Author: Jeroen Erne

If you’re like me and into cryptocurrencies for a while, ICOs probably make you “moan” as much as me. I mean (most of them) just don’t make any sense at all from an investment point of view.

Anyhow, I find myself visiting ICO sites and this is what usually happens.

What do we have here? Ohh what is this?

Another ICO that presents: “Just an idea”, “Just a concept with potentially some potential”.

Or even worse, It’s a: “there’s no purpose at all to the actual ICO or Token but our soon to be released, or maybe one day to be released amazing product, will make the price of this token go skyrocket deluxe 10.000 times so you should just buy it!”.

Pffffff. just wasted another 10 mins of my time! Who is gonna invest in this?

14 days later.

Let me check this site again, ohh wait they got 20+ million in funding based on “Just a concept with potentially some potential”.

Still, ICOs or actually tokens are potentially the best thing that happened to mankind.

So what’s wrong with it from an investment point of view?

You see, in my previous article, I wrote that for example, startups, are usually funded by Angel Investors and Venture Capitalist firms. If there’s one thing these guys (and especially VCs) do, is their due diligence.

They ask fairly basic questions like:

1. Is this Company previously backed by (another) Venture capital fund (VC firm) and/or Angel investors with a big name?
2. Does the company present its complete financial statements?
3. Does the company give insights in its costs?
4. How much will it spend a month (what’s their burn rate)?
5. Does the company give its financial/growth predictions and/or predictions for profit and growth?
6. Does the company explain its benefits opposed to their competitors (if any)?
7. Does the company have solid strategic partnerships?
8. Does the company have patents?
9. Did the company previously give out any real equity (not tokens or coins) but real shares?
10. Does the company have trademarks?
11. Does the company present its sales plan / marketing plan / go to market strategy in any way?

So while researching over 1,500 coins on CoinCheckup we found that the answer to most of these questions is flat out no or not traceable/not public / or perhaps, just: Why would we?

In other words, you can’t do any basic due diligence on tokens, you can’t see their potential, because information is just not publicly available and/or not there at all so why would we?

This is what’s wrong with ICOs and tokens.

Are you telling me I’m investing in “ just an idea” !?

Nowadays most ICOs present “Just a concept with potentially some potential”.  What I mean by this is that they “just present an idea”.

[bctt tweet=”Nowadays most ICOs present “Just a concept with potentially some potential”.  What I mean by this is that they “just present an idea”.  Let me give you a hint: IDEAS ARE FOR FREE!” username=”coincheckup”]

This is just ridiculous, I invest my money in an idea and I just hope they actually deliver. Let’s give this company $20million+ US dollars to see if they might deliver.

I’m curious if most ICO investors are actually aware of this.

Dear everyone who reads this! In case you didn’t know. Ideas are for FREE!

Guess what:

• Ideas are free;
• Ideas are easy;
• Ideas are just being somewhere at the right time at the right moment with the right annoyance about the right thing;
• Ideas are worth “0” as in ZERO, nothing!
• Your mind gives you ideas for free!

But I hear you thinking, I have great ideas, I can build a multi-million dollar company out of it, right? Facebook, Twitter & Google were great ideas right?

Yes, you’re very right. The founders of (for example) Twitter and Google had a great idea, but after that they were not romantic about it. They just started executing.

They iterated and iterated and iterated and failed and failed and failed and came to a great product while working their asses of, in 80+ hour work weeks.

Or maybe they didn’t work so hard but what’s sure is that they did find a business sweet spot in simply excelling in execution!

If we can believe the Facebook story, Mark didn’t even come up with the “Facebook idea” himself, yet we know there wouldn’t be a Facebook like Facebook is today, otherwise, it would have called WinkleVossBook (or likely a different name 😛 but owned by the Winklevoss twins).

They seemed to have gotten some nice money out of Facebook anyway but let’s be honest, that’s because they just lawyered up properly :-).

Still don’t believe me? Let me give you 50+ business ideas for free!

At one of my startups Nexibeo, we give 50+ startup ideas away for free.

Yeah right, must be crappy ideas then?

