
Easiest Path to Riches on the Web? An Initial Coin Offering - robbiet480
https://www.nytimes.com/2017/06/23/business/dealbook/coin-digital-currency.html
======
jamespitts
I would like to make an appeal to the YC community: please reach out and help
guide those involved in this rapidly advancing phenomenon.

There is a huge amount of instantly-deployable capital in Ethereum and
Bitcoin, held by individuals now seeking ways to put it to work. Many
technologists will naturally make use of this energy, but so will BS artists
and people under the influence of hubris.

I am making this appeal because it is irresponsible to stand by and watch so
much financial energy be directed at projects without appropriate constraint.
Many firms funded by ICOs (or soon to be) have qualified leaders and
developers and are developing great ideas, but IMO many are also raising too
much money for their own good.

What may be needed to guide these rockets to their full potential are
maturity, mentorship, and the careful application of jurisprudence and
principles of accounting.

~~~
MachinShinn-
>Many firms funded by ICOs (or soon to be) have qualified leaders and
developers and are developing great ideas, but IMO many are also raising too
much money for their own good.

No, there aren't. Real money has never been cheaper than it is now. Never in
human history. USD, Euros, JPY, etc. Super cheaper. Low single digits to
borrow. Anyone doing an 'ICO' is trying to cash out at your expense, big time.

~~~
pascalxus
Welcome to the everything bubble. For those of us keeping a list, here it is:

\- Government spending/borrowing bubble

\- Education Loans bubble

\- Housing bubble (at least in CA, but also worldwide to some degree)

\- Bit coin, Ethereum, Coin bubble

\- Stock market looks a bit frothy too - all the leading technical indicators
show things won't be too rosy for the next 10 years.

Did I miss any?

~~~
RikNieu
Gold? How's gold doing?

------
realworldview
So this is like buying food vouchers that I can redeem at a store that hasn't
yet been built, if indeed it has been given planning permission and even if it
does eventually get built, I have no idea how the service and product will
taste. And I can't then report any irregularities.

Ponzi? No. Unregulated gambling? Of course.

Sign me up!

~~~
Cakez0r
It's worse than that. In some cases, the coins literally serve no purpose. To
use your metaphor, it's like buying StoreBucks for a store that hasn't been
built yet, with no promise that you'll be able to redeem your StoreBucks for
anything at all.

For example, a project called Status ([http://status.im/](http://status.im/))
recently held an ICO in which people were tripping over themselves to buy
Status's coins. It actually backed up the Ethereum network for several hours
with pending transactions and they raised over $100 million USD worth of
Ethereum (at the time). See if you can find on their website a description of
what the coins are actually used for. I can't!

~~~
Jabanga
The explanation of the token's use is right here:

[https://status.im/whitepaper.pdf](https://status.im/whitepaper.pdf)

------
ransom1538
I have a fetish for watching complicated court cases play through. What you
realize is a judge in a courtroom has a lot of power. They can take your
money, freedom or even kids. However, if I had few hundred thousand in
Ethereum encrypted placed into a few random anonymous git hub repros, well,
the government can't take it. It is truly yours. No one can take it. That must
be horrifying proposition for (some) governments - the inability to control
people.

~~~
xyzzy_plugh
And if you go hide a few million bucks in cash in the middle of a desert, they
can't take it either.

The hard part has always been getting it out and not getting caught.

Nothing is truly yours.

~~~
RexetBlell
That could work, but cryptocurrencies are more convenient. You could transfer
your coins anywhere in the world much easier. For example, you could donate
your coins Wikileaks undetected, but it's much harder to do that with cash
buried in the desert. It's also possible that the government may declare some
bills invalid (what happened in India with larger bills). Also, government
could inflate away your wealth by printing more currency.

~~~
aub3bhat

        It's also possible that the government may declare some bills invalid (what happened in India with larger bills). Also, government could inflate away your wealth by printing more currency.
    

At end of the day governments control both the network via (ISPs & Networking
equipment) and processors (Try producing an 8080 in your backyard.).

