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As startups around the world rush to embrace initial coin offerings (ICOs), regulators are struggling with this new form of fundraising.

At one extreme, China has banned ICOs, while the U.S. has been regulating them aggressively. But there are plenty of other nations trying to plant a flag and declare themselves to be the world’s ICO capital, hoping to attract entrepreneurs, startups, and the potential economic windfall they believe will follow.

Last month, the French government announced its intentions to develop a regulatory framework that would allow it to become a leading hub for ICOs and startups using cryptocurrencies. Bruno Le Maire, France’s Minister of Economy and Finance, wrote that ICOs offer a potentially revolutionary way for the country’s startups to gain access to the funding they need to become global winners.

“This revolution could upset our daily practices in the banking and insurance sectors, financial markets, but also patents and certified acts,” he wrote. “It raises the question of consequences for both savers and traditional players such as banks and investment funds … Let’s not be mere spectators, but instead become actors in this revolution.”

By coincidence, as the government was announcing its regulatory push, a startup called Talao, based in the southwest city of Toulouse, was making preparations for what could prove to be the country’s largest ICO to date at $60 million.

Talao, which offers a blockchain platform for finding talent for a variety of projects, has started presales of its ICO and will open the process to the public in June. The ICO will serve two purposes: raising money to build a new version of the platform, but also distributing the tokens that participants can exchange through the system for goods and services.

In speaking with Talao CEO Nicolas Muller, it becomes clear that if blockchain startups such as this one fulfill their ambitions, they will challenge the most fundamental concepts of capitalism. And while subverting that system offers some tantalizing benefits in terms of more evenly distributing the rewards of such an enterprise, it also means such shifts could undermine things like the tax structures on which governments around the world depend.

“We think this is going to be the biggest revolution since the internet,” Muller said.

Yes, the internet era has been chock-full of revolutionary hype, so it’s worth taking such statements with a grain of salt. By the same measure, there is a reason the blockchain world is full of revolutionary zeal these days. And a closer look at Talao helps explain why.

The company was cofounded in 2015 as a freelancer platform by Muller, Thierry Thevenet, and Denis Lafont-Trevisan. Originally called eMindHub, the company focused on the aerospace industry. It has signed up 30,000 experts and corporate partners that include aviation giant Airbus and autonomous shuttle developer Navya.

But the original version of the platform took a more traditional, centralized approach. The company now wants to overhaul that system with a blockchain platform that is decentralized, what the company dubs a “decentralized autonomous organization” or DAO. The most immediate goal is to disrupt the freelance platform market by offering a service that doesn’t charge any fees and allows users to store their own data in a personal vault.

“We want to change the business model,” Muller said. “We provide the talent with a marketplace where they own their own data.”

In a world of data-driven platform businesses, particularly with the current backlash against Facebook, the ability for individuals to keep and monetize their own data seems like an attractive option that could herald a fundamental shift.

But how would it work in practice? Talao will begin the first phase of its ICO with the goal of raising up to $25 million, a kind of Series A round, if you will. It will use that money to re-construct the platform and create the DAO using blockchain.

That new blockchain marketplace will then operate using the tokens distributed in the ICO. This will allow users to tie their reputation and their data vaults to a value that is managed using certificates. All parties will use tokens to request and provide services.

And that is where the system offers a potentially interesting paradigm shift. All participants benefit as the value of the tokens increase, including the company itself. This means the goal is not to necessarily increase revenues or profits, but rather to increase the overall value of the platform to attract more users and increase the frequency of use.

The company will make some money by offering services such as the ability to promote a project. The money would be used to pay salaries, but founders and executives wouldn’t get disproportionate benefits in the way founders today can become billionaires if their companies go public. And decisions about the platform’s development would be made via votes by holders of the tokens.

“We can rely on stakeholders to move toward the same goal: Increase the value of the tokens,” Muller said.

But this brings the question back around to governments. If one has a system that isn’t based on revenues or profits, how does a country regulate or tax it? If users are rewarded with tokens that increase in value, rather than salary, what happens to the notion of personal income for tax purposes? How can it be monitored to ensure it complies with any existing work laws? And how can users and consumers ensure they are not falling victim to some kind of scam?

In the U.S., governments are still fighting over the notion of how (and whether) to tax purchases made on the internet. Imagine a system where the direct use of money is taken out of the system. If such blockchain platforms become the norm (and yes, that’s a mighty big IF), then national and local governments are going to see their revenues take another major hit.

So it seems urgent that governments take a hard look at this phenomenon to both understand it and to make sure they have a plan in place to adapt to it. While banning ICOs might be tempting in the short run, it could be a massive risk if they continue their explosive growth and become the predominant way of raising money and compensating people for work.

“Clarifying the law to attract innovation, identify risks without hindering our ecosystem, that’s our approach,” Le Maire wrote.

Muller, for one, welcomes the government’s involvement. He said the process for launching an ICO took longer than the team had hoped and was made difficult because of the lack of rules. Bringing that regulatory clarity and certainty would move the process along faster next time and make participants more comfortable.

Because as excited as Muller is by the potential of blockchain and his company, educating the public and attracting companies and freelancers is not going to be easy.

“This is a challenge for us,” Muller said. “It’s not just a new model for us. It’s a new model for clients and talent as well.”

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