ICOs and the Future of Investing Video (w/Charles Hoskinson) | Expert View | Real Vision™


‘m Charles Hoskinson, Chief Executive Officer
of Input Output Hong Kong. We’re a cryptocurrency company
and a research firm that specializes in the science of cryptocurrencies. So I first became interested in cryptocurrencies
in 2011. I read a wonderful white paper written by
Satoshi Nakamoto. And I had known about peer-to-peer technology
for quite some time. For example, I knew about the
BitTorrent protocol, and Napster, and these types of things. And I noticed the evolution of the technology. So it
was really interesting as a paper, really interesting as an idea, but I really didn’t
think that it was a sustainable market. I said, oh well, we have these imaginary tokens. Who’s going to buy them? Will they ever achieve
liquidity? And even if they do that, the government will
just shut it all down. So I didn’t take it too seriously until
about two years later right around 2013, when I noticed that despite the fact that the system
had taken many hits and scandals and other issues, that it exhibited
a tremendous amount of resiliency. And then from there I said,
boy, it would be really interesting for me to do something in this space. But I didn’t know anybody. So I remember an old adage one of my professors
said, which is “Those who cannot do, teach.” So I created a
free class on UniMe called “Bitcoin or How I Learned to Stop Worrying and Love Crypto,”
because I’m big Peter Sellers fan. And so, I kind of named it as a spoof on Dr.
Strangelove. And I just created a bunch of free lectures. I released them as a Creative Commons license. And I expected maybe a few hundred people
would take the class. Well, it turned out I got over 70,000 students
for the course. And I got over 5,000 e-mails in the first
year that I hosted it, and I answered every single
one of them because it was a fun experience. So I got to meet
everybody and got to learn a huge amount through that. But the venture I’m usually most known for
is Ethereum, which I started shortly after setting up Invictus Innovations
with Vitalik Buterin and several other people. So to understand Ethereum, you have to understand
Bitcoin and what problem Bitcoin solves. So Bitcoin is all
about saying can I create a money system, where Alice and Bob can transact with each
other in a trustless way with a decentralized database recording all
those transactions? So in other words, when Alice sends that
transaction it, gets recorded in some magic ledger in the sky, like a giant spreadsheet
in the sky, that once it’s in there it can never go out. It’s tamper-resistant, and it’s immutable,
and it’s time-stamped, and auditable. So that’s
a wonderful concept. And that alone with the notion of digital
scarcity allowed a currency to form. But the minute that you have a currency, people
immediately start saying, well what else can I do with it? Is it just
the ability to move value between Alice or Bob? What about the story behind that value? The metadata, the
context, the contractual relationship? For example, what if Alice says, I’ll mow
your lawn if you pay me $100? Well, that’s a contract. So what if Alice mows the lawn and Bob doesn’t
pay her? That can’t be reflected in a
system like Bitcoin. So what we wanted to do is add a programming
language to a blockchain, so that these bespoke custom
transactions could be coded much the same way someone would write JavaScript in a web
browser. And that in
turn would allow people to have any type of financial relationship that they wanted to
have, very simple relationships to arbitrarily complex relationships. So this was kind of the naive notion that
we had in 2013 for Ethereum is, can we add a programming language
to a blockchain, so that we can then allow people to facilitate
more complex commerce, known as smart contracts? The best projects are projects of frustration. So most of the people who started Ethereum,
they didn’t start and say, hey, we’re just going to go build some
magic new blockchain, and it’s going to have all these capabilities,
and they did this in a clean room in a very academic way. They all started working on other projects. For
example, Jeff was working on master coin. Vitalic was working on color coins. I’d been working on bit shares. And each and every one of us had the same
scenario, where there was something we wanted to do, but the
nature of blockchain technology or the nature of blockchains that had already been deployed
made it very difficult, and time-consuming, and expensive
to do these very simple things. So we had to say, there must be a
better way. So what occurred was that Vitalik started
aggregating really good ideas– ideas that he learned from Sergio
Learner, ideas that he learned while working on color coins and master coin– and kind
of stitched them all together into an initial white paper. Then, like all open source projects, that
attracts attention if it’s a good idea. And so, we started appearing out of the ether,
and discovering, hey, this is an interesting thing. I’d like to help
and collaborate. And then somewhere along the way we decided
that it was a good idea for everybody to meet each other. So really the turning point between this is
a discussion about a cool thing we could do to something
that we actually wanted to devote time, money, and effort to was in January of 2014. Most of the Ethereum founders met up in a
beach house in Miami for the North American Bitcoin conference. It was a wonderful trip. And we had an opportunity to really seriously
