Great piece of work @neavvy
In my opinion current market condition will not change until STO will become more popular. This is the only way to recover investors trust.
Right now ICO do not seem to bring much of this trust and even the best projects launchi out there suffer heavily. Security Tokens are the way to go. That's just simple as that.
Just like you said:
Security tokens came up as a potential solution to these problems.
I've been thiking a lot about STO and their future. And what is main difference between them and ICO? Let's look at STEEM (as an example).
Steemit Inc. is holding majority of STEEM and they are selling it to cover their expenses. They can sell all of it if they only want to and nothing can stop them. There is no risk at their end because they are not selling the ownership. So they can drop the price as much as they want without any restrictions and fear.
At the same time what would happend if STEEM would be backed by real assets and those who would purchase STEEM would be purchasing ownership of Steemit Inc? Price would never drop so much. Simple as that. Steemit Inc. would stop flooding market with cheap tokens in fear, that some other giant can buy it easily and become the owner of their business.
That is HUGE difference. The biggest problem with ICO is that currently those companies that are launching them are usually the reason why price is falling down. Because they are selling as much as they can. No matter what.
And this would not happend if they would be selling ownership to their own business. Would you agree @neavvy?
Yours
Piotr
Firstly, I wish to express my gratitude for your constant support @crypto.piotr :)
I fully agree with you. Current crisis shows that Blockchain technology needs radical changes. ICOs were sufficient when the level of trust among community was quite high. Unfortunately, this trust was based on constant growth of Bitcoin price and success of every ICO. When bear market has begun companies and community got panicky and started to sell their tokens rapidly (btw your comparison to Steemit is brilliant).
However, I think that current crisis may lead to a positive consequences. In "traditional" economy it is a time when market is cleaned up of unprofitable businesses. The same thing may happen in Blockchain, as it is no longer profitable to run a shoddy ICO. This may also result in a situation when it is only economic to run an STO which will certainly make them more popualr.
That's very good point. The situation when company is selling ownership is probably also more comfortable for itself. They wouldn't be afraid that price will fluctuate significantly which may cause a loss of 30% of their funds overnight.
Greetings,
Jan
I love to see how responsive you are @neavvy. That's just way to go :)
Steemit need people like US :)
Thank you. I figured that it will be easier "to feel" this kind of comparison since we're all affected with price of STEEM.
If you would look closer at companies on traditional stock market (like facebook) then you would notice that sometimes those companies are re-buing their own shares. Something that hardly ever happend here in crypto-space. So it's not only constant selling pressure coming out from those businesses launching token.
When the price go down they are sometimes buying "back the ownership" to their own business. This way they also ensure some sort of stability of price of their own shares. Which in long run builds more investors trust.
Cheers buddy, Piotr
This huge difference meams a lot to blockchain and crypto.
@crypto.piotr thanks for inviting me for this great initiative.
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Indeed it really does @abidemiademok21
it really does ....
You pointed this out very good. If they are interested to keep ownership they could not sell all.
But if they want to take the money and go away they could sell all.
The other question is how it will be possible to get power (not only profit) from your token.
By a private limited company their will be every year meeting of shareholders- would be something like this also by companies based on security tokens ? maybe online ?
Voting with the DPos system like Steem would be interesting since in traditional markets your vote also depends on your stake.
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Thanks for the head's up in my wallet @crypto.piotr. This is 100% over my head as I am a weight loss coach barely understanding most of what goes on here. But I have a lot of crypto connections on twitter, so I tweeted :)
Thank you for your support and tweet @fitinfun. I have taken a look at your profile and it seems very interesting and qualitative. If I want to loss my weight I will definitely get on to you. Great to have so various people here on steemit :)
All the best,
Jan
Thank you very much. I hope I hear from you if I can ever help :)