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What is an Initial Coin Offering and How Does it Work?

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Re: What is an Initial Coin Offering and How Does it Work?

#141

Post by jaredklewis »

cslarson wrote: post #125
wyldfire wrote: post #21

Previously, we had a filter screening new altcoins (expletive deleted) in that you had to know enough about bitcoin to at least fork the repo, build it and make some modest changes to create a new namespace. We could see whether those coins are worth anything by looking to see if there was a novel PoW or other network changes, premine, etc. Now, Counterparty and much moreso Ethereum have created an opportunity for an…

Back in the day there was a website where you could fill in a few details and it would create a bitcoin clone including downloadable source. What value do bitcoin alts offer? Hardly anything. Your position is just absurd to say that Ethereum and what is buildable on top of it are valueless. This comment, at the top of a hn thread is a great example of slashdoting of the hn community. It's both weird and educational t…

Where does he say Ethereum is valueless? He just explains that ethereum made launching a coin easier (a point you dispute) and, as a result, more crap coins are popping up.

That most alt coins are crap is, I think, common sense. Such agresssive investment into something with such limited present-day value (i.e. The PE ratio, as it were) smells off. If cryptos are like other markets, they'll need to show more short term value soon, or crash.

Re: What is an Initial Coin Offering and How Does it Work?

#142

Post by hoofish »

sktrdie wrote: post #74

Rather than thinking about the businesses that currently are trying to get rich by doing ICOs, I'd like to point out that the idea of creating tokens out of thin-air, and having them obtain value purely by speculation, is an interesting system we should ponder more about. We're now capable, thanks to these consensus systems, of creating tokens that have certain properties. For instance Bitcoin is a specific kind of t…

thank you for a more thoughtful response amid the knee jerking in this thread.

I think it is likely this is the future - and there is little to no mention of "asset backed tokens" which is the core of the ICO offering, essentially buying against future revenue cheaper.

Re: What is an Initial Coin Offering and How Does it Work?

#143

Post by colordrops »

swrobel wrote: post #133

"though even rating agencies have been known to get it wrong from time to time." Lol! Financial crisis, anyone?

And it wasn't that they got it wrong - they chose to rate bad securities as AAA to their and their cohorts benefit.

Re: What is an Initial Coin Offering and How Does it Work?

#144

Post by richardknop »

colecut wrote: post #116
richardknop wrote: post #99

Earlier quoted context omitted.

The fees are quite high for that card. And you are not paying with BTC. If it's a debit card then you have to have fiat in a bank account. I guess they exchange BTC to USD when you top up your shift card.

Can you please elaborate on what fees are high? I paid $10 for the card. $0.00 annual fee $0.00 Domestic transactions BTC is converted to fiat at the time of purchase, also with no fee, no need to "top up" the shift card..

International fees are high.

But also conversion from BTC to USD is not for free. Whoever is doing the conversion is charging a fee.

Probably as part of exchange rate where they add a markup. So you don't see an explicit fee in your statement but they use little worse exchange rate and that is their cut.

Also whoever is their payment processor (whoever they partnered with to print those debit cards as they don't have license to do it themselves) is charging some fees.

Re: What is an Initial Coin Offering and How Does it Work?

#145

Post by almostApatriot1 »

drcode wrote: post #105
fny wrote: post #88

Earlier quoted context omitted.

The Ethereum founders do: they've managed to turn themselves into a certification/approval stamp of sorts. I've seen them slapped on as advisors for umpteen of these ICOs. If I were them, I'd create a regulatory company and take a cut for "Ethereum-approved ICOs."

Vitalik has conceded this was a mistake and has stated he will no longer have any formal role in outside ethereum businesses. He also stated that he was not paid for any of these advisory positions he held.

He is 'invested' in a lot of these coins though. Seems to be able to own them before they ico. HMMM

Re: What is an Initial Coin Offering and How Does it Work?

#146

Post by wyldfire »

cslarson wrote: post #125
wyldfire wrote: post #21

Previously, we had a filter screening new altcoins (expletive deleted) in that you had to know enough about bitcoin to at least fork the repo, build it and make some modest changes to create a new namespace. We could see whether those coins are worth anything by looking to see if there was a novel PoW or other network changes, premine, etc. Now, Counterparty and much moreso Ethereum have created an opportunity for an…

Back in the day there was a website where you could fill in a few details and it would create a bitcoin clone including downloadable source. What value do bitcoin alts offer? Hardly anything. Your position is just absurd to say that Ethereum and what is buildable on top of it are valueless. This comment, at the top of a hn thread is a great example of slashdoting of the hn community. It's both weird and educational t…

> What value do bitcoin alts offer? Hardly anything.

