- https://blog.ycombinator.com/ipfs-coinlist-and-the-filecoin-...
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....
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.
The beneficiary will be AIs, not humans.
Right now, we're just now thinking of clouds, containers, and "serverless" (functions-as-a-service). If we take those ideas and iterate them forward, we converge closer to a real "serverless" paradigm -- what Ethereum already provides today in principle, if not at scale. This will require storage that can keep up with it, and that is where FileCoin comes in. While human consumers may benefit from this, it enables autonomous software that can live on its own and manage its own matabolism (resources accounted for through the blockchain). What those autonomous software will do? I don't really know.
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!).
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.
I'm personally glad that the fathers of the internet had better things to do than moralizing legality.
Sounds like the opposite of something most would consider "important".
I think blocking a hash can already be a victory, since it basically makes all the metadata that was associated with the hash useless and forces reseeding under a new hash and publicizing that hash. As long as you make it inconvenient enough, very few people will bother, which is the best the copyright holders can hope for.
Reseeding might be pretty easy though in IPFS since there is a block layer below the object layer, and I guess you can't really block block-hashes.
Eventually I'd like to open source code that lets any user create their own index/search server and potentially charge for usage if they want.
You can't implement indexing and search over end to end encrypted data file chunks. You would have to work with the hash of complete files and a localizer, and you want that in the initial design.
Care to elaborate and share examples of other "good, earl technology"? Typically when I hear "solution in search of a problem", I start thinking "this is going nowhere".
Not insinuating, that's my claim - nearly every big technology was too early (eg. a solution looking for a problem - whether in form or scale) before it blew up years or decades later. I don't think that's controversial. It's also true that a lot of trash that never makes it are also solutions in search of problems.
Decentralized blockchain orchestration of storage = you can raise $200M... in the first hour.
That would mean filecoin is less about the use of decentral file storage, but more about giving people a different way to create something that looks like bitcoin that does not involve buying sold-out gpus, unlike ethereum, and storing files is more comfortable than having a gpu make noise all the time anyway.
I think by the way, that's absolutely vital to progress, and I am glad someone has convinced VC/Money to fund something potentially breakthrough (whether I think it is or not).
His favorite response was "...and a whole bunch of other things".
On a more serious note, it's very early days for the filecoin and related group of projects that they intend to fund, so the answer to Dalton's question is : "we don't have the answers yet. There are a whole bunch of theoretical use cases and the most promising seems to be decentralized storage. The reason we are raising money through this ICO is simple : people are ready to invest dumb money and we are more than happy to take it. We have legitimacy because we are backed by the most well known VCs who are eager to 10X their money within 3 years and we have a whole bunch of protocol design/specs."
It's kind of self fulfilling : promise a grand vision, take hundreds of millions and hopefully deliver any working product sometime in the future.
(1) Hard drives are dirt f'ing cheap. Buying more than one and putting them at different locations (home and office etc.) is not hard. Storage is still experiencing a Moore's Law type geometric increase in density so this is going to get easier not harder in the future.
(2) Cloud storage is cheap too. S3 is cheap. S3 reduced redundancy is really cheap. Backblaze B2 is stupid cheap. There's no privacy problem here if you encrypt your data on your end. (1) and (2) are not mutually exclusive. They go together nicely. Keep your data local and then back it up encrypted to cheap cloud storage. Many very affordable NAS devices will do this for you.
(3) Enterprise users categorically don't want a system where they don't know who's running their infrastructure. In some cases such a thing would be prohibited by data residency regulations. You will never ever ever convince a CIO to use this. In some cases it might be illegal for them to use this.
(4) The real problem for end users is data handling UX, not actual storage. (1) and (2) are adequate for virtually all users.
(5) The web does have an ephemerality problem but I fail to see how this will solve it.
(6) These systems are mostly too heavy for mobile and don't cope well enough with node ephemerality for laptops. They only work well on desktops and servers and those already have mega-cheap storage and backup options in the form of (1) and (2). Look into how much disk you can cram in a desktop these days for under $500.
(7) The anonymous/uncensorable niche is already filled by Tor, I2P, and Freenet.
