In the past six years, the number of lCO projects has changed from single digits to four digits, and the amount of individual projects has increased from $500,000 to $4 billion. The original niche experiment turned into a mass revelry. Along with it is the ups and downs of Bitcoin, the blockchain's broader public view, speculators and scammers, and the boots of supervision…
The concept of genius, the astounding scam, the dream of immortality, the lCO of the past six years has witnessed such a variety, what about the future?
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500,000 US dollars, the first lCO in history
On July 31, Zhao Changpeng, CEO of Chanan, issued such a tweet.
The so-called "cotton currency season" probably refers to the 2017 lCO frenzy. In this year, the currency became the most fashionable word in the blockchain and cryptocurrency fields, and a set of data from lCODATA may explain the problem: In 2017, there were 875 token fundraising events, raising more than $6.2 billion. In 2016, these two figures were only 29 and 90 million respectively.
Perhaps, the term "cotton currency season" is not enough to describe the "grand event" at that time. After all, some projects have no white papers to raise funds, which is quite magical.
If the historical clock was dialed back to Zhao Changpeng six years ago, a project called MasterCoin (which was later renamed Omni) was officially opened. In August of six years, MasterCoin was raising funds. This is The industry's first recognized lCO project, the six-year magic history of lCO kicked off.
MasterCoin is a currency experiment based on the Bitcoin network. It is called “BTC 2.0 that survives on the bitcoin blockchain”, and other modifications and changes are made on the basis of the bitcoin source code to generate its own blockchain to establish another hill. Unlike the altcoin, MasterCoin tried to establish a new agreement on the bitcoin's protocol layer.
For MasterCoin, Babbitt’s founder, Chang Hao, once sighed on Weibo: We have just boarded the Bitcoin train and soon boarded the Mastercoin high-speed rail.
On July 31, 2013, MasterCoin officially opened lCO. To be precise, there was no such term as lCO, and a corresponding word was called “token financing” or “token crowdfunding”.
During MasterCoin's fundraising, you can get 100 MSCs (MasterCoin tokens) by sending 1 bitcoin to the specified address. In order to mobilize everyone's enthusiasm, MasterCoin also sets rewards. The sooner investors send BTC, they will get The more rewards.
The way MSC is acquired has attracted a lot of controversy. For Bitcoin believers, MasterCoin's way of sending money is simply deviant. In the eyes of these people, the meaning of Bitcoin is the idea of decentralization. The acquisition of tokens is through mining, and MasterCoin is sold by developers, which is very unbelievable.
Many people are guilty: Is MasterCoin spending money?
Despite the controversy, the fundraising eventually raised 5,120 bitcoins, which was about $500,000.
Many people who can raise so many bitcoins, including the founder JRWillet, are unbelievable, and JRlillet even shows that he is determined not to "run the road."
At that time, JRWillet could not have imagined that in the next six years, lCO will be transformed from a niche experiment to a mass revelry, and the amount of funds raised will be changed from hundreds of thousands to tens of millions and hundreds of millions.
The $500,000 raised by MasterCoin is nothing more than the history of lCO, a shimmering but tiny sand.
Genius and the era of "everyone can send coins"
For the six-year history of lCO, if MasterCoin is the prelude, then Ethereum is one of the most important scenes.
In November 2013, San Francisco, the draft of the Ethereum white paper came out on a cold winter day.
In fact, the first version of the Ethereum white paper was a project proposal by the genius V God in Israel, when V God was working with the Mastercoin team, and Vitalik suggested some improvements to the project.
But when V God sent the document to JRRWillet, the founder of Mastercoin, JRlillet politely expressed his gratitude, saying the idea was interesting, but it took a long time to actually implement it.
"Go to you, I can do this myself."
The perfunctory of the other side made V God determined to do it himself. Later facts also proved that this proposal, which was ignored by JRlillet, was a genius-like idea with a market value of 100 billion.