You make mistake of assuming that countries won't put up a global firewall
that makes bitcoin/ether network impossible to operate. If China can filter
traffic at internet scale, crippling Bitcoin network even if say EU/US/China
are on board is trivial.

Currencies are backed by the only thing that matters, its will/trust of the
people. And no amount of crypto changes that. Unless of course you have some
magical way of baking silicon on your own into processors and other chips used
in computers and networking equipment in your backyard.

~~~
Jabanga
Governments are not a conscious entity that is separate from society. They are
institutions run by a collection parties with numerous competing and aligning
interests, and with extensive stakes in society at large. They're not going to
do something as massively destructive to society at large as ban encryption
and prohibit all microprocessors lacking a back door.

~~~
aub3bhat
HN/BitcoinTalk/etc, suffer from extreme (pro-crypto) filter bubble. The
average man/woman on the street ("society") could care less about
Bitcoin/Ether. Just look at the whole Net Neutrality debate.

Bitcoin/Ether barely register in terms of the total economic activity (75
Billion $). With significant fraction unusable. They will either be tamed or
destroyed.

In fact another way of looking at cryptocurrencies is as a revolt against the
Visa/MasterCard duo-poly & regulations that has made digital transactions too
difficult. The moment digital transactions become cheaper/more-efficient, the
allure of crypto-currencies will disappear.

~~~
Jabanga
It's not Bitcoin/Ether that the average person on the street cares about. It's
the collateral damage that will be done if broad categories of technology are
banned or have their security completely compromised. That's the only way to
stop a purely informational technology.

As for the allure of cryptocurrency, only time will tell. I predict they will
continue to grow in prominence.

------
mathieuuu
I am amazed that in 2017, there is still people qualifying Bitcoin or Ethereum
of ponzi schemes. Crypto currencies have a lot of problems (technical,
economical, philosophical, ICO are insanes) but saying they are ponzi schemes
is plain wrong. And it just takes 5 minutes of reading on Ponzi Schemes signs
and basic knowledges of how those currencies work to understand why.

~~~
RexetBlell
They are as much a Ponzi scheme as gold (which has almost no practical use)
and ugly paintings that cost millions [http://www.therichest.com/luxury/most-
expensive/10-ugly-piec...](http://www.therichest.com/luxury/most-
expensive/10-ugly-pieces-of-art-you-wont-believe-sold-for-millions/)

If expensive ugly paintings are not a Ponzi scheme, then cryptocurrencies are
not a Ponzi scheme.

~~~
ShabbosGoy
Ether is more like oil - it is a fuel source used to power smart contracts,
token sales, and autonomous organizations.

~~~
ailideex
This analogy is not accurate.

~~~
nathan_f77
"gas" is actually a common term used in the Ethereum community. [1] [2]

[1] [https://ethereum.stackexchange.com/questions/3/what-is-
meant...](https://ethereum.stackexchange.com/questions/3/what-is-meant-by-the-
term-gas)

[2] [https://www.ethereum.org/token](https://www.ethereum.org/token)

~~~
DennisP
Yes but ETH and gas are not the same thing. You use ETH to buy your gas. The
gas is burned up in use. ETH is paid to the miners, who can use it to pay
their expenses.