This really looks like a solution to a non-existent problem. Am I missing something?
Not trying to hate, just questioning.
Would love to see a theoretical analysis of Filecoin's impact on the storage market, presuming that it can build the foundations for competing in that market.
For example, when you buy a new computer, with a 500 GB drive, 400GB of it isn't going to be used for a while.
Hard drives may be cheap, s3 may be cheap, but that extra 400 GB of hard disk space? That space is literally FREE.
Hard disk space is weird, because there is so much completely unused space out there, that would be literally free to use.
Filecoin will allow this free space to be put on the market.
Because operating a node for File Coin is certainly not free in terms of network costs and requires the opportunity cost of giving up your local storage for the duration.
With Filecoin I think what happened in that conversation was that to Juan it wasn't a big deal, it's just one of the things possible in the IPFS paradigm. But since crypto currency is all the rage these days, and this being YC, he was being lead to talk about the money side of it, but I don't think he really gave it much thought, other than that Filecoin is a neat way to trade storage without any paper/fiat currency, across country borders, etc.
To put it another way - IPFS is the thing. Filecoin is just a side-effect. But in our present times, Filecoin is worth actual millions, while IPFS is just a protocol. But it's clearly a fluke, the most important technology/idea here is IPFS.
It seems to me that their team has underestimated those challenges and were more busy on designing a big ICO than actually thinking about those problems and the feasibility of their claims. Most probably it will take much more than 6-18 months that they claim or it will be launched with centralized components of the system ("compromises") until they figure things out.
This company might be different because they demonstrated their ability as IPFS is fleshed out but as others pointed out Filecoin is a different beast entirely and they are basically starting from scratch again.
The higher end of 6-18 months of pure dev time is a long risk range to get an untested product out. But I guess they have plenty of runway now to work on it with this massive ICO. Let's just hope they don't spin their wheels forever in research mode and spend their time and money wisely.
It's entirely possible someone else figures it out before them and this play will be a game of scale. I've heard this idea from more than one person well before Filecoin was around.
There are occasional exceptions .
I think as the inventor of IPFS he would have thought a lot about these things so he should at least have a few interesting consumer use case but he gave 0. I'm guessing because it's all illegal ideas. Instead he said it's more about B2b (or something like that) and about people making money from sharing their drive.
Just to be clear I still think IPFS is awesome. Just like how i think BitTorrent is awesome. They will have the same problem if the leader doesn't have a clear picture of how it can be used. Most successful platforms started out NOT as a platform but as a single application and then expanded. He's obviously not trying to build an application but an equivalent of the Internet itself, but then we have the problem of how are you going to make money and how are you going to get consumers excited? And this is something they do need to have an answer to.
If costs and functionality are equivalent to our current solutions (like S3), then the cryptocurrency ecosystem is certainly better, but how much better is it? That is arguable and I would expect the developers to be inflating its value quite a bit.
On the technical side, I find it doable. Unless they actually try to implement it "on the blockchain". Given blockchain transaction rates, by the time you'll download your porn, you will not need it anymore.
Of course we can ask, how big is the market for cold storage? On the other hand, how big is the market for gold?
In the future you will see that the only profitable miners are ones who can "sell" their heat, i.e. using it for greenhouses or other applications.
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.
Look again. Poloniex alone exchanges $1 billion dollars, 3M ETH, on the ETH/BTC pair, weekly. https://cryptowat.ch/poloniex/ethbtc/1w Volume on the path ETH→BTC→USD is a lot higher than ETH→USD and that's the path that whales dumping ETH take.
1) Filecoin gave an amazing deal to their buddies, just a few weeks ago
2) Filecoin is being insanely greedy
3) Early clickers are incentivized, price unknown
4) Protocol Labs and Filecoin foundation are keeping 2x the coins that investors will get
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."
There are a ton of complaints about Coinbase support, but they cater to the largest clients like every other financial company.
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.
GDAX seems to handle 5k-10kBTC on a normal day. So liquidating in a month would be 10-20% of the trading volume on GDAX, every day for a month. Even pushing it out to 3 months liquidating, it would be a sizable portion of the sales. (This would be 0.250BTC/min for 90 days.)