I don’t think so, they range from lifestyle business concepts (make $100k+ and travel the world or do whatever makes you happy) to potentially multiple million dollar business ideas. We even sorted them for you. How easy is that?

Why we give these ideas away for free?

Because we know we can’t execute on all of them;

Because every good idea needs a leader (or leaders) who live and breath by that idea 24/7!

Because we know we’re good at building teams around startups once there’s a good leader;

And currently, because we are very busy already helping the crypto community rating with developing CoinCheckup further.

Feel free to check Nexibeo and let us know if you think you’re the founder to launch any of our ideas. We will happily help you set up a team for your startup.

If you want to take one of the ideas and set up your own team around it and build a successful business out of it in the upcoming 2–5 years then we’ll be the first one to congratulate you with it :-).

Enough with the complaining, solutions please!

I’m ranting deluxe in this post. Honestly, that’s not really me. One of the things I believe is that: Complaining is for people who are not looking for the solution.

Anyhow, no solutions without complaints, so I guess complaining gives birth to the solution.

One possible solution could be the IPCO model.

Screw ICOs, Let’s try IPCOs

Possible new model: ICOs that make more sense… Why don’t we try the IPCO?

We basically need to set up frameworks/standards as a crypto community on how the ideal ICO should look.

My main annoyance about ICOs is the fact that the most ICOs present “Just an idea” or worse: “Just a concept with potentially some potential”.

In my opinion: If you ask people to invest their money, you better show them you can actually develop something of quality before they invest in your business.

I like to propose a model where we actually buy into a service/product. Something that’s already working and not a 1-week-developed demo, alpha or worse than this.

You say IPCO?

IPCO stands for: Initial Public Coin Offering.
During the IPCO a company makes its product/service or a premium product/service available to the public at a discounted rate while giving tokens that offer future benefits in or around the product/service.

How would this IPCO model work?

You buy a subscription for ServiceX and you get “free tokens”, these tokens can later be used to:

• extend your subscription;
• hold in your portfolio and share for example in the profits of ServiceX;
• trade on the open market to people who want to buy a subscription to the service at discounted rate;
• trade on the open market, just to speculate and gain a profit;

Anything else? I need your feedback here dear reader. Many thanks 😉

I used the Software as a Service example above, but this might as well be a product or anything else that actually adds value to people’s lives, before they have to buy the Token.

How is the IPCO any different from an ICO?

Unlike the ICO, you buy a product/service, not “Just an idea” or “Just a concept with potential” or “a token/coin that might grow in the future”.

Unlike the ICO, the tokens are an addition to the subscription, instead of the other way around.

Therefore the product needs to serve value to its users/subscribers from its IPCO launch date and improve after the IPCO launch date.

Unlike a lot of ICOs, the tokens should be used in/for the product. Personally, I’m a bit tired of a coin that, doesn’t have any relation to the product/service itself.

Bitcoin and Litecoin and many others create value by being a digital currency themselves. If there’s an amazing new technology that is better than these coins they might have the right to have the same value proposition, but personally I believe we have enough of the same at the moment and we need Blockchain related products to make Blockchain go mainstream.

Unlike the ICO, the purpose and value proposition of the token has to be clear directly. This is one issue with the current ICOs.

You have to investigate a whole whitepaper before the purpose and the value proposition of a token becomes clear.

Ideally I would like to see ICOs come up with creative models to create value for their token holders.

Now I hear you thinking “there’s other ICOs that have a working product”, or say they will release a working product. Some of them might actually already fall in the IPCO basket.

I’m personally very happy to learn about these ICOs but I would like to see more of them. That’s why I propose an IPCO model.

The purpose of defining a model is because I’m tired of finding those unique cases where an ICO already has a “Real working product” and maybe even better: “a product that adds real world value”.

How is the IPCO any different from Crowdfunding your product/service?

Unlike a product you would buy on Crowdfunding sites (like for example kickstarter.com) for IPCOs you should:

• Get ((early) access to) the product directly. Most of the time this is not the case with products you buy on crowdfunding sites. I’m still waiting for my pair of fancy headphones that I ordered last year and should have been delivered last April.
• Get tokens that will give you future benefits for the product itself.

