Tokenomics Author: Unregulated ICO Tokens Are Long Gone, Urges Startups To Use STOs Instead
Tokenomics Author Proclaims, “Unregulated ICOs Are Dead,” Urging Startups To Use Security Token Offerings Instead
Thomas Power is known for a lot of things – penning “Tokenomics: The crypto shift of blockchains, ICOs, and tokens,” working under Alan Sugar, founding 9 Spokes, and more. Considering the current state of the market now, he decided to speak with the Hard Fork Decentralized Exchange to discuss blockchain’s future.
The discussion turned to the concept of the initial coin offering (ICO) as a method of fundraising, which he believes is over. “Unregulated ICOs are dead,” he said, though he doesn’t see this as something bad for the industry. Instead, it is an opportunity for the current knowledge in the market to establish Security Token Offerings (STOs) instead.
The main difference between the STO and the ICO is that an STO involves securities, while maintaining regulatory compliance within the current framework. Regulation is absolutely essential to the life of tokens sold through this model.
Power related this situation to that of the 1990s dot-com boom, comparing it blockchain technology now. He commented,
“There were about 5,000 dot com businesses, there are about 5,000 altcoins now. But Amazon is still here, the internet didn’t end.”
Even though cryptocurrency has been the victim of a 90% loss in this year alone, Bitcoin remains. Blockchain technology is being adopted and used around the world in different ways. Presently, the ICO model simply doesn’t hold up to the needs of the market and regulatory measures, so it could be time to bring in a better and more suitable funding method.
During the boom, Pets.com and other companies managed to accumulate plenty of capital that would support them, but the lack of actual profit after the boom led them to bankruptcy. Luckily, there were still many companies that managed to build upon their business models that supported the digital economy, allowing it to thrive and succeed.
If there’s anything to learn of the way that these “booms” have gone before in the technological world, perhaps it is a safe bet that cryptocurrency is here to stay. However, some will fall through the cracks due to a lack of innovation, demand, and progress. Right now, evolution of the market is the key to keeping it alive, giving it a vital role in economies worldwide.