In June 2014, ETH began to pre-sell. In terms of fundraising methods, Ethereum also used the same form of Master Coin as lCO. However, unlike MasterCoin, which raised only $500,000, Ethereum raised 30,000 in 42 days. Multiple bitcoins, equivalent to more than 18 million US dollars.
This caused quite a stir at the time, but Ethereum also suffered huge accusations. Looking back at the social media and forums of that period, many people’s evaluations of Ethereum were “swindlers” and “circling money”. .
Unlike the previous lCO, Ethereum actually operates lCO under a certain legal framework. In order to comply with legal and financial regulations for ETH pre-sales, the Ethereum community has established several legal entities, including the Ethereum Foundation, established in June 2014 in Zug, Switzerland.
Because most blockchain projects do not regard themselves as companies, the foundation's non-profit organization is a more appropriate structure. In addition, the foundation structure can effectively avoid taxation.
It can be said that the lCO project since then is basically based on the framework of Ethereum.
At the end of 2015, Ethereum also released a standard that has a significant impact on the history of lCO – ERC20. The unification of token standards facilitates the financing of lCO projects. With ERC20, it is no longer a difficult thing to issue coins. Anyone Both can issue their own tokens through smart contracts and can exchange tokens with ETH.
The era of "everyone can send coins" has arrived.
Ethereum co-founder Hoskinson once commented on the ERC20 token currency crowdfunding model, saying it revolutionized fundraising, decentralized banking, venture capital and crowdfunding platforms like Kickstarter that provide true peer-to-peer funding.
For startups, especially relatively niche cryptocurrency projects, the first thing in front of you is money.
Technology development and project progress are inseparable from financial support, and it is extremely difficult to raise funds often by requiring investment institutions or angel investors to recognize and appreciate them. But after Ethereum, it all became easier.
A white paper, a concept, or even a slogan can attract money from all over the world.
However, while paving the way for the world of cryptocurrencies and allowing blockchain technology to be funded, Ethereum also opened Pandora's Box, which led to the emergence of lCO frenzy and chaos.
After all, behind every money that comes flying, there is a hidden heart that wants to get rich.
Frenzy, chaos and myth
After ETC's 18 million US dollars lCO, the blockchain project lCO wave is higher than a wave, the amount of money, the speed is so dazzling, unimaginable.
On April 30, 2016, the decentralized autonomous organization The DAO project started fundraising, and in just 28 days, it raised ETH worth more than 150 million US dollars, which was hailed as “the largest lCO project ever”.
Perhaps because of the big tree, when the DAO received huge fundraising, the eyes of the hacker also quietly stared at the "fat." On June 18, hackers successfully exploited 3.6 million ETHs using vulnerabilities in The DAO code, which were worth more than $50 million at the time.
The incident of stealing money directly led to the fork of Ethereum, and also allowed the outside world to see the technical risks faced by lCO.
The history of lCO created by “The DAO” has not been maintained for too long. In July 2017, Tezos, favored by Silicon Valley's well-known venture capitalist Tim Pepper, started fundraising and raised 65,000 BTCs and 36s in just two weeks. Ten thousand ETHs, totaling about $232 million, set a new record at the time, and Tezos was once called the "legendary lCO project."
However, Tezos's "legend" is not only a short period of time to raise huge sums of money, but also because of the scandals of management infighting and false propaganda in the months after the fundraising, so that the media played at that time. The title of "The largest lCO project in history has yet to land, it will collapse."
In June 2017, the star public chain EOS began to raise funds. In the year after the fundraising period, EOS raised a total of 4.2 billion US dollars, becoming the largest lCO project to date.
Throughout 2017, more than 800 large and small projects were issued, and $6.2 billion went into the cryptocurrency market.
lCO has become a rich machine. Through lCO, the project party has become a holder of hundreds of millions of public funds. As a result of the skyrocketing of tokens, some investors have also become thousands of people and even billionaires. According to legend, the myth of riches.
"Coin" has also become the most magical word.