------
ashnyc
ICO are the best thing that ever happened. This is no different then
kickstarter.com started. People where saying the same things. People put up
lot of BS project and they got funded, in time these kind of project will fail
on there own. This is just the start, no government or bank would have
supported such system. For once, the small guy can participate in this market.
I would have loved to invest in amazon, facebook, etc when they where private.
You had to have the connection and access .. here the little guy in columbia
or Africa has the same access to such a deal

~~~
ailideex
> I would have loved to invest in amazon, facebook, etc when they where
> private.

I'm sure if you wen't to them then and said here is money plz give share they
would have considered it. Everybody want's to have gotten into the big giants
when they were small - but there are many small cap/penny stock companies you
can invest in now ... yet people don't. There are even non listed share
trading options. And the reason is because hindsight is 20/20 ... it takes
experienced and diligent investors to make good investments that beat the
market - it's exceptionally rare.

ICOs are not like getting into Amazon/Facebook/etc early. It's like penny
stocks or worse. Could it pay out big ? Sure ... why not. So can the lottery.
But there is no enforcement on any of these things in the real world, no
shareholder rights and no protections.

> People put up lot of BS project and they got funded, in time these kind of
> project will fail on there own.

People keep funding these BS projects and loosing their money though. Let's
not pretend nobody is loosing, and I'm actually pretty sure with kick-starter
garbage most of the time nobody is winning.

> For once, the small guy can participate in this market.

I'm not sure what market you think you were excluded from, but I doubt this
was the case.

> You had to have the connection and access .. here the little guy in columbia
> or Africa has the same access to such a deal

... this is just wrong.

~~~
sharemywin
\- try investing in a high flying startup as a non-accredited investor.

~~~
ashnyc
Thank you, that is what i am talking about. I don't mind trying my chance by
investing a few K in a good idea, that can get me astronomical return.

~~~
ailideex
There are options for investing in Reg D companies - and I would like you to
give some actual examples of where you would have done this for Reg D
companies if you could - and how you tried to invest in Reg D companies and
how you were turned down.

The main reason why your line of thinking is flawed is - most cases if you
know the people to a point where you trust them to invest in them - you will
be covered under Reg D affilated investor - and in other cases you probbably
would not invest anyway.

Further, so far I have yet to see a practical example where crypto actually
acts as shares - with the same protections (but via smart contracts or
whatever). So while maybe one day, so far it has not delivered on this
promise.

Your basically happy that at the moment crypto allows you to do exceptionally
stupid things with your "money".

------
matt_wulfeck
These crypto coin bubbles can't pop soon enough.

~~~
soup10
The problem is they will pop, and then come back. They are like a resilient
strain of disease. Each time people lose faith in them they develop new ideas
and arguments for why they are the future. They aren't the future, they are
deeply flawed ponzi-schemes, this is obvious. But we better find out what the
future is before they start converting the gullible masses to a currency that
is less secure in many ways that is swept under the rug. People are getting
hurt by being swept up in cryptocurrency mania; and its not going to end
anytime soon. There is talk of China developing new digital currencies(or
adopting bitcoin) for stronger population control. There are innovative things
happening here, its not all bad, but some of it is clearly evil.

~~~
Jabanga
>They aren't the future, they are deeply flawed ponzi-schemes, this is
obvious.

By definition, they are not ponzi schemes. None of your claims are obvious,
and implying otherwise is disingenuous.

>But we better find out what the future is before they start converting the
gullible masses to a currency that is less secure in many ways that is swept
under the rug.

Ah yes the "gullible masses", and the wise men and women who know better.

How about we respect other people as adults who have a right to buy whatever
they want with their own money and stop trying to treat them like sheep that
need to be protected from their own gullibility. Your presumptions of knowing
what's best for them, to the point where you'd like them to be denied the
option of buying them, are extremely condescending.

~~~
ruytlm
>By definition, they are not ponzi schemes. None of your claims are obvious,
and implying otherwise is disingenuous.

So, it doesn't meet the technical definition of a very specific type of
financial fraud, therefore everything is hunky dory?

~~~
d23
No, it's just that the folks railing against it sound like sour grapes. If you
want to pick a convincing analogy, do so. Calling it a Ponzi scheme doesn't
fit and makes it sound like you're more interested in being contrarian than
making a substantive point.

------
sleepychu
Last month, a small team of computer engineers in Lithuania raised $14 million
in 45 minutes by selling a coin, known as Mysterium, that is intended to give
access to an encrypted online data service that is still being built.

There has to be more background to this? Why would they ever bother building
the service if they have the 14M in cash?

~~~
adbachman
Because unless they've sold their ethereum, they don't have $14mil or
equivalent CHF, they've got ehthereum worth that much.

It's imaginary money, still, or I'm sure they would cash out.

