
Filecoin Suspends ICO After Raising $186M in One Hour - ianopolous
https://www.financemagnates.com/cryptocurrency/news/filecoin-suspends-ico-raising-186-million-one-hour-clogs-system/
======
joeblau
I listened to this YC podcast[1] twice with Juan Benet. Listening to Juan talk
about a lot of historical information and the correlations he drew was
fascinating. When he tried to explain the need for Filecoin to Dalton, I just
didn't hear it. Dalton kept asking him over and over what the point was and he
kept giving non-answers (at least in my opinion which doesn't mean much to be
honest). I understand the goal of the protocol and the incentive structure
behind the protocol, but I don't see a clear vision with the product.

[1] - [https://blog.ycombinator.com/ipfs-coinlist-and-the-
filecoin-...](https://blog.ycombinator.com/ipfs-coinlist-and-the-filecoin-ico-
with-juan-benet-and-dalton-caldwell/)

~~~
AndrewKemendo
Based on your post I went and looked up that question/answer portion, and I
think the back and forth is illuminating in it's lack of either communication
or actual capability:

TL;DR: It's a solution in search of a problem, like so much good, early
technology.

Dalton Caldwell [31:07] – What is the burning, and it’s okay if it’s not
consumers, but what is the thing that, with Filecoin, that is gonna make,
whether it’s business or consumers, people get really excited about using it?

Juan Benet [31:19] – Filecoin is not representative of the entire industry.
Filecoin is one example. With Filecoin, the point is being able to, this is a
whole different argument that I think makes sense with or without a peer-to-
peer winter or summer. The thoughts around Filecoin are about thinking about
the massive latent storage that’s out there and putting it to good use.
There’s exabytes of storage that are not in use right now, and that if you
were to add them to the market, you would drive the price down
significantly......That’s, I think, fundamentally different about this type of
thing than normal consumer products. They solve a lotta problems for a lotta
people.

Dalton Caldwell [33:41] – You said financial, though. Again, they’re doing it
for financial reasons. Again, what I’m looking for is what is the incentive
for someone to get involved, whether it’s a business or a consumer, the reason
you would put a miner on the network?

Juan Benet [33:53] – For Filecoin specifically, the reason why somebody would
add storage to the network, the primary motivator will be money....

~~~
sharemywin
Is it me or is the elephant in the room like "get paid to put pirated movies,
games, music, software on the network"

Obviously, no one is going to admit it because then your network is tainted
but every file sharing outfit ultimately ends up do pirated.

I've been mining lbry and it seems lot more ahead of these others.
[https://lbry.io/](https://lbry.io/)

~~~
onli
You can't create a business out of pirated content (anymore). You can maybe
create such a network, but not gain money or stay out of prison.

Filecoin to my knowledge has or will have no capabilities of sharing files.
It's dumb end-to-end encrypted decentral storage (which is a good thing!).

~~~
rmorey
Filecoin is being built on top of IPFS (ipfs.io) which, in principle, could be
used as a really robust network for sharing pirated content.

However, the IPFS team is aware of this problem, and is building in measures
to allow nodes to opt out of storing globally available blacklists of known
bad objects (i.e. pirated content or illegal content)

In practice, this is definitely a really hard problem to solve, and very
important. But I think doable.

~~~
opportune
If you're hosting something such as a movie, and it's blacklisted, couldn't
you just add a small amount of noise to the video file to make it
unblacklistable?

~~~
scottLobster
For now, but this sounds like a problem machine learning was built to solve.
Youtube has issues because with the sheer volume of video they don't have the
silicon to transcode/examine every frame, but on a more limited network with
less traffic such analysis might be doable. The more "variations" people
introduce in response, the larger the training set for the algorithm.

~~~
uncoder0
What if I just encrypt the video before I put it on the network and use a
side-channel to distribute the key? ML gonna have a tough time with that.

------
dpiers
Can we stop describing ICO raises in USD? They raised ethereum tokens (ETH).
The value of those tokens is specious, as there is no liquidity for the volume
of ETH raised.

Based on current ETH/USD rates, the USD figure given translates to ~614K ETH.
The value of 614K ETH has ranged from 92MM USD to 240MM USD in the last two
months, and has been as low as 4.3MM USD since the beginning of the year.

