
Filecoin Breaks Record for ICO Funding - imartin2k
https://www.coindesk.com/257-million-filecoin-breaks-time-record-ico-funding/
======
leoharsha2
This article shows the dark side of filecoin. [https://medium.com/token-
economy/the-analysis-filecoin-doesn...](https://medium.com/token-economy/the-
analysis-filecoin-doesnt-want-you-to-read-e60d5243f17c)

So many funds will prove a big competitor though, and sequoia Investments is
well known for its success with investing in the past. But who wouldn't invest
at such a discount (read article: pre sale discount is massive)

I think even more than the benefit of money (to hire talent,) Filecoin is
benefitting from the advice and connections from their investors!

~~~
chinathrow
From one of the linked investor questions:

"..all our work has been funded by under $3.5M. We know how to deploy capital
effectively."

Then don't raise capital like hell. Pure greed.

Money quote from your link:

"Call me old fashioned, but wanting to raise half a billion dollars for a pre-
product endeavor is absolutely fucking insane."

~~~
AndrewKemendo
Hey all the hottest startups do it:

Magic Leap ($1.4B), Theranos ($720M), Color ($41M), Clinkle ($25M)

~~~
sireat
Suddenly Color and Clinkle don't seem so outrageous.

------
deegles
How does decentralized storage resist centralization? Backblaze B2 costs
$0.005/GB/Mo (vs. $0.021/GB/Mo for S3). No reasonable person will have
hardware at home that can compete with those prices.

All it takes is a single person with a few unmetered boxes and a proxy to
B2/S3/etc to effectively pressure the price down to cloud storage levels.

As a user, how can I confirm that my data is being replicated properly if
there are few big users? One of them might have multiple identities backed by
a single cloud account, and if they stop paying their bill and run off with
the coins all the data is lost. This will be those darknet market scams all
over again.

Aside from the oodles of money that the early adopters will make, what am I
missing?

Edit: Thought of another issue. The protocol replicates data, so if we assume
a cloud provider does 3x replication, your data will be replicated again by
the storage protocol. The extra overhead means that once the economies of
scale kick in, only big players that can manage B2 style racks themselves will
be able to host economically, just like how Bitcoin mining has consolidated on
large mining operations.

~~~
luke0016
> Backblaze B2 costs $0.005/GB/Mo (vs. $0.021/GB/Mo for S3). No reasonable
> person will have hardware at home that can compete with those prices.

I don't get this. Suppose I have 1TB of data that I want to back up. That's
$5/mo with Backblaze. I can get an external 1TB drive for ~$60. Some even have
3-5 year warranties. $60 buys me one year with Backblaze. There's a good
chance the hard drive will last much longer.

An external drive also gives me the benefit of higher data transfer rates. I
could even splurge and for another $50-60 buy a small fireproof safe to store
it in. Then I'm pushing two years with Backblaze. The external drive approach
also has the side benefit of not having to trust a third party (yeah, I know,
encryption). It seems like a much better deal to me. Does this mean that I am
an unreasonable person?

~~~
acid__
Your external drive may fail or be destroyed in a number of ways -- protection
against this is a portion of what you're paying for.

~~~
luke0016
Well, I did suggest a safe. But sure, there are other ways it could be
destroyed. As for failure, presumably it's already a back up, so assuming the
source didn't simultaneously fail, I can just replace the external drive.

If this makes you queasy, you could always buy a second drive. Two 1TB drives
and a fireproof safe, that's equivalent to three years with Backblaze. Still
seems pretty reasonable to me.

~~~
keithwhor
Or spend five minutes uploading to the cloud and be done with it.

This is such a ridiculous premise that wastes tens of hours (at least) just to
save $10 that I'm pretty convinced you're trolling.

~~~
luke0016
I'm not sure how you come up with $10. Drives regularly last 5+ years. A
single 1TB drive at $60 saves me $240 over Backblaze if it lasts 5 years.
Throw in the safe, and I still save $180. Two drives and a safe? Still saving
$120. I have drives that have gone well beyond 5 years too - so the longer
they last, the more you save.

