
Brave raises $35M in 1 min with ICO - rkaplan
https://twitter.com/BrettShear/status/869932977492459520
======
Cshelton
All these ICO's have been avoiding any SEC regulation regarding private
security sales by claiming the tokens are just a method to use/exchange
services on their platform, not as an investment.

However, when ICO's like this one keep happening where only 100 "accounts" own
99% of the ICO offering, you pretty much lose that argument of the tokens only
being there for use of the platform. It's a private security sale, and I only
see one way this will end. The SEC will make a case out of one of the ICO's
100%. They do not take advertising to unaccredited investors lightly.

My only suggestion, if you are involved in any way with an ICO (developer,
investor on the team pre-ICO, etc.), either get out of the U.S. now and/or
make sure all operations are happening outside the U.S. I was almost involved
with a company doing essentially what these ICO's are doing (not
blockchain/crypto currencies), and fortunately I figured it out before being
involved, but it did not end pretty for them. Like the IRS, the SEC/others
will come down hard, not a matter of if at this point, it's when and who gets
the beating first. They love making cases out of someone to set precedent.

With the general public playing into an overbought token market fueled by
Asian countries for the most part, the regulators/SEC will come down extremely
hard on this.

I think investing in Ethereum/Bitcoin is fine, just know what you're doing,
record your cost basis for when you bought it. And seeing first hand what the
IRS does to people who avoid paying taxes, just make your life easy, when you
exchange back to a currency that is considered a currency by the IRS, just pay
your capital gains on it and move on with life. The IRS will catch up and many
people will go to jail for tax evasion. Don't be one of them. Obviously, all
this only pertains to the U.S..

Also for fun, if you really want to see the hysteria around the Ethereum price
right now, check out r/ethtrader/ or even the Ethereum FB group. People are
throwing their entire savings into this while not knowing anything about it
besides everyone in the group hyping it up amongst themselves. It's really
sad. Ethereum is now actively pumped heavily on MLM sites/blogs. It's beyond
gross. I believe Ethereum is an amazing project and am worried that this hype
fueled hysteria, once it collapses on itself, will give Ethereum a bad
reputation. It is a great protocol.

~~~
hal9000xp
I think the notion of accredited investor is very discriminatory to small
investors. It's basically says - if you already wealthy then you have an
access to attractive investment opportunities with huge upside (and of course,
huge risk), if you are just a middle class man then stay where you are (since
your investment options with huge upside are severely limited and you don't
have enough capital to make sense from investing in index).

The better version of requirements for accredited investors would be some sort
of exam (hard enough to make sure you have solid knowledge about financial
markets, financial instruments and risk/return relationship).

~~~
Cshelton
The effect of missing out on an upside is a lot less than taking a huge hit on
the downside. It isn't discriminatory, it's protective.

It is sad but many people would put their entire savings and next months rent
into a risky investment that is not publicly traded on a regulated market and
basically lose their money most of the time because they invest on hype and
because their buddy told them.

If an accredited investor loses his money, the nobody feels bad because they
had the money in the first place and the means to either hire somebody who
knows what they're doing or be responsible themselves.

I'd be fine with zero regulation on it all together, as long as I, as a tax
payer, don't have to bail out all the idiots will fall for ponzi scheme after
ponzi scheme. But do we let them dye on the streets because they lost
everything? Hence why the regulation is in place.

You are also assuming that being an accredited investor gives you access to
better investments, which is not entirely true. Many accredited investors lose
their lunch on investments. Look at the number of hedge funds that beat a
market index fund, it's like 10%. Or look at VC firms where 1 investment makes
up for the loss of 10 others. Many never do get that return and just lose
money until they're out. The best investment definition varies widely, and in
actuality, most accredited investors would be better off just investing in an
index fund because believe it or not, they don't know what they are doing most
of the time either. Which is why many investments are high risk. So a test
would not help either.

~~~
kolinko
There other ways to protect small investors - education being one example.

If someone doesn't know how to manage miney they will lose it one way or
another - be it forex, or or penny stocks. ICOs cannot possibly be worse than
these legal things.

~~~
mtgx
Yes, but you could make the same argument for companies using toxic substances
in their food, too.

"We don't need the government to tell us what is toxic and what isn't. Let's
people make their own decision about what they eat!"

Which I know sounds very attractive, but then 90% of the population will end
up ingesting food with lead in it from China, or whatever.

------
ummjackson
Ha, the top 100 holders own ~99% of the total token supply. Really poorly
executed distribution model:
[https://etherscan.io/token/tokenholderchart/BAT](https://etherscan.io/token/tokenholderchart/BAT)

~~~
gcp
What's the consequence, though?

Brave got $35M, unless Ethereum crashes very soon.

Some parties can now set the price for advertising within Brave to whatever
they want. If Brave becomes popular, they become rich. If Brave fails, they
lost their money.

~~~
iamacynic
that asset isn't liquid. who are you going to sell it to? a few of the other
200 people? do they have $35M to spend?

~~~
gcp
If Brave becomes popular, advertising space in it is worth real money, and the
tokens get value.

If.