~~~
Animats
I really want to hear the story when someone dumps $100M worth of Etherium. Or
Bitcoin.

I wonder what would happen if you went to an Bitcoin exchange and said "I want
to sell $100M worth of Bitcoins over the next 30 days. I'll pay your usual
fees. After each day's sales, you wire transfer the proceeds to my bank within
one business day, and you agree to a sizable penalty if you're late. Any
validation of identity you want to do takes place before we do any business."

~~~
dahdum
Coinbase/GDAX will do _exactly_ this, and your ~$3m of trade volume per day
will be <10% of their book, and a drop in the bucket compared to the global
markets. Your trades will be arb'd to every other exchange in seconds.

There are a ton of complaints about Coinbase support, but they cater to the
largest clients like every other financial company.

~~~
Animats
The question is how much of that volume is the same money going back and
forth. Taking sizable amounts of money out of the system is different. See
2010 flash crash".[1] There may be less real liquidity than transaction volume
indicates.

[1]
[https://en.wikipedia.org/wiki/2010_Flash_Crash](https://en.wikipedia.org/wiki/2010_Flash_Crash)

~~~
dahdum
The majority of the global volume is crypto-crypto, so I agree it's a valid
concern, but the volume of fiat trades has gone way up over the past several
months. For example, Coinbase added 1 million accounts in June - the vast
majority by necessity are putting fiat in vs cashing out.

One flash crash happened on the ETH-USD pair on GDAX like a month ago, when a
large dump triggered cascading margin calls. Bitcoin has had a few of those
over the years too.

~~~
lizardhunter
The volume on many exchanges are fake. It's pumped up using bots buying and
selling among each other. Large dumping tends to go through dark pools or OTC.
The real volumes are much lower.

------
sktrdie
What's important to note about ICOs is not necessarily whether the idea is
actually practical and that it will work.

What matters right now is whether the idea can stir our intellect and get the
crowds excited.

This is because behind the idea there's a new token which value is completely
driven by the excitement of the crowds (it's pure speculation).

If I invest N amount of money in a token which gets people excited, I will
surely get back N + <crowd excitement>.

So it's sort of like a snake that bites its own tail, and we see these crazy
prices specifically for this reason. People are not investing hoping for the
project to be developed - they're investing because they know others will as
well, which will drive the prices up.

ICOs are a new breed in economy where people can speculate, anonymously, using
tokens that are distributed to the crowds in various ways (PoW, initial
distribution, etc.). What does this mean for our future economy? I'm not sure,
but it surely looks exciting (even though most projects behind ICOs are
complete crap).

If our future economies will be driven by these tokens, we might think back at
this period of time, looking at perhaps the people who will be the %1 of the
future.

~~~
dplgk
ICOs are a new breed of gambling.

~~~
sktrdie
I'd argue that most of our current economy is gambling (stock markets).

~~~
soneca
I'd like to read your arguments on that.

~~~
notfromhere
Information symmetry between company and investor. buybacks also obscure real
stock value (and something around 75% of corporate profits go to maintaining
or raising stock price)

------
Torai
So much people with much money trying to find new ways to make money out of
money. That says much about the current state of the economy.

~~~
sschueller
And making the rich richer. No way to invest unless you have money or you are
in the inner circle. Code has also not been released. So much for open source.

~~~
drieddust
Crypto currency are the new tulip bulbs[1]. Only some are going to make money.
Current buyers are relying on greater fools to take these off their hands.

A crash is eminent so hold tight and wait for it. You will have plenty of
opportunity. History will repeat itself as new fools arrive on the scene[2].

