Civic’s token illustrates why companies masquerading as tokens will fail | EOS is a DAO | Overstock’s been in a tailspin, and even its CEO’s optimism can’t save the firm from a lack of tokenization
|Dec 21, 2018|
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“You don’t have to own a Civic token to use Civic. You just need the app.” — Vinny Lingham, founder and CEO Civic
The Big Block
Civic, the identity system founded by self-proclaimed “Bitcoin Oracle” Vinny Lingham in 2015, is a notable example that serves as a strong case against many of the flawed token-based approaches that have been pursued. Vinny, a bitcoin advocate dating back to his previous gift card company Gyft, raised a 2016 seed from blockchain investors to “secure SSN,” without any explicit goals to incorporate a token or blockchain at the time.
The company raised ~$33m in funds through an ICO that looked like the world’s most bizarre nightclub line: in it, tens of thousands of participants were placed in a queue and randomly allowed access to purchase CVC tokens priced at $0.10 each, regardless of when they joined. Of the one billion tokens, 33% were sold in the ICO, with another 33% retained by the Civic team, 33% to incentivize the community, with 1% left over for running the sale.
I imagine that the conversation between Vinny and his engineering team went something like this:
Vinny: Team, we need to put this on The Blockchain.
Team: Err, come again? We can just store this stuff locally or some distributed system that doesn’t need a chain of blocks.
Vinny: Sounds good, let’s use Blockchain and raise an ICO.
Team: Wait, what?
The token question was always a bit of a mess. The Bitcoin Oracle stated over and over again in 2017 that the CVC token, initially issued on Ethereum, was a temporary placeholder until the launch of Rootstock, a smart contract platform implemented as a Bitcoin sidechain.
The question of why Civic, a centralized company that had an existing mobile identity product, needs a token is an excellent question. It was answered at first in an 18-page whitepaper, which spends more time explaining 50,000-foot views of the digital identity industry and how blockchains work than covering the specific utility of the CVC token.
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EOS is a DAO
his article is a response to this piece by Arjun Balaji.
In Arjun’s article, he asks the question: “Why should we take EOS seriously, when it’s clearly a plutocracy?”
In the context of a crypto asset as digital gold or Money 2.0, this view may be correct. But EOS isn’t that. EOS aims to be a decentralized autonomous organization (DAO).
This industry has largely failed to distinguish between different forms and applications of blockchain technology, lumping them all under the basket of “cryptocurrencies.” Many (if not most) blockchain tokens, including EOS, aren’t meant to be digital gold.
EOS the token is a pro-rata claim on access to the EOS network’s resources, as well as a pro-rata claim on its governance rights. EOS the network is a decentralized operating system governed by a DAO. — More
Overstock’s been in a tailspin, and even its CEO’s optimism can’t save the firm from a lack of tokenization
Overstock hit 52-week lows, to $12.35 from the January 1st peak of $86.90. The former retail darling has come a long way from selling discount furniture and is now on its third year of its Grand Blockchain Experiment, with CEO Patrick Byrne first announcing the original t0 “smart-contract trading platform” in a flashy 2015 launch party. — More
Facebook is reportedly developing a stablecoin for its WhatsApp users — More
Ripple maneuvers through class action lawsuits — More
Exchange volume for Tether sees all-time high — More
Brian Armstrong joins pledge to donate his wealth to charity — More
Bitfinex introduces margin trading for Tether — More
UPbit executives reportedly charged for fraud — More
Bitcoin’s mining difficulty drops another 9% but hash rate picks up — More
News publication uploads an entire article onto Ethereum and IPFS — More
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