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Telegram has raised an initial $850M for its billion-dollar ICO

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Re: Telegram has raised an initial $850M for its billion-dollar ICO

#81

Post by PKop »

saurik wrote: post #47
runeks wrote: post #37

The inherent issue with ICOs is pricing. Buying tokens, which can be exchanged for a service at an unknown ratio (price), amounts to financing a new fast food chain by buying a million tokens for $1,000, where the tokens can be used to purchase hamburgers once the chain opens. The problem is that you have no idea if those million tokens — once the chain is up and running — will buy a thousand hamburgers or three. So…

> the end product of the business will be cheap (as it’s priced in these tokens) Essentially every one of these services creates a distributed market and almost none of them make the mistake of somehow deciding the price of the service in tokens in a way that wouldn't cause the market to adjust to reflect the value of the token (and ironically the only one I can come up with that makes this mistake was the WhopperCoi…

But as a consumer, why would I place my trust, and store my value in your shallow liquidity token when I prefer to just hold dollars?

Certainly the company ICO'ing benefits from the infusion of money selling their token, but what is the value prop for all these different tokens for consumers? (read: not speculators or investors)

Also, if the tokens trade for fiat on an exchange, then they certainly would be volatile as far as what value they can be exchanged for. How can you ensure the service doesn't become more expensive?

Re: Telegram has raised an initial $850M for its billion-dollar ICO

#83

Post by dullgiulio »

prostoalex wrote: post #53
runeks wrote: post #37

The inherent issue with ICOs is pricing. Buying tokens, which can be exchanged for a service at an unknown ratio (price), amounts to financing a new fast food chain by buying a million tokens for $1,000, where the tokens can be used to purchase hamburgers once the chain opens. The problem is that you have no idea if those million tokens — once the chain is up and running — will buy a thousand hamburgers or three. So…

It’s launching an airline by pre-selling miles. Sure, you might have 1,000,000 miles and Platinum status on that new airline, the boarding passes are on the blockchain, but the airline gets to control the mile redemption rates and status privileges for that Platinum level.

Except, of course, that the majority of ICOs today are not organized by airlines (as in, businesses with known market prospects), but by random groups of people with sketchy plans, many not even incorporated (as the saying goes "some even have a homepage".)

Re: Telegram has raised an initial $850M for its billion-dollar ICO

#84

Post by runeks »

prostoalex wrote: post #53
runeks wrote: post #37

The inherent issue with ICOs is pricing. Buying tokens, which can be exchanged for a service at an unknown ratio (price), amounts to financing a new fast food chain by buying a million tokens for $1,000, where the tokens can be used to purchase hamburgers once the chain opens. The problem is that you have no idea if those million tokens — once the chain is up and running — will buy a thousand hamburgers or three. So…

It’s launching an airline by pre-selling miles. Sure, you might have 1,000,000 miles and Platinum status on that new airline, the boarding passes are on the blockchain, but the airline gets to control the mile redemption rates and status privileges for that Platinum level.

> It’s launching an airline by pre-selling miles.

If that’s the case, then where does Telegram state what and how much one token can be redeemed for?

An airline “mile” is redeemable in something physical (being flown a mile), but I haven’t seen any information on what I can redeem a Telegram ICO token for (although I may have missed that).

Unless Telegram explicitly allows people to redeem their tokens for some specific quantity of a service, then it does indeed amount to selling a service at an unspecified price.

Re: Telegram has raised an initial $850M for its billion-dollar ICO

#85

Post by wellboy »

runeks wrote: post #37

The inherent issue with ICOs is pricing. Buying tokens, which can be exchanged for a service at an unknown ratio (price), amounts to financing a new fast food chain by buying a million tokens for $1,000, where the tokens can be used to purchase hamburgers once the chain opens. The problem is that you have no idea if those million tokens — once the chain is up and running — will buy a thousand hamburgers or three. So…

> once the chain is up and running — will buy a thousand hamburgers or three

Like almost all dichotomies, it's a false dichotomy.