[1]
[https://en.wikipedia.org/wiki/Tulip_mania](https://en.wikipedia.org/wiki/Tulip_mania)

[2]
[https://en.wikipedia.org/wiki/List_of_stock_market_crashes_a...](https://en.wikipedia.org/wiki/List_of_stock_market_crashes_and_bear_markets)

~~~
empath75
I am starting to worry that this bubble is going to grow until it threatens
the world economy.

~~~
adventured
An extremely small fraction of the inflated value of these coins is actually
part of - interacting with - the global economy. Most of it is not and will
never be liquid.

Most of it has been and is locked up, not touching other aspects of the global
economy, and most of the actual bubble value will vaporize without ever
touching any part of the 'real' global economy.

It's the specific reason there is nothing to fear about the inevitable
implosion of this crypto-coin bubble. Not to mention, after it implodes, the
real money will be made as throughout history (whether we're talking the auto
bubble or the internet bubble or the oil prospecting bubble).

The dotcom bubble implosion wiped out trillions in moderately liquid value
(the US stock market as one example being radically more liquid than the coin
market overall), a sum that makes the crypo-coin bubble look hilariously
trivial (even if you inflate it up to $500 billion), the global economy kept
trucking regardless; US GDP has expanded by ~80% since the year 2000.

Sun Microsystems during the peak of the dotcom bubble, all by itself, was
overvalued (peak market cap near $200 billion, probably worth more rationally
$60-$80b tops) by more than 2x the total sum of all bitcoins.

~~~
drieddust
>An extremely small fraction of the inflated value of these coins is actually
part of - interacting with - the global economy. Most of it is not and will
never be liquid.

I am not sure how you arrived at this conclusion? As more money will move into
these currencies, won't it create an impact when eventual crash arrives.

> The dotcom bubble implosion wiped out trillions in moderately liquid value
> (the US stock market as one example being radically more liquid than the
> coin market overall), a sum that makes the crypo-coin bubble look
> hilariously trivial (even if you inflate it up to $500 billion), the global
> economy kept trucking regardless; US GDP has expanded by ~80% since the year
> 2000.

Don't you think mania has just started? It took a few years for dotcom bubble
to reach its bursting stage.

~~~
tome
Money doesn't "move into these currencies". Someone has USD, someone has BTC.
They swap. That's it.

~~~
pessimizer
You're not saying anything that couldn't be said about houses in the US
Midwest.

~~~
tome
> You're not saying anything that couldn't be said about houses in the US
> Midwest.

So?

The reason it was problematic for people to pour money into housing was that
loans (often loans of around 100%) were secured on these assets. No one is
currently securing loans on Bitcoin holdings. _If_ they start to, that will be
a problem, but I don't see banks ever securing loans on something so volatile.

------
wscott
I decided not to invest after reading this: [https://medium.com/token-
economy/the-analysis-filecoin-doesn...](https://medium.com/token-economy/the-
analysis-filecoin-doesnt-want-you-to-read-e60d5243f17c)

~~~
problems
It still amazes me that people buy what everyone on Bitcoin Forums would have
called a "premined shitcoin" just a few years ago...

~~~
wmf
Bitcoin maximalists may accidentally be right occasionally, but I wouldn't
take advice from them.

------
prepend
I don't understand why they would do the coin offering now. The network is
inoperable and won't be for quite a while.

The main advantage to me seems to be a more of a community-driven storage
approach. S3 is really cheap and really reliable and really old. A distributed
file store would be cool, but as a community/free network like P2P. The $200M
seems really high for a community project.

~~~
evgen
They do the offering now because they have a bit of a name and the world is
currently filled with suckers who think that getting in on an ICO is a
worthwhile speculation. The greater fool theory at work.

~~~
matthewbauer
It could still tie their hands later on. Once it starts crashing they'll lose
a lot of the early adopter enthusiasm that they will need to catch on.

------
manigandham
So instead of on-premise SANs or cloud provider block storage, store your
files all over random devices protected by a complicated crypto that requires
miners and tokens to stay active?

Fantastic. I'm sure the enterprise sales are going to go really well.