And, what kind of connection do you have that allows you to upload 1TB in 5
minutes? That's spectacular. An ideal gigabit connection is going to take you
a good two hours. Even that would be pretty amazing.

~~~
jjeaff
One thing to consider as well is that when you get to a certain level of
storage, you need a dedicated box (so there is more hardware cost).

I have 50tb of storage in my home server. The electricity cost for this box is
about $35 a month.

In my case it is so much strorage that it saves money, but if you have less
storage and still need a dedicated box, it would be less so.

------
sschueller
This is just insane. No code yet, closed to investors with at least 250k
income or 1M in the bank (Per SEC rules), coins given to friends before
investors could get in on it.

And what do you need this much money for?

~~~
bsaul
Whenever irrational or weird things like this happen, i always tell myself
that maybe people aren't stupid, maybe i just miss a crucial piece of
information.

For example, who are the poeple lending that much money ? Why are they doing
it ? Is this whole thing some kind of money laundering or tax evading scheme ?
Is it related to central banks having 0% interest rates, etc..

You only know what happens after some time, but you always end up knowing.

~~~
jboggan
I see parallels to the 1810s in America where an explosion of banks needed
virtually nothing to get chartered and issue unlimited amounts of their own
currency. That went great, until it didn't.

[https://en.wikipedia.org/wiki/Panic_of_1819](https://en.wikipedia.org/wiki/Panic_of_1819)

~~~
novalis78
That's an interesting link. What's particularly noteworthy is the mentioning
of the inflationary spread of paper money that the banks issued which had no
gold/silver etc backing...and the role of the government facilitating this to
finance their war. Now, the crypto world was created as a direct response to
that problem - nobody can issue fake bitcoins/file coins. You will have to
have the cryptographic key to a public address. In that sense while we might
be back in 1810 we seems to be branching off into an alternative reality where
'banks' can't produce more coin-notes than they have. I am also not sure
anybody would accept a paper note as a substitute for a Bitcoin.

~~~
Nursie
OTOH a coin ICO seems to be exactly this sort of behaviour, the issuing of
effectively un-backed tokens by anyone that wants to.

Bitcoin and other crypto-coins are also created without the gold or silver
backing of course... they just aren't issued in quite the same way.

~~~
novalis78
I think about it this way: if I get a 20 dollar paper note let's say in 1810
and believe it to represent 20 ounces of silver (simplified to make the point)
but upon visiting my bank branch I only find 5 ounces - the bank is insolvent
and the paper notes immediately near worthless. In the crypto world 5 filecoin
will always be 5 filecoin- and I can see (and trade in and out of them) on a
24/7 basis. That's quite a different trust level to me. In fact I can
'shapeshift' them into hundreds of other coins that I deem more relevant or
worthy as a value store at a moments notice. Does not that sound like a
superior system, even when granted, it's not perfect (as long as we are
dealing with imperfect knowledge of the future and human emotions)

~~~
wils1245
This seems to reinforce the analogy rather than rebut it. Your coins can still
very suddenly go from being worth X worth of goods or services to .01X. It's
maybe even worse with crypto, since the only things you can currently buy are
dollars or other coins.

The ability to "shape shift" your declining currency to better ones assumes
you can out-speculate the market in knowing when to exit, and which coins to
buy.

------
EGreg
I have a few legal questions (IANAL)

First of all, is CoinList a registered broker-dealer with the SEC?

The SAFT can take advantage of the 506(c) rule which the JOBS act introduced,
allowing you to raise unlimited amounts from accredited investors, and do
general solicitation. But I believe it requires the securities to be issued
through a registered broker-dealer.

This guy seems to believe that the token issuance itself is not covered by
506(c) if the token is a security. Where does his reasoning come from?

[https://prestonbyrne.com/2017/08/04/thoughts-on-the-
saft/](https://prestonbyrne.com/2017/08/04/thoughts-on-the-saft/)

But even when the next security is _issued_ to these investors, will they be
able to trade them? The _Exchange Act_ regulates the sale and interstate
(electronic certainly would be) exchange of securities.

 _If_ the tokens are later considered securities, then they may not be
tradeable. However, I doubt that, in practice the SEC will go after anyone in
particular on the exchanges, since there will be tons of participants by that
time, and especially since the project has taken the most amount of effort to
comply with the regulations, and many others didn't. All it might do is halt
the trading, and confiscate the tokens of whoever is trading at that time. And
the exchanges have already been trading all sorts of tokens, so they are more
likely to take this one.

