
How I Accumulated 2M Stellar in Less Than 24 Hours - everettForth
https://medium.com/@everettforth/how-i-accumulated-2-million-stellar-in-less-than-24-hours-98b89af934cb
======
jnbiche
I just read at the top of Stellar's forum a note from Joyce Kim, CEO of
Stellar:

>We expect that as a price for stellar becomes more established, we'll have to
continually adjust the total amount of the giveaway to make sure it keeps
making sense.

So they're already dialing back their distribution promise. This is _exactly_
what happened with Ripple. When Ripple first started, there were assurances
that all but 20% of Ripples would be distributed "as quickly as possible".

That didn't happen.

Several years later now, Ripple has decided to basically keep as many ripples
as they can, which is supposedly part of what led to the split between Jed and
the Ripple leadership/owners.

All this is a funny commentary on human nature. As an outsider, it's as clear
as day to me that in order to succeed, Ripple needed to rapidly distribute as
many XRP as possible. After all, 5% of a lot of money is worth much more than
50% of nothing. The only other missing ingredient for Ripple was community
engagement.

And with Stellar I fear we'll see the same thing (at least with respect to a
rapidly decreasing distribution rate).

These issues are exactly why Bitcoiners are so scornful of "pre-mined" coins.
All things considered, proof-of-work and proof-of-burn are still by far the
fairest and most successful currency bootstrapping methods. Stellar uses
neither.

Bootstrapping a currency is the ultimate Zen undertaking: in order to make
money as a crypto-bootstrapper, you must find ways to distribute it, either by
giving it away or (preferably) by fostering entrepreneurship and spending it
on those merchants who take a chance on accepting it.

A lesson much of the Bitcoin community still hasn't taken to heart, which is
likely the only reason why interest in the coin is failing to pass on from the
early adopter to the early majority.

~~~
mrb
_" interest in the coin is failing to pass on"_

What makes you think it is failing? Literally all the indicators show that
interest in Bitcoin is growing:

\- Payment processors are growing very fast (eg. BitPay is signing up 500-1000
new merchants every week:
[http://www.youtube.com/watch?v=f8YSivdLKf0](http://www.youtube.com/watch?v=f8YSivdLKf0)
and see
[https://news.ycombinator.com/item?id=7974197](https://news.ycombinator.com/item?id=7974197))

\- Even very large companies began to accept Bitcoin: Dell, Expedia, Newegg,
Dish Network, Overstock, TigerDirect...

\- BTC continues to gain value --chaotically through bubbles but still gaining
value overall:
[http://bitcoincharts.com/charts/bitstampUSD#rg730zigWeeklyzc...](http://bitcoincharts.com/charts/bitstampUSD#rg730zigWeeklyzczsg2012-01-01zeg2014-08-03ztgSzm1g10zm2g25zl)

\- Bitcoin VC investment reached $158 million this year, and is on target to
reach $200-300 million, approximately 2x-3x more than last year:
[http://www.coindesk.com/bitcoin-venture-
capital/](http://www.coindesk.com/bitcoin-venture-capital/)

~~~
jnbiche
Interest among _businesses_ and _institutions_ has increased and to an
impressive extent. Interest among users seems to have stagnated.

If you can show any metrics pointing to an increasing rate of adoption among
_users_ , I would be greatly heartened.

Instead, we seem to be reaching a wall between the early adopters and early
majority. This is a well-known chasms in the technology adoption cycle, and
I'm a bit concerned about Bitcoin's ability to jump it, particularly given the
current "hodl" mentality of most users of the coin.

On the other hand, if there's another big jump in price (not unlikely), then
there will likely be increased interest among users. So I'm not saying Bitcoin
will never gain majority adoption. I'm just saying that at this point, things
don't look as promising as they did a year ago.

~~~
waterlesscloud
What's your indication that it's stagnated? Other than a guess?

~~~
JeremyBanks
I don't know if this is what jnbiche was referring to, but maybe the
transaction volume isn't growing particularly fast. I don't know how
useful/descriptive these numbers are, but from a quick look at
blockchain.info's charts: the absolute number of transactions per day looks
like it's only up by about 20% over the last year [1]. However, the USD value
of transactions conducted is up by something like 200% [2]. I don't know how
we could tell what fraction of these represent actual purchases, as opposed to
individuals just moving their own coins around...