This fallacy that everything needs to be distributed is really getting out of
hand.

~~~
charlesdm
It's not about the solution. It's about having a token that can go up in
value.

------
Lon7
I have a (not very well supported) prediction that Filecoin will be the first
ICO company to incur the wrath of the Securities and Exchange Commission.

Last month the SEC released a report [0] that said in many cases these ICO
tokens can be classified as securities, and therefor going forward, could be
subject to all the same laws and regulations. These are not laws you want to
be breaking. This Filecoin ICO has been highly publicized, and importantly,
came after the SEC's report.

It doesn't matter if it all only exists on a blockchain. When the SEC decides
to make an example of one of these companies it will be a bloodbath.

Matt Levine has been covering this topic recently. [1]

[0] [https://www.sec.gov/news/press-
release/2017-131](https://www.sec.gov/news/press-release/2017-131)

[1] [https://www.bloomberg.com/view/articles/2017-07-26/tokens-
va...](https://www.bloomberg.com/view/articles/2017-07-26/tokens-vaults-ties-
and-taxes)

~~~
detaro
Filecoin seems at the top end of the scale when it comes to following these
regulations (from my laymans perspective), e.g. only selling to accredited
investors. I guess attacking them would make it even clearer that _all_ ICOs
are a potential target, but there are going to be a lot of targets in clearer
violation of the rules.

------
ckastner
After glancing over the whitepaper, I get the motivation, but I just don't see
how this scheme is viable, financially.

Participants with little storage to give, have little to earn, but must remain
connected to the network. Why bother with that?

Participants with large amounts (petabytes) of storage to give are competing
with Amazon S3, Google Cloud Storage, etc. At this scale, it's hard to imagine
competing financially with these and other giants. (Furthermore, if you have
petabytes of storage idling around, you might have a business problem anyway.)

~~~
nicpottier
This is all pretty hand-wavy, but I think the idea is you are creating a wide
open market wrapped up in a protocol, in such a way that the network effect
becomes your advantage.

I believe the economic model is such that buyers reward nodes that are closer
to where the content is being accessed most. I'm not positive, but I'm hoping
the protocol actual distributes / moves content accordingly. If so, then you
suddenly have something pretty neat, in that you incentivize providers to pop
up where they are needed most, across country borders and at cut-throat rates.

Yes, this happens to some extent with CDNs now, but imagine anybody being able
to be a CloudFront provider and being able to charge for storage at the same
terms as everyone else and I think that is getting closer to what Filecoin is
trying to do. (though I fully admit I may be totally wrong given that a lot of
these details haven't been worked out yet)

To put it in more concrete terms, when I lived in Rwanda one big problem is
that within the country the network is great, they have quite a bit of fiber
and very developed mobile networks. But their connection to the outside
internet is terrible, they have two pipes coming in and neither is reliable.
So there would be great benefits to having local CDNs there, and Facebook and
Google do but others don't because it just isn't worth it. You could see
something like Filecoin being the economic incentive for someone local to
provide that service and greatly increase the speed of internet access for
everyone in the country.

------
runeks
Can anyone tell me how they arrived at the $186m figure? Are they just
multiplying the last traded price by total supply, and forgetting about market
depth/slippage?

I mean, if I sell a plastic cup to someone for 10 cents, and then go produce
100 million of these plastic cups, do I have $10m in plastic cups? Or could it
be that I’m unable to find 100 million buyers each willing to pay 10 cents for
a cup, even though that’s the last traded price?

As far as I’m concerned, the amount of USD they’ve raised equals what they
could earn by executing a limit sell order with a price of zero into the
Filecoin/USD market (thus eating up all bids).

~~~
DanBlake
They literally sold 186m worth. As in, Filecoin literally has 186 million in
the bank. Its insanity

~~~
runeks
Wow... I just had to get it confirmed, and I still can’t believe it. Did they
raise this without giving up any equity?

~~~
uncoder0
Yes

------
moe
This is probably a money laundry/tax evasion operation.