The product itself is not good enough if you ask my personal opinion.

CompanyX asks people to invest in the first version of their product/service itself and CompanyX doesn’t give them anything else in return.

CompanyX asks you for your trust and the only thing they give you is a first version of the product or service. Why not give more rewards to the people who give their trust in your business?

A potential gain and ability to publicly trade in your company’s tokens.

Before the invention of the token, this was never possible. As I described in a previous article, tokens make it possible to trade anything.

Tokens make it possible to let the market decide the value of your token, the market is always right so this is a great thing, in my opinion.

More (IPCO) standards that would make me happy

So while brainstorming I came up with some more standards that I would personally like to see improved in the current ICOs.

The current IPCO product you buy is subject to grow from its current version. Since it’s an “Initial product offering” the focus should still be on “Initial”, therefore a Roadmap should always be available for IPCO offerings and companies should commit to grow their product based on this roadmap for a set period of time unless “acts of god” prevent the company from being possible or unless “better opportunities arise for the company and its token holders.

The initiator of the IPCO has to offer a trial version of the product so potential buyers during the IPCO phase can make a fact-based decision on whether they want to buy into the product or not.

This makes sense according to me. Why would you force someone into a product if they’re not even able to use a trial version of the product?

Tokens given in the IPCO should give future benefits to the product itself.

Besides the ideas I presented in this article an IPCO should offer more for it’s subscribers/token holders. Some possible ideas:

• Access to special features of the product;
• Discounts to additional services
• Voting rights related to product development (items on the roadmap)
  Anything else? I need your Feedback here dear reader. Many thanks 😉

How to move on from here?

I honestly hope this article gains some traction. Not for personal reasons but because I hope that more people are willing to share their vision on a “Better ICO model”

In my next article I’ll likely write about the transparency I would like to see in ICOs or IPCOs if you will.

If you give a company your money you should be able to expect what they are going do with your money.

[bctt tweet=”If you give a company your money you should be able to expect what they are going do with your money. ” username=”coincheckup”]

I don’t think you need to know all the details but I have seen ICOs that mentioned: 10% — Marketing Plan

This is a joke to me. If CompanyX’s ICO generates $8 million USD are they really gonna invest 800.000USD for a marketing plan??? Even if they hire Ogilvy for your marketing plan you would be spending less.

We simply need more transparency, anyhow more on that later 😉

Please share your vision on the ideal ICO. Please share your thoughts with me on what you expect from ICOs that you invest in. Reply in the comments please! 🙂
— — — — — — — — — — — — — — — — — — — — — — — — — — — — —
On another note: Are you as excited about the Crypto Market as me?
It would be great if you could help me out and let me know your thoughts on our startup: CoinCheckup.com

If you’re reading yourself into cryptocurrencies or if you’re in the Crypto space for a while you can’t open your Facebook, Twitter, Google or Medium anymore without reading about the latest amazing ICOs.

Well I’m a fan! But I’m not a fan!

The concept is great, how startups use it these days, on the other hand, is most of the time, heavily disappointing. Anyhow, let’s talk about the concept and how it makes possible for everyone to invest their money where the top 0.04% of the world puts their money.

[bctt tweet=”ICOs make it possible for everyone to invest their money where the top 0.04% of the world puts their money.” username=”coincheckup”]

Pretty cool concept, the ICO.

The ICO concept is pretty cool. Never in human history could humanity (even your grandma) buy into a company and:

• get a share of their profits;
• ride along the ride of the company’s growth;
• or invest in a something that grows in value by people using the actual product / service / protocol / or whatever it is the ICO represents.

For example: If people use Steemit.com, the value of the token goes up as demand increases.

99.96% of the world could simply not invest the way the other 0.04% did!

Before the ICO phenomenon Investing in an early stage startup was possible if you:

• had the connections;
• had a lot of money;
• were on top of everything that’s going on in the branch you want to invest in;
• heard about the opportunity at the right time, at the right moment;
• had the time to meet the founders of the startup you invested in, do thorough due diligence on them and have your connections vouch for them.

