IN recent twitter conversationRipple CTO David Schwartz had a discussion with bitcoin proponent Tuur Demester about the difference between Ethereum (ETH) and Microsoft (MSFT) stocks.
The conversation began when Demister tweeted about the Howey test, which is a legal test used to determine if an investment is considered a security or not.
Demister stated that according to the Howey test, ETH is an investment of money in a common enterprise with the expectation of profiting from the efforts of others.
Schwartz responded by saying, “I don’t understand exactly what you’re saying. You are saying that there is an investment of money in a common enterprise and that common enterprise is ETH. So you’re saying they bought their ETH from ETH?!
Demister explained that running ETH nodes and writing client updates is a tightly coordinated, commercial, centralized affair, making it easy to argue that investing in ETH is an investment in a shared enterprise.
To which Schwartz responded, “So you’re saying that when someone buys ETH on an exchange or receives it as a reward for staking, it’s ‘investing money’ ‘in a business as usual’? I don’t understand how the money goes to some ordinary business.”
Demister compared buying ETH to buying Microsoft shares, to which Schwartz pointed out that when someone buys Microsoft shares, they have legal rights to the company, which is not the case with ETH.
Schwartz then stated that it was unclear what Demeester claims is similar here. “To be clear, I’m trying to understand what you’re talking about a ‘general enterprise’ so you can say that people who bought ETH on the secondary market or received it as a reward are putting money into this common enterprise. ,” he added.
The conversation between the two highlights the ongoing debate in the crypto community about whether cryptocurrencies like ETH should be considered securities. As regulations regarding digital assets continue to evolve, it will be interesting to see how the debate develops and what the final decision will be.
Credit : u.today
