Kik could pave the way for more mainstream tech company ICOs

History repeating itself.

The easy ability for corporate entities to dupe smaller investors is the oldest scheme in the book.

The 1929 crash was dependent on it.

The 2000 crash was dependent on it - it was largely due to the fact that 'online investing' caused a flood of small-time money into the markets pushing up prices. When the 'smart money' decided to end it, they pulled out ahead of the dumb money and left others holding the bag.

The housing crisis had elements of this as well.

There is definitely an argument to be made that 'regulations hold people back' - surely - but without them there is a 100% guarantee that things will go sour.

And when I refer to 1929 - that's not even going back that far.

The entire history of economics is about this - the 'quandary' of why supposedly rational markets crash and burn so often. It's seems a rather apparent explanation would be the asymmetry of information (and greed) between some actors, and others.

Kik can do whatever they want with their currency, there's no oversight, no transparency, no nothing.

----> The whole point of doing an ICO instead of an IPO is because they can paper over and gloss over issues, avoid regulation and transparency, and take advantage of wide-eyed and under-informed speculators.

It's just a way to leverage over individuals keen to make it big on speculative mania.

If Kik were in a position to do an IPO - they would. But they can't. Because they are slowly dying, and have almost no revenues. That doesn't sound like a good position to be in. So how could they possibly raise money otherwise without a lot of smoke and mirrors?

Why not simply 'raise a bunch of USD' and then 'pay developers' some of that USD - instead of fabricated coins?

Because the terms of an ICO to them vis-a-vis 'investors' are incredibly better.

Yes - an argument could be made that 'regulations are onerous and limiting and create undue friction' - and that's on some level a good point.

But this won't end well in the long run.

These ICO's are speculative mania. They'll be a 'good investment' for some, but there's nary any actual value being created.

ICO's are 99% a 'net zero gain' scheme whereby a lot of money changes hands - and it will go from 'dumb uniformed people to smart, informed, empowered and slightly greedy' people.

The only long-run winner for these things are the Hedge Funds getting in early, backing the ICOs, and then dumping their positions over time.

ICO's are not a financial innovation.

You can't create value out of thin air.

Yes.

Facebook. Google. Microsoft. Amazon.

--> A company does not need to pay dividends in order to 'return value to investors' <---

This is a common misunderstanding of valuation.

--> Whether a company pays dividends or not is technically irrelevant <--

The only real relevance in 'share buybacks' is the ability of the corporation to generated yield from that cash, more than the investor could otherwise. I.E. A large, doddling company who is sitting on tons of cash, but generating very little yield, would be urged to pay dividends. Companies like Amazon, which can generate more yield from re-investing - should do that.

Key point: stock ownership implies ownership of the assets - so whether it's in Amazon's bank account or in yours - it doesn't matter - if you own stock, you 'own' that money.

The only question is - do you want Amazon to 'keep investing' (because they are good/bad at it) or do you want the money transferred to your account (because maybe you can do better).

The increase in value of the stock is economically/technically the same thing as a 'dividend payment'.

A token has no value.

It's inconvenient to acquire entire large companies and then liquidate them. So what we do is we divide the company into a million little pieces of paper that cannot be liquidated if you don't own all of them. Of course you are now mad that you can't liquidate your share but unless you owned all shares you couldn't liquidate them previously either. Nothing has changed in this regard.

Except ownership of miniscule parts of companies is now a whole lot easier and quicker. It's no longer a privilege of people with a multi billion networth!

https://www.microsoft.com/en-us/Investor/dividends-and-stock...

A company uses its cash reserves (generated by operating profits or assets sales) to purchase back some of its own shares.

As the same 1 share entitles you to a bigger percentage of the business (the number of total shares has decreased), the stock price is pushed up.

After that you can immediately put money in your pocket by selling the appreciated shares you own.

To give you a specific example Apple has a buyback program open since a while. But it's a common practice really.

Nobody cares about the issue of decentralization, but a small group of people, moreover, their concerns are not practical, they are intellectual. (Unless they are trying to do something illegal, in which case their concerns would be practical)

From the average 'token user of Euros or Dollars' perspective - the current financial system has incredible integrity. There is zero advantage in 'decentralization'.

There is zero risk from short term holding of any major currency. And they're massively liquid, especially in the natural region of that currency.

100% of 'Ether-anything' are nearly useless to the average person anywhere, whereas dollars are amazingly useful to Americans and others, for example.

If there were a single, global, well thought-out 'Ehther' type currency, that were used in major and minor transactions - I can see some theoretical value in that. Conceptually, it's not crazy. But in practice, especially in terms of these small, one-off ICO's - they don't make any sense at all.

Also Facebook makes real world revenue and profit. Almost no blockchain startup has, or even builds, or even plans to build, a product, and almost all of their declared products are at the very least, impossible due to network scalability limits, or for the most part, even ridiculous by themselves. Plain fakes, exist only as words.

The credibility of their business to generate future profits as decided upon by investors who investigate their markets, the credibility of their team and execs, etc. etc..

Most ICOs are done because those companies would not stand a chance at raising actual money - by people doing real due diligence.

Doing an ICO is in fact, a pretty string signal that there is something not good about the situation.

In Kik's case, well, they have maybe 3 million daily actives, and it's slowly dying, nearly zero revenues. Can't do an IPO. Should make you wonder about putting money into a currency that is dependent on their 'ecosystem'.