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Official Response to “Bancor Is Flawed”

blog.bancor.network

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Re: Official Response to “Bancor Is Flawed”

#91

Post by cynicalkane »

cynicalkane wrote: post #70
rockmeamedee wrote: post #14

> Our thinking here is that people invented money to solve the [Double coincidence of Wants] problem in barter, making trade asynchronous, more efficient and predictable. Fun fact, that's not true! It's called "the barter myth", and was put forward by Adam Smith in The Wealth of Nations. But anthropologists everywhere have looked for 'pre-money' societies in their field research and haven't really found any. Barterin…

The "barter myth" isn't really considered valid economic history anymore--and I'm not sure to what extent it ever was--but it's useful to explain the purpose of money in a society that cannot reasonably keep track of informal debt. When modern people in modern economies no longer have access to money (from economic collapse, or being imprisoned, among other things) they often resort to barter. So the barter myth may…

Too late to edit, but the link at the end got cut off. The whole link is: http://delong.typepad.com/sdj/2013/04/david-graeber-april-fo...

Re: Official Response to “Bancor Is Flawed”

#92

Post by atmosx »

hedonistbot wrote: post #42
spangry wrote: post #24

Earlier quoted context omitted.

It's only my faint impression, but I think there's some renewed interest in some sort of international financial / monetary framework similar to Bretton-Woods. The governor of the Chinese central bank publicly expressed interest (and explicitly invoked Bretton-Woods) a few months ago. And other 'mainstream' central banking authorities seem to be acknowledging that there are big deficiencies with the current model (e.…

There was some noise about bringing about a world reserve currency in the years after 2008 but not much came of it. There was a big increase of the SDR allotments to handle the bailouts that were expected immediately after the crisis. And Chinese currency is now part of the SDR basket. But I don't think a world currency outside of US control will be allowed to exist. Also Keynes' ideas on handling imbalances goes in…

In a closed system your surplus is someone else's deficit, that's not a hard concept. The problem is seems to be cultural (some cultures consider debt a sin or a divine punishment) and educational (even renowned economists trying to explain macro-economics to the layman resort to false analogies e.g. Comparing the economy of a country with a household economy, when in reality the way these work is the exact opposite).

Re: Official Response to “Bancor Is Flawed”

#93

Post by microwavecamera »

cynicalkane wrote: post #70
rockmeamedee wrote: post #14

> Our thinking here is that people invented money to solve the [Double coincidence of Wants] problem in barter, making trade asynchronous, more efficient and predictable. Fun fact, that's not true! It's called "the barter myth", and was put forward by Adam Smith in The Wealth of Nations. But anthropologists everywhere have looked for 'pre-money' societies in their field research and haven't really found any. Barterin…

The "barter myth" isn't really considered valid economic history anymore--and I'm not sure to what extent it ever was--but it's useful to explain the purpose of money in a society that cannot reasonably keep track of informal debt. When modern people in modern economies no longer have access to money (from economic collapse, or being imprisoned, among other things) they often resort to barter. So the barter myth may…

> Apple Computers is a famous example: it was founded by (mostly Republican) computer engineers who broke from IBM in Silicon Valley in the 1980s, forming little democratic circles of twenty to forty people with their laptops in each other's garages

Umm...Apple was found in '77. Laptops didn't exist then. Steve Wozniak worked for HP and Steve Jobs worked for Atari when Apple was founded. And IBM didn't even have a facility in Silicon Valley back then. Am I missing something?

Re: Official Response to “Bancor Is Flawed”

#94

Post by thisisit »

JumpCrisscross wrote: post #74
thisisit wrote: post #59

Earlier quoted context omitted.

This is the very basic function of a market maker. They offer to "make" a market even when none exists. So if everyone wants to buy they will keep offering until their inventory runs out. I haven't read the Bancor paper or code so I am not sure if this is implemented but every market maker's another objective is to make money. So they normally don't trade on a fair price, rather fair price - x/2 to buy and fair price…

I was expecting something different given the novelty of the term "asymmetric price discovery" to this former equity derivatives market maker. Also, nitpick, a market maker has to actually trade for price discovery to have occurred. I can run around quoting "bid AAPL 2 at 10 billion" all day long, if nobody bites I didn't promote price discovery. TL; DR You can't asymmetrically discover prices.

One of the points Sirer brought up was exactly this - without an external feed, the Bancor network will never know if things are working correctly. A malicious party could very use the public nature of the transactions and manipulate prices such that they get cheaper coins or ensure the "asymmetrically price discovery" end up marking coins for hundreds of ETH.

OT - Thanks for your illuminating posts. I am a software engineer by profession so most of my learning have been from trying to trade stocks at my country's local exchange so it is interesting to learn things from someone who worked in that field. I was checking your profile and had a question - What is a PE/VC trader? We can talk offline if you want :)

Re: Official Response to “Bancor Is Flawed”

#95

Post by wpietri »

opportune wrote: post #48
EternalData wrote: post #41

You would get absolutely slaughtered in a public market setting if this happened -- I love the idea of ICOs giving non-accredited investors the ability to invest in risky ventures, but you have to wonder about the diligence layer that comes with it, especially as organizations like Bancor do not have nearly the legal requirements for transparency.

Meh, I say let the fools spend their money however they want. Soon they'll understand why there are restrictions on investing in areas like this

Nope. It's like feeding pigeons. Pigeon-feeding is illegal because doing it results in an exploding pigeon population and pigeon shit everywhere. It becomes everybody's problem.

We want to keep the number of scam artists to a minimum, and especially to reduce the number of training grounds where novice would-be scammers become practiced experts.

