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If there was a bad response to a critic, this will be it. While Sirer's post was a bit terse, this response doesn't earn brownie points by going the same route.

If there was a bad response to a critic, this will be it. While Sirer's post was a bit terse, this response doesn't earn brownie points by going the same route. First, they start off as many "responses" in crypto currency seem to start that is - saying this is all FUD and the critic should stop spreading FUD. They also take the Trump route, not a great choice of words - "fake news". Where I lost them was when they equated themselves as being so important to crypto currency space that critiquing them can be used to tag the whole space as being a giant ponzi scheme. On still persisting, I found their clarification on "asynchronous price discovery" very funny. The point of a market making algo is to "make the market" ie they have to act as counter parties to each trade irrespective of whether there is a buyer or a seller (ie not a price matching algo). The price discovery in that process happens on how the market making algo is written. Though I guess being programmers and writing a document for programmers they had to go with a technical term. But with someone who understands economics on their team, they should have done away with it. All said, the most important part of a market making algo is not to provide liquidity or smooth prices. As Sirer put it, smoothing prices is a bad idea. If something is volatile it is because the market deems it to be so. Going against the market is not good. I hope these guys watch this video carefully to understand how trading works: https://www.youtube.com/watch?v=RLySXTIBS3c https://www.youtube.com/watch?v=RLySXTIBS3c

davidgerard 9y ago
> Where I lost them was when they equated themselves as being so important to crypto currency space that critiquing them can be used to tag the whole space as being a giant ponzi scheme. To be fair, the whole ICO scene of the past few months largely is a bubble phenomenon: an incoherent idea, incompetent code, and really obviously just creators who see easy money selling to buyers who see easy money. The critique is widely applicable. There are non-bogus ICOs, but mostly it's complete air.
- thisisit 9y ago
  Agreed but the same could be said about VC money and unicorns like Uber, Snap Inc. etc. It will be laughable if say Uber's CEO equates bashing of Uber's tech or business model as a threat to all unicorns. One of the bigger problems I see with these ICOs is they that they don't offer much in terms of business viability other than maybe "cool" tech. I have been thinking of a purely profit focused contract(coin) on top of ethereum network. Something which provides value to people and the investors as well. Unfortunately not a programmer so it has to remain a plan forever.
  - root_axis 9y ago
    > but the same could be said about VC money and unicorns like Uber, Snap The same cannot be said about VC money going to unicorns. Those companies provide in-demand services that people use and enjoy, even if the business model is tenuous, there is clear value created by the services. Not true of ICOs which create no value.
    - thisisit 9y ago
      My bad. My phrasing should've been better. I am not implying anything on the value side of ICO vs VC backed real world companies. I am just pointing out that - No company is an island. Criticizing one doesn't implicate the whole industry as the Bancor guys try to portray.
  - davidgerard 9y ago
    Have you seen EOS.io? Here's what the white paper says it is: > The EOS.IO software introduces a new blockchain architecture designed to enable vertical and horizontal scaling of decentralized applications. This is achieved by creating an operating system-like construct upon which applications can be built. The software provides accounts, authentication, databases, asynchronous communication and the scheduling of applications across hundreds of CPU cores or clusters. The resulting technology is a blockchain architecture that scales to millions of transactions per second, eliminates user fees, and allows for quick and easy deployment of decentralized applications. No, that doesn’t end "and a pony." Sounds great! So I buy some tokens, and I get ... from the FAQ: > The EOS Tokens do not have any rights, uses, purpose, attributes, functionalities or features, express or implied, including, without limitation, any uses, purpose, attributes, functionalities or features on the EOS Platform. The legal EOS Token Purchase Agreement is a frankly amazing document that you need to read all 15 pages of. US citizens or residents are not to buy the tokens (though EOS is sure they don’t constitute a security, honest SEC); the tokens are defined as not being useful in any manner; forty-eight hours after the end of the distribution period, the tokens will no longer be transferable; the buyer is not buying them for speculation or investment. https://eos.io/purchaseagreement/EOS%20Token%20Purchase%20Agreement%20-%20June%2022,%202017.pdf https://eos.io/purchaseagreement/EOS%20Token%20Purchase%20Ag... They're doing one billion tokens, dribbled out slowly over a year, at a price of "how much money do you have to throw at us". Really, that's the price. 'Coiners are still lining up to buy them. "Whatever these people do, I'm going all in. Nuff said." https://bitcointalk.org/index.php?topic=1904415.0 https://bitcointalk.org/index.php?topic=1904415.0
- xorcist 9y ago
  > There are non-bogus ICOs Where?
  - davidgerard 9y ago
    The Civic ICO struck me as a sincere attempt at using an ICO for actual not-intrinsically-fraudulent fundraising. Their product is still a weird misapplied but-with-blockchain idea that I can't see how it'll work, but the ICO itself didn't make me go "wtf".
    - xorcist 9y ago
      Fraudulent doesn't mean there is no product. It means that the founders are well aware that the token is useless but sold it to the general public anyway, under some sort of pretense of an investment while at the same time it is clearly not a security. I can not speak for every jurisdiction of the world, but I believe any lawyer would advise against marketing non-securities as investment if you want to stay out of jail. Civic specifically has absolutely no use for a token. The service they offer would look completely identical without the token. I believe the official explanation why they did anyway it was to "harness the enthusiasm of the community" or something like it. Since the Civic token is completely dysfunctional without Civic the company providing the underlying service, it is also unnecessarily expensive and complicated to use a blockchain for storage. That they have a procedure where they can restore your keys should you lose them should be enough to raise questions. While the public blockchain is an innovation that I believe will have important use cases going forward, it is absolutely clear to me that this is a golddigger era for scams, and the shift from altcoins to tokens have lowered the signal-to-noise ratio even further. I have yet to see an ICO that was not useless, bordering on fraudulent (which is a word that should not get used too lightly), so I would be genuinely curious to see one that is not.
wpietri 9y ago
> As Sirer put it, smoothing prices is a bad idea. If something is volatile it is because the market deems it to be so. Going against the market is not good. Yeah, as somebody who used to work for market makers, the Bancor notion of markets struck me as... I guess "utopian" is the kindest word I can come up with. The reason we as market makers got a special deal was that the market wanted us to provide liquidity, which sometimes can smooth prices a bit. But we personally didn't give a fuck about that. We were there to make money while avoiding getting crushed by market movements. That was honestly a grim mindset, and I'm glad I don't do that anymore. But I appreciate the way a lot of individually self-serving actions can sometimes balance out to something socially useful. To make that work, though, I think requires you to be extraordinarily cynical. From what I've seen, utopians get eaten alive.

