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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?

#151

Post by nicksdjohnson »

kang wrote: post #130
heliumcraft wrote: post #83

Earlier quoted context omitted.

Ethereum has no "play" here, it isn't a platform made for token sales (aka "icos"), it's a generalistic platform that happens to have projects that do this sort of token sales.

>happens to have Sorry but ethereum has no use case, nor is technically ethereum's architecture makes distributed computation possible or even is decentralised. There is not one single dapp that is decentralised and working.

> There is not one single dapp that is decentralised and working.

Sure there is. ENS, for one example. Plenty of gambling apps for another (I don't find them particularly _compelling_, but they are there and they do work)

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

#152

Post by kanzure »

simias wrote: post #126
elif wrote: post #114

Earlier quoted context omitted.

>If anyone is saying the word "investment" while talking about a cryptocoin, smile and nod while slowly receding in the other direction. >EDIT: I think it's possible to invest in cryptocoin smiles about 1000% gains and walks away

It's like encouraging people to play the lottery because you won the big prize once. It's an very risky investment and I think it's incredibly irresponsible to encourage people to dump money in it if they don't understand fully what it's about. The "to the moon" memes aren't funny anymore when gullible people start buying bitcoins with money they can't afford to lose. Bitcoins will have to overcome massive challenges…

> none of the proposed scaling methods so far come even close

you sure? what happened to the estimates related to payment channel proposals: http://diyhpl.us/wiki/transcripts/scalingbitcoin/hong-kong/o...

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

#153

Post by elif »

simias wrote: post #126
elif wrote: post #114

Earlier quoted context omitted.

>If anyone is saying the word "investment" while talking about a cryptocoin, smile and nod while slowly receding in the other direction. >EDIT: I think it's possible to invest in cryptocoin smiles about 1000% gains and walks away

It's like encouraging people to play the lottery because you won the big prize once. It's an very risky investment and I think it's incredibly irresponsible to encourage people to dump money in it if they don't understand fully what it's about. The "to the moon" memes aren't funny anymore when gullible people start buying bitcoins with money they can't afford to lose. Bitcoins will have to overcome massive challenges…

a lottery is an absolutely horrible metaphor abuse.

If you put $2 into buying a powerball ticket, you have a ~1:290 million chance at becoming a millionaire and a ~1:50 chance at breaking even.

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.

If you left $2 sitting in your wallet for 2 years, you lost $0.05-0.10 depending upon who you believe

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

#154

Post by api »

hudon wrote: post #148
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 b…

It would be gamed.

Real resistance to gaming requires continuous adaptation. Google "red Queen's race." All closed form systems would fall.

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

#155

Post by hudon »

avsa wrote: post #149
hudon wrote: post #136

Earlier quoted context omitted.

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

> because it can't handle too much traffic

The two most popular blockchains, Ethereum and Bitcoin, can't "handle too much traffic". They both suffer from severe congestion the moment people start using them actively. Distributed databases that have existed for a while scale much more efficiently.

Blockchains do not prevent this.

> you decided you didn't want to play anymore

If the coins have value, users are incentivized to keep the app running to preserve their wealth and to preserve the value of having a network of users participating in the decentralized app. Because all the code is open source and all the data is readily available, I can easily sell off the write keys to the highest bidder. There will be bidders because the BazaarCoins and userbase has value. If it does not have value, then there is nothing lost in me burning the write keys.

The blockchain does not add value here.

> you might be tempted to create a bunch of coins on your own mysql database to pay yourself

I cannot do this without hurting the network. The data is all readable so people will know. If I'm lying about the data being available, I will be sued or worse: arrested for fraud (because I'm selling something that is not in the contract).

The blockchain does not prevent this either, by the way. If anything, it is worse: for example, the Ethereum Foundation broke their promise of honoring "code is law" by reverting transactions on the blockchain and paying people who should not have been paid. In the real world, this is fraud.

> because authorities seized your servers

Bingo! I agree with this argument. The blockchain allows anyone to use the app and disregard authority.

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

#156

Post by coolspot »

hoofish wrote: post #137
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…

Not necessarily true at all. ICOs can offer revenue pegged tokens against company future revenue - which is then used to buy back the tokens from the investors.

But there is nothing that forces such company to actually share the revenue. Tokens are not legally enforcable.

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

#157

Post by simias »

elif wrote: post #153
simias wrote: post #126

Earlier quoted context omitted.

It's like encouraging people to play the lottery because you won the big prize once. It's an very risky investment and I think it's incredibly irresponsible to encourage people to dump money in it if they don't understand fully what it's about. The "to the moon" memes aren't funny anymore when gullible people start buying bitcoins with money they can't afford to lose. Bitcoins will have to overcome massive challenges…

a lottery is an absolutely horrible metaphor abuse. If you put $2 into buying a powerball ticket, you have a ~1:290 million chance at becoming a millionaire and a ~1:50 chance at breaking even. 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. If you left $2 sitting in your wallet for 2 years, you lost $0.05-0.10…

>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 statistics, just pointing out that it's just a big gamble, like the lottery. It's extremely difficult to predict the future of bitcoin so investing in it is not entirely unlike playing the lottery.

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

#158

Post by simias »

kanzure wrote: post #152
simias wrote: post #126

Earlier quoted context omitted.

It's like encouraging people to play the lottery because you won the big prize once. It's an very risky investment and I think it's incredibly irresponsible to encourage people to dump money in it if they don't understand fully what it's about. The "to the moon" memes aren't funny anymore when gullible people start buying bitcoins with money they can't afford to lose. Bitcoins will have to overcome massive challenges…

> none of the proposed scaling methods so far come even close you sure? what happened to the estimates related to payment channel proposals: http://diyhpl.us/wiki/transcripts/scalingbitcoin/hong-kong/o...

It'll help but it's really untested and nobody knows for sure how the network will react when you change the topology and incentives like this.

In general it's a pretty complex technology that introduces a big number of new variables in the mix.

Look at the example in your paper:

>You're probably buying a coffee only once, right? Well, maybe the coffee is $5, and you put $50 into the channel and leave it open. Then someone else comes to the coffee shop and she does the same thing. But she has a channel with the grocery store. There's me, coffee shop, Alice, grocery store, they all have channels. When I go to the grocery store next time, I don't have to open a channel. Payments are routed.

[...]

>I am guessing the mean is going to be 3, but it will probably be an exponential distribution. Most people will probably have 1 channel, and then some might have 100s of channels open.

Note the use of "I am guessing". And what happens if I'm not willing to put $50 in the channel to leave it open because it's a one time thing and there's no point for me to do that? I'd say that most of ebay and other "peer to peer" purchases are like this. Would you put 10 times the amount of the transaction in a channel to some alibaba seller just for the sake of being a good bitcoin-izen?

In general I find the idea of people opening only 3 channels a year to be a tad optimistic if bitcoin is to replace Visa.

So it remains to be seen how well it'll work in practice. Maybe it'll work great, but maybe it'll be a huge mess. At any rate I wouldn't say that bitcoin scaling is a solved problem.

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

#159

Post by programmarchy »

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…

There's good arguments for the IMF and Federal Reserve being scams, too. [1]

I'd rather live in Snow Crash than Brave New World.

[1] https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years

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