I, too, would like to see what happened if someone liquidated a position that quickly.
(Of course, if you had $100M in BTC, you'd probably want to liquidate over the course of a year -- where you'd still be sizable traffic, but perhaps not completely crash the price. This would be 0.06BTC/min for a year.)
Looking closer, GDAX seems to have a volume of about 6BTC/min. So the volume estimates for clearing 30kBTC in X days:
30 days - 11.5%
90 days - 3.8%
365 days - 0.95%
It'll definitely drive the price down ,so that would be a weird thing to do anyway, except if you _want to_ drive the price down.
I would be curious to see the ratios of the currencies involved in their funding. I.e how much raised was in raw USD vs ETH vs Bitcoin. Maybe most was in fact ETH? I have no idea, I haven't seen those numbers listed anywhere.
Volume is over $80 million in the ETH-USD pair over the past 24 hours, on just two exchanges (Coinbase/GDAX, Bitfinex).
Add in CNY, KRW, EUR and the true liquidity is much higher than that.
They'll need to spread the ETH to basically all the big exchanges, with multiple bank accounts attached, and liquidate large sums everyday for months and hope none of the accounts get frozen.
Still quite the windfall even if realistically just a fraction of the sums being thrown around.
That's why your lawyers and their lawyers have to negotiate this up front and have a deal with penalties signed before any transactions take place. If you're dealing with amounts that big, you do that.
As I see it that's irrelevant. Whats relevant is the value at the time of the investment. As of yesterday, they raised Ethereum that had a then value of $186m. The fact that it may go up or down tomorrow is irrelevant.
The point in having currency is a speculation of value between entities?
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.
I get your point but please don't feed this "fear of missing out" that I'm sure many are feeling (myself included, to a certain extent). Some people are going to invest money they can't afford to lose.
Maybe they'll be the next 1%ers. Or maybe they're just like the folks who bought pets.com shares. There's simply no way to know and at this point it's more akin to gambling than investment.
Play the roulette, bet everything on red. You wouldn't want to miss out, would you? If red does come out and you don't bet you'll feel like a loser.
ICOs are a new breed in economy
Is not like it doesn't happen with the regular VC cash money right? E.g. Color?
Or with regular stock market. e.g. Enron.
Clueless investors are always gonna be there.
Likewise, that "$30B USD" is referencing exchange between different crypto-assets, yes?
2) They really don't need to sell all at once and who knows, may even have engineers willing to be paid in cryptocurrencies.
If Bitcoin's price history is anything to go by, when the prices start to fall, they will fall fast and hard. At least in Bitcoin's case, there's a core value proposition that's actually worthwhile, so it's able to recover. With most of these ICOs, the core value proposition isn't actually valuable. When the price finally starts to collapse, the floor could be very low, and there may not be a recovery. See the old tokens Quarkcoin, Primecoin, and most of the rest of the top 25 altcoins from 2013
My understanding is that an ICO is like an IPO minus a century+ of regulation and oversight by the authorities and instead of a share of future earnings, you get a share of a closed economy.
The oversight and rules governing stock offerings is fantastic no doubt but when you describe a Coin as a circular investment scam, I think you are glossing over the possibility that the economy you are buying into could become valuable. An example of this would be Second Life which at one point had a thriving virtual economy in digital goods.
Extrapolating further, ICOs, due to their horizontal, borderless nature, are going to be instrumental in further tying together a global economy. Just like they used to say no two countries on the Dell supply chain would fight wars with each other, I can't imagine a world dominated by ICOs for different slivers of the online economy actually fighting an IRL war.
Probably utopian but I think worrying about ICOs being a ponzi/greater fool get rich scheme overshadows its potentials.
That's where we are today with ICOs. Cryptocurrency is going to be absolutely massive, and it has some very intelligent people doing amazing things. But the vast majority of ICOs are going to flop. Look at the rankings in 2013:
Who wants that?
There are use cases where this is needed/desirable, but for the most part this is a bug and not a feature. I don't want to convert my general purpose currency into SomethingCoin to purchase Something. I want to purchase Something with general purpose currency.