~~~
chongli
To me, Brave's value is due to its ad blocker. If they start shoving native
ads into the browser then I'll uninstall it.

The set of technical users out there who will do anything and everything to
avoid and block ads is not a valuable advertising space in any way, shape, or
form.

~~~
gcp
I thought the entire point of Brave was to have ads, but share the revenue.

~~~
manigandham
The current tech already does that just fine, no need to have an ad network
built into the browser that just overwrites existing ad networks on the page.
At that point, it's no different than spyware/malware.

~~~
mbgaxyz
All roads lead to AllAdvantage :-)

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

------
dsun178
I still belief ICOs are made up to launder crypto-money. Invest anonymous into
your own ICO, ed voila, the money is clean to use.

~~~
ThrustVectoring
In-app purchases are a decent alternative. Give a mule some BTC, mule buys
premium currency in your shitty game, your shitty game company sells the BTC
it "acquired" on the open market.

Either way, you've got income from selling digital goods for cryptocurrency,
rather than cryptocurrency with no socially accepted narrative for possessing
it.

~~~
vikingyc
Can you explain a bit more on how does it work? I heard this two times in past
week here. Thx.

~~~
ThrustVectoring
The more traditional route converts dirty USD into game company revenue.

Step one is recruiting some people to be a "customer" of your game. You give
them $500 of dirty money, they go visit various retail establishments and buy
$450 worth of pre-paid cards, then spend the balances on those pre-paid cards
buying stuff from your game. Various banking institutions and app marketplace
owners take their cuts, you wind up with clean money earned from selling
premium coins to your "customers", which you then report as taxable income and
use for whatever legal-market purposes you want.

So, the short of it is that it's a two-part scheme. Part 1 converts
undocumented cash into pre-paid debit cards. Part 2 converts the balance of
those cards into business income from selling digital goods. The receipt of
cash gets offloaded to retail establishments that routinely handle such
transactions. The delivery of goods is cheap and verifiable, and the payment
for those goods goes through legitimate channels.

Compare to laundering money through a literal laundromat. If you double the
sales through putting dirty money into the laundromat's cash deposits, you
ought to be using twice as much power and water. Auditors can find that out.
Selling twice as many virtual battleships, though? You've got customer
accounts you've "delivered goods" to.

------
seibelj
If I was a VC, I would be pooping myself. Quick, get on the phone with your
old college buddies at the SEC / IRS, and stop this right now! The whole VC
model is going to implode if companies can raise money like this. No equity,
no dilution, no kissing ass... MADNESS

------
phamilton
Ostensibly, the tokens here are representative of future services on the
platform. Is this just a fancy kickstarter?

Was Tesla's model 3 preorder basically the same thing? They raised $400M
dollars ($1000 down payment on 400k reservations) on future sales of a product
not yet built.

~~~
eridius
If Tesla fails to deliver the Model 3, I assume they'd need to refund the down
payments for all the pre-orders. Similarly, Kickstarter's rules say if the
kickstarter is funded but then fails to deliver, they must refund the money
(though I have no idea how well-enforced this actually is).

Meanwhile, if Brave completely fails and the BATs become worthless, I don't
think anybody's going to get refunded.

~~~
greglindahl
Tesla's deposits can be refunded for any reason up until the car starts being
produced. So all of those Model 3 reservations are refundable. And some people
who wanted for a long time in the queue for Model S or Model X changed their
minds (or got tired of waiting) and got refunds.

------
porter
You can download the Brave private browser at www.brave.com. The Brave browser
automatically disables all ads and tracking when you browse any website. The
founder of Brave also created JavaScript.

~~~
pacaro
I think it's ok to name Brendan Eich here. Just saying "[person who] created
JavaScript" makes me think "that's either Brendan Eich or someone lying about
having created JavaScript"

If he's chosen to be the CEO of a company again, then he's also chosen to put
his social/political views on equality into the public sphere again.

~~~
chews
political/social views? Isn't this an ICO discussion?

~~~
gcp
If only this argument had worked for Mozilla.

------
cellis
Could someone explain this to me like I'm five? I have an understanding of
blockchain, kinda. What is this ICO?

~~~
pacaro
This is my understanding

Put aside blockchain, ICO, and browsers for a moment.

Imagine an app that shows ads, nothing more.

The users of the app are credited in tokens for viewing and/or clicking ads.

The advertisers pay tokens to show ads.

There is a middleman (presumably brave) who manages the ad marketplace and
distribution (for a cut)

The users can then take their tokens (acquired viewing ads) and sell them on
the open market, ultimately to further advertisers.

The tokens become a CPM backed currency.

The ICO is how you create an initial pool of tokens and establish an initial
value.

Blockchain is used as a clearing house and ledger of transactions.

Brave happen to be using a browser as the vehicle for ads.

~~~
soared
And to make it more interesting... An average CPM is $2 (2 dollars for 1000
impressions). If you use the internet for an hour you likely generated ~200
impressions. You could in theory earn about $1 a day for casually using the
internet (after Brave's/others' cut).

