
Beyond the boring blockchain bubble - shanev
https://techcrunch.com/2017/08/06/beyond-the-boring-blockchain-bubble/
======
throwaway6420
This. So much. As a developer, I personally feel sick thinking about all the
greed associated with cryptocurrency right now. I was an early adopter of both
Bitcoin and Ethereum, but I only mined a bit or purchased enough to build
little side projects for fun.

Now I have non-technical friends and coworkers who are suddenly millionaires
(literally, a friend bragged to me about having a few hundred BTC. He since
quit his job) because they decided to dump their life savings into this stuff
knowing nothing about it. It frustrates me to no end when I have family
members ask, why didn't you buy or mine more? Why aren't you a millionaire?
You were so into this stuff, weren't you?

Yeah, I was. As a developer, not as a speculator. It's not just about the
markets. But all of the exciting tech constantly gets drowned out by the noise
of people going on about lucrative investments and comparing coins to gold.
I'm so sick of the hype. I'm disappointed at the lack of millions I could have
made (maybe, if I were a serious "hodlr"), but I do actually see value in the
tech so it's extremely frustrating...

Distributed ledgers and consensus algorithms are neat. Greed isn't.

~~~
noddy1
If you understood and saw the promise, why didn't you load up? If you believe
Sathoshi's thesis, and believe that the technology can fulfill the stated
function, it is kind of a no-brainer to buy a few/a bunch?

In addition, even now, at $3200, the market cap of bitcoin is still only ~50
billion. If you believe it has a good shot of being a superior global reserve
currency, then it is still cheap and you should be glad that you can buy it
for $3200.

Most people I know who knew about it but did not buy constantly thought it is
worth less than the current price, whether that price is $3000 or $30. So they
never buy. Your job as an investor/speculator is to guess what something is
worth, not just look at a chart going up and wish you got in at sometime in
the past. In addition, you need to realise that the people who really do well
in any bull market or bubble are people who did stupid or manic things and
managed to catch the upside. Sensible people rarely make outlandish returns.
If you are a very level-headed, sensible person, you will not make outlandish
returns, especially short-term.

~~~
antonvs
> Your job as an investor/speculator

You missed the part where he wrote that he was into this "as a developer, not
as a speculator."

~~~
nebabyte
> I'm disappointed at the lack of millions I could have made (maybe, if I were
> a serious "hodlr")

He might say (and even believe) that he's looking at this purely from a dev
standpoint, but it's just another investor angry over sour grapes.

We are all "investors" whether you/he likes it or not. Even if you choose to
keep all your funds in cash stuffed in your mattress - that's just investing
in fiat currency :)

The technology hasn't fallen back. It's evolved, even. (With the new fork
we'll potentially even see competing alternate realities soon :D) Several devs
I know are still happily tinkering away and following the progress of various
cryptos - if you're "sick" over the sphere as it currently is, don't blame it
on external forces.

~~~
avaer
I took it more as the frustration of someone who wanted to grow a garden when
the circus rolled in to drill for oil.

~~~
nebabyte
> wanted to grow a garden

And what's stopping him? There is nothing he could do yesterday that he cannot
today, other than invest at yesterday's prices.

Hell, it's probably significantly easier to develop with today's landscape -
services and libraries being much more numerous than before - so you're going
to have to enumerate specifics if you want to argue otherwise.

------
sillysaurus3
One interesting aspect of ICO's is that the owners don't necessarily need to
build a business. It's far less work to skim the money and say the business
failed. And until anyone goes to jail for doing that, it remains a lucrative
opportunity.

Raising $120M in an ICO isn't the same as raising $120M from a VC. In the
latter case, you get nothing if the business fails.

The big question is, why are people dumping so much more money into ICOs than
into Kickstarter projects? Why does an ICO seem so much more legit? It's
mostly the same thing. Yet ICOs are somehow raising 10x more than the most-
funded Kickstarters without breaking a sweat.

~~~
anovikov
That is a gross understatement. Vast majority of ICOs are deliberate scams,
not just they aren't building a business, they have no idea how to do it, have
no relevant skills, and whole 'idea' is lunatic and would be laughed off by
even a beginner angel investor if pitched to him. In many cases, an idea is
also technically unworkable due to scaling limits of blockchains used. It is
just that: a scam. Not a bubble as in: 1990s tech bubble, or subprime mortgage
bubble. There, you got something which didn't follow the profit curve you
predicted. Here, you get nothing for your money.

~~~
magnetic
How do they manage to con so many buyers?

~~~
anovikov
Because it is a new kind of scam and it is in overhyped industry.

------
roberdam
The point with cryptocurrencies is that it's a coin with two faces, the
technical side and the speculative side, and most of the time one is not
related with the other, and makes no sense for us technical guys because the
tech is not related to the valuation.

