In the last post I tried to explain the blockchain in a way so that anyone should understand what it actually is. The sequel that was promised at the end of that post will probably take a bit more of my time to write well, so today I’ve decided to skip that and take a look at the level of ridiculousness that we are investing in.
Imagine you have two friends that want to open a bar. They’ve never had a bar before, they haven’t even worked in a bar, they have though, you know, visited a bar quite a few times in their life. So of course they know the business - they know they need a cool looking pace at a convenient location, some bar stools, glasses and a distributor to buy drinks from. Also their bar is going to be special in every imaginable way — it’s going to have that magical vibe when you enter the place and there are going to be many bells and whistles that no one has ever imagined.
Cool right? The only problem your friends face is that they don’t have the money to open a bar. So they get together, drink a few beers and brainstorm for days but nothing comes to mind. So one day one of the friends goes to a big shopping mall and notices that you can buy a gift card for 50$. He stops, thinks for a moment and there it is, he’s got the best idea in his life. He calls the other friend and explains to him in frenzy — “Yo Tim, I had this amazing idea. You know how you can buy gift cards at the mall? Why don’t we sell like coupons, people love coupons you know, everyone has coupons nowdays, or something similar as a coupon, for our place in advance?”. And there it is, the idea was born.
Tim and his friend decide to print out 100.000 coupons for their dream bar. They even give the coupons a fancy name — MONEE. Next they decide they need a cool looking presentation for the bar where they will explain to coupon buyers what’s their idea and how it’s all going to work. At the end of their presentation they write: Inside the bar you will be able to pay for drinks only with MONEE. You can buy your MONEE at a initial sale at a rate 2$ per coupon.
So naturally you have some questions about the bar and their coupon logic, and they gladly provide you with a FAQ.
So far so cool right? The guys seem to have everything planned and buying MONEE right now seems like a good investment, it’s value should appreciate in the future since there is going to be less and less of them in circulation.
I know what my reaction would be if this was presented to me as an investment opportunity. Now I have nothing against the cool looking bar in town, but frankly the MONEE idea is stretching it a little right? It’s so much work I mean, why would I need to go to all the trouble to obtain some MONEE, whose value will probably fluctuate a lot, when I can just buy the beer with my regular money at the bar next door. If it doesn’t exist yet, it will.
This is the current situation with too many companies doing ICOs, not all of them of course but many follow this model to the letter. It’s so ridiculous that I really don’t know what to say, but in a way I get it - no one wants to give actual equity in their dream company if they don’t have to, so we make up “currencies”, I call them micro-currencies, and sell that to the investors at a discount.
Just imagine having to have 40 different currencies every time you went shopping because each store has their own. On top of that as it wasn’t painful enough already the value of each micro-currency would change by the minute so you would never know if you got a good deal or not.
Do you really want that to be our future? Do we really want that to be our future?
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