11–20 of 40 posts
Kickstarter campaigns follow a similar pattern to the ethereum graph shown in the article. It’s not because of a malicious user who wants to secretly own all the kickstarters. It’s because time-limited crowdfunding campaigns tend to attract the most donations at the beginning (when enthusiasm/press is high) and towards end of the campaign (when FOMO is high). Also the author should really state in the article that th…
Earlier quoted context omitted.
This is totally wrong: Since there was no "upper limit" on total cap of ether in the presale there was a significant incentive in waiting until the last minute to benefit from additional information (i.e. to know what percentage of ETH supply you were bidding on) and similarly to withhold bid info from competitors- This was partially offset by a gradual decline in ETH/USD exchange rate set by the presale terms. It se…
I've updated the post to include a chart of the Tezos raise, which was both much larger than the Eth raise and I think illustrates my point rather well.
...also, I feel like you still need to explain more explicitly why bidders making purchases in multiple lots is a nefarious thing- Does the argument just boil down to saying there were too many big fish, which means that ethereum may not be "decentralized" and therefore a security? If allowing arbitrary people to make their own purchasing decisions on an asset is not adequately decentralized, then it seems you've defined "decentralized" to the point where no asset could ever reach your threshold to fall under that definition.
- Some claim that Ether is not a security because it is decentralized and therefore not a "common enterprise" by the Howey test, but the author disagrees with this specific argument because he thinks it's centralized.
- Author believes that a "horizontal commonality" of interested Ether participants can constitute a common enterprise.
- Author believes that that GitHub and commit rights are quite centralized.
- Author speculates that the shape of the Ether pre-sale curve signifies very few participants because it strongly resembles a power curve.
Near as I can tell, the Howey precedent is for a type of asset so vastly different from a cryptocurrency such as bitcoin/ethereum that it is pretty much completely at the discretion of regulators as to whether they consider it to be a "security". I know it would be nice to live in a world where judges can use an objective reading of the law/constitution to decide for certain in one way or another on such a fact, and…
Well it's not the regulators who make the decision and set the precedents, it's the judges. Regulators are currently trying to figure out, to the extent existing precedents are inadequate, how to extend by analogy the existing precedents to the new circumstances in such a way as to convince a judge to extend the precedent. This is how a common law system is designed to work.
Earlier quoted context omitted.
I've updated the post to include a chart of the Tezos raise, which was both much larger than the Eth raise and I think illustrates my point rather well.
So I'll grant you that the differences in the smoothness in the ethereum vs tezos charts is interesting, but your argument is still unconvincing to me for two reasons: First of all, you're basically saying "The ethereum graph is so perfectly what you'd expect from an ideal auction that it can't possibly be ideal" which is the sort of argument that requires more convincing evidence. Secondly, the Tezos auction had man…
Making purchasers in multiple lots isn't nefarious at all, it just disguises how many purchasers there are, which is a relevant consideration for the _Howey_ analysis. If (arguendo) 85% of the tokens are in the hands of 1 person, that would militate against a finding that Ethereum is like Bitcoin and lacks the necessary degree of organization to constitute a scheme in which any one person shoulders personal civil or criminal liability.
If, again for sake of argument, they find that the largest hodler only holds 1% of the tokens, then that tends to make it more difficult to identify a central promoter and parallel investors (think: LPs without a partnership deed) which is usually required to bring enforcement.
I'm not making normative claims here, just saying that those three factors (common fund, repo, likely centralization of Ether holdings in few hands) tends to suggest the scheme is in the "regulated" bucket rather than the "unregulated" bucket.
Earlier quoted context omitted.
Well it's not the regulators who make the decision and set the precedents, it's the judges. Regulators are currently trying to figure out, to the extent existing precedents are inadequate, how to extend by analogy the existing precedents to the new circumstances in such a way as to convince a judge to extend the precedent. This is how a common law system is designed to work.
To be fair, It's totally reasonable that regulators/judges come come to the same conclusions that you make in your post, I just hold more cynical views as to how they arrive at those conclusions.
Near as I can tell, the Howey precedent is for a type of asset so vastly different from a cryptocurrency such as bitcoin/ethereum that it is pretty much completely at the discretion of regulators as to whether they consider it to be a "security". I know it would be nice to live in a world where judges can use an objective reading of the law/constitution to decide for certain in one way or another on such a fact, and…
Well it's not the regulators who make the decision and set the precedents, it's the judges. Regulators are currently trying to figure out, to the extent existing precedents are inadequate, how to extend by analogy the existing precedents to the new circumstances in such a way as to convince a judge to extend the precedent. This is how a common law system is designed to work.
There are four requirements for the Howey test: 1. It is an investment of money 2. There is an expectation of profits from the investment 3. The investment of money is in a common enterprise 4. Any profit comes from the efforts of a promoter or third party
Ethereum tokens are virtual commodities useful for purchasing computational services on the Ethereum network. The token's value increases as the value of the network increases...but this can only increase in part due to Ethereum holders themselves promoting and propagating the network and pluggable services into the ecosystem. By this point alone, number 4 is invalid. Another point is that Ethereum is forkable, which means that anyone is free to take the project in a different direction if they disagree with the governance or stewardship of ETH core devs. It has even undergone one major fork (ETC being a totally divergent blockchain at this point).
Even point #2 is debatable. There certainly are no expectation of profits in the classical sense with Ethereum. That someone is buying up limited supply in anticipation that demand will increase does not a security make. If that were the case, then dot com domains are securities, and all those savvy 90's speculators who snatched up desirable domain names are guilty.
Kickstarter campaigns follow a similar pattern to the ethereum graph shown in the article. It’s not because of a malicious user who wants to secretly own all the kickstarters. It’s because time-limited crowdfunding campaigns tend to attract the most donations at the beginning (when enthusiasm/press is high) and towards end of the campaign (when FOMO is high). Also the author should really state in the article that th…
I suspect there is also some degree of not wanting to back things that won't make it/wanting to back at around the time the money is taken.
I know the latter is a consideration for me at least.
Why does centralization of the holders have anything to do with whether Ethereum is a security or not? There are four requirements for the Howey test: 1. It is an investment of money 2. There is an expectation of profits from the investment 3. The investment of money is in a common enterprise 4. Any profit comes from the efforts of a promoter or third party Ethereum tokens are virtual commodities useful for purchasin…
Centralization of holders makes it look like a more traditional scheme with a central promoter.