Most ICOs end up going up by 2x, but having the 1000x you described are very rare, plus ICOs going down in price are also not as frequent. Most ICOs stay in their price range.

Re: Telegram has raised an initial $850M for its billion-dollar ICO

#86

Post by beefield »

dfox wrote: post #78
beefield wrote: post #72

Earlier quoted context omitted.

But isn't there some link between ICO and traditional cryptocurrencies? I thought the transactions are somehow logged to e.g. ethereum blockchain?

Most tokens are implemented by ethereum contracts, because it is the simplest way to implement such thing, but they don't have to be.

Here is where I go confused. New tokens are supposed to be completely independent from ethereum economically, but at the same time they are somehow ethereum contracts. Would that not mean that someone needs at some point own ethereum and take the market risk?

Re: Telegram has raised an initial $850M for its billion-dollar ICO

#87

Post by skellera »

munchor wrote: post #82
orasis wrote: post #80

Given that Russians created Telegram, why does anyone trust it?

This is a quite racist and unnecessary comment. It doesn't belong on Hacker News.

I am not sure how you think that’s racist. Distrust in Russian products is a current discussion.

Re: Telegram has raised an initial $850M for its billion-dollar ICO

#88

Post by wmf »

PKop wrote: post #81
saurik wrote: post #47

Earlier quoted context omitted.

> the end product of the business will be cheap (as it’s priced in these tokens) Essentially every one of these services creates a distributed market and almost none of them make the mistake of somehow deciding the price of the service in tokens in a way that wouldn't cause the market to adjust to reflect the value of the token (and ironically the only one I can come up with that makes this mistake was the WhopperCoi…

But as a consumer, why would I place my trust, and store my value in your shallow liquidity token when I prefer to just hold dollars? Certainly the company ICO'ing benefits from the infusion of money selling their token, but what is the value prop for all these different tokens for consumers? (read: not speculators or investors) Also, if the tokens trade for fiat on an exchange, then they certainly would be volatile…

Most ICOs don't have much value prop, but Telegram has a lot of network effect lock-in that they can use to force people to use their token for any services that ride on the Telegram network. And according to the leaked white paper, they're planning to offer every imaginable service similar to WeChat.

Re: Telegram has raised an initial $850M for its billion-dollar ICO

#89

Post by alehul »

amasad wrote: post #33
mrb wrote: post #27

Earlier quoted context omitted.

Per the SEC filing, yes, they are receiving the $850M as cash from private investors (mostly VCs). The "product" they are selling is tokens for their ecosystem, described in this leaked whitepaper: https://drive.google.com/open?id=1oaKoJDWvhtlvtQEuqxgfkUHcI5...

Does it say in the document who the investors are? How did you know they are VCs?

Not the parent, but I suppose it's safe to assume that VCs populate most large deals in tech. He also said 'per the SEC filing', so his source could be that.

With that said, Telegram's founder, Pavel Durov, is a Russian entrepreneur and of the $850m from 81 investors, an entire $300m was invested by a well-known oligarch in the country, Roman Abramovich.

Re: Telegram has raised an initial $850M for its billion-dollar ICO

#90

Post by wmf »

beefield wrote: post #86
dfox wrote: post #78

Earlier quoted context omitted.

Most tokens are implemented by ethereum contracts, because it is the simplest way to implement such thing, but they don't have to be.

Here is where I go confused. New tokens are supposed to be completely independent from ethereum economically, but at the same time they are somehow ethereum contracts. Would that not mean that someone needs at some point own ethereum and take the market risk?

Yes, to transact tokens that run on top of Ethereum you have to pay transaction fees in ETH, which AFAIK means you need to buy at least a small amount of ETH. There are some recent proposals that would allow fees to be paid in other tokens, so I guess if those go through then you could use tokens without ever touching ETH.
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