~~~
vasilipupkin
I don't think you need to issue them through a broker dealer - where does it
say that?

~~~
EGreg
It says that here - but might be a simple omission

[https://www.crowdcheck.com/sites/default/files/CrowdCheck%20...](https://www.crowdcheck.com/sites/default/files/CrowdCheck%20Memo%20on%20New%20Regulation%20D.pdf)

~~~
vasilipupkin
Ahh, if you use an intermediary, that intermediary has to be a broker dealer

~~~
EGreg
So, if you use CoinList, are they an intermediary?

Where did you confirm they _have_ to be one?

~~~
vasilipupkin
It's in the document you linked to.

------
cousin_it
So Filecoin is intended to create a marketplace for the world's unused storage
capacity. Is there a corresponding coin for the world's unused computation
capacity? If there isn't, should someone create one? Probably using "deep
learning" and "big data" as buzzwords, and somehow tie in with adtech /
analytics / surveillance. I wouldn't buy it, but it seems like the kind of
idea that investors would throw billions at!

~~~
Geee
Computation is much harder because it's not possible to do it in private and
secure way. You could only compute public datasets. Even in 3D rendering this
is the limiting factor. Still, I think such a network would be necessary for
the creation of autonomous AIs.

~~~
cousin_it
It's possible, but expensive:
[https://en.wikipedia.org/wiki/Homomorphic_encryption](https://en.wikipedia.org/wiki/Homomorphic_encryption)

------
phkahler
ICOs are fraud IMHO. I want to ask why this is even legal, but then I think -
why shouldn't it be? And then how can people be so stupid? There is no legally
recognized thing as ICO is there?

~~~
berberous
No, an "ICO" is not a legal term. Filecoin, however, is one of the few folks
that tried to comply with US law. They limited their sale to accredited
investors and user a new legal document referred to as a SAFT (Simple
Agreement for Future Token), analogous to the SAFE documents popular in
startup land.

Most ICOs are unregistered securities offering that are violating US law by
going public without an effective registration statement in place with the
SEC, or an exemption therefrom.

Some ICOs may be legal to the extent they are not 'securities', I.e. the
argument that you are buying a useful network token, not a security. In my
opinion, this argument is BS for the majority of ICOs.

------
acejam
If you're interested in Filecoin, I suggest looking into Siacoin. It's been
online for several months and actually works. Filecoin is literally vaporware
at this point with just a whitepaper.

~~~
donnearness
Exactly. Storj is another company with a working product in this space

~~~
Veratyr
StorJ isn't really in this space as the entire system is centralized. You
can't buy storage from anyone other than StorJ, nor can you sell storage to
anyone other than StorJ. They don't have a free market like Sia (or even
Filecoin). The protocol technically supports it but it's not implemented and
doesn't seem to be high priority at all.

------
chrischen
What is the difference between Filecoin and Siacoin? I thought Siacoin already
proved renting out storage space was pointless?

~~~
ericflo
For what it's worth, I could not be more excited about Siacoin. I think both
it and Filecoin are, along with the nascent self-sovereign identity providers,
the most important projects in the tech industry right now.

~~~
nickonline
Distributed storage is pretty neat definitely

On your second point self-sovereign IDPs are not going to become a thing, it's
a huge chicken and egg problem, consumers don't care because there's no
merchants on board and as a result merchants don't care.

The only real option is to extend out from something that already exists, has
a large customer base, and that you true to be secure. That way you solve for
the chicken and only need to make an egg. It could be social media (FB,
LinkedIn, Insta, SNAP), private (teleco, bank, ISP) or gov but the point is ou
already need that critical mass as identity is a secondary benefit to a
consumer (at least right now).