Before the ICO phenomenon the market looked like this:

For the sake of this article, I assume that you and I are the “Average investor”. We have a bit of money left on the table and we don’t want to spend it on a liability like the latest TV or a new car so we decide to let our money work for us and we invest in assets.

Part of our money was reserved for “High-risk investments” like funding gambling operators including Triumph online casino or any gaming affiliate like CasinoGap.org, so we take a look at Facebook, Tesla, Alibaba, and Google.

So Wait a minute. Huh! What do I miss? Where did the other 92.8% of Google shares go during their IPO?  Well, that’s easy.

Part of those shares went to the team, Larry & Sergey have a bit more shares than Developer #29.458, but what about the rest?

The rest went to early-stage investors: “Angel Investors” and “Venture Capital firms”.

Angel investors usually provide a one-time investment to help the business propel or an ongoing injection of money (usually from VCs) to support and carry the company through its difficult early stages.

US-based Angel investors must meet the Securities Exchange Commission’s (SEC) standards for accredited investors. To become an angel investor, one must have a minimum net worth of $1 million and an annual income of $200,000.

Last time I checked. 99.96% of the world population doesn’t make > $200.000/year and therefore doesn’t fall into the category “potential Angel Investor”.

Venture Capital firms get the biggest slice of the IPO pie. They put in vast amounts of money into multiple startups. Many of them fail, a couple of them do pretty well, and a couple of those become the next Google or Facebook.

That’s before the ICO phenomenon. You (assuming you belong to the 99.x % of the world, and assuming you don’t work for a promising startup that gives out shares yourself) don’t have the opportunity to invest in early-stage startups.

Besides benefits for investors, ICOs can also be far easier for enterprises to implement. Compared to the tedious compliance processes and high costs (up to 10 million US), ICOs allow smaller companies to raise money on the blockchain. In fact, all that is required for an ICO is an Ethereum Smart Contract, a website, and a whitepaper according to cybersecurity company ExpressVPN, although they concede marketers would help.

ICOs Tokens: Now everyone can invest in everything!

So you could ask yourself:

• Why didn’t early-stage startups give the opportunity to buy $100 shares to you and me?
• Why doesn’t the SEC allow people to invest $500usd/year in early-stage startups, even if they were not accredited, a small amount doesn’t hurt anyone right?

Reality is that even if the above was answered as “Yes we make that possible / Yes the SEC would allow this” it wouldn’t be feasible.

How do you keep track of all those mini shares thousands of people have in your company. It’s just not feasible.

The ICO solves this issue. Well the ICO itself doesn’t solve that issue but the “Token” does.

So what’s an ICO and how does it relay to tokens?

ICO stands for Initial Coin offering. Though the crypto community didn’t fully make up their minds on this, actually the term is wrong. It should be an ITO: Initial Token Offering. Anyway, since ICO is the common term it doesn’t make any sense to change it now.

A Coin in the crypto community is a digital currency. A token, on the other hand, is a programmable digital currency/way to store value/a lot more (see below “how about the token, what‘s so special about it?”

Tokens are those things that all these ICOs give away in return for another cryptocurrency or fiat money.

But how are tokens created?

Tokens can be created by building a so called DAPP (Decentralised Application) on platforms like: Ethereum, Waves & NEO.

Or some of the less familiar ones: Qtum / NXT / UbiQ / Counterparty / Omni / Metaverse ETP and in the future probably EOS / Lisk.

There’s one exception to the rule. It’s Bancor, if their platform will be finished one day, everyone can create “Smart tokens”.

Tokens that can be created out of thin air and can hold a reserve in another coin or token. The system is kind of complicated but interesting on the long run.

During the ICO, a smart contract makes it possible to exchange crypto currency for tokens. Do note that you can build DAPPs without issuing tokens.

Ok, I get it.. so how about the token, what‘s so special about it?

The token works simple: You give a company money, the company gives you a token/tokens in return;

• This is usually done during an ICO.
• Token represents: value (since you paid the company for it in the first place);
• The Token can potentially be used on the platform/service/product that you support;
• The Token can potentially be used for discounts;( work as a discount card)
• The Token makes it possible for me to give you a profit share (dividends);
• The Token makes it possible for you to vote. Each token has x% voting rights;

If the company’s token is good, other people want the token, demand grows, price goes up.

