Thread by @moo9000

@Johnny_Nashbro @block_one_ 2/ If you are building an vertical application (securities) and a blockchain (settlement system) at the same time you are trying to solve two problems. 1) Compliance and 2) Scalability... and everything between them.

@Johnny_Nashbro @block_one_ 3/ Compliance does not depend on scalability or vice versa. This is called a separation of concerns in development.

en.wikipedia.org/wiki/Separatio…

Both of these problems can be solved independently.

@Johnny_Nashbro @block_one_ 4/ Here is my rough image what are business problems (a lot of phone calls with regulators and lawyers), what are engineering problems (software development) and what are hardcore pure math a science problems in #blockchain space

@Johnny_Nashbro @block_one_ 5/ I believe everybody doing "a securities blockchain" or "a regulated blockchain" will fail because they do not understand this problem space.

@Johnny_Nashbro @block_one_ 6/ Blockchain is essentially an ecosystem game... a little bit similar what is the "network effect" in old fashioned social media. When Facebook started there were many social networks, not there is only one.

@Johnny_Nashbro @block_one_ 7/ But in a blockchain game, besides users, you are more fighting over developers who produce value added services on your blockchain. Developers then polish your development tools, making it easier for other developers to join.

@Johnny_Nashbro @block_one_ 8/ You need developers to support ecosystem services like blockchain explorers (@etherscan), wallet protocols (@WalletConnect), compliance services (@Coinfirm_io), wallet apps, exchanges and you name it

@Johnny_Nashbro @block_one_ @etherscan @WalletConnect @Coinfirm_io 9/ If you start a develop "securities blockchain" you would need to recreate all these service provides from the scratch *for your specific business use case only* - even though these generic services would work fine with your security tokens if you would use a common chain

@Johnny_Nashbro @block_one_ @etherscan @WalletConnect @Coinfirm_io 10/The cost of creating blockchain ecosystem services is huge.

Ethereum and EOS VCs have funded infrastructure companies. like @infura_io and now Voice, verified identiy, on EOS massively ($150M!)

@Johnny_Nashbro @block_one_ @etherscan @WalletConnect @Coinfirm_io @infura_io 11/Not to mention that for you blockchain, to be usable in finance and have smart contracts for financial transactions, it needs to have a stablecoins. A lot of stablecoins.

(See here the last bit on decentralised finance tokenmarket.net/news/opinion/c… )

@Johnny_Nashbro @block_one_ @etherscan @WalletConnect @Coinfirm_io @infura_io 12/ It has been hard enough to get USD, EUR and GBP on Ethereum. If you start your mickey mouse securities blockchain banks will see a risk in execution failure which they do not see on a popular chains.

@Johnny_Nashbro @block_one_ @etherscan @WalletConnect @Coinfirm_io @infura_io 13/ Sidenote: I believe @binance chain will have super hard time to find an issuer and banking partner for a USD backed stablecoin, because of the spotty reputation of Binance what comes to compliance.

USD banking is haaaard.

@Johnny_Nashbro @block_one_ @etherscan @WalletConnect @Coinfirm_io @infura_io @binance 14/ Also it is complete bullshit that you cannot run regulated securities on public Ethereum. You write your own smart contract to be the ledger for your securities and this contract can have rules for reversing txs and fixing lost keys.

See: docs.tokenmarket.net/smartcontracts…

@Johnny_Nashbro @block_one_ @etherscan @WalletConnect @Coinfirm_io @infura_io @binance 15/ Benefits of having your securities only blockchain: none, except maybe it sounds sexy and you can cash out your otherwise worthless ICO token

Cons: You need $200M minimum to make a dent

@Johnny_Nashbro @block_one_ @etherscan @WalletConnect @Coinfirm_io @infura_io @binance 16/Banks can afford to drop $200M on their own chains. But they have other disadvantages, like inability to co-operate. Too proud, inflexible, lack of open culture. They cannot win over the hearts.

@goquorum and "JPMCoin" has so far been the only credible entry in this space.

@Johnny_Nashbro @block_one_ @etherscan @WalletConnect @Coinfirm_io @infura_io @binance @goquorum 17/Here is a picture of monkey that lives upstairs

(I learnt the trick to interrupt tweetstorms with a cute animal picture from @adamscrabble )

@Johnny_Nashbro @block_one_ @etherscan @WalletConnect @Coinfirm_io @infura_io @binance @goquorum @adamscrabble 18/ I have been writing an article "What is the best #blockchain for #securitytokens" with objective metrics and feature matrix for a while now. Research takes time.

Follow me and I will promise to publish it next week.

@Johnny_Nashbro @block_one_ @etherscan @WalletConnect @Coinfirm_io @infura_io @binance @goquorum @adamscrabble 19/ Meanwhile you need to take my word on it or challenge me in Twitter.

Now I am going to back my wine bottle. If you want to get your hands dirty here is technical documentation for my security token work

docs.tokenmarket.net