~~~
ericflo
I think we’re about to see a whole new class of browsers and app platforms
emerge in order to exchange small amounts of cryptocurrencies for incremental
services on the internet. It will start with ideologues who believe in a
distributed internet or whatever, but what will quickly happen is people will
learn the value of their personal digital output and monetizing ones own data
will become the driving incentive for adoption.

------
gourou
People will only buy Filecoin because very well known VC firms are already
backing it. And that creates trust somehow? I wonder how much it will hurt the
reputations of these firms.

~~~
MikeKusold
That's how raising VC money works too. You get a lead investor to do their
diligence and set the terms. Other investors come in and go "So&So is leading
this round, I trust they did their due diligence so I'll invest too"

------
joeblau
This is the 2017 version of Color App where the team raised way more than they
need.

------
mynewtb
I really hope that IPFS will not be affected by this nonsense...

~~~
product50
IPFS will be powered by Filecoin in future. Filecoin will incentivize
miners/users with redundant storage to be a part of the network thereby
increasing the size of the network itself.

~~~
c3833174
I hope not, because the last time I tried it still ate a lot of resources just
idling.

~~~
ashark
IPFS has been a frustrating project to watch. It's felt like it was 6 months
away from being amazing for... over two years now. Despite their writing it in
Go explicitly so they could get something working and usable quickly, rather
than C/C++ which would let other languages and platforms wrap their lib, which
is what I'd have expected them to do if they were serious about becoming an
infrastructure-level protocol. This ICO may explain some of those choices, and
makes me more worried about the future of the project than ever, which sucks
because I _really_ want to use it and to be able to trust it'll still be
around in 10 years.

~~~
detaro
From my perspective, they seem to focus to much on the technical side. E.g.
they are working on P2P communications over the network formed between nodes
and lots of libraries and features, but not much work in the way of making it
user-accessible. People put all kinds content on IPFS, but the most common way
to access it is through centrally run gateways, either the official ones or
ones run by the individual project. No browser plugins that would upgrade
sites from HTTP through gateways to using IPFS locally, no special IPFS-
enabled browser (like e.g. dat has in beaker browser), no other applications
accessing it directly...

It's possible that I'm missing something or approached it with the wrong
expectations, but I'm underwhelmed by that side of it. E.g. I looked into
using it on my website, but can't find an actual benefit to doing so.

~~~
ashark
That's where the choice of Go (which I like as a language, mind you) has
hamstrung them. Anyone who wants to do anything with it must either 1) add an
entire separate daemon as a requirement for their
project/plugin/library/whatever, or 2) re-implement all of IPFS from scratch,
and commit to tracking the reference Golang implementation forever.

Sure they have a Javascript implementation they're developing in parallel, but
in a world where most end user devices are battery powered what the hell good
is that for anything serious or interesting? The requirement of a daemon to
achieve reasonable network performance is already asking a lot of anything
with a battery indicator. And at the same time the stability/reliability's
still not there to use it for infrastructure, which is the other way they
could have taken it (though they _seem_ to stress that it's for end users).

Again, just a very frustrating project to follow. Oh so close to being
awesome. Maybe in another 6 months...

------
thinbeige
Since SoundCloud I am extra cautious with USV investments. They invest, pump
(pulling other investors into their great opportunity) and then nothing.

~~~
immad
What does "and then nothing" mean?

Not every investment will succeed which is the point of risky startup
investment. And USV has an incredible amount of success (Twitter, Kickstarter,
Cloudflare etc)

~~~
thinbeige
> What does "and then nothing" mean

SoundCloud? Just look at the recent downround.

The 'incredible auccess' is decades ago. USV had its best times.

------
chinathrow
This is pure madness. I wonder how long regulators in the western countries
look before they act.

~~~
Roshie5u
It will be too late when they act but I can't blame them - it is all about
politics. With recent pyramid scheme it was something like:

1\. It is as scam, why the regulators don't do anything!

2\. Regulators added company to warnings list - people say it is not enough

3\. Regulators launch formal investigation - people still say it is not enough
but another group complains that government tries to interfere with
entrepreneur

4\. Some branches are closed shut down - people say it is regulators fault
that caused massive withdraws.

5\. Pyramid scheme company is dead, everyone complains that regulators didn't
do enough and reacted too late.

------
joosters
ICO lunacy aside, did they break the funding record by virtue of holding a
month-long ICO? How much has ETH gone up in the meantime? Do you value their
funds at the start price, the day they got each coin, or the end of the sale?

