{"id":13848,"date":"2019-01-15T16:08:56","date_gmt":"2019-01-15T16:08:56","guid":{"rendered":"http:\/\/mediashower.com\/blog\/?p=13848"},"modified":"2019-01-15T16:08:56","modified_gmt":"2019-01-15T16:08:56","slug":"blockchain-prediction","status":"publish","type":"post","link":"https:\/\/www.mediashower.com\/blog\/blockchain-prediction\/","title":{"rendered":"A Blockchain Prediction for 2019"},"content":{"rendered":"

My blockchain colleague Joseph told me about an Israeli entrepreneur who spent 2018 finding promising new companies doing an Initial Coin Offering, then buying up 51% of their tokens. The idea was to have majority ownership over these fledgling companies, so he could guide their future direction.<\/p>\n

Guess what he discovered? He didn\u2019t own the company at all.<\/em><\/p>\n

Sure, he owned the company\u2019s tokens\u2014but this is like the difference between owning a Home Depot gift certificate, and owning Home Depot. The tokens were a unit of value that the company created out of thin air\u2014not ownership in the company itself.<\/p>\n

Investors\u2014especially early investors\u2014want a piece of the company. Let\u2019s say you want to open a new airline, and you need $100,000 from an angel investor. The investor is probably not going to give you $100,000 in exchange for airline miles.<\/p>\n

\u201cHey, have you heard about that new airline QuickJet?\u201d the investor\u2019s friends would ask her.<\/p>\n

\u201cI invested in it.\u201d<\/p>\n

\u201cWow! What do you own? A piece of the company? Profit sharing? A private jet?\u201d<\/p>\n

\u201cAirline miles,\u201d she\u2019d respond. \u201cI can go anywhere I want in the tri-state area, excluding blackout dates and holidays.\u201d<\/p>\n

The logic of ICOs is that you can buy and sell these tokens (i.e., airline miles) to other investors. But that\u2019s a lot different from owning the airline, and having a say in its direction.<\/p>\n

This is why in 2019, the ICO will be replaced with the STO, or Security Token Offering<\/strong>. Here\u2019s how they work.<\/p>\n


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\n<\/center><\/p>\n

Equity Tokens: Like \u201cSmart Stocks\u201d<\/h2>\n

I\u2019ll start by explaining equity tokens, a specific subset of security tokens.<\/p>\n

Think of an equity token exactly like a stock. You buy a share of Tesla, you own a small piece of the company. You buy the majority of Tesla shares, you get to tell Elon Musk what to do (if you dare).<\/p>\n

If you\u2019re starting a blockchain company, you offer equity tokens, which function exactly like shares of stock. They literally are stock, simply recorded on the blockchain. (See the Forbes article on our Equity Token project<\/a>.) Think of them as smart stocks<\/strong>, which can be programmed to do cool things in the future, like making it easier for shareholders to organize and vote.<\/p>\n

For example, an angel investor puts in $100,000, and in return you agree to give up 10% of your company. Your company is now valued at $1,000,000 (100,000 x 10). To keep it easy, let\u2019s say you create 1,000,000 tokens, and transfer 100,000 of those tokens over to your investor\u2019s digital wallet.<\/p>\n

The investor has all the rights of a traditional shareholder. We\u2019re working within the existing legal framework, using the model that VCs and investors have used for years. Everyone gets it.<\/p>\n


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\n<\/center><\/p>\n

Security Tokens: The Entire Asset Class<\/h2>\n

Now think of security tokens as being the wider asset class. Just as investors can trade a lot more than equity securities (like your Tesla stock), they can also trade debt securities (like banknotes and bonds) and derivatives (like futures, options, and swaps).<\/p>\n

Imagine a new token for each of these security types. They will work just like these securities work today, but instead of a paper certificate, you now get a token to prove your ownership.<\/p>\n

That\u2019s security tokens in a nutshell. And that\u2019s why 2019 is going to be nuts.<\/p>\n

John Hargrave is the CEO of Media Shower. Click here to get our weekly blockchain investor briefing.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

My blockchain colleague Joseph told me about an Israeli entrepreneur who spent 2018 finding promising new companies doing an Initial Coin Offering, then buying up 51% of their tokens. The idea was to have majority ownership over these fledgling companies, so he could guide their future direction. Guess what he discovered? He didn\u2019t own the… Read More…<\/a><\/span><\/p>\n","protected":false},"author":2,"featured_media":13849,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[459],"tags":[],"_links":{"self":[{"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/posts\/13848"}],"collection":[{"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/comments?post=13848"}],"version-history":[{"count":5,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/posts\/13848\/revisions"}],"predecessor-version":[{"id":13856,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/posts\/13848\/revisions\/13856"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/media\/13849"}],"wp:attachment":[{"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/media?parent=13848"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/categories?post=13848"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/tags?post=13848"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}