discuss, not only the technology and what it would require, but also the philosophy. What are we actually trying to do? Now from that, we had reached an internal
consensus that this is something we’d like to pursue. But you can’t
just build a product in isolation. You have to actually go show it off and see
if anybody cares. So we thought we
were all crazy, you know? We’d show the world, and they’d say, we don’t
care about this stuff. There’d be no
interest, and we’d just all go home and go do something else, maybe start a bakery in
Hawaii or something. So what we did is we went to the conference. We did some presentations. Vitalik presented at the conference. And I did a debate with Dan Larrimer and David
Johnston. David represented Master Coin. Dan represented
BitShares. And I represented Ethereum. And we got almost like a Mick Jagger-esque
rock star reception to our presentation. Vitalik, for example, right after he presented
was mobbed by people. And it took nearly an hour
to pull him out of that circle of people who had questions. So we realized that we had something very,
very special. The problem is then– now we have momentum. We have something special. We have a group of people that
are willing to do it. You very naturally go to the next question,
which is how do you do it? Where do we do it? How do we execute? And that was the hard part, the devil in the
details, behind it Ethereum. That’s a long story, but I’ll try to make
it concise. OK. So after Miami, we took a vote. And we tried to decide
whether we were crypto Mozilla or we were going to be crypto Google, and these kind
of meant two different things. So crypto Mozilla is saying let’s do a not
for profit organization. Mozilla’s the maintainer of Firefox and
projects like that. Crypto Google is a great patron of open source
software, but ultimately it’s a for profit business. So these are very different models, and they
have different notions of how these things ought to operate. So we
took a vote. And initially, the vote was eight to zero. All the founders said crypto Google is the
way to go. So I went to Switzerland. And we started examining how one would set
up a for profit venture that would build a protocol and launch the protocol through
a not for profit foundation, So I lived in Zug for several months. We got tax rulings and did very complicated
work all in German, which was quite fun. I ate a lot of pretzels and gained a lot of
weight. But you know, that’s how these things always
operate. And then somewhere along the way around June
of 2014, we eventually had to make some hard decisions. And
the decision was made to reverse that and move to crypto Mozilla. And some people left the project, myself
included, as a consequence of that. And the remaining people set up a foundation,
did a crowd sale, and moved on. So I never thought at that point I’d ever
get back into the Ethereum space. I said, well, my time is over. I
enjoyed the six months I was there. I learned a lot. I met a lot of interesting people. I enjoyed the beautiful vistas
of Switzerland. So it’s time to go and do something else with
my life. So I suppose the easiest way of thinking about
ICO is it’s just basically a mechanism, a decentralized mechanism,
for somebody to raise capital. It’s a very neutral thing. It’s not a pro thing or a negative thing. It’s just a gateway
that allows capital to flow in. So the very first ICO that was done was MasterCoin. The beautiful thing about this
mechanism is just how incredibly simple it is. So with MasterCoin, the founders of that project
just listed a forum post at Bitcoin Talk. And they said, hey, we’re doing something
interesting. If you like it, send some Bitcoin to this
specially formed address. And that was that. And that’s basically what occurred, and they
raised half a million in a month. And everybody was just blown away. They said, wow, I can just create a forum
post, put an address up, some text, and then suddenly half a million
dollars appears. So that’s the basic notion of it is this idea
of saying, hey, I’m going to do something. Here’s how you pay me. And then using a cryptocurrency as the value
transfer mechanism. But more broadly, an ICO has become
formalized, because there is now a lot more tools, and functionality, and interesting
things that one can do. The
first ICOs were all kind of meta to the system. You had a Bitcoin as the value carrier. But all the terms, the
conditions, the liquidity, all these things were kind of outside of the system itself. So somebody had to go and
build MasterCoin, and then find a way to issue a token in MasterCoin. It was very bespoke, time-consuming
process that took months. Now with Ethereum. What Ethereum has allowed people to do is
to find that once. It’s called the ERC20 standard. And then they can take that ERC20 contract,
issue as many tokens as they want, and then go ahead and issue a
sale. People swap Ether for ERC20 or what have you. So what this allowed people to do is it’s
kind of democratized access to this new fundraising
mechanism. It’s allowed thousands of people to raise
billions of dollars all throughout the world without actually
having to physically meet the people that they’re raising money
from, and in some cases, not even knowing who they’re raising money from, because it’s
being done over the internet through these types of payment systems. So it’s an incredibly interesting mechanism. It’s like
crowdfunding on steroids. It’s not an entirely new concept. We’ve had things like Indiegogo and Kickstarter
for years. The difference is that now Indiegogo and Kickstarter
