The common lie about blockchain is that it establishes trust between participants, but this Wall Street Journal article proves that to be incorrect:
“In a review of documents produced for 1, 450 digital coin offerings, The Wall Street Journal has found 271 with red flags that include plagiarized investor documents, promises of guaranteed returns and missing or fake executive teams.
“ Jeremy Boker” is listed as a co-founder of Denaro, an online-payment project. In investor documents for a public offering in March, which claimed to have raised $8.3 million, Mr. Boker boasted of his cryptocurrency startup’ s “powerhouse” team. In his biography, he noted a “respectable history of happy clients” in consulting before he launched Denaro.
In fact, Mr. Boker’s bio image was a stock photo, there is no evidence he exists and the rest of his team appears to be fictional, except for two freelancers who said they were paid by people unknown to them to market the project, the Journal found.
The principals behind Denaro couldn’t be identified and attempts to reach the company went unanswered. The real person whose image was repurposed as Mr. Boker’s turns out to be Jenish Mirani, a banker in Poland. Mr. Mirani, who had posted the photo on his personal website, said “it was really shocking” to find out about its afterlife”
The immutable ledger can make sure digital documents, once deposited into the ledger, are not tampered with. The problem is that blockchain can’t recognize that the document put in the ledger is a forgery or fake. This is not true for the cryptocurrency that was delivered to the criminals, in that the cryptocurrency is created and managed by the blockchain, whereas the entire ICO contract was just a criminal’s pipedream created externally and then published by the blockchain – any ICO, car registration, bond, or other instrument of value that can be forged in the real world can be deposited into the blockchain – so buyer beware!
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group