Once SomethingCoin becomes fungible with Something2Coin and Something14Coin, you could have the makings of an economic system.
Edit1: Say you sold disk space for FileCoin, converted it and bought petfood using DogeCoin (I know Doge is for charity but hear me out), you wouldn't ever have to move money between IRL currency and Coins.
I found out recently that this is called the Greater Fool Theory - https://en.wikipedia.org/wiki/Greater_fool_theory
I haven't invested in any other crypto-currencies, and don't have any plans to do so.
Just one datapoint.
It won't. This is zero sum gambling, not investment. Economic growth does not come from this.
Moreover. In The DAO, the "tokens" gave you voting rights so the "curators" couldn't pick up all the money and go to the small island in the Caribe on vacation^H^H^H^H^H^H^H^H^H^H^H to write a white paper.
Also, in The DAO you can get (most/hopefully) of your Ethereum back, with a (incredible useful) one month delay.
I.E. someone realize that you can pick all the money without giving any concrete right to the "investors".
This is just a way to profit off people who don't understand math and have some sort of addiction.
It's a poor tax.
I once saw an ad that said something like "if you are putting in your resume to be a door man, it's time to play the lottery"!!!!
Not, time to go back to school, time to vote for better income redistribution, not good for you for looking for work -- no, the city decided to trivialize unemployment and poverty AND make the claim playing the lottery is better than hunting for a job.
Regulation seems to be about limiting who gets to extract the profit from the poor, not protecting the poor / the people.
A friend once commented on the subway advert that went:
"All you need is a dollar and a dream"
His comment was:
"We'll keep the dollar and you keep the dream".
On top of that, you don't have to hit the jackpot to win life-changing money. Powerball odds for a 10k/250k prize are 1 in 913K, and for a 1M/2M prize, 1 in 11M - much better than the jackpot prize's odds of 1 in 292M.
Many people are totally okay with coughing up $2 every now and then for raising their chances from 0/infinity to 1 in a million or few.
That lotteries are a tax on the poor (who often cite gambling as a legitamit retirement investment option!)?
And you actually DON'T raise your chances, at all.
The odds are actually in favor of you lowering your standard of living by whatever you are spending on lottery tickets.
Look at the statistics on where the bulk of the money comes from for lotteries -- the poor, often people who can't afford food for their children.
It's offensive that a democracy would run state lotteries and advertise them to its most vulnerable people.
For people who make 100k a year they spend about $300 a year on lotteries.
Many states generate more revenue from lotteries than by taxes, so this is a regressive hidden tax effectively.
States also tax ticket sales for lotteries at close to 40% so it's also the worst investment tax around.
Lotteries are used by states to generate money from vulnerable poor populations and move that money back up to support other programs that wealthier folks enjoy.
Here is an indepth article outlining more. Unfortunately some of the links are broken, but I will update you if I find the base research studies mentioned.
I think you're confusing economy with speculative investment. Most of the US economy consists of manufacturing and service industry output, not the stray under or over valuation of the stock market (which is derived from non-gambling output in the first place). Since when is $6.3 trillion in gross manufacturing output considered gambling? If there is a major economy anywhere on earth that has been a more sure thing (aka the exact opposite of gambling) on average over the last ~140 years than the US, please point it out.
Whether you value Apple at $500 billion or $800 billion right now, has no substantial impact on their sales or net contribution to the US economy / GDP. The same is true for Facebook, Microsoft, or 3M, Delta Airlines, Johnson & Johnson, GE, Berkshire Hathaway etc. Whether the S&P 500 has a PE ratio of 25 (2017) or 18 (2013), does not dramatically alter the US economy.
There's also nothing "current" about it. The stock market has been important for the US economy for more than a century. It's increasingly less important, not more. The private non-bank market for business capital has expanded dramatically while the public market is contracting - and likely to continue contracting - as fewer companies go public.
Gambling is not a sin /
Provided that you always win.
-- Roald Dahl
Risk is a spectrum; p < 1 is gambling for small n. So where does sure thing become risky become gambling become plain stupid? And one thing society as a whole will agree on is that p = 1 is not morally wrong. Therefore, "Gambling is not a sin / Provided that you always win" is true regardless of your sense of humour. The grey areas are less well defined, just like people's sense of humour.