~~~
dmurray
Ethereum is exchangable for USD (or EUR, which is the currency in Lithuania).
Calling it imaginary money isn't helpful here. I'm sure they have cashed out
at least some of that.

As for why they would take investors' money (not really investors according to
the SEC) and actually build their product? Maybe they value keeping their
promises, or their dream is to build this product and the $14mm is just a
means to that end.

~~~
adbachman
> Calling it imaginary money isn't helpful here.

"Imaginary" in the sense that it's unrealized in the currency in which it's
described, exchangeable only if there are enough people willing to pay the
market rate at the moment. "Unrealized" may be better than "imaginary", that's
a fair criticism. So it wasn't $14m USD, it was ETH whose market value at the
time of calculating was potentially $14m.

To pay employees or themselves I'd also bet they cashed out a slice. I'd love
to see a tracker for % of ETH raised at ICO and subsequently sold off. I
wouldn't be surprised if the recent flash crash[1] was an ICO selloff.

[1] [http://www.zerohedge.com/news/2017-06-21/ethereum-flash-
cras...](http://www.zerohedge.com/news/2017-06-21/ethereum-flash-crashes-
after-status-ico-clogs-network)

------
bluetwo
200 years ago in the U.S. regional banks printed their own currency. The
constitution does not create a common US currency, although we have been
operating as if it does.

Will a non-nation state be able to generate enough credibility to run their
own currency that lasts a lifetime?

I don't know be I think it's interesting to watch.

And if they do, it may force central banks into a corner by limiting their
ability to print money (i.e., lowering the value of your currency by printing
money will cause people to move their money to the alternative currency,
leaving you with inflation).

~~~
Pinckney
Has there ever been any successful privately issued non-backed non-crypto
currency?

~~~
tetraca
On a local level there have been a good few, particularly local time-based
currencies. I can't point to one that ever had national level adoption,
however.

------
equityloan
So these ICOs are currently legal? In that case, is it legal to have an ICO
for shares in an existing private company?

I am imagining the following scenario:

Someone has some vested shares in a startup. They send proof of their shares
to some administrators of this hypothetical service. The shares are then
listed on the website. Someone browses the website and decides that they like
the company, and they want to invest $10k. They make a request on the site,
and then transfer $10k worth of Bitcoins to a specific address. The Bitcoins
are then transferred to the person with the shares.

When the company has an acquisition or an IPO, the person then buys $X worth
of bitcoins, and sends them to an address, where they are distributed among
the investors.

This would be highly illegal, no? Something that would have to operate on the
darknet? So then why are people getting away with ICOs?

P.S. As you might be able to tell from my username, I've been trying to figure
out a way to sell some of my shares in a private company. (They're a unicorn
in Silicon Valley.) You could call it an options contract. Or you could call
it a loan, that would be repaid if/when the company has an exit. I've tried
using a secondary market service, but the company blocked the sale.

P.P.S. This is completely unrelated to any of the above, but feel free to send
me $20k worth of Bitcoins or Ethereum. I could even send you a link to my
LinkedIn profile. But of course, this would just be $20k with no strings
attached. But who knows, you might receive some bitcoins in the future.

~~~
wc-
It is important to clarify that buying one of these tokens does not result in
you owning a 'share' or a percentage of the company that issued them. Some
lawyers are using this lack of ownership as a critical part of their argument
that tokens are not a security and therefore ICO's are legal.

It's complicated and a very gray area right now. In response to this gray-
ness, ICO's are now requiring investors to declare that they are not from the
USA and some are geoblocking USA residents.

Obviously this means nothing, if a US citizen wants to buy they still will,
but it is an interesting case of Cover Your Ass From the SEC taken by the ICO
companies.

~~~
api
So it's illegal to do an ICO and offer something of actual potential value,
namely shares?

Seems like a serious unintended consequence of regulation.

