June 1, 2017
A rose by any other name would smell as sweet – the quintessential Shakespearean analogy seems to be losing relevance in today’s rapidly evolving technology investment scene, accentuated by multi-million-dollar raises within minutes. Internet companies have been traditionally seen as lucrative, high-growth investments – so much so that we went into a bubble a decade back, investing in anything internet. Interestingly, few select internet companies who leveraged the network effects in the right way have enjoyed unprecedented growth and monopoly. Among the abundant promises of the Distributed Ledger Technologies – including taking us to the Sun someday, walking on water and what not – a less magical one is the inherent network effects of DLT protocols. Some of these networks such as Bitcoin and Ethereum have indeed seen substantial adoption and value appreciation (>100x). However, interesting enough is the fact that barring few exceptions, there aren’t any companies operating these DLT networks, unlike traditional networks such as Facebook. So the natural follow-on question would be: "How do I get a piece of this network’s value appreciation?"
Well, there exists an option to invest in these protocols, some call it "ICO" while others prefer "token sale" and we have seen quite a few of those over the past two years: