This is why digital currencies need a self-regulating organization
In a recent Huffington Post article that is catching fire throughout cryptodom, John Gotts outlines a brilliant plan to protect the new industry from the falling dominoes of unqualified and overreaching outside regulation. At stake is the freedom of most digital tokens to remain free of burdensome requirements that historically apply to true securities.
This article talks about a new movement in which John Gotts has enlisted many crypto industry leaders to seize the initiative and self-regulate, rather than leave that option open to other regulatory bodies who may feel tempted to extend their dominion over that function if a vacuum is left for them.
Key to the process is the differentiation between tokens that represent securities (Security Tokens, aka "Stokens") and those that are clearly NOT securities and therefore not subject to regulation under securities law.
Here are examples of non-security coins:
- Charity – Coins used to raise money for a cause
- Games – In-game purchases for magic swords, gaming…
- Reward for Work – Utility for getting someone to test, mine, refer…
- Software/Site Access – Provides Access to something of value
- Coupon – A digital coupon, redeemable for something of current value
- Currency – A digital token tradable for goods or services
- Network of Physical Access – Provide access to somewhere that is valued (i.e., an altcoin sale or nightclub)
- Fat Protocol – The software becomes more valuable the more apps and businesses are built on top of it. Union Square Ventures posted a great article about fat protocols here.
This is particularly important to the BitShares community with its rich selection of all these types of tokens. It is also exciting because John plans to introduce dozens of high-quality Stokens to the BitShares platform, making it a shining example of how tokens and stokens can exist on a common decentralized exchange superhighway.
John's article is a great read, and Cryptonomex supports his initiative.
About the Author -- Stan Larimer