[1]:
[https://blockchain.info/charts/n-transactions?timespan=1year](https://blockchain.info/charts/n-transactions?timespan=1year)

[2]: [https://blockchain.info/charts/estimated-transaction-
volume-...](https://blockchain.info/charts/estimated-transaction-volume-
usd?timespan=1year)

~~~
cgjaro
Actually the number of transactions grew +90% year-over-year, which is pretty
fast growth! At +90% year-over-year, Bitcoin will reach 600k transfers/day in
3.5 years (what Western Union does today). Compare 2013Q2 with 2014Q2:

\- 2013Q2: 3.0 million transactions

\- 2013Q3: 3.8 million transactions

\- 2013Q4: 4.8 million transactions

\- 2014Q1: 5.7 million transactions

\- 2014Q2: 5.7 million transactions

You can get these values from the graph at
[http://www.quandl.com/BCHAIN/NTRAN-Bitcoin-Number-of-
Transac...](http://www.quandl.com/BCHAIN/NTRAN-Bitcoin-Number-of-Transactions)
(select QUARTERLY).

------
gus_massa
Stripe paid $3000000 for 2000000000 stellars @$0.0015. He's paying up to $2
for 5000 stellars @$0.0004. So the MT are selling it at a 25% of the Stripe
price.

IF stellar is a success, hoarding can be a good idea. But if this has a fate
similar to to Auroracoin (also heavily premined, handed out for free to
everybody) the price may drop 20 fold:
[http://en.wikipedia.org/wiki/Auroracoin](http://en.wikipedia.org/wiki/Auroracoin)

~~~
imaginenore
And it will. There's nothing revolutionary about Stellar. It's a fork of
Ripple (the founders of which already cashed out).

Instead of inventing yet another premined coin Stripe should have integrated
Ripple.

~~~
EarthLaunch
They should have integrated Bitcoin.

~~~
imaginenore
Yeah, they should have.

------
malanj
That seems like the market mechanism working as it should. It's a little
tacky, but effectively the turkers are valuing their Stellars really low. I'm
not sure it's a problem.

Arguably Bitcoin was the same initially, except in Bitcoin's case you paid CPU
manufacturers and electrical utility companies who preferred to be paid cash
than mine Bitcoin themselves. Division of labour in action.

------
joyce
I am the executive director of Stellar. Wanted to share my reply to the MTurk
stuff: [http://forum.stellar.org/t/stellar-
updates/1026](http://forum.stellar.org/t/stellar-updates/1026)

~~~
cheshire137
On my laptop, I scroll the screen but cannot read all the text in the blue
popup titled "Updates from Stellar HQ." It just scrolls the white page
underneath, which is not what I'm trying to read.

~~~
alanfalcon
Yeah I had a lot of problems with this on my iphone

------
SandroG
I bet that the unsuspecting Mechanical Turk workers, who traded their 6000
Stellars, did not realize that this was a one-time deal, rather than a
repeatable revenue opportunity.

Mechanical Turk workers are used to low-paying and high-volume jobs. The $1.00
fee is very attractive for the steps involved, if this was a repeatable job.
It's only natural to assume that every worker would attempt to create another
Stellar account and retry the steps anew, only to be confronted with a an
error after the first attempt.

And, unbeknownst to them, if Stellar does become a success, those workers will
forever be left on the sidelines. Considering that Stellar has the potential
to include the world's underprivileged into the global economy, often without
bank accounts or identities, it's a shame that we are the first to take
advantage of them.

~~~
Aqueous
Or Stellar flops and the guy just spent 24 hours of his life and $50 or so
dollars to accumulate a bunch of useless not-even-paper. It could go either
way. The mechanical turk workers implicitly made the bet that stellars will
not be worth much more than they are worth today in the future - and were
thus, reasonably, willing to trade nothing for real actual money that's there
right now.

~~~
SandroG
Those same workers could have traded in their 5000 Stellars for $50 on Stellar
Forums. Everett was actively selling 5K Stellars at $50
[[http://forum.stellar.org/t/i-want-to-buy-your-
stellars-50-fo...](http://forum.stellar.org/t/i-want-to-buy-your-
stellars-50-for-your-5-000/520/32)], while buying them at $1 on Mechanical
Turk.

~~~
ghshephard
Otherwise known as "Arbitrage" and something that _any_ commodity, let alone
_currency_ faces in the first 30 seconds on the market.

If it wasn't Everett, there is a 100% guarantee that if there was money to be
made, that any one of another 10,000 people would be immediately utilizing
this mechanism.

------
opendais
Everett,

The cat was out of the bag before you even tried. The only difference is
others showed restraint and didn't break Stellar's mechanism intentionally.

When I pointed out you could buy access to FB accounts, you weren't actually
supposed to go out and do it, y'know?

Just because we can break dumb mechanisms like these just means we have to
show restraint. :/

>
> [https://news.ycombinator.com/item?id=8115497](https://news.ycombinator.com/item?id=8115497)

>
> [https://news.ycombinator.com/item?id=8115430](https://news.ycombinator.com/item?id=8115430)

~~~
kibibu
I _know_ there are clever people working on this, but I can't see how any
system based on handing out free money can really work.