~~~
berberous
They received most of the money in the first hour. Like $175mm plus.

------
dispo001
I suppose the rest of the monies should be spend on advertising the service.
At least, if you want to avoid people calling it a scam, Ponzi or pyramid
scheme.

also:

[https://news.ycombinator.com/item?id=15198854](https://news.ycombinator.com/item?id=15198854)

------
leonwin7
So this is basically pied piper?

~~~
gourou
Exactly their product
[https://www.youtube.com/watch?v=nk0BT7tTWno](https://www.youtube.com/watch?v=nk0BT7tTWno)

Not as well received though
[https://www.youtube.com/watch?v=Lrv8i2X3gnI](https://www.youtube.com/watch?v=Lrv8i2X3gnI)

------
mehh
People are willing to speculate, and until this pops some people will make
money, some will get seriously burned.

The credibility of the technology or adoption of it by users isn't really
important at present.

------
tzfld
can't find Filecoin on coinmarketcap

~~~
product50
It is because it hasn't launched yet. Their network will be ready in 6-12
months when the token will be released.

------
trytolookcool
When will filcoins be available for purchase at exchanges?

~~~
detaro
once the network launches, which is supposed to happen some time next year if
I remember correctly.

------
fergie
Why would this investment makes sense? Can anybody ELI5?

~~~
frabcus
At a basic level, it is 1/280th the market cap of BitCoin.

So just a bunch of people holding BitCoin selling <1% of their holdings for
diversity would cover it.

It is an error to compare it to an investment in a product. It isn't. ICOs are
different.

I reckon it is a lot of rich early crypto investors who will happily throw $1
million into each of 20 different new cryptocurrencies that look the most
plausible.

This one looks plausible, solves a real world problem, and covers a different
set of use cases to Ethereum or BitCoin. It has VCs watching over it for
management mentoring and control.

So worth the diversification of portfolio. Esp for someone whose crypto
portfolio shot up a load this year.

Why are ICOs different? Because anyone (in this case, anyone acredited) can
get in early. How many people in 2003 would have invested in 20 promising
social networks if they could have?

~~~
frabcus
I'm not sure I'm explaining this well - would love to see a proper
psychological and economical analysis by someone.

------
readhn
can you spell "b-u-b-b-l-e" ?

------
mpermar
And China was crazy for banning ICOs...

------
companyhen
This ICO is shit it's basically for rich people only. Not decentralization
friendly!

------
jondubois
Filecoin is VC money, it is a different type of coin because of it; after the
first confidence crisis it might crash and never come back. I think VCs are
too fickle and not idealistic enough to support the value of a cryptocurrency
in the long run.

------
doener
[https://news.ycombinator.com/item?id=15195178](https://news.ycombinator.com/item?id=15195178)

~~~
dispo001
You are taking this place to seriously.

~~~
dajohnson89
How so? He's pointing out that this article is a dupe.

------
xHopen
257 million dollars is nothing, I don't know . PSG , REAL MADRID, BARCELONA,
NFL TEAMS... they spend 100 times that in a single summer.

~~~
slyfocks
This is an absurd comparison—major sports teams bid for extremely scarce
talent, and they generally have the revenue to support large talent purchases
(which have never been anywhere close to the price of Neymar).

No file storage startup with minimal operations needs or deserves this much
money. They’re not in an industry with high initial fixed costs and they’re
not labor-intensive like an Uber or Instacart.

~~~
_pmf_
> This is an absurd comparison—major sports teams bid for extremely scarce
> talent

If you watch closely, the increased prices payed by sports teams are
calculated in such a way to lower operating profit for the "team" (i.e .
company) to a tax friendly point.

~~~
quickthrower2
Any links? I'd be interested to know more.