BUT if you understand that there are two (non related) faces of the same
"coin" (pun intended) , you can use your technical expertise to have an edge
on the speculative side, why all the craziness with crypto? check out this
stats: [https://icostats.com/roi-since-ico](https://icostats.com/roi-since-
ico)

Where in the world you can bet 1000$ and earn 1.000.000$ ? , Are all ponzi
schemes? Definitely many are totally scams but many of them are here to stay
as a part of the future.

Now do this exercise, pick a number from 1 to 100, done?, go to this link and
check your crypto with the number you pick searching it by the first column.
[https://coinmarketcap.com/historical/20170101/](https://coinmarketcap.com/historical/20170101/)

Write the coin the price on January 2017, now go to :
[https://coinmarketcap.com/](https://coinmarketcap.com/)

And check If you had bought 1000$ at the first price how much did you win or
lose today, you can answer this exercise if you want here!.

My point is, why not use our technical expertise to separate the wheat from
the chaff?, understanding that you are playing on the speculative side with
the help of your tech expertise the odds are in your favor.

What do you think?

------
ploggingdev
Regarding ICOs, I have noticed a fair number of submissions to HN titled
something along the lines of "[Insert market] ICO : sale opens [date]". These
submissions are from new accounts with newly created Github and other social
media handles with an anonymous user behind the submissions. Most of the
submissions get flagged and the ICO never happens. Do these people think they
can raise hundreds of thousands or millions of dollars anonymously with newly
created accounts? It just screams _scam_.

All of the successful ICOs seem to have a team full of PHDs, investors, and
seasoned entrepreneurs and they also have commitment from a few well known
investors and entrepreneurs as social proof. Some even have "pre ICO sales" to
reward their inner circle.

For people in the know, I have a few questions:

* Who invests in these ICOs apart from the "pre ICO investors" who are generally close friends of the founders?

* How do ICOs reach these people (I'm guessing a subset are clueless retail investors and the average Joe who gets excited by the words blockchain, cryptocurrency and ICO)?

* What is the legal status of ICOs?

* Are there any case studies regarding how successful ICOs take place?

(I have no plans of starting my own ICO, just want to understand how these
ICOs work.)

~~~
noddy1
> Who invests: \- Some of the hundreds of thousands of people who have made
> big $ in crypto - especially ether

> How do ICOs reach these people: \- There are numerous
> forums/chatrooms/reddits/twitter posters etc etc. One of the common tricks
> is for ICOs to reward 2-3% of tokens in "bounty programs" which basically
> rewards participants for facebook/forum/blog/youtube posts/spam. Very large
> ICOs like bancor have done this

> Legal status of ICO's \- Unclear, but they are global and switzerland -
> where many of them are based out of seem to have liberal laws. For the SEC
> they seem to have indicated that you are likely to get in trouble if ICO's
> are more equity based, whereas "token" based network payment stuff is less
> clear.

The high early liquidity of ICO's basically mean that if an ICO has capped
investment and has any sort of credibility, the ICO will reach its cap rapidly
and when it opens on the exchanges it'll be up 3-10x and you can dump it and
make a fortune, regardless of whether it is actually vaporware or a ponzi.
This does not really happen in the past 3 months as the high demand ICO's
generally take as much money as possible and don't cap it.

I think its sad that this business is going the way of the venture capital biz
where well connected people get early/cheap dibs and average joes only get in
once all the potential gains have been sucked out. Compare this to the
ethereum ICO where everyone really got a fair short. I also think that if
these have ponzi elements, being a preferred/connected/private investor in a
ponzi makes you complicit in the ponzi scheme, whereas being an average joe
just means you're playing the game.

~~~
ploggingdev
> How do ICOs reach these people: - There are numerous
> forums/chatrooms/reddits/twitter posters etc etc.

Can you post a few links to the forums/chatrooms/subreddits/twitter accounts?

~~~
slewis
[https://www.smithandcrown.com/icos/](https://www.smithandcrown.com/icos/)

Mostly memes and mindless speculation, but you can get an idea of sentiment
here:
[https://www.reddit.com/r/ethtrader/](https://www.reddit.com/r/ethtrader/)

That's the tip of the iceberg.

------
codingmyway
I take heart in knowing that most of the people who made money were
developers, especially from ethereum which I bought to play with.

Be careful of getting emotional about it. It could well be techies and
goldbugs who knew about it early on and regret not buying earlier that succumb
to fomo last after stewing over it too long.

It's best to buy just enough to assuage your feelings so that you're
comfortable with whatever happens and then forget about it.

With so many being created, cryptocurrencies will come and go so speculating
on which will become the winner is a time consuming obession. As dev Andreas
Antonopolous says the best investment you can make is in learning the tech.

Solidity and other smart contract developers are in serious demand, paying
stupid salaries as every finance company plows money into them. The space is
still full of opportunities for developers if you look forward and around and
not back.

------
gpvos
Dumb question maybe, but if you bought bitcoin at the right time and now have
$ 1 million worth of them, is it actually possible to convert such a large
amount to dollars right now, and where would you do that? What if it were 10
million, 100 million, a billion?