In other words: Now it’s possible to be an investor and invest < $1 in an early stage startup without any administrative hassle.

All of the sudden you can have your company funded by everyone who believes in it and you can reward everyone for doing so without to much administrative hassle.

On top of that all your token holders are stored on the blockchain. There’s no discussion anymore if somebody holds a token or not.

The Blockchain:

• makes counterfeiting impossible;
• is fraud resistant;
• is decentralised so has no single point of failure;
• makes it possible to hold tokens free of charge;
• has ultra-low fixed or sometimes free transactions fees when transferring tokens;
• Doesn’t consist of IOUs (I owe you / a signed document acknowledging a debt) like your stock broker. You actually really hold the tokens, they are really yours. They are stored in your own wallet.

Tokens make it possible for the other 99.96% of the world population to invest in anything.

Previously I used “Early stage startups” and “companies” as an example in this article but there’s a ton of other interesting high-risk options that the 0.04% invest their money in and that are currently not accessible.

Actually, it gets even more interesting. Everyone can create tokens. Take for example your local bakery. They can create tokens and sell them.

The bakery creates new funds to expand the store and buy some new ovens. In return, the token could give you a nice discount on your daily bread and an end of year dividend on the Bakery’s profit.

Wait! It’s even more interesting: Tokens could also figure as a discount coupon or point system. Burger King recently launched a token to do “just that”.

In short: We could potentially create tokens for everything. Every service, every store, every product, every asset, etc.

If it’s so revolutionary why do I read so much negative stories about the ICO?

As with every new revolution, especially when there’s money to be made, there are always people who take advantage of it.

[bctt tweet=”As with every new revolution, especially when there’s money to be made, there are always people who take advantage of it. That’s the case of ICOs too. ” username=”coincheckup”]

I wrote a nice piece on: What’s wrong with most ICOs, Currently ICOs just don’t make any sense at all! and a possible solution could be the IPCO model, I wrote about it here.

And since complaining is for people who are not looking for the solutions I’ll come up with possible solutions in my next articles.

For now, please share your thoughts on this article. I’m really curious about your thoughts on ICOs, tokens and the possible opportunities you see now we have this new medium of fundraising and making people part of our businesses.

Feel free to share your constructive feedback and argumentations on this new phenomenon so we have some solid forward thinking discussions 🙂

On another note: Are you as excited about the Crypto Market as me?

It would be great if you could help me out and let me know your thoughts on our startup: CoinCheckup.com

 

 

The media loves it. Crypto is in a bubble; This is the next big Bubble; Remember the IT bubble?

Crypto might be in a bubble but, it’s a very small bubble at the moment. Compared to the internet bubble of 1999/2000 which saw 6+ Trillion US Dollar evaporate. The total Crypto market cap which swung between 300 billion and 800 billion over the last 3 months is still a relative bubble.

There’s are 5 other major differences if you compare Crypto to the 1999/2000 internet bubble. Reasons why crypto could and maybe should go way higher than its current relatively small market cap:

1. Everybody can join and they likely will: your grandpa, the taxi driver and the hairdresser. You can open a crypto account in about 20 minutes. Opening a stock-account back in 1999 was a lot harder. Besides that, we didn’t have social media in 1999. Ever wondered why anything internet related can grow from 0 to millions or billions? It’s the internet and its social media. Metcalfe’s law* never grew so fast 🙂
2. This crypto bubble keeps popping. And it’s a good thing! The cryptomarket with Bitcoin at its forefront has seen some major highs but also some serious downward trends, but, after every low, there were some new highs. This is a very healthy bullish pattern and actually doesn’t suggest that we’re in a bubble like for example the IT bubble in 1999/2000. At least, not yet!
3. Attractiveness to the young generation, these youngsters out there, they are:
   • an internet generation – They grew up with the internet, they didn’t have to learn it.
   • an instant generation – If I want something I want it now (Netflix, iTunes)
   • and a social confirmation generation – If my friends have it I also want it, I can’t stay behind.
     Crypto ticks all 3 boxes for an easy investment for the young generation.
4. The potential benefits of cryptocurrencies/blockchain can be way bigger than the internet. It can revolutionize the way we do pretty much anything. You can argue that the internet made our lives easier and more convenient. Which is great. The Industrial Revolution, however, made our lives (back then) completely different. Blockchain has the same potential.
5. With some of the strongest cryptocurrencies, you buy into a protocol. What… a protocol? Yes a protocol! What’s a protocol?The internet is a protocol (TCP/IP). So is email (POP3 / SMTP / IMAP). Bitcoin also runs on it’s own protocol (blockchain). Think of, for example, Bitcoin as buying “the internet” in 1995. Nobody owns the internet, but with Bitcoin and some other cryptos you do own a piece of the blockchain by holding it’s cryptocurrency.