~~~
bjl
Basically, its illegal to market exotic investment opportunities to
unaccredited investors (for good reason IMO). Same reason only accredited
investors can invest in things like CDOs and weather derivatives.

~~~
api
Could you do an ICO or BTC share sale to only accredited investors with an
online form asking for details a statement to that effect?

I recall from angel funding that the criteria is that you must ask, and that
you must have "no reasonable reason to doubt" that a person is an accredited
investor. The language is nice and vague, as per SEC regulatory standards.

------
quantdev
With regards to cryptocurrencies, which the standard HN anti-crypto groupthink
is bashing in full swing, let me just point out that most bashings I've seen
on here are US-consumer-centric and don't consider the needs of countries with
oppressive governments that aim to control the wealth and labor of their
citizens. In these countries, cyrptocurrencies allow the movement of wealth to
your family overseas, allow the store of wealth in the face of 30% inflation
(Venezuela, Zimbabwe, etc.), and allow privacy and economic freedom. If your
central bank wants to lower interest rates so that yields are even more
negative, you can take yourself out of that system in which you have no vote
or control. If you oppressive ruler wants to track every transaction and stop
funding to political opponents, you can take yourself out of that system and
do so if you wish.

Yes, it's not easy and not for everyone, but people in these countries go
through enormous risk and effort to accomplish economic freedom.

------
huckyaus
If there's anyone qualified to write about the crypto bubble, it's surely a
guy called Popper.

------
thedrake
Wait until amazon offers its own coin...that is when the mainstream will
happen and if these much less know are able to pull this valuation the
legitimacy and hype will many x when amazon does it. They have already tested
the waters with
[https://www.amazon.com/gp/feature.html?docId=1001166401](https://www.amazon.com/gp/feature.html?docId=1001166401)

~~~
skybrian
What do you expect to happen? What advantage could a different coin give them
over the one they already have? (Or Amazon gift cards, for that matter.)

------
devoply
> made it easier than ever for entrepreneurs to raise large sums of money
> without dealing with the hassles of regulators, investor protections or
> accountants.

Umm no easier than raising funds for any other venture, in fact probably more
difficult and I would think a lot of that money is coming from people who were
already made rich by other coin like bitcoin. Easy come, easy go, but enjoy
the gravy train while you are riding it.

~~~
sanswork
>in fact probably more difficult and I would think a lot of that money is
coming from people who were already made rich by other coin like bitcoin.

That's why it is easier. You have a bunch of gamblers who have gotten lucky on
one bet thinking they are now master investors. They have seen a few ICOs pop
so they are willing to take a punt on any that come through pretty much even
if it makes no sense.

~~~
to3m
I claim it can be +EV even when it's a punt. Suppose you make 3x on your first
bet, as I did - and it's a long story why i settled for such a poor return ;)
- you can then "invest" 2/3 of your winnings, and even if it all goes to
nothing then you've still broken even.

But in the current climate a 0% return seems, at least for now, unlikely....

(In the interests of even-handedness: Preston J Byrne, quoted in the article,
is worth listening to, especially if you are by nature inclined to be a true
believer when it comes to this kind of thing. Relevant thread:
[https://news.ycombinator.com/item?id=14573875](https://news.ycombinator.com/item?id=14573875))

~~~
sanswork
Winning your first bet doesn't make the others +EV even if you cash out your
initial investment. That's not how EV works.

~~~
to3m
Yes, you're right, sorry.

------
the_cat_kittles
these things are strike me as greater-fool schemes. everyone hops on thinking
they are probably ahead of the curve, and most of them are suckers. what a
funny game- the skill is knowing how many other people will go for it.

~~~
taberiand
I think there are at least some people (e.g., money launderers) who will use a
cryptocurrency even in the face of losing money, therefore it's not entirely a
pyramid scheme.

~~~
hendzen
Wow. So people should treat it not as a pyramid scheme, but as a legitimate
asset, because it can be used for money laundering! That is truly hilarious!

~~~
taberiand
Well, if money laundering it legitimate to you...

~~~
mschuster91
Money laundering, in my opinion, is not only legitimate, but _neccessary_ ,
given that e.g. European banking transactions end up via SWIFT or implants at
the NSA headwuarters.

