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As the ICO epidemic continues to spread around the globe, many proponents of pure, PoW-issued crypto claim that the tokens issued via public funding rounds aren’t fit to be called bona fide decentralized blockchain-backed assets.
Bobby Lee: ICO-Issued Tokens Are Comparable To Blockchain Investments, Not Crypto
The debate between proponents of “pure” cryptocurrencies and ICO-issued utility tokens has raged on, with Bobby Lee, the former CEO of the BTCC exchange, recently speaking with reporters from Cheddar, an up and coming fintech news outlet, to discuss his opinions between the two individual classes of crypto assets.
Discussing the matter, the longtime Bitcoin proponent, who was attending the Crypto Finance Conference in California, stated:
“People, companies or investment firms can invest in Bitcoin and cryptocurrencies, [which are] native digital assets. And then there are things like tokens that are issued by groups, teams or projects that are supposed to back certain projects, certain development effort, certain applications. So those are more like securities, even though they call themselves utility tokens.”
As you are likely aware of, unlike Bitcoin, tokens issued via an ICO are minted and distributed by a central authority, with a single group of entitled individuals holding the responsibility of divvying up said crypto assets. Taking this into account, as the BTCC executive alludes to, these so-called “utility tokens” aren’t decentrally distributed, with ICOs essentially rubbing salt in the wound that is situated right at the heart of diehard decentralists.
Additionally, Lee, who also holds a position on the board of the original Bitcoin Foundation, claimed that these utility tokens are often misclassified, and should be likened to equity investments into a project or team and are “very different” from “native digital assets.”
So although Lee doesn’t seem to hold an overtly negative stance towards ICO-focused projects, he added that he is bullish on Bitcoin, Litecoin, and Ethereum, compared “to tokens that represent a company’s efforts and business models.”
Decentralized V.S. Centralized, Bitcoin V.S. XRP
Driving the conversation regarding this topic forward, the reporter brought up Ripple co-founder Chris Larsen’s claim that the discourse between centralists and decentralists is a drawn-out “religious war” that doesn’t hold much merit. Rebutting this statement, Lee noted:
“Well, I think he has a bit of a bias on that front… Ripple (XRP) has the reputation of being centralized, even though some (XRP) proponents claim that it is decentralized. So I do think that it is important because the world up until Bitcoin’s invention has never seen some that is digital that is also decentralized. In the real world, things are decentralized, like water, air, gold — that’s decentralized. Whereas everything else is centralized, so in a digital world everything has been centralized up until Bitcoin.”
The Bitcoin Foundation board member added that the fact that firms and individuals are misusing “decentralized” for centrally-issued tokens is “dangerous, and is a waste of a great terminology.”
What he’s alluding to is the ideology that ICO projects claiming to be “decentralized” may cast “native” cryptocurrencies in a bad light, or in other words, “Bitcoin maximalism.” While critics would say his opinions are nothing more than senseless “FUD,” some Bitcoin veterans would beg to differ, including Blockstream’s Samson Mow, who recently claimed that diversification would have “thoroughly rekt” your portfolio.
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