In bitcoin software contributors can propose changes to the protocol and software, but they have no absolute power since they can just be rejected by the miners, who are not paid directly from bitcoin raising in price, but from fees from the operation of the network itself. So there is no organization or entity promising returns for owning bitcoin.
In Ethereum, a centralized group of people put together a public sale of the token, promising great returns in exchange due to their visionary ideas. This is all perfectly fine, except they didn't register their sale as a security and companies touching Ethereum and other tokens continue to not follow security rules; which involve for instance disclosures about ownership and conflicts of interest. Ethereum is an extremelly centralized business with a few key figures with an interest in the appreciation of the asset, advertising it illegally to a US audience without following US laws.
"In Ethereum, a centralized group of people put together a public sale of the token, promising great returns in exchange due to their visionary ideas. This is all perfectly fine, except they didn't register their sale as a security"
If I write a book with visionary ideas that promises to change your life (great returns) and continue to work on revisions as I come up with new ideas - should I register it as a security before I can sell my book?
The whole concept of securities laws makes little sense if you try to expand its reach beyond narrow traditional finance use cases... if even those cases make sense in the first place.
Might be better off repealing all this complexity/bureaucracy and better enforce existing generic laws about theft/fraud...
> If I write a book with visionary ideas that promises to change your life (great returns) and continue to work on revisions as I come up with new ideas - should I register it as a security before I can sell my book
Is there an expectation of profit in those buying your book? No? Then it’s not a security.
It’s a multi-prong test. Investor protection laws are substantial; everything is constantly being challenged in courts as a security.
How about, say, Pokemon cards? Lots of people buy them with an expectation of profit, which relies on the efforts of The Pokemon Company (among others) to continue to grow the player base.
They very well could be. I'm knowledgeable enough to answer.
I also wonder how does it work with one-of-a-kind collectibles, such as old letters written by famous people, paintings, rare/unique coins, ..., and NFTs.
The development of Ethereum is more decentralized than the development of Bitcoin. Bitcoin is primarilly developed by Bitcoin Core while Ethereum has multiple client implementations.
Anyone can join the Core Devs meeting and discuss new features and push back on ideas. You can also propose these features outside of the core dev meetings and never attend that meeting if you don't want to.
New ideas aren't centrally proposed and are handled by raising an EIP and getting support for it, just like BIPs in Bitcoin.
For example, EIP 1559 was dead for years until a community member decided it was time to push it and worked with many different people to present it in a way that convinced multiple teams to implement it in their client.
The validators can always reject a change just like Miners can reject changes to Bitcoin clients. The big difference is that Bitcoininers don't have many clients to choose from, so they have to be more willing to accept whatever Bitcoin Core implements.
The bug difference between BTC and ETH from the SEC perspective is the initially issuance being an investment of money, and whether PoS is a return on investment or if running a node is similar to running a PoW node and you're providing a service and not simply expecting a return. In other networks, you can "stake" without running any hardware and that's clearly different than Ethereum's PoS model.
The crux of the problem for ETH is its first few months after launch where they indeed raised money. So ETH was a security at first (according to the Howey test) but now probably not anymore.
In Ethereum, a centralized group of people put together a public sale of the token, promising great returns in exchange due to their visionary ideas. This is all perfectly fine, except they didn't register their sale as a security and companies touching Ethereum and other tokens continue to not follow security rules; which involve for instance disclosures about ownership and conflicts of interest. Ethereum is an extremelly centralized business with a few key figures with an interest in the appreciation of the asset, advertising it illegally to a US audience without following US laws.