have been disintermediated, and also that the payment system itself no longer goes through
the standard financial system. So banks and financial intermediaries
are not involved. It’s now in direct peer-to-peer payment system
between people. So this obviously causes a lot of regulatory
questions about how this model is going to survive, thrive, and stay
within compliance given that the legacy system never imagined that such a system like this
could exist. Well first, the magic of ICOs is that they
have now made everybody equal in terms of their ability to raise money. There’s never been a time in human history
where we’ve had this power. So ordinary days, if you wanted to be
an entrepreneur, get venture capital, you have to go where the money lives. So that’s New York. That’s Silicon
Valley. That’s London, Beijing, Tokyo. There are certain cities where that kind of
value aggregates, and the people who dispense it aggregate. So you’d go and come up with your great idea,
and go on the road and go live somewhere. Well, for a certain group of people, that’s
a perfectly fine proposition– the young and the affluent
or those who are in a position to take a risk. But let’s say that you have a brilliant idea,
maybe you want to run a decentralized grid. Perhaps you’re in Haiti,
or in Puerto Rico, or somewhere, and you’ve just had everything destroyed by a hurricane. And you say, instead
of rebuilding an old stupid grid, let’s build a really good grid, maybe with solar or something
like that, and have the people on it. Well, that may be a wonderful idea. You might have a great business model. There might be a
lot of passion behind that. But the issue is you have no access to capital. So your only option is to either fly capital
to you, which seldom occurs. It’s luck usually. Or you have to leave, and then find a way
to somehow bring that back home and build relationships. So people in the developing world or people
outside of these zones have historically always been at a disadvantage. What the ICO does is say your geography no
longer matters. Many ICO’s have been done from very small
countries, like Barbados, the Cayman Islands, Switzerland, and so forth, and have been able
to raise money on par with what you would expect from Silicon
Valley, and from New York, and these other large capital hubs. That’s a very powerful, very prominent, very
amazing thing. But with great power does come potentially
great problems. Some of these offerings could be construed
to be securities offerings, especially where these offerings require
centralization for the end product to work, or they have no product that they’re selling,
and they’re using it to finance the construction of the project. So as a consequence, it’s very unclear about
how legacy laws will fit into this new fundraising model, and also unclear
about what jurisdictions ought to take precedent. Normally when
one raises money, they raise money in a particular place, let’s say California. Then you would say as an
entrepreneur, I have to keep the state of California happy, and I have to keep the US
government happy. Those
are the two constituencies. It’s manageable. Lawyers know how to do this. When you do an ICO, you could end up raising
money from 10,000 people in 200 different jurisdictions. In
some cases, jurisdictions on embargo lists, like North Korea and Iran. So in that case, how do you actually
manage that? Or do you even know who your customers are
if you’re not doing your customer and anti-money laundering compliance? So these are some of the great challenges
of ICO’s is that, while they increase the liquidity and they put everybody on equal
footing, and it’s a real revolution in terms of investment banking and finance in general,
it also introduces the issue that there is a gap of good governance, good regulation,
and good compliance that would allow people to
produce a good outcome for these things. So any time there are contracts, markets,
transfer of value, and expectation of return or a potential for fraud and
abuse, there is universal consensus that there needs to be some notion of governance behind
that, and recourse in the event that people fail to meet their
obligations. So the role of the government, at least in
a Western sense, is to be the arbitrator of last resort. It creates levels that says, well, for markets
that are very efficient, work well, and are generally not filled with fraud, the
government does tend to stay out of those markets. But for markets
where there’s just too much temptation, there’s conflicts of interest, agency failures, these
types of things– in those marketplaces, the government feels necessary
that it has to have some form of a role. So this is kind of a contrast between, let’s
say, journalism or things involving written content in the financial
markets. In the first case, it’s completely unregulated. For the most part, can say whatever the heck
you want to say in the United States, and everybody just
finds a way to deal with it. Whereas in the financial markets, they
tend to be the most regulated of all markets, not because we started that way, but because
we’ve had consistent collapses from collapses in the 1880s with
gold deflation, to the Knickerbocker crisis in the turn of the 19th to the
20th century, to again another crisis in the Great Depression, to the crisis in the 1970s,
the S&L crisis, Long-Term Capital collapsing, the dot com bust, the
Enron scandal, you can just keep going down the line. And in every
single one of these instances, usually what occurs is the government says that there is