~~~
sanswork
Braves traffic would be considered incentivized so no way it is making $2/cpm.

------
TeMPOraL
What's ICO? Initial Coin Offering?

~~~
ada1981
yes.

------
the_common_man
What exactly does this mean? Brave raised $35m? I find that hard to believe
but wow if that's true.

~~~
jcousins
They conducted an ERC20 token sale on the Ethereum network. It sold out in
seconds. The tokens (BAT - Basic Attention Token) are to be used to buy
advertising in the "attention economy." The premise is really interesting, but
the dynamics of the Ethereum token sale space are borderline insanity at the
moment, and will continue to be until most of the fools are parted with their
ether either by a company that fails or turns into a scam.

~~~
MarkPNeyer
When Mt. Fox failed, nobody called for more regulation of bitcoin exchanges.

I think many people have decided that regulation just ends up benefitting the
established players at this point.

------
mmwako
Got a question on de business-model side of things: if Brave will block ads on
websites, and replace them with their own advertisement and pay the user for
looking at it, won't the owner of the website (aka the person that generated
the valued content) get cut out of the deal? If so, assuming Brave succeeds,
wouldn't it "kill the web", as there is no incentive to generate web-content
anymore (a big % of websites gets financed through ads)? Am I missing
something here?

~~~
mmwako
follow-up question: will they block Google ads, as in Adwords? Messing with
the big fellas here.

------
thebiglebrewski
Lol, nobody understands what really happened here. Myself included!

They used some kind of digital currency to purchase shares in an upcoming
venture?

I'd love to try to explain this to my grandma

~~~
mason55
The idea is that the Brave platform will allow users to send micropayments to
content publishers. The micropayments will be in the form of "Brave Coins"
which are like Bitcoins but specific to the Brave platform. The reason for
this is that you reduce transaction costs to a point where it makes sense to
send a $0.50 (or whatever) payment.

So if the Brave platform succeeds then you'll have a whole bunch of people who
want to exchange cash for these "Brave Coins" so they can send micropayments.
These early investors will hold all the Brave Coins and so they will get the
initial influx of cash from people buying Brave Coins to use the platform.

Edit: Possibly the coins are being used by advertisers on the platform, not
for micropayments.

~~~
altern8tif
My understanding is that the tokens (BAT) are sold to/for advertisers to allow
them to purchase advertising on the Brave platform so that they can advertise
on specific publishers' websites.

The tokens paid for by the advertisers will then go into the pockets of these
publishers, while a small portion will end up with users to compensate them
for their attention spent viewing those ads.

Am I reading it wrong?

~~~
mason55
Oh, you are probably right and I'm probably wrong

------
edaemon
What's the incentive for a user to switch to the Brave browser?

What advantages does it have over a different browser using ad- and tracker-
blocking plugins, especially now that the Brave browser allows ads from these
ad providers?

~~~
solotronics
I use Brave on Android almost exclusively. Its built on Chromium with built in
ad blocking.

~~~
mdeeks
Strongly seconding this. Finding Brave on Android was a huge moment for me.
The mobile web is downright unusable on Chrome in Android and there are no
good non-root options for ad blocking.

Firefox is dog slow (sorry FF), Opera crashes on me regularly, and I don't
really trust any of the other 3rd party browsers.

Brave is basically Chrome with ad blocking.

URL for the lazy:
[https://play.google.com/store/apps/details?id=com.brave.brow...](https://play.google.com/store/apps/details?id=com.brave.browser&hl=en)

------
RichardHeart
If the only thing you can do with a token is sell it to a greater fool, you're
participating in a Ponzi. It's all fun and games till the music stops, then
lots of people are going to be left without chairs, and in these cases, life
savings. This space has existed for over 6 years now, which ICO has generated
revenue near it's "raise" ? Even 1M of revenue?

Bitcoin is boring, but it's a real currency you can use. Move fast and break
things is a bug not a feature. If you can't buy things with it, it's not a
currency, it's Russian roulette.

------
conradk
Is this expected to affect the market for ETH ? And if so, by how much ?

------
cslarson
In the end this was a fail for BAT. Sure they got the money, but what would
have been more valuable would have been a massive bunch of new incentivised
users.

~~~
gcp
Given the speed with which this sold out, didn't they massively under-price
their advertising space? At least versus the rampant speculation that
happened.

------
arcaster
It's great that only 5 actors control a majority of the value LMAO. Even
Gnosis handled their roll-out more gracefully than the BAT team.

------
wehadfun
More details please

------
Sir_Cmpwn
Plus, I don't really see any reason to be impressed by "the founder also
created JavaScript". That's just like saying "the founder is a famous fuck-up
whose legacy has made you suffer".

~~~
chongli
Read the history of JavaScript sometime. It's not his fault that the language
has so many flaws. He had 10 days to create it [0]! If he'd been given a
normal budget and schedule and free license to design the language, we
might've​ had something more like Scheme [1].

[0]
[https://www.w3.org/community/webed/wiki/A_Short_History_of_J...](https://www.w3.org/community/webed/wiki/A_Short_History_of_JavaScript)

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