~~~
runeks
You can see the depth of the various exchange’s order books on
bitcoincharts.com. For example, if you sold 4000 BTC on Bitstamp right now,
the price would fall from ~$3250 to $2300, and you would earn ~$11m:
[https://bitcoincharts.com/markets/bitstampUSD_depth.html](https://bitcoincharts.com/markets/bitstampUSD_depth.html)

Selling ten times that (40.000 BTC) would only net you ~$26.5m so, to answer
your question: selling just $10m worth of BTC on a single exchange will move
the price significantly. For $1m worth of BTC you’d move the price very
little.

~~~
cesarb
That's assuming none of the orders will be pulled before they're filled.

~~~
omgtehlion
That's what 'MARKET' orders are for. Don't be greedy and allow for some
slippage, otherwise you would give yourself out and loose even more.

Anyway, if you have enough money, why not hire someone to write you a multi-
exchange execution tool, and save some more money.

------
IanDrake
>the value of which is then inevitably measured in… US dollars, which says
something.

Which says a lot. These are crypto commodities at best. The real currency is
the US dollar.

I really wanted crypto currencies to work, instead they've made me see the
value in the Federal Reserve System even though I don't like the way it's run.

The promise of a systematic currency supply growth was enticing, but now I see
what spiking demand can do with a fixed supply. Perhaps this is a problem that
could be solved via a new supply algorithm.

------
known
Decentralized + Private + Cloud + Immutable + AUDIT TRAIL
[https://science.slashdot.org/story/16/11/21/0622255/walmart-...](https://science.slashdot.org/story/16/11/21/0622255/walmart-
tests-blockchain-for-use-in-food-recalls)

~~~
BLanen
There is no reason that can't be done with a traditional database.

------
aqsheehy
Blockchains are for dark net markets. Everything else is Ponzi pumping.

~~~
tradersam
I work for a huge company where a mouse is the boss. We are looking into
blockchains very seriously. (Obviously not speaking for them, just saying.)
Since that is the case, I don't think your assessment is correct.

~~~
tome
A mouse?

~~~
knopkop
Maybe Disney?

------
proofofstake
Every time Bitcoin hits an all-time-high, these news articles get posted. "Oh,
it's all a bubble! Surely, it will all come crashing down.". But now you also
see analysis posted like: [http://fortune.com/2017/07/03/goldman-sachs-
bitcoin-price/](http://fortune.com/2017/07/03/goldman-sachs-bitcoin-price/)

Anecdotally, but you can also see the trends in wallet increases, nearly
everybody I know under 30 owns crypto.

Will there be a bubble bursting? Sure, much like the dotcom bubble, crypto
will see its downtrend too. But look where we are now. Businesses like
pets.com could thrive.

Not all early internet developers got rich. People who bought domains like
pets.com and pizza.com got rich, and they did not need a lot of technical
know-how. If they did, the internet would have always been the playground of
highly technical people, and would not have seen wide adoption or eternal
Septembers.

I first got into Bitcoin around 2013 after lots of articles were posted about
it on Hackernews. Second stint in 2015. Finally started again two months back.
There is still (a lot of) money to be made. Some people say I missed the boat
by not buying the outlier BTC when it was 1$, but I could have also bought it
at 50$ or 200$. Heck, you think Bitcoin is going to stay at 3300$ forever?
Ethereum was 1$ 2 years back. That's a 200x-300x ROI there. I have no doubt
some newer coins will do an easy 5x in 12 months. Past two months for me have
been life-changing (possibly life-changing for my family too).

Some of these crypto companies are going to be the next Google's. Or they will
use their winnings (or ICO) to bootstrap a competitor.

Are there scammers, hackers, hoaxers? Yes, it is still very much the wild
west. Compare your email box around 2000, and the amounts of spam you had to
sift through. Some less tech savy and/or naive people will get suckered in and
some people will invest more than they can stand to lose. This is unfortunate,
but beyond my control. I may even make some money of their irrational
behavior. But people who read HackerNews? I've no doubt they can sift through
the crap to find the diamond mines in the making. To spot if a team is
technically advanced or just faking their marketing and headcount.

About the blockchain. To me it is like the early days of the internet ~1997,
but for the financial world. It has the potential to disrupt Central Banks,
FinTech, Money Transfer, Micropayments, Identity & Privacy, Money lending,
Smart Contracts, Provenance, IOT, ... Far from boring, far from bubble.

This month will see the third wave of large-scale Bitcoin interest. I've
spoken to web developers that are learning blockchain and smart contracts to
prepare 3-5 years out. People are actually betting their livelihood on this
technology. Is that a guarantee that the crypto market cap will increase? No,
but it is a sign of the times we live in and the sweet spot that Bitcoin hit
this month.

~~~
codingmyway
Domain names were the bitcoin of the dot com bubble. The digital asset that if
you got in early has largely gone up ever since.