In addition many governments try to move citizens to "electronic payment"
(ranging from online banking to NFC credit cards). The reason is once again
tracking, and as could be seen during the financial crisis it's easy to just
confiscate money when it's just numbers in a mainframe vs actual piles of cash
in my home safe.

~~~
daveguy
Blockchain currency definitely isn't the solution if the problem is tracking
or avoiding confiscation. 1) the blockchain is a permanent immutable log. Once
you do tie and identity to an address _every transaction ever is immediately
available_. 2) the key that is the currency resides as just numbers in a
computer. Maybe you have yours on a hardware wallet in a fireproof safe. Most
don't. Especially those launderers who are shuffling coin around.

~~~
kaffeemitsahne
There are other cryptocurrencies that (try to) solve problem 1), e.g. Monero.

------
piratebroadcast
Anyone have a resource on the technical aspect of this? Seems like these
businesses create their own cryptocurrency? Or build it on top of Ether?

~~~
feelix
You can easily do it in an hour or two by copying and pasting some code off
the ethereum site.

They encourage it. I like to think of ethereum as a ponzi scheme which spawns
ponzi schemes (some of which themselves are intending to be a new platform for
generating currencies...)

[https://www.ethereum.org/token](https://www.ethereum.org/token)

~~~
detaro
Not every questionable, bad or even fraudulent financial construct is a Ponzi
scheme. Unless a coin has a clear promise of payout that the people organizing
it would have to satisfy, it can't be a Ponzi scheme.

~~~
ruytlm
I suspect they're not using Ponzi scheme literally, more as a shorthand for
the kind of scheme that promises plenty, but doesn't actually do anything.

See e.g: [http://www.nytimes.com/1990/02/25/books/nothing-but-zzzz-
bes...](http://www.nytimes.com/1990/02/25/books/nothing-but-zzzz-best.html)

~~~
kaffeemitsahne
Luckily we already have a word for that kind of scheme, "scam".

------
hendzen
Someone should start WebVanCoin.

~~~
wmf
It's funny you should mention Webvan. In 1999 grocery delivery was a hot
market, then in 2002 it was completely and obviously stupid, now in 2017 it's
hot again. Cryptocurrency is a bubble now, but will the world change such that
it actually makes sense in 20 years?

~~~
MachinShinn-
Its still obviously stupid. The difference this time is there is a new niche
that places like Whole Foods serve. They're not in the 'food' business so much
as the 'whole food / wellness' business.

These people will pay a premium that warrants delivery.

~~~
sanswork
I've been having groceries delivered from the internet pretty much
continuously for the past 15 years or so across 3 countries and a half dozen
services. What is stupid about grocery delivery?

------
GreaterFool
It's been a running joke for a while that the easiest way to be a blockchain
consultant is to charge $50k to say "you don't need blockchain for that". Not
it seems the 2017 version is to charge 1M to say "you don't need a special
token for that".

ICOs are not the micro-investing many would like to see and the use of a
special tokens distinct from ETH is rather contrived.

That said, if people are willing to throw money at it, so be it. But the
amounts are quite frankly insane.

------
kim0
Can someone in the know shed some light on why does every project need its own
currency?! Why isn't a standard coin like BTC or eth good enough?

~~~
programmarchy
Why does every company need its own stock certificates?

It's a token representing ownership.

~~~
sanswork
ICOs almost universally don't represent ownership.

~~~
ailideex
but what about smart contracts !? (/s)

------
notadoc
Does anyone think these cryptocoins will hold value during, in, and through
the next recession?

~~~
pmorici
If you go to [https://coinmarketcap.com/](https://coinmarketcap.com/) you will
see they have info on over 600 individual crypto currencies. 99% of them are
going to be worthless long term. Best case scenario a handful of them survive.
I'd be extremely skeptical of any coin that distributes coins via an ICO or
"pre-sale" instead of via competitive mining like Bitcoin.

