Against Tokens: Part II

This is adapted from a Reddit thread (shout out to my homeboys in /r/ethereum). It is a follow-on from an earlier piece, Against Tokens. Warning: this blog post is long. Today brings us a paper, written by Coin Center and Debevoise & Plimpton, and sponsored by Coinbase, USV, Coin Center and ConsenSys, which explores the question of whether tokens sold on a blockchain are or are not securities under the test of Howey v SEC.    Given what we know of the paper’s sponsors, the paper’s unsurprising conclusion is: An appropriately designed Blockchain Token that consists of rights and does not include…

Against Tokens (and token Crowdsales)

Part of a two-part series. See Against Tokens: Part II (Token Harder). Yesterday, I was having lunch with Tierion’s Wayne Vaughan at our local Irish diner when our conversation turned to a rather distressing recent development we’d both noticed in the “blockchain” space. That development is that certain people who frankly should know better are openly discussing whether speculative investment in “crypto crowdsales” (for the uninitiated, this is the practice of creating a Bitcoin clone or some other distributed protocol, and selling “coins” or “shares” in the protocol directly to the public in exchange for investment funds) should be encouraged. Long have I been a vocal critic of…

#THEDAO: Broken, but worth fixing

tl;dr – there’s a thing called THEDAO, and it’s almost irredeemably broken. In many, many ways.  This blog post doesn’t discuss the economic or game-theoretic aspects of its brokenness – this piece by Bitshares’ Dan Larimer over at Steemit.com does so very capably, so there’s no need to duplicate that work. My expertise in this field relates to how people use blockchains to automate organisational governance, and in particular, legal aspects surrounding their use. So the rest of this blog post focuses on that.  Suffice it to say, none of the below is intended to be, nor should it be construed as, legal advice. …