Even if we have zero compassion for people who get rooked, there are a bunch of negative externalities to scams. A giant one is that trust is the lubricant of the machinery of the marketplace. The busiest and most efficient financial marketplaces are the ones that are the most effectively regulated. E.g., many foreign companies list in the US because people trust US regulators better than the home-country regulators, meaning they can raise money more effectively here.

A good analogy is restaurant health and safety inspections. If they didn't happen, more people would get sick. If people were often getting sick at restaurants, they'd go out to eat a lot less. That harms the whole industry, resulting in sub-optimal outcomes for both businesses and consumers.

Re: Official Response to “Bancor Is Flawed”

#96

Post by davidgerard »

thisisit wrote: post #66
davidgerard wrote: post #61

Earlier quoted context omitted.

> Where I lost them was when they equated themselves as being so important to crypto currency space that critiquing them can be used to tag the whole space as being a giant ponzi scheme. To be fair, the whole ICO scene of the past few months largely is a bubble phenomenon: an incoherent idea, incompetent code, and really obviously just creators who see easy money selling to buyers who see easy money. The critique is…

Agreed but the same could be said about VC money and unicorns like Uber, Snap Inc. etc. It will be laughable if say Uber's CEO equates bashing of Uber's tech or business model as a threat to all unicorns. One of the bigger problems I see with these ICOs is they that they don't offer much in terms of business viability other than maybe "cool" tech. I have been thinking of a purely profit focused contract(coin) on top…

Have you seen EOS.io? Here's what the white paper says it is:

> The EOS.IO software introduces a new blockchain architecture designed to enable vertical and horizontal scaling of decentralized applications. This is achieved by creating an operating system-like construct upon which applications can be built. The software provides accounts, authentication, databases, asynchronous communication and the scheduling of applications across hundreds of CPU cores or clusters. The resulting technology is a blockchain architecture that scales to millions of transactions per second, eliminates user fees, and allows for quick and easy deployment of decentralized applications.

No, that doesn’t end "and a pony."

Sounds great! So I buy some tokens, and I get ... from the FAQ:

> The EOS Tokens do not have any rights, uses, purpose, attributes, functionalities or features, express or implied, including, without limitation, any uses, purpose, attributes, functionalities or features on the EOS Platform.

The legal EOS Token Purchase Agreement is a frankly amazing document that you need to read all 15 pages of. US citizens or residents are not to buy the tokens (though EOS is sure they don’t constitute a security, honest SEC); the tokens are defined as not being useful in any manner; forty-eight hours after the end of the distribution period, the tokens will no longer be transferable; the buyer is not buying them for speculation or investment.

https://eos.io/purchaseagreement/EOS%20Token%20Purchase%20Ag...

They're doing one billion tokens, dribbled out slowly over a year, at a price of "how much money do you have to throw at us". Really, that's the price.

'Coiners are still lining up to buy them. "Whatever these people do, I'm going all in. Nuff said." https://bitcointalk.org/index.php?topic=1904415.0

Re: Official Response to “Bancor Is Flawed”

#97

Post by davidgerard »

DonbunEf7 wrote: post #64
davidgerard wrote: post #7

Earlier quoted context omitted.

In theory, but in practice almost nobody did. I've been looking into this question. Szabo first proposed "smart contracts" in 1994, but Ethereum is basically the first practical smart contracts platform ever - the first one that people actually use a whole lot. (You can squint at things and say "well that's a bit like a smart contract", but that's retrospectively applying a label - like calling Git a "blockchain". I'…

Too bad it's not the first secure smart-contract platform; that honor probably goes to the folks who developed Joule, E, etc. in the mid-90s. Szabo and his contemporaries were steeped in capability theory, but Ethereum glossed over all of that in favor of hype and cash.

Worse is better, yet again.

Re: Official Response to “Bancor Is Flawed”

#98

Post by davidgerard »

xorcist wrote: post #68
davidgerard wrote: post #61

Earlier quoted context omitted.

> Where I lost them was when they equated themselves as being so important to crypto currency space that critiquing them can be used to tag the whole space as being a giant ponzi scheme. To be fair, the whole ICO scene of the past few months largely is a bubble phenomenon: an incoherent idea, incompetent code, and really obviously just creators who see easy money selling to buyers who see easy money. The critique is…

> There are non-bogus ICOs Where?

The Civic ICO struck me as a sincere attempt at using an ICO for actual not-intrinsically-fraudulent fundraising. Their product is still a weird misapplied but-with-blockchain idea that I can't see how it'll work, but the ICO itself didn't make me go "wtf".

Re: Official Response to “Bancor Is Flawed”

#99

Post by davidgerard »

Bartweiss wrote: post #78
davidgerard wrote: post #9

yeah, not taking Emin Gün Sirer critiques seriously is not the sort of thing that works out well in cryptos.

He's often wrong on the market (infamously told people to sell Bitcoin at like $100), but that mostly seems to be about underestimating optimism. On tech critiques like this... well, he predicted the DAO attack in such detail that people accused him of being the one behind it. Seeing a non-response to Sirer here seems very, very bad for Bancor.

yeah, when a computer science professor calls you out for rolling your own math routines ...

Re: Official Response to “Bancor Is Flawed”

#100

Post by davidgerard »

The first-up response was on Twitter: https://twitter.com/BancorNetwork/status/876934646344404992 http://archive.is/75Gqk

"This hack job, like the FUD you intentionally spread right before the fundraiser with NO ATTEMPT to contact the team will not age well Emin"

(the responses go into his attempts to contact them ahead of time)

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