Agreed, if taken by count. But there's a few that offer real distinctiveness IMO: Litecoin (scrypt, segwit), Monero (cryptonight, ring ct), Myriad (multi-PoW), Peercoin (PoS), CounterParty (colored coins/tokens). I'm not super up-to-date so there are bound to be more modern ones too.

We all heard Litecoin loud and clear win the race to segwit and it lit a fire under Bitcoin. In fact, many of these coins serve as inspiration for features included or considered for inclusion in bitcoin. So if nothing else they offer real world testing grounds (not merely testnet) for cryptocoin features.

> Your position is just absurd to say that Ethereum and what is buildable on top of it are valueless.

As noted elsewhere, I don't think Ethereum is worthless. But there are a lot of junk assets on there. Are there more junk Ethereum assets than there are junk altcoins? Well, IMO, the only investment altcoins solicit is computational capacity of PoW to secure their blockchain. Some altcoins do a premine and in general I think those are often as shady as some of the junk Ethereum assets.

Re: What is an Initial Coin Offering and How Does it Work?

#147

Post by nicksdjohnson »

hudon wrote: post #128
sktrdie wrote: post #74

Rather than thinking about the businesses that currently are trying to get rich by doing ICOs, I'd like to point out that the idea of creating tokens out of thin-air, and having them obtain value purely by speculation, is an interesting system we should ponder more about. We're now capable, thanks to these consensus systems, of creating tokens that have certain properties. For instance Bitcoin is a specific kind of t…

> We're now capable, thanks to these consensus systems, of creating tokens that have certain properties. For instance Bitcoin is a specific kind of token which is scarce - hence will work more like gold. Other tokens (perhaps Ether or Dogecoin) instead are not scarce at all, and new tokens continue entering the system all the time. You talk as if we were never able of issuing digital tokens before. All you need is a…

Censorship resistance isn't the main thing that blockchains enable; trustlessness is. If you host them on your own SQL database, people have to trust that you're acting honestly.

Re: What is an Initial Coin Offering and How Does it Work?

#148

Post by hudon »

skywhopper wrote: post #50

A: It's a scam, and it works by scamming people. The text as written on this site describes a conspiracy to commit tax and securities fraud. I have no idea if it will ever be prosecuted as such, but that is what is being proffered here. The subtext is that a bunch of finance quants read Cryptonomicon and think the blockchain is the answer to their dream of becoming the gangster bosses of the anarcho-capitalist hellsc…

I'm curious to know if you erased all of modern civilization (governments, laws, et. all) and replaced it with decentralized apps and a blockchain-based currency, would it work? I read Snow Crash and I can see how fascinating the concepts are to libertarian technocrats, but I would like to see a rebuttal to it.

I know the transition to this model seems impossible and this is what most people in the blockchain-space blissfully ignore.

> The subtext is that a bunch of finance quants read Cryptonomicon and think the blockchain is the answer to their dream of becoming the gangster bosses of the anarcho-capitalist hellscape from Snow Crash.

This made my day, it's a shame it's too long to tweet

Re: What is an Initial Coin Offering and How Does it Work?

#149

Post by avsa »

hudon wrote: post #136
cslarson wrote: post #125

Earlier quoted context omitted.

Back in the day there was a website where you could fill in a few details and it would create a bitcoin clone including downloadable source. What value do bitcoin alts offer? Hardly anything. Your position is just absurd to say that Ethereum and what is buildable on top of it are valueless. This comment, at the top of a hn thread is a great example of slashdoting of the hn community. It's both weird and educational t…

Your comment is just one big ad hominem so I'm going to guess what your position is: tokens on the blockchain are great to bootstrap users. (correct me if I'm wrong) Given my assumption, can you explain why I can't do this: 1- Have a great idea for a decentralized marketplace app (think OpenBazaar) 2- Store 21 million BazaarCoin in a MySQL database and give these coins some purpose in my app (eg. used to buy stuff) 3…

Your site can be taken offline either because it can't handle too much traffic, because authorities seized your servers or simply because you decided you didn't want to play anymore. If that doesn't happen and your site becomes very popular, you might be tempted to create a bunch of coins on your own mysql database to pay yourself.

Blockchain prevents all that: your code is committed and public

Re: What is an Initial Coin Offering and How Does it Work?

#150

Post by ac29 »

ereyes01 wrote: post #103

Much has been said about risks to investors buying into ICOs. What about risks to startups selling ICOs? Should every startup be fundraising via ICOs right now or risk missing the gravy train?

Any startup with competent legal counsel, accountants, etc, would certainly be advised to stay far, far away.
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