At the same time, the rich effect of lCO has attracted a large number of speculators and scammers to enter the market, such as pyramid schemes, fraud, illegal fund-raising, and scams. The world of cryptocurrencies is mixed, muddy, and even unwelcome. Point out: 99% of lCO projects are air.
The currency frenzy and the chaos that it has caused many people to get rich overnight, but also let some people go bankrupt. lCO, the financial technology originally used to support the fundraising of blockchain projects, has become a tool for some people to squander money. The sinful coat, so the boots of supervision came to the fore.
In September 2017, the seven ministries and commissions of the People's Bank of China and other seven committees determined that lCO financing is essentially an unauthorised illegal public financing, suspected of illegally selling tokens, illegally issuing securities, and illegal fund-raising. Financial fraud, pyramid schemes and other illegal criminal activities.
In addition to China, financial regulators around the world have also paid close attention to lCO and acted.
At the end of 2017, Bitcoin reached its highest point in history, and the crazy lCO is considered to be one of the important reasons for the opening of this bull market.
With Bitcoin reaching its historical peak, blockchain technology has entered a broader public view, and the controversial lCO has not stopped with the stop of supervision, but has been pushed to another climax.
The last craziness?
In 2018, the blockchain jumped into the air.
Xu Xiaoping’s arms shook the blockchain, and talents, capital, and resources all poured into the blockchain field. Investors were swaying money, and the platform was promoted for the project, and the aunt’s cafe gathered to sell coins. Gold and dross are difficult to distinguish, and believers are as happy as scammers.
lCODATA data shows that there were 1,253 lCO incidents in 2018, raising more than $7.8 billion, both figures surpassing 2017 data.
However, when Bitcoin went down all the way, many projects broke or run, and when the bubble collapsed, it can be found that the so-called ideal of changing the world and subverting tradition is just to make money for lCO.
Million-level TPS, Silicon Valley technical team, traditional corporate landing scenes… The swaying slogan has become the most naked deception.
As lCO goes to the end of the road, various variants of lCO appear, seeking STO to raise funds in a compliant manner, IEOs that use the exchange as a back-end to issue money, and resonance coins that are madly collecting money in a "MLM + fund-slot" model. Mode currency.
But it turns out that STO is just another unrealistic dream of sending money, and IEO is getting more and more degraded in the screams of investors trapped in the secondary market. Resonance and model coins are the most "candid". Harvesting.
Recently, market research institutes Inwara and Crypto Valley Association released a report saying that the main financing method for encryption projects in the first half of 2019 was lCO. So far, the total financing amount of blockchain projects has reached $3.3 billion, of which funds raised through lCO. It accounts for 69% of the total financing, and the funds raised through IEO and STO account for 21% and 10% respectively.
In addition, investors' enthusiasm for encryption projects is less than 2018, and its performance is that the financing amount in the first half of 2019 is less than the $4.2 billion in the first half of 2018.
However, while seeing chaos and low tide, you should also see that some projects have been working on compliance and have achieved good results.
On July 12, 2019, the US Securities and Exchange Commission (SEC) approved blockchain startup Blockstack to issue a $28 million token sale under RegulationA+, the first such currency issue approved by the SEC, followed by the cryptocurrency company. The financing provides a new template.
In Zhao Changpeng's view, the next "cotton currency season", the project will have products and users, although they are still high-risk investments, but the industry is now much healthier.
Zhao Changpeng said that after all the scams and chaos, the eyes of the market are much brighter than before. The altcoins that rely on a paper slogan or concept will be rejected by the market, with products and users. The project will appear more and more.
However, does this also explain to some extent: the difficulty of identifying the merits of the project is also improved?
The six years of lCO have witnessed the genius of genius geeks, and witnessed the astounding scams, and witnessed the dreams of the rich and the resurrected, endless life.
“The industry is much healthier” will be an indisputable fact and a good hope, but before that, too many people have deliberately or unconsciously gone too far and detours.
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