Securitization is the unsung hero of inventions.

Its curb appeal is less than that of the wheel, vaccines, and movable type. It's not complex enough to patent. But in terms of changing-the-worldness, the notion of chopping up companies into tradable chunks punches way above its weight.

It got the middle class investing and in doing that, it helped create the middle class.

It got companies funded.

It, along with technology (which it helped fund) is part of the reason human progress has been parabolic: A human living 7,000 years ago would likely recognize human society 6,000 years ago, but a human living 150 years ago would be floored by life today. (Let's hope this continues.)

But what if the things you're chopping up aren't companies?

Republic is a crowdfunding platform intending to offer (i.e., waitlisting until a regulatory green light) what it doesn't like to call derivative securities – because they're legally debt, even if they feel like derivatives – that pay out the difference between a hard-to-get-into pre-IPO private company's price now and its eventual IPO price.

Republic is on the hook for the debt, and notes that it hedges.

The pre-IPO companies don't have to like this because this trade is between two third parties – a bit like if you were to pay me $50 if Amazon rises more than, say, 1% tomorrow and I were to pay you $50 if it doesn't (or if it rains in Detroit, if Justin Bieber wears jeans at his next concert, or any random thing two people could wager on).

Republic was first, but Robinhood is testing something similar in Europe. If regulators OK this, more will follow.

I'm sympathetic to the idea that with many of the best companies delaying (or even avoiding) IPOs these days – thanks to a surplus of private capital – this token (Republic's is a token for licensing reasons), offers a way to get in on unicorns and near-unicorns that represent the cream of the private market crop.

This space may be prone to bubbles, but many smaller companies on crowdfunding platforms are for all intents and purposes entertainment investments (not in an industry sense), so investing in large, well-recognized private companies that could be public if they wanted to be is one of the safer private plays for average investors.

But the lines between investing and gambling are increasingly blurring. Private markets are private because the disclosures are minimal and the risks are high (though in fairness, I'd feel safer investing in SpaceX than in, say, the skeeziest 20% or 30% of public stocks).

What's missing? The more transactions happen between third parties in a "betting" market – versus primary transactions where companies actually get money for selling themselves – the less humanity benefits, one could argue. (Yes, 99.9%+ of transactions on public exchanges are between third parties, but they provide a price discovery that informs (and possibly encourages) secondary offerings.)

But it's here. And we as a species learn by exploring.