I don't believe these "big name Silicon Valley investors" just flush such
amounts of money down a toilet without a hidden agenda.

~~~
jbob2000
After watching Ozark, I'm actually convinced that software is amazing for
money laundering, it's stupid easy to generate huge amounts of fake data.

"Look, our food delivery app delivered 10,000,000 meals and everyone paid by
cash!"

"Wow, we rented 10,000 homes through our short term rental app this month and
everyone paid by cash!"

"Hey, we have an ATM that lets you convert money into NameCoin, sooo many
people are using it, look at all this cash!"

~~~
wmf
"Uber for X" apps generally don't even accept cash; it's credit card or
nothing. Building an app that accepts cash would be a red flag in itself.

~~~
hobofan
Not in Germany (and I think also other european countries). People here love
using cash, and so a lot of the startups go with it, or they would lose out on
+50% of the market.

------
richardknop
Is this a joke? Regardless whether the concept has any merit, at this stage of
idea/startup we would normally be talking about seed level funding round so
small sums of money to get a small team and build a product.

Almost 200 million is obscene as a seed funding. If this isn't the proof this
is tullip mania then I don't know what is.

~~~
api
I lived through the late 90s dot.com mania and you saw an MBA out of Harvard
and a couple techies raise this kind of money on nothing more than a hair
brained idea with .com after it. Russ from Silicon Valley with his "radio. on.
internet!" is pretty close to the truth.

This is a bubble. Not FileCoin, but ICOs and block chain.

The vast majority of these ICOs are outright scams or unworkable nonsense.
I've read some of these white papers but I stopped when they threatened to
give me an eye rolling injury. (Can eyes roll so far back they get stuck?)
Some of them read like they were generated by a statistical language model to
parody CS papers on distributed systems.

FileCoin is actually one of the best I've seen-- the team behind it has
actually shipped distributed/decentralized systems that actually work (IPFS).
I have to stress this-- in the ICO space a team that has _actually shipped
something useful_ is rare and this places them far above the herd. They might
actually do something with this money.

I also hope the honest/good ICOs don't get crushed when this inevitably
implodes or gets prosecuted by the SEC. There's so much obvious outright fraud
in this space I can't imagine the SEC (and FBI, etc.) aren't watching or even
briefing prosecutors.

That being said we (ZeroTier) have looked at an ICO but...

(1) Our system has no built-in scarcity that needs a token. We have no use
case for a token. It would be a force fit or an invented case, which would
make it scammy.

(2) We have existing investors who are justifiably nervous about taking on an
unknown liability of the "potential criminal violation of securities laws"
sort. So am I for that matter.

~~~
jrs95
Well, Russ from SV's story is essentially what happened with Mark Cuban and
Broadcast.com...so it effective _is_ the truth.

------
crypt1d
I'm kind of amazed how Filecoin managed to create such a hype, even though its
nothing more than a whitepaper right now.

I mean, there are already 2 or 3 coins that are doing something very similar
and already have at least a working prototype (eg Siacoin, Storj), or have an
interesting algo like Proof of Storage from Burst. Is there anything that
makes Filecoin superior compared to the other's, or is it just that its VC-
backed?

------
pavlov
I don't get it. Competing with Amazon S3 seems like a very unpromising
business idea, blockchain or not.

~~~
moe
There is indeed only a single legitimate use-case: Censorship resilient
storage.

For everything else the available Cloud storage options are cheaper, faster,
easier and more reliable.

~~~
wslh
Would you accept filecoin to use your resources to host children pornography?
I also think you will receive a visit from the police if you do that.

