The popular newspaper comic Dilbert ran two curious strips a couple of weeks ago:

Dilbert, “Initial Coin Offering”, 16 October 2017

Dilbert, “Explaining Block Chain To Marketing”, 17 October 2017

These came across as odd to those of us who know the blockchain space. As a buzzword, “Blockchain” pretty much always flows from upper management, and sometimes marketing, down to the beleaguered lower employees who are then charged with researching or implementing something that will fit the buzzword, whether or not it makes sense. (Chapter 11 of Attack of the 50 Foot Blockchain was written specifically to help said beleaguered lower employees defend themselves and their companies against this class of bad idea.)

However, we now have some idea what might have inspired Scott Adams, the author of Dilbert, to write such strips: he’s just announced his ICO, WhenHub SAFT (Simple Agreement for Future Tokens).

Summary: The token business model isn’t convincing because there’s little reason for the end service providers to accept these tokens over actual money or even bitcoins, but Adams seems to have tried to get his legal ducks in a row concerning the ICO itself.

Adams explains why this is a “SAFT” and not an “ICO”:

If you lawyer-up in advance, jumping through lots of (expensive) hoops to minimize future regulatory risks, your lawyers will tell you to call it a Simple Agreement for Future Tokens (SAFT). A SAFT is a contract with the startup to issue you tokens if and when it is able to launch a network in which the token has utility value. That’s what WhenHub is announcing today.

It’s available only in a limited range of countries, and only to accredited investors in the US and not at all in New York state (home of the BitLicense).

In chapter 9 of the book, I list conditions for an ICO to possibly be useful:

if you have a technical problem that requires decentralised, cryptographically verified tokens (if it doesn’t need tokens, they shouldn’t be bolted on); if the tokens are directly usable on the platform itself; if at least a proof-of-concept of the technology verifiably exists; it also helps if the idea is even plausible as a business.

WhenHub is Adams’ startup. It already exists as a company with products. This new product is called the WhenHub Interface Network (WIN). The token sale page offers a 76-page white paper and a 39-page private placement memorandum (terms of sale).

The plan is to sell access to experts, who will be paid using WhenHub’s WHEN tokens, which will be standard ERC-20 tokens on the public Ethereum blockchain — so it’s more or less Fiverr, but paying people with tokens instead of actual money.

This satisfies criteria 2, 3 and 4: the tokens are used on the platform, the idea isn’t prima facie silly and there exist previous implementations (Fiverr and similar platforms); the hard part will be marketing it to buyers and sellers.

It’s not clear it satisfies criterion 1. WhenHub is at the centre of the arrangement anyway, so this could be done much more efficiently with a centralised database. For the experts selling services, these single company special-purpose tokens would be clearly inferior to being paid in actual money. There are a few people who presently find bitcoins a more viable payment option than conventional currency, but even bitcoins have vastly superior exchangeability to any ERC-20 token.

Adams’ pitch to initial token buyers, and by extension to the experts who will be paid in these tokens, is:

WHEN Tokens are not an investment vehicle, but because they will be artificially limited in quantity, their value is expected to fluctuate based on customer demand for the WhenHub Interface app.

— i.e., an expectation of future profits from the efforts of others on an investment now. The white paper also suggests hypothetical future use of the WHEN token as a centrally-controlled cryptocurrency.

The reception, even from Adams’ own fans commenting on the blog post, can’t be described as positive — the blockchain jargon seems to have obscured the fact that this is just an offering for a (risky) security. Richard Barnes’ comment summarises the general response:

1. I am too stupid to know what most of those words mean. An excellent writer called Scott Adams warned me to be sceptical of people selling via confusion. 2. I own this orange book, warning me about this guy called Scott Adams, who fails at 90% of things he does. Apparently the other 10% win big. He seems like a nice guy, and the book is well worth $10. But I don’t like those odds for giving him my money.

Some respondents have linked edited versions of old Dilbert comics that seem to address Adams’ proposal twenty years ahead of the fact:

An edit that’s been in circulation since “blockchain” became a business buzzword; editor unknown.

Original, 17 November 1995.

Edit by BMan on Something Awful. Original, 15 January 1999.

Or just switch the characters’ eyes in the second recent comic, to swap the roles of “wide-eyed idiot” and “cynic”:

Edit by Syd Midnight on Something Awful. Original, 17 October 2017.

It is possible that Adams’ SAFT will do well if he can make it sufficiently appealing to the crypto crowd as an ERC-20 token that will go somewhere. From the response, though, it seems unlikely to do well even with the “Dilbert” branding with Dilbert fans or newspaper comic fans in general.

The author asserts that the use in this post of Dilbert comics and derivatives of Dilbert comics, copyright Scott Adams, Inc. and United Features Syndicate, constitutes fair dealing under UK law and fair use under US law for purposes of research, criticism and reporting.