some area that we probably should have been regulating or understand
a little bit more about, and we now are going to step in. For example,
Enron resulted in the creation of Sarbanes-Oxley. Whereas in the 1930s, they decided to create
Glass-Steagall to separate retail and investment banking. And both of these were probably pretty good
ideas within the context of society. So there are two modes of thought on should
the government have a role or not. One of them says, yes, the
government ought to have a role, and that role ought to be very hierarchical, meaning
that the government is the final say of this matter, and that we should
adapt existing regulation to now cover cryptocurrencies in a way that
makes sense. Whereas, there’s another group of people who
say that due to the nature of this technology and how incredibly
transformative it is, where now money can move at the same speed as information, at
the same speed as an email, it’s intrinsically global, and it’s
impossible to really know how much people are really making because of
this new paradigm that it’s going to be very, very difficult, if not impossible, to actually
regulate it in a conventional sense. As an example, if you take a look at how conventional
MSB regulation works, Money Service Businesses, it’s not
the regulatory agency that acts as the watchdog. They actually delegate their eyes and ears
to the financial institutions themselves. We have a notion of something called the Suspicious
Activity Report, which says if your customers– you the bank or you the exchange–
are doing business with or doing something that seems a bit
suspicious, you have a legal obligation to report to the regulatory body on your customer. So what does that
mean? That the regulatory bodies have turned all
of the money service businesses into their eyes and ears into
their watchdogs, and by extension have a pretty good handle on the conduct of everybody using
those pipelines. But when you move to a cryptocurrency setting,
there is no longer that third party to file a suspicious activity
report. And as a consequence, the only way that the
regulatory body is going to get data on these people is either, A,
finding it themselves, or B, having people report it, self-report, which generally doesn’t
work out so well. So when
we look at the totality of this problem, and the fact that a lot of the tools that regulators
traditionally use to maintain control over the markets and a lot
of the tools that regulators need to use to maintain order are not
present or superseded by cryptocurrencies advancement, as well as the very rapid advancement
of cryptocurrency technology, it does seem to
be a Pyrrhic, almost Sisyphean, effort to actually regulate the
cryptocurrency markets the way it’s done in the legacy system. That said, if there is no regulation, there
are no controls, it’s the Wild West, you will unfortunately see the
consequences of a lack of control, of anarchy. There will be scams. There will be plenty of people who run around
and defraud people, because they know they can, and they can hide in some jurisdiction. So there’s kind of a
good, bad, and ugly to all of these things. My personal opinion is that we need to take
a measured hybrid approach. There are cases where we probably
can institute effective legacy regulation. And there are cases where we can use things,
like self-regulatory organizations, voluntary standards, things
like smart contracts to compensate for the fact that these markets are
different, and also start enforcing best practices. And the other point is that if the consumer,
the market, knows that they have to look out for themselves,
they start making accommodations for that. But one final point of caution, which is if
governments do choose to take too draconian of a measure on
cryptocurrencies, this will not stop the market. There’s never been really a case in human
history where there has been a demand for something and the government
decides to ban it, where all of a sudden people stop using it. From prohibition to the war on drugs, all
of these things we’ve spent trillions of dollars, put many people in jail,
and yet these black markets continue to grow. So if there is utility and demand, there will
always be a way. And the problem with cryptocurrencies is that
there are just so darn hard to stop. As anonymity technology
improves, as these peer-to-peer protocols become more resilient as they start working
their way into mobile devices, it’s going to become harder and harder
to know how much people even make every year, unless they
self-disclose these things. So if we look to analogy, for example, Hollywood’s
war on file sharing and the lack of success that they’ve had there. If regulators do choose to have a very aggressive
stance, in my belief, it’s not going to actually protect any consumers. It’s just going to reduce the overall availability
of information, and ultimately cause more harm than good. I think the biggest risk of ICOs is not necessarily
the specter of government intervention or this idea of is it a scam
or not. It’s more that because of this disintermediation
that’s occurred by the nature of the technology, the people
who conduct ICOs tend not to have as strong of a relationship with the people whom have
given them money. There is an unspoken and sacred bond when
you run a business. When somebody capitalizes that business,
gives you money, you have a relationship of trust with that person. That person had to work really, really, really
hard to get what they have. And what they’ve done is they’ve taken it,
