A couple of days ago, PBOC (People Bank Of China) announced that they will not only forbid any new ICO but will also ask the ones who already took place in China to refund the contributors.
As a result, the entire market is in red. Bitcoin lost almost 10%, Ethereum more than 15% and some of the altcoins lost as much as a quarter of their value. The most prominent example being NEO, the so-called "Ethereum of China" which lost over 26%.
But as red as the market looks right now, I think this is a good move. It may have come with a dash of centralization, it may have come at the "wrong" moment, when the market was booming and Bitcoin was ready to pierce the $5000 level, but it's a good thing.
Here's why.
1. First of all, there is a contextual situation.
During the last few months, hundreds of so called ICOs emerged out of nowhere. Most of them didn't have more than a one-page website, with a few paragraph of text and a couple if images. Yet, they expected to receive millions of dollars. This is pure speculation. It doesn't do good to anyone, except, probably, the beneficiaries of these ICOs. So, first of all, the inflation of ICOs must be stopped somehow.
2. Second, an ICO is not a cryptocurrency.
These two activities were so tied together during the last few years, that in the collective consciousness they tend to blend. Wrong. An ICO is just a way of asking money upfront, for something that may, or may not go as expected. A cryptocurrency is a very complex project, requiring a significant amount of human resources, and, most important, time, to get to maturation. Satoshi Nakamoto didn't have any ICO, AFAIK.
3. The fact that this regulation comes from China is very significant.
As you know, a lot of Bitcoin mining power, probably more than 50%, is coming from China. This puts a big question mark on the term "decentralization". If all the mining power is concentrated in the hands of a single community (being it a country, or a government) then Bitcoin is no longer decentralized. So, despite the temporary dive of the price, I consider the dumping of Bitcoin from China, to be a good thing. Please note that I have no proof that the majority of the dumping is coming from China, it's just a hunch.
4. I've been in the position of taking money from investors before, and, although it sounds great, it's not as good as you think.
Of course, if things go well, everybody is happy. But if things don't go well, well, it's shitty. So purely from an entrepreneur perspective, the fact that many crypto enthusiasts will work without the pressure of the ICO (I'm talking about the genuine developers, not ICO scammers) may lead to better products in the future.
All in all, this measure, as strange as it is, and as upsetting as it may be for those who had plans these days with their tokens, it's a good one.
So, hodl! :)
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
https://steemit.com/~witnesses
If you're new to Steemit, you may find these articles relevant (that's also part of my witness activity to support new members of the platform):
You are right dip in market is temporary it's good decision for market for long term you had explain it very well.
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Some people were misusing the ICOs,just because they were the "in thing"
They saw it as an easy way to raise money!
It is good it will be stopped.
This will weed out the wrong companies from the right ones.
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@dragosroua,
Personally I am happy, no matter coins are at the bleeding stage! But I really accept the work done by China Public Bank! Few weeks ago I told at your article I am fed up by all those fake pulse cryptos and ICO calls! Not only that ITO is there and once my money was scammed too!
So, basically those regulations should be there, and whole world should implement such kind of process as well!
Great article you have written here! Really appreciate it and you know I am daily ReSteem the best post I have read in a certain day! So, today I will ReSteem your post! I hope you allow me to do that!
Cheers~
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I see this dump as either manipulation/stupidity or the combination of both.
The only things effected by the PBOC are ICO tokens, which as you rightly say are not crypto-currencies and perhaps Etherium/NEO, whos price has been largely based on its only production use case which is ICOs.
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Thank you, there's so much FUD about this topic lately, when it's actually a good thing! May I traduce this article for the Spanish community? (Of course giving you the due credit ;)
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Yes, by all means, send me the link when you're ready and I'll give it a resteem as well.
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Thanks I will ^^
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Here it is :) https://steemit.com/spanish/@arturomdg/china-prohibe-las-icos-buena-noticia
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Great job, resteemed :)
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very bad for me already have been holding these coins for almost 3 months :(
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I only hodl.
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That's the attitude :)
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@dragosroua - Actually it little hurts me. Because, I had NEO & few other new coins, but today I decided to sell the off. You described the situation in-detailed. Love your work Sir. Therefore, I wish to ReSteem your post.
+W+ [UpVoted & ReSteemed]
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I guess this could be a benefit for the future. It is just speculation at first with an ICO. Sometimes people judge something purely on the look of the website which many people did with District0x. I saw some peoples justification of getting on to DNT was because the website looks nice however it was purely just a hype coin.
I didn't realise how big of an influence China has had it is probably a good thing for the long term if they give up some of their influence now as they begin to dump to make the network more distributed across the world @dragosroua
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agreed, well put together. a bit of a distribution after this pull back would be a good thing. more mining power elsewhere, maybe steemit posse should think about getting some mining space in the node pole? i know a few people ;)
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The market may be jittery for a while (was it ever anything else?).
The Chinese regulator has now targeted (i) the exchanges (ii) ICOs. I vaguely remember something with the miners as well, moving them from the cheap electricity region?
The question for me is: Is that it? If not, what's next?
The other side of the coin is that increased regulation may actually bring increased demand from the mainstream (after an initial period of uncertainty).
All guesses of course. Not advice.
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Great Post... I have been thinking about the hash power concentration issue for a while now - I think you are spot on in saying "this is a good thing"... I will definitely be watching what happens... Steem on...
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Still only good news to me, seeing as it gave me some opportunity to buy more EOS and Bitshares ^_^ Why do you think China is the one that dumped all of the Bitcoins? They are seperated from the ICO's aren't they? Of course it might be the case that trust is lost with some of the holders but its still Bitcoin, the #1 hyped coin ^^
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Because the majority of mining power is in China, and, as a potential consequence, a big part of Bitcoin is there too. It's just a numbers approximation.
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I agree with you 100% most of those so called ICO's are just scams and not serious projects. Maybe now we will have quality projects. Lets keep holding and am sure despite the dump, bitcoin and other cryptos will be on the uptrend soon :)
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In the world of cryptomoney we should not care about governments. This should be kept decentralized and in the hands of everyone. Let's continue to build a world of fair consensus with no one deciding alone for others.
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amigo #resteemia at your service
'A-Z' guide about PBOC incident. hat off for your work @dragosroua
ReSteemia
'UpVote ReSteem Comment'
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Nice post friend post of the day ....keep going
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We hope so.
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Very Interssing post ! thank you for sharing
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it was that good decision i didn't think that way i was worried about the market that what will happen
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I agree completely. Plus, for me - a person who's just starting to get into the cryptocurrency world, the price drop is more than welcome and I just bought some more Bitcoin. If it drops more, I will buy more. Then invest in other cryptos. Great entry point created now!
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Thank you @dragosroua. Good post, followed.
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Good thought on the china issue! Having also read your post on how not to be a steemit douche and beeing a newb here, is asking you to look at a post of mine already bad netiquette?
I have made an infographic on ICOs. I'd be happy if you'd take a look if I am missing something...
https://steemit.com/ico/@bitcoinblase/how-icos-work-an-infographics
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