~~~
tehlike
if it's encrypted, i don't think anyone can prove it's porn, which probably
makes you immune

~~~
bhouston
Unless that is the primary reason to use Filecoin. You can not prove it is
porn, but if Filecoin's primary use case is child porn, then if you have
Filecoin, you are likely storing someone's child porn, and you are likely
running Filecoin to access your own child porn that is stored on someone
else's computer.

Remember that just running a Tor node makes the authorities suspicious about
that person. There are few non-suspicious reasons for running Tor
unfortunately from a government's perspective, you are either an activist
fleeing some government censorship (sometimes, but I think that is rare) or
doing something semi-illegal (much more often.)

There is a big risk that is where this is heading.

------
fpgaminer
$186M ... that's crazy.

And here I've been sitting wondering if anyone would bother investing in my
idea for a Bitcoin mining co-op. I want to create a U.S. based mining farm
that allows anyone to buy-in and have access to a portion of the hashrate. The
idea being that, today, the average Bitcoin user has no way to reasonably
voice their opinion through the hashrate because they can't compete with the
efficiency of the big miners. We fix that by being a big miner; build our own
ASIC, hardware, everything, and sell that back to average users at market
rate. Level the playing field.

But the level of investment needed is in the tens of millions (custom ASIC,
custom hardware, custom datacenters, etc). It's not an incredible amount, and
I'm not worried about the technicals (I previously co-founded a company making
FPGA miners and my previous company was a hardware startup), but it's enough
to give me pause and sit on the idea for now. But if Filecoin got $186M
through an ICO ...

~~~
dajohnson89
Isn't it already possible to own shares of a mining pool?

~~~
fpgaminer
I'm not aware of any such thing.

------
tyingq
Not completely thought out, but I believe parasitic storage might be a better
approach to scaling out a censorship resistant distributed object store. Some
kind of cryptocurrency could help fuel it as well.

A parasitic storage approach would leverage existing "free" tiers of services
like google drive, onedrive, dropbox, yandex.disk, etc. One of the hard parts
of scaling that would be creating the fake accounts to hold the data, so a
cryptocurrency+contract could fuel the reward needed for people to create
these by hand. You use the reward to buy storage space, so there's some
incentive for the people creating them.

I'm less clear on how you would combat the various providers finding the fake
accounts and deleting them along with the data. Would clearly need duplicate
storage of objects to work around that, and some central reference table to
map keys to the various copies, and provide the high level "api" for creating
buckets, etc.

~~~
davrosthedalek
This is why we can't have nice things. If you misuse the free tiers in this
way, they will go away.

~~~
tyingq
That's a fair point. Maybe if it focused on the services that more clearly
abuse their customer's privacy. Like mapping to Facebook post attachments.

~~~
davrosthedalek
Yeah, an interesting way to change the balance of "if it's free, you are the
product".

------
bhouston
For most storage, one needs it to be local to compute or easy to put behind a
CDN - e.i. in a datacenter or on a very fast network that is connected to the
datacenters.

If not, you are cut out from the main commercial storage market.

What is left is:

\- People who want to store stuff that is can not be legally stored on
existing networks, such as illegal drug or porn stuff.

\- People who need secure stuff stored in a distributed fashion.

\- People who want to have a way of backing up their PC? But will this be
faster and cheaper than using Backblaze-like solutions that buy storage in
bulk and optimize for costs?

Is there enough redundancy to ensure that no data is ever lost?

Could someone actually attack the network to cause data loss?

What are the costs? \- Inbound, new storage per GB. \- Outbound, access per
GB. \- Deleting storage. \- Static storage on a per GB/hour.

What is the performance of this?

Can Backblaze make more money being a provider to Filcoin or should Backblaze
use Filecoin for it storage? Just like Bitcoin mining Filecoin should, if
successful, be dominanted by people like Backblaze.

~~~
simias
That's pretty much my take as well. I really like the concepts behind IPFS and
FileCoin and I think they're really fine piece of software engineering (well,
IPFS is, can't say much about FileCoin yet) but as an other comment pointed
out it's a solution in search of a problem.

I tried hard to find a use for IPFS but I failed. I could use it to share
files with other people but simply having a publicly reachable web server is
simpler and more convenient. People don't have to install IPFS or use a public
gateway to get my content.

The cool feature is being able to rehost any content if you want to "cache" it
but that's only possible if the original provider decided to host it through
IPFS, so there's kind of a chicken-and-egg issue.

I can't really use it for backup either unless I pay a third party to always
cache my data, but in this case I might as well use tarnsap, dropbox or
something similar and it'll probably be even more straightforward.

So it's a pretty cool piece of tech but sadly I simply have zero practical use
for it.

------
joosters
I assume that the VC investors actually bought a stake in the company? It's
misleading to lump them together with the ICO investors, who are buying
nothing more than a vague, non-enforceable promise (see any ICO terms &
conditions, you have absolutely no rights or ownership as a coin holder)

