Generally speaking, token offerings (ICOs) have achieved popularity because they promise the next wave of innovative computing. In exchange for a cryptocurrency investment, backers typically receive digital assets (tokens) that they expect will increase in value over time. Tokens are frequently designed to be used on a blockchain, usually as a means of interacting with a platform. That utility is often what draws investors and consumers.
Almost inevitably, gag token offerings have sprouted to parody the cryptocurrency financing frenzy. The same thing happened with Kickstarter. Many nascent businesses have attempted (and still strive) to raise funds with varying levels of success, but don’t forget about the man who scored $50,000 to made potato salad.
In traditional crowdfunding (if there is such a thing) fundraising hopefuls tap into the hearts of their audiences. People enduring health struggles or family crises post desperate pleas on platforms like GoFundMe and, even in a world mediated by screens, it feels cruel to scroll past these pitiful souls. Sitting in the warmth of your own home, with a few clicks, you could send them a small sum to ease their pain.
It was just a matter of time until we saw a corresponding phenomenon in cryptocurrency. Now, we bear witness to the next phase of token offerings, those of the altruistic variety – which I’d like to christen “Initial Charity Offerings.”
Unlike Scam Token or FitVitalik, initial charity offerings (or charitable token offerings – take your pick) don’t just capitalize on laughs, they aim for a connection, a chance for backers to feel like they’re making a difference in the real world. For example, the tiny village of Nishiawakura, located in Japan’s Okayama Prefecture is reportedly considering a token offering with the support of blockchain development company Chaintope with the goal of stimulating the local economy. It’s unclear what sort of tokens the village would provide and if they would have any actual use or value.
A charitable token offering is decidedly not a business model. It’s simply not a sustainable practice or a long-term plan. If anybody hears otherwise, I can send them my wallet address. Looking at Nishiawakura, I’m left wondering how the funds would be used. Would there be any oversight? On its face, it kind of seems like the village and its corporate partners are capitalizing on the cryptocurrency craze.
Furthermore, has the village reached out to Japan’s national government for assistance? It’s worth noting that as a jurisdiction, Japan has proven relatively friendly to cryptocurrency.
Despite this ostensibly new mode of fundraising through token offerings, we find ourselves asking the same old questions. Do you have a responsibility to help your global neighbors? Should you show your support with your wallet? Only you can answer those questions, but it’s important to determine 1) whether to give help and 2) if so, how much support to provide.