Topic: Crypto Market Reboot - taking the trash out of the ICO space (Read 75 times)

Deedcoin is proud to announce our reddit piece that went viral has been picked up by tokendesk.io

https://www.tokendesk.io/crypto-market-reboot-taking-trash-ico-space/

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As one of the team behind a startup in the crypto space, we have had many late night conversations in the office regarding the “startups” recently seen in the space and have realized some general rules regarding what belongs and does not belong in the crypto space. Our Deedcoin company position on funds from our private sale has shifted to an immediate sell or conversion to ETH for all BTC funds as they come in (thanks Tether). Simply said, this Tether nonsense has completely destabilized the price base for Bitcoin in the short term. It is always darkest before the dawn, but should this crash continue, we believe the emerging projects afterwards will ring true to what this technology was initially designed for. The factors below are our position on whether or not a project should seek funding through a token release and we would like to share them with people new in this space.

Avoid all projects backed by something physical (tether). Simply put, it makes no sense for a token to be backed by gold, diamonds, oil, or llamas. The speculation in this space may cause a token to rise drastically whereas real world commodities only rise a fraction of crypto assets gains per month/year. Should a crypto asset rise 100% while the backing only rise 20% (best case), this has caused a specific bubble in token itself and leads to a dangerous inflation in a specific asset. Crypto was always designed for a solution to a service, or the ledger for a commodity, but never tied directly to a physical asset itself. The worst case scenario leads to the growth of a physically backed token that no longer holds the assets to back it. If this token is used to buy other crypto, it allows the problem to spread across markets and destabilize other projects.

Projects using the free market mechanics of crypto are typically positive. The what and why backing bitcoin (excluding the tether shenanigan) has always been the ability to avoid banks and regulation in sending or holding money. Money was designed to be free but the electronic and outdated ledger technology created by banks 30 years ago had given too much power to these institutions. 30 years of control of a technology lead to increased rates and manipulation by the powers that middleman all electronic fund transfers. Bitcoin’s power is in the solution to displace these central powers and their monopoly through a better free ledger system.

Archaic database improvement. So many real world databases are maintained by many different organizations worldwide. This is the reason that banks, governments, industrial maintenance providers, and healthcare records have been rush filing patents for blockchains without ever releasing a token. The power to take information, store securely, and share it amongst parties in an industry holds massive improvement over the current system in which nothing is standardized. Simply converting information in database between corporate user bases is an expensive, manipulatable, and often manual task.
Solutions that apply to no-one. Blockchain tokens that offer discounts selling luxury cars are simply of no benefit to the average person. If a solution applies to 1% of the general public, then it may need a blockchain for industry improvement, but does not need a token to be traded amongst the public. If a token is useable, it should be useable by most people.

All said, we are not against the IDEA of Tether, but the project should have had and ongoing audit from inception with account access to allow continuous 3rd party verification of funds backing the USDT. If Tether had a standing audit agreement from day 1 with public posting of weekly verified funds independently, this situation would have been avoided. At this point, no one in the public knows if the funds are or are not present, but the public possibility of the lack of backing alone has caused enough damage.

We are early in this technology and many growing pains will still occur. Holders of crypto may lose 50% of their portfolio value but the lessons learned in each crash drive this technology forward. Blockchain will not die, however growth is painful. Its time for the industry and token purchasers to be more informed as a whole. The more bad actors in this space upset the industry for everyone and cause the needed regulation to be overly harsh in initial implementation. Our best defense is to stop funding or using projects that don’t meet solid criteria and weed them out at onset before they reach exchanges.

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