   People will use blockchains for many purposes and companies will build their businesses on it. Therefore they need to own cryptocurrencies on that blockchain as well. If people want a piece of this blockchain, and many will in the future, simply because they have to. The growth potential of some of these cryptocurrencies is tremendous and likely underestimated by many.

* Metcalfe’s law states that the value of a communications network is proportional to the square of the number of connected users of the system (n2). In other words, networks/communities etc can grow exponentially. Due to social media, this can happen in no-time.

Half way September JP Morgan CEO, Jamie Dimon, called “Bitcoin a Fraud” which was one of the reasons the Bitcoin price plumed to < $3000usd back then but interestingly enough he actually mentioned 2 of Bitcoin’s biggest use cases in the same 1:45 minute conversation.

Value or no value, that’s the question?

There’s different theories about this. Does the technology itself hold any “real value” / “intrinsic value” or not? For the sake of this article we won’t go into this discussion but into some the use cases Jamie Dimon mentioned that look small but perhaps aren’t that small.

Jamie Dimon himself doesn’t believe Bitcoin has any value. I quote.

I don’t personally don’t understand the value of something that has no actual value

Which is interesting because Jamie Dimon also described some of the exact of use cases of Bitcoin.

The 1st Use Case that Jamie Dimon mentioned:

You can argue and I also know there’s a good reason for it (bitcoin) if you’re in Venezuela or Ecuador or North Korea you’re better off probably using Bitcoin than using their currency. It can’t possibly be true in the United States unless you speculate.

In my opinion this is exactly why Bitcoin could and arguably should have value. Though the United States is a huge economic super power it currently doesn’t have a “real use case for bitcoin”.

But let’s take a look at these countries.

• Venezuela —GDP: $371 billion USD (source 2013)
• Ecuador —GDP: $97.8 billion USD ‎(source 2016)
• North Korea — GDP: $12.38 billion USD (source 2011)

These are countries that are currently in- and/or have a high potential to be in an economic crisis. There’s a whole bunch of countries that are in the same boat.

These countries are fairly small compared to some of the big economic powers in the west but hey, there’s some serious value potential here if you look at the GDP.

Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period. GDP is usually calculated on an annual basis.
source: Investopedia

Jamie Dimon’s argument: Governments like to control their currency

I personally do agree with Jamie Dimon on the fact that Countries like to control their currency. As Jamie Dimon noted:

Governments, the first thing they do is to form a currency, they like to control the currency, they control it through a central bank; they also like to know who has it; where it is; and where it’s going.

Eventually the government will shut this down.

But can/will the governments of these countries really shut down Bitcoin… Economic crisis come with Revolutions.

In times of Economic crisis any currency that doesn’t deflate “like crazy” becomes a necessity. Take Venezuela for example.

• This is exactly what you see in countries like Venezuela. People risk “getting in jail” by mining bitcoin in order to make some money.
• Despite Bitcoin’s fluctuations, Bitcoin is arguably more stable than Venezuela’s local currency the “Venezuelan bolívar”.
• Since’s Bitcoin’s inception (2010) has outperformed every single fiat currency if you take the average growth per year. This sounds very lucrative for any citizen in a country in an Economic crisis.

In times of Economic crisis governments are usually replaced.
If people risk jail time in order to use an alternative currency that does perform way better than any other currency over the last 7 years (on average):

What type of government will gain most trust to become elected.