The euro/USD exchange rate has varied between roughly 1 and 1.6 over the past 10 years. That's including the 2008 crisis.
Meanwhile over the last year alone the BTC/USD exchange rate varied between about 500 to 3400.
My 10 euro bill is extremely unlikely to suddenly massively increase or lose in value. That's the difference.
This low range variation is only possible because of government monetary intervention that doesn't exist on CryptoCurrency.
Traditionally, the gambling-investment line is drawn at the zero-sum boundary. If you're buying these tokens because you think the encrypted storage business is worth that much (i.e. based on profits), it could be investing. If you're buying to avoid missing out on something other people will want to buy because it's cool (i.e. there is no discussion or thought given to profit) it's probably pyramidesque gambling.
If you can have Amazon S3 type service hosted in IPFS and actually get paid for it instead of paying for it... what is the problem with this business proposition?
Does that necessarily mean it is worth what it is valued at? No, but comparing the IPFS folks with total snake oil is a bit unfair.
The ICO in this case kind of bootstraps the value of the coin in a way that is needed in order to bring on miners and providers. So in a way the value being raised is a bit like capital costs that the network will "spend" to bootstrap and verify the network.
Don't get me wrong, this is a lot of money to raise, but saying this is totally nuts without taking into account that the model is very different (and interesting!) is not giving credit where its due. Will it work? Who knows and certainly most startups fail, but it isn't a foregone conclusion.
Or did the market blindly throw $186 million in one hour into a hot deal because it's the hottest deal?
Juan has been saying for years that one of their primary goals for Filecoin was a token sale to fund Protocol Labs.
Bubbles and fraud are not really exciting per se...
Or terrifying, take your pick.
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.
That is also to imply that some may emerge after a crash in the same way that Amazon, Google, eBay/Paypal, etc., emerged and thrived after the crash.
Even Amazon lost its value during the crash so chances are that most investors sold out everything in panic. Only those who had nerves of iron actually came out alive.
I hope you are right and crash comes early on.
All that is ever discussed about cryptocurrencies at HN is marginal in comparison.
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.
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.
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.
Bitcoin market cap was $9.4B a year ago, now it is at $58.3B. Average daily trade volume is ~$1B over the last few months. I guess trade volume just reported in USD, but includes all bitcoin transactions.
Is there a way to estimate how much money from 'global economy' actually moved into bitcoin and other currencies?
I think the question is how much actual currency will be borrowed against cryptocoin valuations, and how much and over how many generations will people manage to leverage that credit, before that value vaporizes. Derivatives will always be the problem. With the actual economy not producing returns (over 1 or 2%), cryptocurrency may distribute the paper value that investors demand throughout the economy without 99% of people and funds being able to find a mention of any cryptocurrency in their own portfolios.
What is the state of cryptocoin derivatives anyway? Are they being synthetically collateralized? Are they part of any major consumer fund mix?
Then you have contagions because it will erode trust in other sectors. Economies kinda freeze up without trust or reliable value propositions.
I don't think these VC-backed cryptocurrencies will win in the long term. It's the same principle as with stocks, cryptocurrencies are going to work in favour those who understand them the most; in this case, developers.
The mission of cryptocurrencies is to take control away from finance people. Hobbyist developers are going to decide which cryptocurrencies deserve their precious development time.
Cryptocurrencies are all about the tooling and infrastructure around them.
i dont think developers are the ones who will profit - after all, developers are the ones who wrote the code for a lot of financial institutions, and none of them gain much more than just a salary.
This (https://en.wikipedia.org/wiki/List_of_largest_companies_by_r...) lists the 5 largest companies in the US as:
2. Berkshire Hathaway
4. Exxon Mobil
Walmart's CEO, Doug McMillon, career at Walmart was in distribution and then buying before moving to the executive.
Buffett had a background in business admin, economics and insurance.
Tim Cook has that CS background.
Daren Woods of Exxon Mobil has a degree in Electrical Engineering in the early 80s, which might be at best half a point.
John Hammergren of McKesson has a pure business background, with a Bachelors and Masters in Business Administration.
