Editing Ico crapcoin checklist (section)

= The problem is investors think all shitcoins are DACs =

What made Bitcoin so unique was that nobody had to trust anyone. If you think that the idea of a high-security ledger is useful you can always buy your own special hardware to help secure the ledger in exchange for receiving Bitcoins and even if tomorrow everyone decided Bitcoin was worthless you could always keep mining it for rewards.

Economically speaking, the value of a token issued by a DAC is directly tied to the utility that results from doing so. Or in other words - if you were to take away the token the entire thing would fall apart.

Essentially in a DAC, tokens and services are so inextricably linked that taking one away necessarily implies taking away the other. In a far-fetched kind of way, DACs are kind of like a new form of digital organism that feeds off a persons belief that its still worth enough to keep “alive” by providing it with whatever resources it needs to survive (power, hard drive space, processing resources, datasets, networking bandwidth, etc.)

'''A DAC is more like an idea than a tangible entity'''

The most important thing is that nobody has to trust it. If you think of a new DAC then you can write the code for it, put it in the wild, and it will survive so long as people think its a cool idea. So you can imagine that if a company were to invent a new DAC then actually raising money to help bootstrap this project might make sense since no trust in the resulting entity is required.

A DAC-based fund-raiser would thus entitle an investor to receive some benefit within the system so that in the future there was no way for the company to stop the service from existing or to reduce the value of rewards. It’s kind of like investing in a startup run by robots with a 100% predictable output - that model is extremely unique to the blockchain space.

Shitcoins are the opposite of that. A shitcoin offers no additional value. The token neither helps to create a new service nor does it entitle an investor to any equity in the resulting company. In a worst case scenario the token is speculative and empty (though a well-designed shitcoin can still have a monetary value by locking it to a given platform.)

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