~~~
659087
Many of the ICOs flat out stated that the tokens you're receiving entitle you
to absolutely nothing, and hold no value, but somehow people have convinced
themselves that the people behind these ICOs are going to give them something
in return out of the goodness of their hearts anyway.

------
HashThis
This is pointing out something profound. Investing is powerful when you can
have liquidity right away.

AN ASIDE: The valuation in the ICOs too high. But the following profound point
still holds true...

Imaging if an angel investor can invest in a company early, like Dropbox. Then
when it grows some, he could sell 10% of his shares on a highly public and
liquid market (like Ethereum coin exchange). He then invests that in AirBnB
when it was tiny. He may invest in a startup that goes down after the Series
A. Oh well, he may sell for 30% the valuation he invested in. The power is
there by those who make big gains in the big winners, and that they can then
move money out very soon and into new places.

~~~
wmf
_he could sell 10% of his shares on a highly public and liquid market_

This is the part that's illegal. If a company's shares trade on a public
market then they need to file all the paperwork of a public company with all
the costs that entails.

------
noway421
Their Filecoin Token Sale Economics says that 10% of all tokens is allocated
to investors. Not sure how much they sold, but even if it's almost all out,
does it make it a $1.8bn capitalisation?

~~~
Taek
The total number of Filecoins that will enter circulation is going to be
around 2 billion, and they are selling right now for somewhere between $2 and
$5 each. That puts the valuation somewhere between $4 billion and $10 billion.

------
memossy
A lot of money for what's basically Pied Piper without middle-out.

Seriously though these coins won't be worth much given a competitor could
either a) dominate mining or b) fork it.

~~~
cableshaft
Yeah, these guys don't even have a cool name like EndFrame.

I'm actually more confident in Sia than Filecoin, despite them flying much
more under the radar. Sia devs are more transparent (you can reach the lead
dev here or on reddit pretty easily), have software that's in early stages but
works, they've been regularly putting out new releases with new features, bug
fixes, and polish.

But Filecoin does have the funding, so they might be able to sweep the rug out
from under Sia just by paying serious money to close the gap. I'm hoping Sia
ends up the dominant player, though.

~~~
api
I tried Sia and it worked. I was able to use it. The tech seems solid and the
plan seems straightforward and logical. If there is a good niche for
decentralized storage then it already exists and they have it.

No wonder nobody has heard of them. /cynicism

Edit: Cynicism is not wholly unjustified. A while back I was taking to a big
marketing guy about how marketing teams in big companies often get less
excited about products once they hit prototype. Something that doesn't exist
is just so much more exciting than something that does. Real things have
caveats, limitations, and costs.

~~~
cableshaft
Yep, Silicon Valley covered that as well. "Don't try to make money with your
software! Because there will be solid numbers and it'll never be enough. Have
a zero revenue model! That way all they see is the potential!" (paraphrasing)

A startup I worked for actually had exactly this problem when they had a big
idea the company was founded for, but wanted to put out a couple small apps
first as a warmup for the team. When those ancillary practice apps didn't
perform amazingly well, the board of directors got nervous and killed the
company before it even got started on the app that the company was founded to
do in the first place. I'm pretty convinced in hindsight that if we just
worked on the big app in the first place, the company might still be around
today.

------
zero_one_one
This is what's good (and bad) about the cryptocurrency / blockchain (etc.)
state at the moment.

It's all pure speculation, and makes a fantastic study from an anthropological
and economic standpoint into how the perception of value (and the belief in
that value in something) can increase the value of that 'thing'.

I think there's a lot of hyper-salesmanship at play at the moment - my real
worry is that the hype catches up to the technology which is (at the base
level at least), proven. When this happens, I believe a lot of these ICOs are
going to crash and burn due to a lack of understanding of the base
technologies they're implementing in order to generate revenue.

Abstraction is not always a good thing.

------
fav_collector
So are the developers of Filecoin just going to retire in Hawaii now after
becoming rich?