5. Berkshire Hathaway
5. Berkshire Hathaway
Does he? He certainly has decades of experience in computer companies, but his educational background was, to my knowledge, in industrial engineering.
All depends which side of the coin you're on (pun intended).
Even so, I am concerned about letting just anyone put money in. Even though we are an extrajurisdictional company and the SEC doesn't trouble us, I'd like to know people putting money in have some idea what they're doing. At first we thought to limit the amount, require a minimum $1000 or $2000 purchase. But that makes it worse, I think.
What is a company in our situation supposed to do to be socially aware and not just "make the rich richer", while also making sure someone doesn't invest their last $1000? Just put up disclaimers?
An American computer engineer is sent to install the machine. He chuckles at the monks' superstition: they claim that generating the billion gibberish strings is a task from God and the fundamental purpose of the universe.
On the other side the crypto mining is not only the power consumption: it's all the hardware and it's production as well. The ASIC antminers can't be used for anything else, hard to recycle as well and they constantly need to get bigger and faster. For Ethereum, people are buying shitloads of high end GPUs.
I also don't like the idea of storing insane amount of data, hoping to find correlations to make more money, but this is also nothing I can do anything about.
Utility and potential for utility are incredibly different. Bitcoin has no utility. I can't safely store value in it, nor can I use it for quick transactions.
Its only utility is speculative. The energy consumption is fueling a somewhat randomized, opt-in wealth redistribution service. That's not to say I think bitcoin or its ilk are terrible, but rather that the energy, in most cases, could be better used elsewhere (or like, not at all).
It's ok to like bitcoin. But let's not fool ourselves about the bad parts of it.
(Of course the worth of paper currency is the same, still, the backing is stronger)
What will happen when bitcoins are worth less than the cost to mine them is anyone's guess
> There was approximately $1.56 trillion in circulation as of July 12, 2017, of which $1.52 trillion was in Federal Reserve notes.
> In FY 2017, total US government revenue, federal, state, and local, is “guesstimated” to be $6.56 trillion
Current balance of federal bank deposits is ~$2.3T:
Now think of how much energy is "wasted" keeping all those accounts updated, the lights on at all the branch offices, etc.
> Now think of how much energy is "wasted" keeping all those accounts updated, the lights on at all the branch offices, etc.
You should do some research before making such uninformed assertion (also banks do more services than just transaction ledgering)
Especially the special ones that got in early at a fraction of the price.
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.
And to drive attention.
And to engage people in a way they will have to defend their investment later.
This is quite cynical of me, but the first thing that comes to mind is that they could be scared that theres a general CC bubble going on right now and they want to be sure to get some money before it pops. Look at bitcoin prices right now: https://coinmarketcap.com/currencies/bitcoin/
Something like IPFS? https://ipfs.io
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.
Unlike many other ICOs, I think this is actually a good example of something that can and arguably should be distributed. Cheap storage is much more readily available in a system like this than from cloud providers and there's no real trustworthiness of the cloud providers. No nth time dropbox gets hacked, no EC2 going down, etc.
I've been using client-side encrypted cloud storage for a while, but you either self-host with relatively poor tooling, use fairly untrustworthy proprietary tooling or use a provider that charges an arm and a leg for storage fees.
There's no good compromise right now - and I'm not saying FileCoin will be it, but they have a good backing of developers and have decent chances. Other contenders:
- GridSync - fixes Tahoe-LAFS syncing, making the self-hosted solution much more bearable, but still size limited
- Sia - an already existing cryptocurrency based solution that seems to have done a lot right, but doesn't have the same marketing wank.
I'm really not impressed with the way Filecoin has run their token sale though - but it doesn't rule it out if they can make the best solution in the end.
Last month the SEC released a report  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. 
Now, I'm not sure if that'll be enough or if they'll be held responsible for the secondary markets which will surely pop up once it's released.
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.)
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.
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).
They could theoretically just earn interest on $186 million for 5 years and then return the money and say "oops, we missed our target". The terms of the SAFT allow it.
I don't believe these "big name Silicon Valley investors" just flush such amounts of money down a toilet without a hidden agenda.
