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Autonomous corporation “The DAO” has become the biggest crowdfunded project

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Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#121

Post by drcode »

c2315261 wrote: post #118
drcode wrote: post #89

Earlier quoted context omitted.

So you're saying the intrinsic value is certain to be lower than it's current market value? I have good news for you: You can become rich by simply shorting ether on Kraken and Poloniex!

You're completly disregarding that timing is far more important than simply knowing that there will be a downward correction. The shorting fees will end up being consuming a large chunk of the profit even though you sold a hundred thousand ether coins at $11 and bought them back at $1.

That is a valid point.

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#122

Post by dmix »

street wrote: post #116
benjaminmbrown wrote: post #110

Earlier quoted context omitted.

It actually did go down 50% from $15ish to $6ish and recovered. Early adopters trying to get rich = all early stage investing so what's your point?

That's because of the tiny liquidity. Nowhere near $120 million was sold, and it still lost 50%. Now try selling tens of millions worth, and see what happens.

Market incentives exist for it not to crash. People who put money into ETH/DAO and who want to see growth have strong incentives against this type of bank run.

So I don't really see your point by comparing it to Apple as it's not the same at all. It's not equivalent to cash or public stocks but that doesn't mean it's not a worthy investment to make for someone interested in the technology or potential in Ethereum.

What the currency needs is something of tangible value underpinning it and this project seems like a good way to add real value to back up the currency. It could potentially result in some successful businesses and projects which would compensate early adopters at a higher level both in the value of ETH and in dividends.

But I don't believe there is any doubt that this is speculative. I visited /r/ethereum the other day and someone asked why they backed DAO and a common reply was "I wanted to support this new technology as much as seeing it as a possible investment opportunity for financial return".

It's high-risk speculative investments but also a group of people who are interested in the idea itself and are willing to invest money at a potential loss in the process. Just like any startup founder.

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#123

Post by forgotmysn »

dragontamer wrote: post #29
drcode wrote: post #7

TLDR; A computer program living on the ethereum blockchain is currently in control of 107+ million dollars, making it the second largest crowdfunded project in history. Shareholders vote on proposals to give money to other entities (probably also programs on the ethereum blockchain) that they hope will make money and send it to the parent contract. All votes are managed by a program written in EVM code, which runs on…

Last time I checked, Apple Computers is worth $500+ Billion and is a public company. Don't forget that the stock market is the original mass-crowdfunded project. Anyone can become an owner if you go to a brokerage account, and ownership rights entitles you to a vote for the board of directors and a share of the profits (ie: the dividend)

ya but they are publicly traded. crowd-funded refers to group funding for privately owned companies

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#124

Post by street »

dmix wrote: post #122
street wrote: post #116

Earlier quoted context omitted.

That's because of the tiny liquidity. Nowhere near $120 million was sold, and it still lost 50%. Now try selling tens of millions worth, and see what happens.

Market incentives exist for it not to crash. People who put money into ETH/DAO and who want to see growth have strong incentives against this type of bank run. So I don't really see your point by comparing it to Apple as it's not the same at all. It's not equivalent to cash or public stocks but that doesn't mean it's not a worthy investment to make for someone interested in the technology or potential in Ethereum. Wh…

> Market incentives exist for it not to crash. People who put money into ETH/DAO and who want to see growth have strong incentives against this type of bank run.

That's where the pyramid/ponzi/bubble comparison comes in. There's no actual value (yet?); the adopters would have to keep buying more to keep the price up and to keep the "value" of their holdings high. Not because it's so useful; just financial incentives.

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#127

Post by cloudjacker »

street wrote: post #115
cloudjacker wrote: post #108

Earlier quoted context omitted.

Ethereum's daily volume is around $22 million, and thats just on public exchanges. So you could sell $120 million in Ether in 4-5 days also using OTC exchanges. I've had worse liquidity on penny stocks and the options market, so you'll have to drop the meme. Cryptocurrencies are liquid enough and they continue to attract more and more liquidity.

Uh, that's not how volume works. For one, because you'd be adding to it. But also: much of that volume is buying and selling of the same ETH. I like your comparison to penny stocks.

All that matters is that liquidity begets liquidity. Volume metrics are merely referential, something with $300,000 in daily volume can easily be inferred to be less liquid than $22,000,000 in daily volume.

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#128

Post by Bjorkbat »

kuschku wrote: post #72
Bjorkbat wrote: post #44

An interesting concept, but I'm not buying the hype. At the end of the day a bunch of people bought shares in a company (or did they? Legality is weird) with the special condition that in addition to owning a share of said company they also get to vote on what the company actually does, and even submit proposals for what it should do. Oh, and they also bought said shares with cryptocurrency. Magic internet money guys…

> Admittedly I think enabling this kind of democracy in a company is a bad idea. It might actually wind up being less nimble than an actual corporation because of the extra consensus required. This stuff is also known as a cooperative, and is a very common concept for democratic companies – almost all housing in europe is owned like this.

I'm vaguely familiar with the co-op model through organic co-op grocery stores.

I actually like the notion of grocery stores being run this way, but members participate in a grocery co-op primarily so they can get less expensive organic groceries and even have a say in what the co-op carries. Really it's just buying in bulk with strangers.

But then I look at a corporation where members are ultimately voting on their best idea for making the corporation profitable, and presumably also mixing in ethics as well, that's where things could get hairy.

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#129

Post by dmix »

street wrote: post #124
dmix wrote: post #122

Earlier quoted context omitted.

Market incentives exist for it not to crash. People who put money into ETH/DAO and who want to see growth have strong incentives against this type of bank run. So I don't really see your point by comparing it to Apple as it's not the same at all. It's not equivalent to cash or public stocks but that doesn't mean it's not a worthy investment to make for someone interested in the technology or potential in Ethereum. Wh…

> Market incentives exist for it not to crash. People who put money into ETH/DAO and who want to see growth have strong incentives against this type of bank run. That's where the pyramid/ponzi/bubble comparison comes in. There's no actual value (yet?); the adopters would have to keep buying more to keep the price up and to keep the "value" of their holdings high. Not because it's so useful; just financial incentives.

> the adopters would have to keep buying more to keep the price up

That's a logical fallacy. As a Ponzi scheme is not the only way, nor the best way, to add value to the investment. So I don't think that fairly represents the market incentives that exist for the early adopters. Especially given the context of it's creation and the community of early adopters around it.

As I mentioned in my comment above, they are incentivized to have the project produce real tangible value if a) they are interested in seeing the technology succeed and b) they want returns on investment via dividends, which is typically the premise of a longer-term investment.

Even if a percentage of investors don't fit that criteria, I highly doubt they represent the majority. It would only require is a sufficient enough sized majority of well-intentioned investors to keep the project operational.

I'm not convinced the only way it could generate returns - and more generally prevent a drop in value - is by continually adding more investors. I expect they will put in some real effort to make it work as a functioning economic entity.

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#130

Post by sp332 »

reviseddamage wrote: post #12
drcode wrote: post #11

Earlier quoted context omitted.

I'm pretty convinced the vast majority of tech startups were started by individuals who relied on their family supporting them through the initial phases of their business.

pretty convinced from what data? source please? thanks!

Yeah, a couple of studies have been done on it. http://qz.com/455109/entrepreneurs-dont-have-a-special-gene-...
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