~~~
659087
Only if EOS and Tezos didn't already buy the property they were looking at.

------
elmar
The Economics of Filecoin

[https://medium.com/@ryanshea/the-economics-of-
filecoin-a8d82...](https://medium.com/@ryanshea/the-economics-of-
filecoin-a8d826774674)

------
progx
What is the difference compared to storj?

~~~
659087
A different group of people is running with the money this time.

------
bhouston
The end result of Filecoin will be extreme centralization just like Bitcoin
mining unless there are extreme legal issues that makes everyone scared of
being part of the network (e.g. child porn.)

Thus there will be a few ultra large cost optimized providers probably similar
to BackBlaze that handle 90% of all storage on the network.

Does that extreme centralization fulfill the vision of Filecoin?

------
nikolay
Didn't centralized storage win long ago as there were a bunch of failed
decentralized storage services in the past? With the low price, high speed,
CDN, and reliability of centralized storage, what would the decentralized one
give me that I don't already have?

------
nagarjun
Can someone please explain how exactly someone would transfer their files onto
Filecoin? How does the system ensure reliability? I just don't understand why
I would put my files in some random person's hard drive.

------
brianwawok
So if I am personally bearish on the entire "alt-money" movement, how do I
turn this into a potential profitable bet? Any tips on where I go to "short"
coins?

~~~
ve55
You can short these coins in a lot of locations, depending on which ones you
want to short. If you want to short larger ones, you should check out bitmex
([https://bitmex.com](https://bitmex.com)), a derivatives platform, or
bitfinex ([https://bitfinex.com](https://bitfinex.com)), a very large
exchange. If you are expecting platforms as regulated as stock brokers in the
US, you are out of luck. There's many other exchanges that will allow you to
work with more (lesser value/known) assets.

Keep in mind just about everyone who has tried to short these things has lost
everything. I've watched coins that I think are completely worthless and have
zero real users go from 100 million market cap to 200 million, to 500 million,
to over a billion. And they still sit there today. And every step of the way,
'rational actors' are trying to short it, waiting for it to finally correct.

I've seen this quote mentioned a lot recently in cryptocurrencies, and it is
still not mentioned enough: "the market can remain irrational longer than you
can stay solvent".

------
glebecho
LIke to know how this can be done I have a Quant Trading Platform I need to
raise money pinder321@gmail.com

------
andy_ppp
Great, another Ponzi scheme I can get in at the start with... how do I invest?

------
ico_skeptic
Half the money these ICOs are raising is going to end up being paid to the SEC
in fines. Maybe not Filecoin because they have at least made an attempt to
pretend to comply with the rules - although Christ knows what will happen when
Filecoins start trading on exchanges! But there are a LOT of companies out
there who are going to be totally screwed.

------
gaetanrickter
These could go big too... "3 ICOs Set To Out-Perform Long Term Benchmarks In
The Cryptocurrency Markets" [https://medium.com/@alexanderwestin/3-icos-set-
to-out-perfor...](https://medium.com/@alexanderwestin/3-icos-set-to-out-
perform-long-term-benchmarks-in-the-cryptocurrency-markets-b83f445ab8bd)

~~~
yclopediaen
I actually think we'll see our first billion dollar ICO here soon.

~~~
zero_one_one
I don't doubt you, and I think that's an incredible shame to everything
computing has enabled humanity to achieve.

~~~
tylersmith
I don't think it's a shame personally. Cryptocurrencies and especially ICOs
have enabled economic Darwinism at a scale rarely before seen.