~~~
atomical
Mining is a waste of energy. An ICO makes sense if they 1) have a product that
benefits from a blockchain, 2) have a great team and a demo of their product.

~~~
SkyMarshal
Mining doesn't waste energy, it's the cost the network pays for security, and
it usefully indexes the value of the token rewarded to miners for securing the
network to their cost of electricity, grounding the token value in some hard-
to-manipulate real-world value.

~~~
atomical
It wastes energy compared to POS (Proof of Stake).

~~~
pmorici
Is there a working implementation of POS yet?

~~~
atomical
It will likely happen this year with Tezos. Ethereum will eventually use POS
as well.

~~~
pmorici
So, no.

~~~
atomical
Depends if you count the test nets I suppose.

------
atemerev
OK, when NYT writes about something, the hype is officially over. Selling
time!

------
nikolay
We'll look at this a couple of years from now and will laugh at the yet
another example how greed makes people ignore history!

------
sriram_sun
Would it make sense for companies like Amazon or Alibaba to print their own
currencies when they are in the business of selling everything under the sun?

Would they be saving on transaction costs?

I believe most of the money that is ending up in Bitcoin exchanges is
laundered in the first place. Also, there is a whole lot more that is getting
laundered everyday than Bitcoin being mined. That would mean Bitcoin will keep
going up in value. Gold should correspondingly fall.

~~~
pmorici
"I believe most of the money that is ending up in Bitcoin exchanges is
laundered in the first place."

Do you have any evidence for that because I'd say that is almost certainly
blatantly false.

------
partycoder
Except that soon, the proliferation of cryptocurrencies will reduce the value
of such ICOs.

~~~
ruytlm
Agreed; I'm yet to see any serious discussion of how fragmentation to various
coins isn't going to cause headaches.

It's like if we were to print different banknotes for different services;
suddenly we have blue Advertising Dollars, red Server Time dollars, yellow
Financial Transaction dollars, and none can be used for anything else.

To me this looks like an arbitrary level of complication, the only true winner
from which is whoever runs the exchanges.

------
thebiglebrewski
How can one profit off of this?

~~~
kbaker
1) Get a bunch of Eth. 2) Invest in the right ICO. Not the wrong one, where
the value drops to zero.

~~~
thebiglebrewski
I've bought some Ethereum. Why should I buy more though? Do you have a theory
of future value for it?

~~~
adbachman
Sell it when it goes up, but make sure you decide to sell before everyone else
decides to sell.

~~~
thebiglebrewski
Hahah nice.

------
nodesocket
I'm sorry but this is so absurd. They are doing the equivalent of printing
their own monopoly money in the garage and then selling it for real
currency... dollars.

~~~
Alex3917
Blockchain is perhaps the most economically important invention of the last
500 years. Right now the whole space is worth less than $100B, and it's going
to be worth tens or hundreds of trillions of dollars.

Obviously valuations have far outpaced the present usefulness of these
technologies, but because the pie is so enormous it would be irrational not to
overpay. Right now prices are too out-of-whack with reality so it's inevitable
that there will be a correction, but it's entirely understandable why this is
happening.

It's sad though that most people on HN have now apparently become the older
generation representing the entrenched interests, rather than being the
disruptors.

~~~
peckrob
> Blockchain is perhaps the most economically important invention of the last
> 500 years

Holy cow are you serious? The most economically important in the last 500
years?

So the steamship, the airplane, the automobile, the railroad, the telephone,
the printing press, nuclear power, vaccinations, electricity, radio, radar,
the semiconductor, television, the cell phone, penicillin, the Gregorian
calendar, pasteurization, the refrigerator, the microscope, the telescope,
electric lighting, the transistor, the Internet, the microprocessor, and
pretty much everything that makes modern life possible is somehow less
important than the block chain?

Even is you limit this to just banking, you have widespread checking, credit
cards, credit reporting, interbank transfers, wire transfers, mortgage
lending, and more. And the blockchain is more important than all of those?