• One that allows Bitcoin or doesn’t?
• One that sees Bitcoin as a valid form of payments for it’s citizen or one that doesn’t see Bitcoin as a valid point of payment?

There’s your answer.

Side note: I didn’t go into the argument “If Government can actually shut down Bitcoin without shutting down the internet” I think the answer is “No!” but I do believe Bitcoin can make the usage of Bitcoin very difficult. Anyhow it’s not that relevant in relation to this article.

The 2nd Use Case that Jamie Dimon mentioned:

and also like I said the other reason of close down is because it’s use for illicit purposes and so it’s just not a real thing and eventually it’ll be closed.

Now this is obviously not a use case that any ethical person would favour. But it’s a use case none the less. Let’s take a look at this use case for the sake of this article.

Illicit purposes: Let’s take money laundering for example

Because of the clandestine nature of money-laundering, it is difficult to estimate the total amount of money that goes through the laundry cycle. The estimated amount of money laundered globally in one year is 2–5% of global GDP, or$800 billion — $2 trillion in current US dollars.
Source: United Nations

Now that’s quite a use case.

But is there any rational reason why governments would shut down Bitcoin if it’s used for Illicit purposes.

My initial logical answer would be “Yes!!!”.

But does it honestly make sense?

Before there was any Bitcoin, money was laundered in fiat currency. I can’t imagine any money launderers who would decide to launder more money now that there’s Bitcoin. Money Laundering is done anyway. Money launders launder money anyway. Money launders will find creative solutions anyway to circumvent the system.

I can’t imagine there’s any criminal who would decide to make less money out of Illicit activities because he/she can’t launder the money. Criminals will make as much money as they can anyway.

You can argue that it’s easier to catch criminals if they launder via Fiat currency but I honestly couldn’t find any resource that stated that the amount of money laundered worldwide decreased over the past years, neither I found any sources that it increased since Bitcoin’s inception but maybe I’m wrong here.

Bitcoin is more transparent than a Fiat Bank account which should actually make Money laundering harder.

Bitcoin is a fully transparent transaction medium. Once KYC/AML is implemented properly it’s significantly harder to launder money since all of Bitcoin’s transactions are fully transparent. Government needs to focus on implementing proper KYC requirements in order to practically have a higher change to decrease money laundering activities. Bitcoin is more of an answer to this than fiat in my opinion.

Conclusions

Listen carefully
I found it interesting that we don’t really listen to what one says. In this case Jamie Dimon basically explained 2 major use cases that describe a high potential in the growth of value for Bitcoin in just a “ 1 minute and 45 second conversation”. Yet, interestingly, everyone seemed to focus on the negative tone in the conversation.

Use case 1 — Countries with devaluating currencies: There’s a lot more countries that can likely be in a similar economic situation as: Venezuela, Ecuador, North Korea. It only takes 1 country which implements the Bitcoin Use case successful and others might value.

Use case 2 —Bitcoin being used for Illicit activities purposes. Illicit activities are a serious issue that no ethical person agrees with, but I don’t see that Bitcoin is enforcing these activities or would lead any criminal to the right path. If implemented properly it could actually limit illicit purposes due to it’s transparent nature.

On another note: Are you as excited about the Crypto Currency Market?

It would be great if you could help me out and let me know your thoughts on our startup: CoinCheckup.com — Categorised Crypto Currencies, Basic Fundamental coin analysis, Price predictions & Investment Stats.

Disclaimer

I’m not a financial advisor. This is not financial advise. Do your own research if you want to invest money in any crypto currency, including bitcoin.

Personally Bitcoin is not my number 1 coin. I think there’s a lot of community politics around the coin that could potentially destroy/devalue it. I could easily replace the term “Bitcoin” in this article with “Any cryptocurrency that might be successful in the future besides bitcoin”. But I didn’t for the sake of this article.

This article is my personal opinion. Feel free to disagree with me. Freedom of speach and such :-).

I tried to quoted Jamie Dimon properly and included the video but I’m not responsible for any (spelling) mistakes I made in my quotations. Feel free to listen to the video yourself and draw different or similar conclusions.

(more…)