voluntarily given it to you. And you’re
going to go and take that money, and hopefully build it up, make it strong, and come back
with more of it, more value for them. If it’s a donation, that’s fine, but it’s
the same notion. You’ve taken their money, and they want
you to go do something, maybe build wells in Africa, what have you. So the issue is when you now no longer know
whom you are getting money from, there is a tendency to
dehumanize these people, to say I have no relationship with them. I have no obligations to do anything for them. I don’t have to care about them. And if you read a lot of the terms of sale
for the ICO’s that have recently been coming out, they’re using semantics, such
as this is a donation; there is no expectation of return; there’s no
expectation of delivering a product; if we take the money and go to the French Riviera,
and just decide to live in opulent lifestyle for the next five years,
you can’t sue us; these types of things. Now, under ordinary circumstances,
no investor in the world would ever agree to that and ever finance a business that has
that kind of prospectus. But because of the nature of these markets
and the fact that there’s going to be liquidity, and the initial investor
may be able to resell that token to somebody else and recoup their investment regardless
if the project ends up being successful, it has created a moral hazard. And this is something that the community regulators
and investors in general need to have a broader discussion
about how we’re going to overcome this. For example, there needs to be segregation
of capital. If capital is raised, it needs to be stored
somewhere where the people who have raised it don’t have immediate
access to that capital, and there are some sort of controls
over that. Second, there needs to be a better relationship
between the buyer of the token and the person delivering
the project. Now, it’s not completely fair to say that
this lack of a relationship is solely because of the negligence of the person
issuing the ICO. In some cases, because of draconian or very
out-of-date securities laws, just by giving basic
investor protections and basic investor participation, you’re tacitly admitting that this thing ought
to be regulated as a security. That’s a very unfortunate artifact of old
laws that ought to be updated, where they’re intended to
protect somebody, but in consequence to avoid them, people are actually diminishing consumer
protections. So
basic things like this need to be thought about and done, and it goes back to best practices
and community standards. Where do these standards come from? They come from failure. So if you want to know how to run a secure,
good cryptocurrency exchange, you look at the people who ran
insecure, bad cryptocurrency exchanges, and say, what did they do wrong? Just like if you want to build a rocket,
you look at the rockets that exploded, and you say, what did we do wrong? And from those failures, you learn
tremendously quickly on how to change things. And we’ve seen a tremendous evolution already. There’s a lot
more formalism occurring with the ICO markets. There are now ICO rating agencies, for example. They’re very
preliminary. They are starting to create some things. And eventually, there will be stronger regulation,
and hopefully that regulation will be quite intelligent,
and sensible, and guide the market in the right direction. If it’s
not intelligent, not sensible, then unfortunately, as I said before, it’s likely to result in
the market becoming actually worse for consumers, not better. hard to get what they have. And what they’ve done is they’ve taken it,
voluntarily given it to you. And you’re
going to go and take that money, and hopefully build it up, make it strong, and come back
with more of it, more value for them. If it’s a donation, that’s fine, but it’s
the same notion. You’ve taken their money, and they want
you to go do something, maybe build wells in Africa, what have you. So the issue is when you now no longer know
whom you are getting money from, there is a tendency to
dehumanize these people, to say I have no relationship with them. I have no obligations to do anything for them. I don’t have to care about them. And if you read a lot of the terms of sale
for the ICO’s that have recently been coming out, they’re using semantics, such
as this is a donation; there is no expectation of return; there’s no
expectation of delivering a product; if we take the money and go to the French Riviera,
and just decide to live in opulent lifestyle for the next five years,
you can’t sue us; these types of things. Now, under ordinary circumstances,
no investor in the world would ever agree to that and ever finance a business that has
that kind of prospectus. But because of the nature of these markets
and the fact that there’s going to be liquidity, and the initial investor
may be able to resell that token to somebody else and recoup their investment regardless
if the project ends up being successful, it has created a moral hazard. And this is something that the community regulators
and investors in general need to have a broader discussion
about how we’re going to overcome this. For example, there needs to be segregation
of capital. If capital is raised, it needs to be stored
somewhere where the people who have raised it don’t have immediate
access to that capital, and there are some sort of controls
over that. Second, there needs to be a better relationship
between the buyer of the token and the person delivering
the project. Now, it’s not completely fair to say that