"Since we decided a few weeks ago to adopt leaves as legal tender, we have, of
course all become immensely rich."

~~~
opendais
Honestly, I'm mainly just angry someone went out and basically ignored the
fact multiple people told Stellar this would happen. Then went and did it.

------
cconcepts
Am surprised no one with the coding skills has put up a graph showing the
value of a Stellar over time. A rudimentary beginning could be a derivative of
these values: [http://bit.ly/1o2eBJl](http://bit.ly/1o2eBJl)

Which is currently around $0.000353USD/STR ($2.05/5800)

~~~
striking
What was supposed to be at that link? Could you take a screenshot?

~~~
cconcepts
It was the Mechanical Turk page showing people buying/selling Stellar

------
dan_bk
Is USD 1.00-2.00 really enough of an incentive for people to do this (instead
of keeping the Stellars), considering they (normally) can do this only once
(b/c 1 FB account)?

(Edit: it seems more likely to me that, if this was done over MT, the people
working on MT were in turn using botnets for scale.)

~~~
listic
I actually thought it is way too much. People are filling surveys for cents
there, after all.

------
prezjordan
Why would you _tell_ people this?

~~~
opendais
For some reason the link to the other HN thread got downvoted so:

[https://news.ycombinator.com/item?id=8124119](https://news.ycombinator.com/item?id=8124119)

He got outed.

------
iamjdg
hey everett, just because you are so ahead of the curve i used my "send 1000,
receive 1000" new stellar account promo on you..well deserved, spend wisely...

------
everettForth
[https://twitter.com/EverettForth/status/495725720464023552](https://twitter.com/EverettForth/status/495725720464023552)

------
hankhill
Not only is he arguably violating Mechanical Turk's terms of service by simple
asking people to sign up for this in the first place, he's even gaming MTurk
itself by creating multiple Amazon accounts with pseudonyms and spamming the
marketplace with requests. Cute, Mr. Forth, really, really cute.

Update: If you don't believe it, here's a screenshot straight from HIT
Scraper, a Greasemonkey script MTurk workers often use to display job listings
on Mechanical Turk in a more easily parsable fashion:
[http://imgur.com/DOAIuy3](http://imgur.com/DOAIuy3)

Not sure how he pulled this one off, considering Amazon is now requiring a
verified SSN or tax ID for requesters to purchase money to post HITs, but
there you have it.

~~~
yincrash
When was the screenshot taken? Once the cat was out of the bag about what he
was doing, I'm sure many people decided to also try the same thing.

------
SandroG
Everett's response is much appreciated.

Per my original HN post last night which broke the story
[[https://news.ycombinator.com/item?id=8124119](https://news.ycombinator.com/item?id=8124119)],
I still think that he gamed the system. If I remember correctly, he asked
mTurkers to create a Stellar account _without_ an identifiable account name so
the transaction couldn't be easily backtracked. Also, he did not use his real
name in mTurk and impersonated someone else. Not sure if his actions violated
the ToS.

It was right for Everett to have come forward and disclose his means. His
suggestions to improve the system are excellent. It will improve the Stellar
system for everyone involved. Nevertheless, I believe that he should donate
his balance to a charity. It will be an honorable thing to do.

Sandro

~~~
lessnonymous
It makes no sense to suggest he donate it to charity. He found a pile of
people willing to sell him the goods at a price both they and he were happy
with. If something like Stellar is to succeed you can't put limits on the free
market and the transactions that are allowed to take place using them.

Just because he didn't use his real name doesn't make the transaction less
valid. And just because the task didn't use an identifiable account name
doesn't make the transaction less valid.

What you're insisting is that you can't buy something from someone on
Craigslist using a fake name and meeting in a place that nobody else can tell
where you made the transaction. In other words, 99% of Craiglist transactions.

~~~
SandroG
He found a pile of people looking for a job, and willing to perform a set of
tasks for a certain price. Nowhere was it disclosed that this was a one-time
deal, and by proceeding they would be forever limiting the upside of their
personal economic prosperity.

If you disclosed to these people that this is a one-time transaction, and that
they will forever be parting ways with their only allotment of currency which
might appreciate in the future, and which is currently valued 50X higher, I
bet you wouldn't get as many takers.

~~~
avalaunch
I think most people are aware you're only allowed one Facebook account thus
the fact that it's a one-time deal is implied.

I also think most of the turks probably thought it a good trade: $1-2 USD for
5000 funny money. I imagine most turks, like most people, aren't familiar with
cryptocurrencies and the only way they will ever hear of Stellar again is if
it becomes so commonplace that the giveaways are long a thing of the past.

Compared to the rates that the other MT tasks pay, I think they made out
pretty good.

