Estonia is to launch its own cryptocurrency and it could change the world.
Managing director of the nation’s e-residency, Kaspar Korjus, announced three different models for the virtual currency, nicknamed ‘estcoin’.
In a blog post, Kaspar wrote positively of the creeping presence of ICOs (Initial Coin Offerings) – in his mind, the world is being ‘rapidly transformed’ by the things.
The post continued:
Instead of giving up shares, many startups are now raising finance by issuing their own blockchain-based crypto coins to investors around the world.
The US, Singapore and Switzerland are currently the leading jurisdictions for entrepreneurs considering where to launch their ICOs, although all governments are still figuring out how to regulate ICOs.
Unfortunately for both entrepreneurs and investors, that means ICOs continue to operate in what could be described as legal grey areas at best, while the lack of clarity and trust is holding back the benefits of this innovation in finance.
Despite this, the amount of money being raised globally by startups through ICOs is now far in excess of the amount being raised through venture capital.
Raising finance is only half the story of ICOs though.
People who invest in crypto tokens issued by a startup are then strongly incentivised to support the development of that startup in other ways too and they tend to form an online community.
Speaking about the decision to make the process public, he explains:
We could have developed the idea behind closed doors first, but openness has always been the best policy for developing the e-Residency programme.
Starting an open discussion at the earliest possible stage has been useful to gather both the feedback needed to refine the idea and the support needed to proceed with it. Both the supporters and the critics have been invaluable.
My initial assumption was that the crypto community would be the most critical of any government involvement in their sector, but the opposite was true.
Entrepreneurs and investors within the crypto world expressed enormous interest and largely seemed to welcome the idea, while traditional institutions were the most critical. Even European Central Bank President Mario Draghi voiced his concern.
The news comes as Bitcoin’s co-founder has sold all of his bitcoins, calling them ‘as good as useless’.
Emil Oldenburg, chief technology officer of Bitcoin.com now believes it to be the ‘most risky investment you can make’ despite the recent boom in value.
Speaking to Swedish tech site Breakit, Oldenburg described why he no longer has faith in the cryptocurrency:
It’s an extremely high risk. I’ve actually sold all my bitcoins recently and switched to bitcoin cash.
It costs a lot to transfer bitcoins to and from the stock exchanges. When I sold my BTC I had to pay $50 and wait 12 hours for the transaction to go through because of this.
Do you think ICOs are the future?