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Ether is not a currency like Bitcoin. Ethereum is a pure platform play that enables multiple Bitcoin competitors to rapidly experiment and find the product-mark

by daoland 10y ago

Ether is not a currency like Bitcoin. Ethereum is a pure platform play that enables multiple Bitcoin competitors to rapidly experiment and find the product-market fit of crypto-currencies in the real world. I believe there can be a crypto-currency with better properties than Bitcoin. Once one of these Ethereum apps finds their hockey stick, Ether will continue to play its role in securing the Ethereum network for this killer app which removes the need for both Ether and Bitcoin to play the role of crypto-currencies. While you are distracted by one DAO, there are many other DAOs successfully in operation on the Ethereum network. There is only one that made a lot of noise because it had to, the others are silently building their products after raising money from a passionate set of users.

dharma1 10y ago
What other DAOs are there and how much have they raised? The thing with tokens is that because Ethereum is so young, the companies being built on top of it are by default super early stage, with no real traction or product market fit to show. So anyone buying tokens at this stage because they want a shared revenue stream of the companies profits, is making very risky bets which have a high likelihood of failure (on average). I think it's the lure of secondary markets for DAOs that is behind a lot of the interest in, at least, The DAO - people buy the tokens early because there is anticipation of the token prices going up relatively soon after the crowdsale, fear of missing out etc. I think a lot of it is driven by speculative motives rather than long term investment in Ethereum companies themselves.
- DennisP 10y ago
  The other major DAO was Digix, which set a target of $5.5 million and raised it in 14 hours. They've got a more definite revenue plan: DAO token holders get transaction fees from transfers of the gold-backed tokens Digix plans to issue. For various reasons I don't think this is going to work out very well for Digix DAO holders in the long term, but it's an interesting experiment.
- daoland 10y ago
  Yes, the bets are risky. It is an opportunity to rethink your portfolio like a VC where few investments could return 10x easily and a lot will lose the capital allocated to them. I think this is better than buying IPO stock in public markets which are so bad these days that only zombie companies are being listed and investors are being screwed very regularly.
  - dharma1 10y ago
    Except you don't own equity - just a share of potential revenue. Most VC returns come from exits - here you get none if the company is later sold
    - EdHominem 10y ago
      You can create whatever structure you want. There's no reason (other than that it doesn't make good financial sense) that you couldn't sell special preferred tokens, etc.

by daoland 10y ago

dharma1 10y ago

What other DAOs are there and how much have they raised? The thing with tokens is that because Ethereum is so young, the companies being built on top of it are by default super early stage, with no real traction or product market fit to show. So anyone buying tokens at this stage because they want a shared revenue stream of the companies profits, is making very risky bets which have a high likelihood of failure (on average). I think it's the lure of secondary markets for DAOs that is behind a lot of the interest in, at least, The DAO - people buy the tokens early because there is anticipation of the token prices going up relatively soon after the crowdsale, fear of missing out etc. I think a lot of it is driven by speculative motives rather than long term investment in Ethereum companies themselves.

DennisP 10y ago
The other major DAO was Digix, which set a target of $5.5 million and raised it in 14 hours. They've got a more definite revenue plan: DAO token holders get transaction fees from transfers of the gold-backed tokens Digix plans to issue. For various reasons I don't think this is going to work out very well for Digix DAO holders in the long term, but it's an interesting experiment.
daoland 10y ago
Yes, the bets are risky. It is an opportunity to rethink your portfolio like a VC where few investments could return 10x easily and a lot will lose the capital allocated to them. I think this is better than buying IPO stock in public markets which are so bad these days that only zombie companies are being listed and investors are being screwed very regularly.
- dharma1 10y ago
  Except you don't own equity - just a share of potential revenue. Most VC returns come from exits - here you get none if the company is later sold
  - EdHominem 10y ago
    You can create whatever structure you want. There's no reason (other than that it doesn't make good financial sense) that you couldn't sell special preferred tokens, etc.