this lack of a relationship is solely because of the negligence of the person
issuing the ICO. In some cases, because of draconian or very
out-of-date securities laws, just by giving basic
investor protections and basic investor participation, you’re tacitly admitting that this thing ought
to be regulated as a security. That’s a very unfortunate artifact of old
laws that ought to be updated, where they’re intended to
protect somebody, but in consequence to avoid them, people are actually diminishing consumer
protections. So
basic things like this need to be thought about and done, and it goes back to best practices
and community standards. Where do these standards come from? They come from failure. So if you want to know how to run a secure,
good cryptocurrency exchange, you look at the people who ran
insecure, bad cryptocurrency exchanges, and say, what did they do wrong? Just like if you want to build a rocket,
you look at the rockets that exploded, and you say, what did we do wrong? And from those failures, you learn
tremendously quickly on how to change things. And we’ve seen a tremendous evolution already. There’s a lot
more formalism occurring with the ICO markets. There are now ICO rating agencies, for example. They’re very
preliminary. They are starting to create some things. And eventually, there will be stronger regulation,
and hopefully that regulation will be quite intelligent,
and sensible, and guide the market in the right direction. If it’s
not intelligent, not sensible, then unfortunately, as I said before, it’s likely to result in
the market becoming actually worse for consumers, not better. I love the oil and gas business. I’ve had a lot of friends and family who have
been in these industries. And if you look at how natural gas, or oil,
or coal, or any commodity is treated in the Western world, these are very competitive,
reasonable markets, and people have an expectation that there should
be a fair value for what they’re extracting, and that’s somewhat
predictable. But if you go to the developing world where
they don’t have the expertise, the credibility, the infrastructure, and
other such things to actually develop their resources– for example, Guinea with its bauxite
has nearly a third of the world’s supply of bauxite. What they end up having to do is go to China,
or to Rio Tinto, or these other firms, and make very predatory deals where they get
pennies on the dollar for these natural resources. And they accept
bribes and they accept some infrastructure play. But at the end of the day, they’re literally
selling something that could be worth $100 for $1 or less. So what if you could actually tokenize the
development of natural resources? So you say something like, OK,
we’re going to survey this field for oil, or we’re going to survey this field for bauxite
or for diamonds. And then
we’re going to tokenize the entire production. And each token represents some ownership stake
of that. Now,
this kind of a way of going about things is not completely new. It’s been proposed before. But now because of all these tools and cool
things that we’re getting in the cryptocurrency space, it gives us many
more levers that we can pull to prevent corruption, and to prevent theft, or other such things
from occurring, or cut off the flow of capital in the event that
agency failure occurs, even on the government side perhaps. So this
will allow smaller jurisdictions that really do want to compete on the global markets to
actually get a fair price for their resources, which in turn they can
use to reinvest in the community. As a corollary to that, if you look at infrastructure–
for example, energy, water, all of these types of things–
we’re moving from a centralized model to a more decentralized model. It wasn’t too long ago that Tesla
announced the solar roof, and then before that, the power wall. But basically, what they’re doing is proposing
a decentralized grid. So wouldn’t it be a wonderful world to say,
instead of having to build a $50 million or $100 million power plant
to go provide energy for people in Ghana or people in Nigeria, for example, why don’t
we instead build a solar grid or wind grid, and have that be community-owned? And these tokens actually represent ownership
of that grid, and they can be ICO’d? So everybody in the world can now make money
from a Ghanaian energy farm that’s providing cheap, clean power to people
in this jurisdiction. Or if we talk about, for example, foreign
aid, instead of saying we’re going to just give
all this foreign aid to some hegemony in the country and hope they do
a good job, foreign aid can actually be participating on the open markets. The UN, for example, could buy some of these
tokens in order to promote the development of water and promote
the development of solar, and actually get a return on these tokens. These are new opportunities that are
incredibly exciting to me. And they can do everything from creating a
decentralized internet via a mesh net to things like utility services to the tokenization
of natural resources. I think this is going to be one of the great
fun challenges to explore over the next 10 or
20 years as this technology matures. My great hope for cryptocurrency technology
is that we stop talking about Blockchain, and Bitcoin, and all of
these things. We no longer talk about TCP/IP in the general
public. In the early days of the internet, the only
people who used it were very sophisticated, very technical people, and they were capable
of doing so much, and that was because the internet could do
