Cryptocurrency is becoming classist.
This is particularly dismaying, because if anything, cryptocurrency networks have the potential to drive financial inclusion on an unprecedented scale. Ethereum-based ICOs can bring early-stage investing to ordinary individuals, giving them the opportunity to add some risk to their portfolios at a reasonable price. However, cabals of insiders are forming.
In June 2017, cofound.it, billed as a Blockchain venture capital fund, had its ICO. This ICO was purchased entirely by a group of insiders who had the cofound.it “Priority Pass”. To get on this priority list, you need to have a minimum of 5000 CFI tokens in your wallet. This token is currently priced at USD 0.25, meaning that you need a deposit of about USD 1,250 with cofound.it to participate. Cofound.it’s first partner ICO – Santiment – is allotting a portion of its tokens exclusively to CFI Priority Pass holders. Looking at Santiment’s white paper, this is particularly worrying, as Santiment aims to be the leading provider of Cryptocurrency market information. If this “vision” materializes, the Cryptocurrency market will mimic the uneven playing field that the global capital markets have become. It is highly possible that these Santiment “insiders” will have preferential access to both information and platforms and will possibly drive the agenda of what Santiment pushes to the public.
So where are we headed with this? This trend is not going to slow. These cabals of insiders will continue to grow stronger, and will extend their influence in the cryptocurrency sphere. Services like Santiment will have the power to make or break any upcoming ICO. In addition, as algorithmic trading systems become increasingly active on cryptocurrency markets, data cues will drive broad-based market movements. In the worst-case scenario, the entire cryptocurrency industry will become a casino, where optimistic lay investors will hope to make a fortune, while a bunch of insiders will laugh all the way to the bank. In the end, we will be left with the cesspool of collusion, corruption, and deceit that today’s capital markets have become.
Tinqle 