The way I look at things…
Technology moves fast, business must move fast to keep up, to stay profitable and to engage customers.
ICO’s have been making the headlines again recently, mainly due to Chinese stories about banning them because they are or can be fraudulent, I totally agree with them, many are nothing more than a scam and a way to con people out of more valuable crypto, mainly Bitcoin and Ether. But this is nothing new, companies have been doing this for years in the form of IPO’s.
A crypto coin or token is basically a small part of the company that backs it, the same as buying a share in a company… If the company does well then the price of the share, coin or token will rise in value. Likewise, if the company does poorly and or fails completely then the share, coin or token value will fall or become totally worthless and you’ll lose all your initial investment.
Small risky companies, mainly those listed on the AIM market are highly volatile and many more fail than succeed but some of the ones that succeed can show 1000’s percent increases and make those willing to take the huge risks very wealthy. Crypto currency and ICO’s are the same but are carried out in a more technology based modern environment. Some of the dominant players such as Bitcoin and Ethereum are at the forefront of the game and are less risky than the smaller little-known coins and tokens, there may be less upside in the short term but there is less overall risk, but obviously there is still risk.
The recent claim by Jamie Dimon, CEO of JP Morgan that Bitcoin is a scam is actually positive news even though it caused a slight and temporary drop in the price of Bitcoin and consequently most other coins. The reason I see it as a positive is because you cannot expect bankers and those in the general ‘old school’ financial industry to accept the new way (Cryptocurrency) without a fight to the death!
Banks have had everyone at their mercy for as long as they have existed, they need YOU to be in debt to them, for them to survive. They cannot continue with their existing business model if people start using an alternative method of payment that does not need them to be involved, person to person transactions and peer to peer lending all done on the blockchain using cryptocurrency is the death of banking as we know it. ICO’s are the new way to fund a new business start-up, sure some are scams but many are genuine businesses and will thrive in the new world and increase in value and make a lot of people a lot of money because they hold the coins or tokens of the company (shares). These coins or tokens are not held in a brokerage account, they are held in the investors crypto wallet, which is private and cannot be accessed by anyone other than the owner. This is also extremely damaging for banks! You see, when you currently buy shares in a company you will need a brokerage account, this account will be backed up by a bank, when you buy the shares you will have to pay more for them than market value because of the spread… Banks (middlemen) make money here… They also make money when you sell, they also charge you to hold the shares in their account and charge fees. You may not know but you still don’t actually own these shares, they are held in a nominee account which basically means the bank owns them and can do whatever they want with them… So they do, they will trade the shares long or short and make money with your shares while you think they are safely stored away. Can you see how much money is involved, you are being charged every step of the way and if the bank goes insolvent you could lose all your shares even if the company you bought the shares in is still profitable and solvent!
SURELY THAT IS FRAUDULENT MR DIMON!
ICO’s kill this banking scam and they know it!
When you invest your money into an ICO you are taking the risk but you will hold the coins or tokens in your own wallet, the banks will not make a percentage out of the purchase or sale and they will not be able to charge you monthly fees to hold your coins or tokens (shares) in the company. They will also not be able to trade your coins or tokens to make additional profits for themselves.
Banks are losing millions now and will lose billions or trillions as the new way of investing in companies becomes the norm and the new crypto currencies and increasingly used to pay for services and goods, all outside of the fraudulent banking system.
Of course Jamie Dimon, is screaming FRAUD, SCAM, SELL… I expect a lot more bankers and their mates to scream all sorts of things like this in the future, they have to, cryptocurrency and the blockchain is going to shake up their debt fuelled, manipulated money making machine …