so little and they had to carry the load for them. So things like TCP/IP
and these ideas, they kind of faded into the backdrop. They’re necessary. They’re useful. Technologists iterate
and evolve, and build things on top of them. But at the end of the day, the consumer doesn’t
care. Consumer
looks at things like, does my Skype work or not? Am I having a good high quality call or is
it crackly and there’s high latency or something like that? And so, if we can achieve the same thing we’ve
achieved with the internet that it just works, and it just works
well, but do that for money, then I think we can have some really magical revolutionary
things. For example, I
believe we’ll have this idea of a universal wallet. Just recently, I was actually on a trip throughout
Europe. I was
in Ukraine. I was in Greece. I was in Switzerland. And I was in London in England. And all these countries have
one thing in common, which is they have different money. So Ukraine’s money is different than the euro,
which is Greece’s money is different from the franc,
which is Switzerland’s money, which is the pound, which is
England’s money. But I never once used a currency exchange. And I never once used the local money. I had my
card. And every time I bought something, that card
would go from US dollars to the local currency. So I actually
didn’t care what the local currency was. I just had to kind of in the back of my mind
track what I’m spending. So could you imagine a future where all of
your assets live in a wallet, a digital wallet, where you have some
tokenize gold and tokenize stock, but even more exotic things, like tokenize airline
miles? Or maybe tokenize
your house, and sell part of it. It’s like a reverse mortgage, and you have
some tokens in there. Maybe you presell
your labor, and you put it there. And then when you go into Starbucks, or to
McDonald’s, or any of these places, they always will charge in dollars. So when you go and tap your cell phone to
pay, you’re going to pay in airline miles, or your labor, or your house,
and they get dollars. They didn’t know that you paid in airline
miles. Some decentralized market making network took
care of all that process. Now, if we can get to that reality,
we start caring a lot less about our local money. It doesn’t really matter if you live in Argentina
and the peso is not doing so good, because you can just rebalance
your portfolio, and say, I’m actually pretty long on the dollar. I’m just going to go for that. Or I like gold, so I want to store all my
wealth there. So now what we’ve done is we have taken a
person where their financial life is determined by geography, and
we’ve now put them in the driver’s seat of their financial life. They get to make the final say about their
portfolio and how they store their assets. And by the way, every single one of these
assets are going to be secure. They’re
going to be well accounted for. They’re going to be free of fraud or a lot
more resistant to fraud. They’re going
to move at the speed of light. You’re going to be able to buy and sell them
at a fair price. And there is no longer
a silo effect that occurs, where your equities live here, and your bonds live here, and your
currencies live there, your commodities live there. They’re all just treated the same under the
same type of protocol, and they flow just as fast as email. If we can accomplish that by 2030, I think
that the cryptocurrencies will have become the greatest
innovation of the last 500 to 1,000 years, since the invention of banking and the invention
of the printing press. That would just be an amazing future to live
in.

12 thoughts on “ICOs and the Future of Investing Video (w/Charles Hoskinson) | Expert View | Real Vision™”

  1. The… very timely video … much food for thought… how is tokinization of projects any different than share Issuance?

  2. amazing, first he talks about the different currency in different countries and how the existing system works so well then he talks about the new currency like its so much better without giving any reasons why it will work so well, maybe they should work on making a world language

  3. Good interview. Cardano (ADA) currency of the future. You can buy it now, look it up. Anyone that wants to buy cryptocurrencies easily on a US-regulated exchanged: https://www.coinbase.com/join/52aa109b13f3469d44000253

  4. The final question was insightful. Hopefully the tokenization (monetization) of all items of value will develop into a liquid means of intermediation for barter transactions. Although, it's not much different from fiat currency apart from the portfolio re-balance concept of selecting where to draw value from for any given transaction. This could work as long as issuers of such items (e.g. airpoints) allow transferability and cashing-out options, which could work if they tokenize these too. Potentially, through tokenization, a smart exchange could broker a large number of barter transactions (i.e. a person wants to sell scrap iron and also wants to buy eggs, a smart exchange could collate dozens of such buy/sell listings through multiple parties with either (i) the minimum amount of net cash required as a balancing item, or (ii) the minimum/maximum number of transactions required for completion, subject to any geographic constraints).

  5. I am stuffed with knowledge. Very good. For once, a cryptocurrency related video is not about any ICO promotion/idea/pick/it-token etc. P.S. Pound sterling is British/UK currency not England money, cheers.

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