"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!"
Not accepting cash seems like a the lack of features in an MVP. It's easier to handle CCs, but collecting cash in a sharing-economy situation is more work. It certainly isn't a good thing to not accept cash!
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.
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.
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?
For everything else the available Cloud storage options are cheaper, faster, easier and more reliable.
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.
Long rant: https://davidgerard.co.uk/blockchain/icos-magic-beans-and-bu...
Plus, getting average people to switch from services like S3 "because blockchain" is even less likely than getting average people to switch from WhatsApp/Telegram/whatever to Signal "because privacy". It's just not going to happen.
Also S3 is incredibly expensive if you factor in outgoing traffic costs.
Buying 5TB consumer drives for 130€ and throwing them away after one month of usage makes more economic sense than using S3 for filecoin. Heck if you throw those consumer drives away after 12 months the storage cost will still be cheaper than glacier which you can't even use for filecoin.
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 ...
> And you’ll be starting from scratch.
I haven't built a mining ASIC (yet), but I built the first open source code for mining FPGAs. I wouldn't be starting from scratch. It'll take a little bit of re-architecture to update that code to multi-core designs (the FPGAs were single core, fully unrolled loops), but that's relatively easy. The more aggressive optimization will be around power consumption, which I plan to hand off to the engineers working with the target fab's libraries doing the HDL->layout conversion.
This isn't rocket surgery. Mining ASICs are perhaps the easiest ASICs to build. It's even feasible to do manual layout, since the design is so repetitive. Just need to hand layout one round of SHA-256 which amounts to only a couple adds and mix of binary ops. Done.
> That’s half a million dollars per day, or $15m per month
Minus NRE, manufacturing costs, on-going maintenance, on-going electrical costs, and all the money they wasted mining BCH and playing other games.
With mining chips, if you have a chip that’s just half as efficient as the best one, your customers have zero incentive to buy your product, as efficiency is all that matters. An inferior car can still transport people, even though it’s not the best car, but a mining chip whose electricity cost is $5,000 to mine a Bitcoin that costs $3,500 is worse than useless (you might as well throw it out).
That’s quite a difference.
I’m not saying this makes your venture impossible, just that it’s an important aspect to consider.
Efficiency isn't actually all that matters; it's total cost versus revenue. Every mining device has some sort of lifetime to it. Its total cost is cost of the device itself + (electrical costs + maintenance + cooling) * lifetime. Its revenue is a function of its hashrate.
So, all else being equal, if someone makes a mining chip with less efficiency than the best, they simply have to sell the chip for less $/TH.
But usually all else _aren't_ equal. Say you're mining in the far northern regions of the planet. You can take advantage of the colder climate to reduce your cooling costs, so you don't have to expend money designing chips and hardware with good cooling. But you can't take advantage of hydro or solar power, so power efficiency becomes more important.
Or, let's say you mine near the equator. Now you can probably build out a solar farm and get cheaper power than anyone else. But cooling is a major issue. You have to spend more on good chip packages and thermal designs.
On top of that, the design of the chip itself can dictate a lot of cost. For example, when I designed my FPGA miners, I made it so that the FPGAs could be both programmed and communicated with by a single, cheap FTDI chip. This made the boards super simple and cheap.
Basically, it's a complex equation that can't be boiled down to simple power efficiency.
Have you considered leasing as a way to reduce risk for operators? So, rather than mining operators needing to take the risk of standing with outdated hardware, you — as the manufacturer — would take on that risk by allowing mining operators to stop the lease if it becomes unprofitable.
This changes the incentive structure so that you stand with a loss if your hardware becomes obsolete.
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.
Imo, we shouldn't have free tiers.
It's like "unlimited" internet. I don't want things to be non-sustainable, it's a myth. Give me scalable solutions. How about instead of free tiers, very cheap tiers with very limited resources to try the product out? etc etc.
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.
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.
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.
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.
What is your point? This has nothing to do with cryptocurrencies. If you replace "Etherium coin" with "USD", the scenario is unchanged.
Seriously though these coins won't be worth much given a competitor could either a) dominate mining or b) fork it.
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.
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.
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.
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.
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?
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".