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Comment by xur17 | Hacker News Reader

There's no technical reason why that can't be the case. Legally, I agree.

My point is, for anything like a crypto-security, you have to integrate with meatspace, which requires the introduction of legal agreements (because there's nothing about 0s and 1s in ledger that can compel company representatives to act in a certain way). At that point you've completely gotten rid of decentralization, and you might as well use a more robust, faster, and environmentally friendly centralized option.

Conventional paper-type legal agreements exist already for this kind of thing, and will mature further as jurisprudence and experience are developed. They don't introduce much centralization that I can think of. They are mostly P2P agreements about the guarantees given to token holders.

On top of that, smart contract mediated investments can have much more additional guarantees. Projects like Aragon are creating DAO governance UIs that are on-chain, usable (from a UX perspective) and transparent for token holders. They allow holders to vote on transfers of funds, or monthly capital allocation, with the possibility to withdraw funds if they deem the operation of companies irresponsible. This a programmable financial infrastructure: the tools are there to build whatever you can come up with in terms of governance.

Besides DAO governance platforms, what will compel executives, for the cases where this applies, is the same thing that compels them right now: financial incentives, and the threat of prosecution. Are the guarantees comparable to those you get from a CEO on a NYSE traded company? Not by a long shot, this is the wild west right now.

But in keeping with the "Internet of Money" metaphor from my other comment, lack of controls and accountability didn't prevent Wikipedia from displacing the Encyclopedia Britannica.

You're missing the point. Blockchain tokens are worse than centralized alternatives in most ways, so if the integrity of a financial security is codified through law then there is no need to pay the expensive costs to also have it codified as a blockchain token, especially because the law is the ultimate arbiter of the security's qualities and capabilities not a blockchain. A blockchain is useful when it can establish consensus rules around a system that is not controlled by a centralized authority, but if a centralized authority is already necessary to recognize the asset, the cost of decentralized consensus is unnecessary and thus wasted.

There is not much that is centralized about "the law", and "the law" isn't really a mechanism for modeling and trading securities. To some extent, by the same logic, the Internet is inherently a centralized platform (because it's governed by law as well) and would therefore be better if replaced by AOL.

I looked at your comment history and it seems you are assuming that people with a so called "pro blockchain" angle are all missing the point. I assure you not everyone in the space is an idiot, and you might be missing some points yourself.

> There is not much that is centralized about "the law"

Perhaps, but the SEC is pretty centralized, when two people can't come to an agreement then securities law enforced by the legal system determines the outcome of the dispute not smart-contract rules enforced by blockchain consensus.

> * I assure you not everyone in the space is an idiot, and you might be missing some points yourself.*

I don't think they're idiots, I think they're financially and emotionally invested in a fascinating technology that's not very useful. I don't think anything is wrong with that, and maybe one day I'll be proven wrong, but I have worked in this space (backend engineer for an exchange) and continue to follow it closely but skeptically and with good reason if you're intellectually honest about the track record of this industry.

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