I get it. *coins are cool, but it has a LONG way to go to even be in the in
the same league as the greatest inventions of the last 500 years. Let's
reasses this in 50 years or so and see where we are before declaring
blockchains more important than penicillin. :)

~~~
tomrod
> In early 2017, the Harvard Business Review suggested that blockchain is a
> foundational technology and thus "has the potential to create new
> foundations for our economic and social systems." It further observed that
> while foundational innovations can have enormous impact, "It will take
> decades for blockchain to seep into our economic and social infrastructure."

[https://en.wikipedia.org/wiki/Blockchain](https://en.wikipedia.org/wiki/Blockchain)

~~~
peckrob
Let me see if I can explain this better.

500 years ago was 1517. This is just a bit into the Age of Discovery. We
hadn't even managed to sail all the way around the world yet (that wouldn't
come until 1522). The Enlightenment was still a couple centuries away.
Feudalism was still a thing, plagues still routinely struck. Absolute monarchs
reigned over lands. Most people still lived on subsistence agriculture and
would starve is there was a bad harvest. People routinely died of things that
we don't even think about because of modern medicine.

Now, compare that to the world we live in now, where satellites and cables
beam information around the world in milliseconds and childhood deaths from
diseases are much rarer now. I could be in China in less than a day if I
wanted to. And I'm not likely to starve this winter and I never had smallpox
as a child.

Blockchains MAY someday be important. But it is the height of tech arrogance,
not to mention a gross lack of awareness of history, to put a yet largely
unproven technology that most of the human population has not even heard of on
the same level as vaccinations. A LOT has happened in 500 years, and it is WAY
too early to be making those kinds of pronouncements.

(As a side note, two of the most underrated inventions of, let's say the last
100 years or so: the pallet and the ISO container. Both of these are so
crucial to the modern economy that they blend into the background.)

~~~
Alex3917
> it is the height of tech arrogance, not to mention a gross lack of awareness
> of history, to put a yet largely unproven technology that most of the human
> population has not even heard of on the same level as vaccinations

I said 'economically important'. The couple years they add to our life
expectancy is great, but vaccines weren't really associated with an enormous
transfer of wealth on the same level as, say, the railroads or the age of
sail. (And wouldn't have even if Salk had patented the polio vaccine.)

~~~
BoiledCabbage
> Weren't really associated with an enormous transfer of wealth on the same
> level as, say, the railroads or the age of sail.

How do you predict wealth will transfer differently under blockchains than
with usual state backed currencies. Not the literal (you don't need a bank),
but societal?

If block chains were to completely replace US currency, but society used them
exactly the same, then they wouldn't be a transformative tech. They'd need to
change society economically to do that. How do you see it doing that?

~~~
Alex3917
I'll blog about this in the next few months, I'm going to wait until the hype
dies down first though because I don't want to encourage other folks to make
bad life decisions, and also so I can buy what I want to hold until the next
cycle.

What I would say though is that blockchain has nothing to do with currency,
that's just a red herring out there to trick people into not seeing its
transformative potential. It's about reaching consensus and being able to make
decisions at a society-wide level. I blogged about the implications of this is
a little in 2006, before any of this was even invented:
[http://www.alexkrupp.com/fourwebs.html](http://www.alexkrupp.com/fourwebs.html)

~~~
pascalxus
> It's about reaching consensus and being able to make decisions at a society-
> wide level.

If this was really true, I could see how important that would be. Having
better ways to govern ourselves, and putting 35% of GDP to better use than it
currently is being used, would have tremendous impact. But, the Government and
the majority will never in a million years allow this to happen and thus none
of this "consensus" will ever matter (because it occurs outside the scope of
our operating government). The real key to achieving what your alluding too is
a massive political innovation which I don't see how bitcoin can bring about.

------
surrey-fringe
You all get so angry when someone mentions a blockchain. It's strange.

------
CaseInsensitive
These guys took the money and ran. Absolute radio silence since the ico. Not
to mention nobody is going to run an exit node since being paid to do so would
mean you would be on the hook for illegal traffic, unlike TOR. It's a nice
idea but completely impractical, even with a dev team that didn't disappear
after raising money.

