. I'll leave you with my favorite quote from the EOS terms and conditions,"
"The EOS Tokens do not have any rights, uses, purpose, attributes, functionalities or features, express or implied, including, without limitation, any uses, purpose, attributes, functionalities or features on the EOS Platform."
- DFINITY is utilizing Coinlist for its airdrop
- It won't be available to US citizens
- $35MM worth of DFINITY will be airdropped
Why Does This Matter?
The airdrop is the first one through the Coinlist platform. Coinlist promises to employ KYC/AML due diligence for companies utilizing airdrops. This process seems very anti-cryptocurrency. Yes, our token pledges to be decentralized, but we need to verify your name, social security number, address, etc. before we give you the token. The cryptocurrency industry is slowly looking like the very traditional financial system that we use every day. A year ago, one could send ETH or BTC to an address and, voila, they would have a new token. ICOs were creating a global platform where anyone could participate in an investment, regardless of wealth status or location. That process is going away. Most ICOs forbid US investors or require accreditation. The same can now be said of airdrops. The reality is that for cryptocurrency to become mainstream, it'll need to become part of the global financial system we have in place today, not an alternative to it. It's a Libertarian's wet dream to believe that Bitcoin/Blockchain/Cryptocurrency will replace what we have today. We need platforms like Coinlist to help bridge the gap between traditional finance and cryptocurrency. I look forward to seeing how the DFINITY airdrop goes, but I hope most people realize that blockchain and cryptocurrency will augment the current system not replace it.
Some Other Things I Read Today:
- Amid Chaos, Our Decentralized Future Is Being Built
- CryptoKitties sued for trade secret theft over Stephen Curry collectibles
- Korean National Assembly Makes Official Proposal to Lift ICO Ban
- The Hunt for Bitcoin’s Creator
- Bitcoin Gold Responds to Recent Double Spend Attack
- Bitcoin and cryptocurrency addicts offered treatment in the UK for the first time
- Crypto is making a comeback as Italy's political crisis mounts
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