What is an Initial Coin Offering and How Does it Work? • Hacker News Board

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

#201

Post by lrvick » Tue, Jul 04, 2017, 4:02 AM UTC

richardknop wrote: post #101

lrvick wrote: post #98

Earlier quoted context omitted.

Tezos has a working testnet available to anyone on request and a functional (albeit early) platform. They also took extra time and delayed their ICO to get proper accountability systems in place via good legal standing for the Tezos Foundation. Tezos asks a vital question. Can cryptocurrency governance be decentralized? Can we do better than the anarchy of management for Bitcoin and Ethereum with chain splits being t…

You think 200 million in funding for a blockchain implementation in Ocaml written by one developer is reasonable? Because to me it seems absolutely ridiculous. For comparison, Docker has so far raised around 180 million in 5 funding rounds. It has somewhere between 300-400 employees.

Not anymore than we say a billion pieces of green paper is worth trading for a company that lets you take selfies and put cute frames on them.

Money as it exists today and how we attribute value is pretty ridiculous. Blockchain tech today is the 90s internet, poised to crash hard then later be integrated into the lives of everyone.

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

#202

Post by ThrustVectoring » Tue, Jul 04, 2017, 6:42 AM UTC

skewart wrote: post #187

ksahin wrote: post #66

Earlier quoted context omitted.

Several years ago, ICOs were a way to crowdfund and distribute a new crypto currency. With your example you would sell "pre-mined" FrogCoin and there wouldn't be any real world asset that make them valuable, only speculation. Today, most of the ICOs are made on the Ethereum blockchain, it's a way to crowdfund distributed/decentralized application and protocol. It's not about currencies anymore. The tokens that are so…

So, from the token buyer's perspective, how is it different from a company that pre-sold a bunch of regular old API keys without any connection to any cryptocurrency or blockchain? I get the trustlessness of 'smart contracts', but with tokens-as-API-keys I still have to trust that your company's products will work and that those API keys will continue to work. Or, is the idea that the code my API key gives me access…

There's a much healthier secondary market for these API keys, since there's an algorithm for using your API key to grant someone else the use of your API key.

On second thought, I don't think that helps all that much, since that could just be an API endpoint on the company's server instead.

Maybe the actual benefit is just interoperability with other crypto-currencies?

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

#203

Post by nicksdjohnson » Tue, Jul 04, 2017, 6:45 AM UTC

kang wrote: post #188

chejazi wrote: post #185

Earlier quoted context omitted.

ENS is implemented as a set of smart contracts with some multisig management. Are you arguing that this is centralized? Also, money that is collected by the ENS contracts is only held as a deposit.

Yes, I am arguing it is centralised. Read about the centralised root signature system that is the way to add new TLDs to the system. Also this is worse than the current system we have in the world because it wastes more energy in doing so! It claims it is a decentralised naming system, though looking deeper you will find it is just clever marketing and underneath is it is only ethereum-platform based naming for anyth…

You seem to have very (some would say ridiculously) high standards for 'decentralised'.

If the root multisig was deleted, would it be 'decentralised' in your book?

> It claims it is a decentralised naming system, though looking deeper you will find it is just clever marketing and underneath is it is only ethereum-platform based naming for anything like your address etc. will only work in eth browsers, not all etc. which I have already mentioned in my OP.

It doesn't claim to be DNS. DNS is not the only naming system.

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

#204

Post by nicksdjohnson » Tue, Jul 04, 2017, 6:46 AM UTC

kang wrote: post #189

nicksdjohnson wrote: post #168

Earlier quoted context omitted.

What's centralised about ENS? Also, it can be used to resolve any resource you want - although you're shifting the goalposts, since that wasn't originally a requirement.

1. the whole blockchain it is based on 2. root signatures in ENS

Okay, I'll bite. What's 'centralised' about Ethereuem, without twisting the word beyond all recognition?

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

#205

Post by sillysaurus3 » Tue, Jul 04, 2017, 7:34 AM UTC

clarky07 wrote: post #166

simias wrote: post #157

Earlier quoted context omitted.

>If you put $2 into bitcoin at any point in history and held for 2 years, you have a 0% chance at becoming a millionaire and a 100% chance at breaking even. That does not compute. What do you mean here exactly? Clearly if you invest $2 in BTC and the value of bitcoins increases 500,000% you're a millionaire. Conversely if it crashes and becomes worthless you've lost everything. But more generally I wasn't arguing sta…

I believe he is referring to the past. The history so far is such that there haven't been many losing 2 year stretches. So far, it also hasn't gone up 500,000% in two years either. So, not nearly as risky as a lottery, and not quite the same upside either.

