The ERC20 Token Standard, Token Summit, the explosion of token ICOs on the Ethereum blockchain, and whether this activity is premature in terms of security (and securities). Every million dollars you put into any token built with ERC20 creates a million-dollar honeypot test on the Ethereum virtual machine, implementations of Geth and Parity, the ERC20 codebase, and whatever poorly-tested code you added for your particular DAPP. The killer app for Ethereum is DAOs (decentralized autonomous organizations), reinventing the modern corporation — just not that way, as venture capital firms… The security needs to be tested first with $10k, not $10 million; gradually escalating. The trade-off of flexible smart contracts is that every contract has to be independently tested. What happens to a brand-new start-up with a whitepaper but no management experience that suddenly comes across millions of dollars? Soon, not many dollars. ICOs right now are the biggest reputational risk for Ethereum. Opening up crowdfunding to a global audience is an amazing application, when you have governance, but when you do it prematurely you blow up the launch pad. Sometimes lessons have to be learned the hard way. The market will teach them when they lose their money. The purpose of this early stage experimentation should be to test the security of the protocols, not attempt to get-rick-quick. If we don’t remind investors of the risks, they will get a visit from the SEC, because one of the first rules is that you don’t promote securities to the unaccredited public.

CORRECTION: The “exit scam” allegation regarding Matchpool’s CEO (mentioned in the previous version of this video) was circulating in the news at the time this talk was filmed — but it was later shown to be false, and the ICO funds were accounted for: http://www.coindesk.com/the-matchpool-ico-scandal-is-all-smoke-and-no-fire/

This talk took place at the Silicon Valley Bitcoin meetup on April 11th 2017 at the Plug and Play Tech Center (@PlugandPlayTC) in Sunnyvale, California: https://www.meetup.com/Silicon-Valley-Bitcoin-Users/events/233760417/

RELATED:
Initial coin offerings (ICOs) – https://youtu.be/Q5R8KuxV4A0
ICOs and responsible investment – https://youtu.be/C8UdbvrWyvg
ICOs and financial regulation – https://youtu.be/Plu_WX3Gs8E
ICOs, disruption, and self-regulation – https://youtu.be/yfjgcI8xX3A
ICOs and pyramid schemes – https://youtu.be/8HYWWP1QU7Q
Scams, gambling, and regulation – https://youtu.be/fTI88YrN1UE
Regulation and the bank boycott – https://youtu.be/8ypH69Cb1l0
Unstoppable code – https://youtu.be/AQx3E3F8Kz4
The Lion and the Shark: Divergent Evolution in Cryptocurrency – https://youtu.be/d0x6CtD8iq4
Ethereum: Consensus vs. Immutability – https://youtu.be/OGGW9ozE-ys
How to get people to care about security – https://youtu.be/Ji1lS9NMz1E
Governance trade-offs in decentralised systems – https://youtu.be/dtwaW79Fj7c
Impact of smart contracts on law and accounting – https://youtu.be/K-TRzuPwJCc
Smart contract platforms – https://youtu.be/XU8Bc5oxneE
The Scaling Rites of Passage – https://youtu.be/rZi86_ovB3Y
Altcoins and the scaling debate – https://youtu.be/slbpdW-H3yk
Blockchain vs. Bullshit: Thoughts on the Future of Money -https://youtu.be/SMEOKDVXlUo

Andreas M. Antonopoulos is a technologist and serial entrepreneur who has become one of the most well-known and well-respected figures in bitcoin.

Follow on Twitter: @aantonop https://twitter.com/aantonop
Website: https://antonopoulos.com/

He is the author of two books: “Mastering Bitcoin,” published by O’Reilly Media and considered the best technical guide to bitcoin; “The Internet of Money,” a book about why bitcoin matters.

THE INTERNET OF MONEY, v1: https://www.amazon.co.uk/Internet-Money-collection-Andreas-Antonopoulos/dp/1537000454/ref=asap_bc?ie=UTF8

MASTERING BITCOIN: https://www.amazon.co.uk/Mastering-Bitcoin-Unlocking-Digital-Cryptocurrencies/dp/1449374042

[NEW] MASTERING BITCOIN, 2nd Edition: https://www.amazon.com/Mastering-Bitcoin-Programming-Open-Blockchain/dp/1491954388

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Outro Music: “Unbounded” by Orfan (https://www.facebook.com/Orfan/)
Outro Graphics: Phneep (http://www.phneep.com/)
Outro Art: Rock Barcellos (http://www.rockincomics.com.br/)

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24 COMMENTS

  4. These talks are extremely helpful. thank you so much for making them available. the most important tool i learned to used is the ability to teach myself from watching tutorials and studying and applying the application. Which ico raised 17,5 million dollars? i would really like to look at the case study.
    Rock on and keep them coming 😛

  7. Seriously, how does this not become an SEC problem. Even predictive markets have had their trouble. Just because you can code a public way to keep track of who owns what and then write more code for who is owed what doesn't mean its free to operate in the US unfortunately. I'm hoping though that ethereum opens up the idea of code being jurisdictionless.

  13. Why are you so pessimist about ETH? I don´t want to defend it, but I´m looking for a good reason to stay as a saving short term investment instead of a long term. 5:40 Initially wanted to leave if for the long term but every time I hear you, you challenge all the security I had of my decision.Why why why??? Dapp….jajajajajaajajaja…nice one!!!

  18. People need to read up on the Howey test and understand the SEC is investigating ETH foundation and many of these ICO scams. Vitalik is also sloppily building a case against himself by making public statements that supports the Howey test . Check out his latest insane comment and than research into the Howey Test – https://twitter.com/NickSzabo4/status/871462865206509568

    The SEC may be slow to prosecute , but when they start filing they will have an airtight case against ETH foundation and all the ICOs.

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