ICO is the abbreviation of Initial Coin Offering. It means that someone offers investors some units of a new cryptocurrency or crypto-token in exchange against cryptocurrencies like Bitcoin or Ethereum. Since 2013 ICOs are often used to fund the development of new cryptocurrencies. The pre-created token can be easily sold and traded on all cryptocurrency exchanges if there is demand for them.
From September 2015 to January 2017 a pre-launch sales event of cryptocurrency token ‘Ada’ was undertaken.
The sales event covered five specific periods, referred to as ‘tranches’ (T1/T2/T3/T3.5/T4).
And was audited by an impartial firm, the ICO was KYC / AML compliant, this means that they have the identity of the buyers (Know Your Customer), this prevents a whale from impersonating 5000 people by doing 5000 transactions. This is especially relevant now that the SEC wants to regulate ICOs and treat them like securities.
The principal party retained Attain Corporation of Japan to manage the sale of Ada ‘vouchers’ that could be exchanged into Ada tokens after the platform launch.
So, Cardano launched an ICO, and that ICO is now concluded. Right now ADA is a token running on the Cardano platform.
Although they have launched a public test net they are still in a token distribution phase.
The EOS Token distribution will take place over 341 days starting on June 26, 2017 at 13:00 UTC. One billion (1,000,000,000) EOS Tokens will be distributed.
There is some confusion whether this token distribution is an actual ICO. This is because they put this disclaimer on their site:
It was decided that U.S. citizens, residents and entities should be excluded from purchasing EOS Tokens in the token distribution because of some of the logistical challenges associated with differing regulations in the many states of the United States of America. block.one does not believe that the distribution of EOS Tokens or the EOS Tokens themselves are securities, commodities, swaps on either securities or commodities, or similar financial instruments. The EOS Tokens are not designed for investment or speculative purposes and should not be considered as a type of investment. Nevertheless, U.S. citizens, residents and entities should not purchase or attempt to purchase EOS Tokens.
Basically they are dodging the ICO question a bit. Since they don’t enter the US market they can not be regulated as an ICO by the SEC. My personal opinion is that, because they did not do a KYC / AML they will be unable to prove that there were no US citizens who bought EOS tokens and face some SEC backlash, or the disclaimer might hold up in court, I’m not knowledgeable enough in US law to be sure.
His definition of launched is “when it is decentralized”. This is a subjective definition from his perspective and not congruent with the crypto terminology of launched. I would dare to say he is not as knowledgeable as he seems to be.
tranches 1&2 are 100% and 99.9% in Japan while tranches 3 & 4 are 92% in Japan. This averages roughly to 96% in Japan. Doesn’t this concern anyone? Such a high concentration in any one geographic location is not a strength. Agreed?
Yeah that was the original distribution, but who knows what it is today, remember there was no new ADA minted, everything has to be bought on the open market, aka. coming from these initial Japanese holders. Over time, it wont really matter.
I’m not making this argument - but the Japanese are notorious savers. So conceivably this could add to a tighter supply when/if the Cardano platform is adopted for real world uses and needs ADA to be the oil in the machine.
To compare Japan vs US:
Japan averaged 11.94 percent from 1970 until 2017, reaching an all time high of 50.10 percent in December of 2017
The personal saving rate in the United States amounted to 2.4 percent in 2017
So, if a country has a high savings rate as does Japan, and functionality of a currency is dependent of its use (circulation), what is the assumption on how this will impact ada? We’re all going to buy a coin that no one is going to use and everyone is going to hoard (hold).
I don’t know, if I wanted a coin to be successful, I would think that I would consider including places where it will have a high/robust amount of circulation.
How does having a high concentration of a coin in one location, where holders predominantly have a saving behavior and culture, benefit the coin? Wouldn’t most people there save a pass on to the next generation who would then save the coins as well, spending minimal amounts?
It has no relationship to the coin, it really does not matter, the market automatically takes account for all of this. The market value of the usage of the coin will always be the real and only sustainable value. What part of the supply is in circulation and what part is not, has no impact at all, because they wont determine the value.
If I owned all the ADA in the world, I dont control the price… If one person wanted to use Cardano and would only do so at 1 cent / per ADA and only 10 a week… That would be the only price on the demand side… So the ADA network would be worth 10Cents/ a week… You see? It doesn’t matter who is hoarding and who is not, because they dont determine the real underlying market value.
If everyone is going to hoard the coin, and if the coin has no use, it will go to 0, if it has a use, it will correct to the price where people will use it… So it all automatically evens out… People only hoard the coin when they believe they can flip it higher, one day this will go away, there will be no purpose in hoarding it.
The fact that people are hoarding it, is because thats the only thing you can do with it at this point lol.
If we burned 95% of all the coins and took them out of circulation, again it would have no impact on everything else as a whole.
The only reason having a high concentration in one country would be bad is due to malicious attacks, like what if Japan went down due to a natural disaster, no power, then network could be vulnerable to attack… But again, we dont even know the distribution, and in 10-20 years it wont even matter at all, if the project is successful, japan wont be holding much anyway.