The risk is yourself, not the market. Losing your coins is equivalent to the market crashing to 0. And it's shockingly easy to completely lose your coins, even if you're not incompetent.

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

#206

Post by Capt-RogerOver » Tue, Jul 04, 2017, 9:11 AM UTC

acdha wrote: post #197

wyldfire wrote: post #178

Earlier quoted context omitted.

> Tokens are not legally enforcable I think this is not accurate. It's more likely accurate to state that their use is not tested in courts. But if you could show corporate communications indicating "such and such mechanism will be how we track obligations to shareholders or creditors" and establish that the tokens were not paid back per the operations of the token mechanism, then in all likelihood a court would agre…

At that point, what value is all of this infrastructure adding? It seems like the real guarantees come from having access to a stable court system, well-defined contracts, trusted third parties, etc.

While there is sure some enforceability, like he says, it has to be much harder to do because there is no way these ICOs actually have as much legal text written out and agreed upon by all participants. This has to mean that it will be much easier for dishonest actors to get their wishes with ICOs, as opposed to with regular LTDs and such.

More interestingly, there seems to be no real answer for the question you have asked. What is the real value, if the courts and legalities are what people need in this situations, and those things are already in place? Sometimes it really seems like the enthusiasm of most honest people coming into ICOs is fueled by the fact that they don't understand this. They don't comprehend what stocks are really about: making sure that the state can aid in contract enforcing.

Think otherwise? Please prove me wrong. There just don't seem to be any real industrial value in ICOs, we already have stock technology.

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

#207

Post by richardknop » Tue, Jul 04, 2017, 9:53 AM UTC

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?

If you take a look at startups raising money with ICOs, they are usually based in some sort of exotic country in Asia or something like Gibraltar. I think there are couple of reasons for this.

1) Tax avoidance 2) "Safe" jurisdictions (so they don't have to worry about any repercussions in case they just run away with the money)

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

#208

Post by richardknop » Tue, Jul 04, 2017, 9:59 AM UTC

TeMPOraL wrote: post #47

wwwv wrote: post #32

Earlier quoted context omitted.

It's worthwhile to note that not a single once of the thousands of "ICO" things that have been launched in the last year have actually done anything of value. They all generate hype, raise money, and then give up and go to work on other things. It happens over and over again with no memory of the past failures, apparently. That said I wouldn't fault you for believing that a lot of the $xM raised in x ICO just turned…

> It's worthwhile to note that not a single once of the thousands of "ICO" things that have been launched in the last year have actually done anything of value. I honestly thought there was like a few of ICOs to date, and that the whole thing is like a month or two old. Does anyone track these things? A continuously updated list would be great!

Oh no, this has been going on for about a year, with increasingly more ludicrous amounts of money when random people living in exotic countries with questionable jurisdiction are starting companies and without any product, just a whitepaper (so PDF file with some nice pie charts and buzzwords) raise tens of millions of USD in exchange for blockchain tokens which then get traded on exchanges where speculators further drive up their price.

It's becoming especially more concerning now that we have one man companies raising hundreds of millions of dollars in couple of hours/days. This can't end well.

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

#209

Post by richardknop » Tue, Jul 04, 2017, 10:01 AM UTC

dandero wrote: post #194

wickawic wrote: post #40

Earlier quoted context omitted.

HN doesn't need to be a place where we can "teach the controversy" about stealing people's money. Imagine Amazon raised money by selling people BezoBucks, but promised "BezoBucks are totally safe because their value is tracked through an incorruptible distributed ledger". I think you would probably not be ok with this. I see no difference.

I considered this platform innovative, but I must say like someone stated above that most of the comments here have no clue about what we will see in the next year. The evolution of venture capital. The future of finance. And most of users at HN just see all of this as a scam. The money raised will be invested and you will see then the result of the investment. It's funny how people think about the future looking at…

I doubt it. What we will see next year will be thousands of unsophisticated naive investors losing their life savings or ending up with big credit card debts because they tried to get rich quickly without any effort, just by flipping tokens. This is a disaster in waiting.

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

#210

Post by NielDLR » Tue, Jul 04, 2017, 10:39 AM UTC

Animats wrote: post #161

Mastercoin, mentioned in the article, is now down to 85th place on Coin Market Cap. Despite all this smart contract stuff, few of these "ICO coins" give the holders any authority over anything. It's not like 51% of the coin holders can fire management. Ethereum now has half the market cap of Bitcoin, despite the total failure of the DAO, the one big application of the smart contract technology. See "Use Cases Of Ethe…

Ujo has not done an ICO.