davidgerard 9y ago

> Where I lost them was when they equated themselves as being so important to crypto currency space that critiquing them can be used to tag the whole space as being a giant ponzi scheme. To be fair, the whole ICO scene of the past few months largely is a bubble phenomenon: an incoherent idea, incompetent code, and really obviously just creators who see easy money selling to buyers who see easy money. The critique is widely applicable. There are non-bogus ICOs, but mostly it's complete air.

thisisit 9y ago
Agreed but the same could be said about VC money and unicorns like Uber, Snap Inc. etc. It will be laughable if say Uber's CEO equates bashing of Uber's tech or business model as a threat to all unicorns. One of the bigger problems I see with these ICOs is they that they don't offer much in terms of business viability other than maybe "cool" tech. I have been thinking of a purely profit focused contract(coin) on top of ethereum network. Something which provides value to people and the investors as well. Unfortunately not a programmer so it has to remain a plan forever.
- root_axis 9y ago
  > but the same could be said about VC money and unicorns like Uber, Snap The same cannot be said about VC money going to unicorns. Those companies provide in-demand services that people use and enjoy, even if the business model is tenuous, there is clear value created by the services. Not true of ICOs which create no value.
  - thisisit 9y ago
    My bad. My phrasing should've been better. I am not implying anything on the value side of ICO vs VC backed real world companies. I am just pointing out that - No company is an island. Criticizing one doesn't implicate the whole industry as the Bancor guys try to portray.
- davidgerard 9y ago
  Have you seen EOS.io? Here's what the white paper says it is: > The EOS.IO software introduces a new blockchain architecture designed to enable vertical and horizontal scaling of decentralized applications. This is achieved by creating an operating system-like construct upon which applications can be built. The software provides accounts, authentication, databases, asynchronous communication and the scheduling of applications across hundreds of CPU cores or clusters. The resulting technology is a blockchain architecture that scales to millions of transactions per second, eliminates user fees, and allows for quick and easy deployment of decentralized applications. No, that doesn’t end "and a pony." Sounds great! So I buy some tokens, and I get ... from the FAQ: > The EOS Tokens do not have any rights, uses, purpose, attributes, functionalities or features, express or implied, including, without limitation, any uses, purpose, attributes, functionalities or features on the EOS Platform. The legal EOS Token Purchase Agreement is a frankly amazing document that you need to read all 15 pages of. US citizens or residents are not to buy the tokens (though EOS is sure they don’t constitute a security, honest SEC); the tokens are defined as not being useful in any manner; forty-eight hours after the end of the distribution period, the tokens will no longer be transferable; the buyer is not buying them for speculation or investment. https://eos.io/purchaseagreement/EOS%20Token%20Purchase%20Agreement%20-%20June%2022,%202017.pdf https://eos.io/purchaseagreement/EOS%20Token%20Purchase%20Ag... They're doing one billion tokens, dribbled out slowly over a year, at a price of "how much money do you have to throw at us". Really, that's the price. 'Coiners are still lining up to buy them. "Whatever these people do, I'm going all in. Nuff said." https://bitcointalk.org/index.php?topic=1904415.0 https://bitcointalk.org/index.php?topic=1904415.0
xorcist 9y ago
> There are non-bogus ICOs Where?
- davidgerard 9y ago
  The Civic ICO struck me as a sincere attempt at using an ICO for actual not-intrinsically-fraudulent fundraising. Their product is still a weird misapplied but-with-blockchain idea that I can't see how it'll work, but the ICO itself didn't make me go "wtf".
  - xorcist 9y ago
    Fraudulent doesn't mean there is no product. It means that the founders are well aware that the token is useless but sold it to the general public anyway, under some sort of pretense of an investment while at the same time it is clearly not a security. I can not speak for every jurisdiction of the world, but I believe any lawyer would advise against marketing non-securities as investment if you want to stay out of jail. Civic specifically has absolutely no use for a token. The service they offer would look completely identical without the token. I believe the official explanation why they did anyway it was to "harness the enthusiasm of the community" or something like it. Since the Civic token is completely dysfunctional without Civic the company providing the underlying service, it is also unnecessarily expensive and complicated to use a blockchain for storage. That they have a procedure where they can restore your keys should you lose them should be enough to raise questions. While the public blockchain is an innovation that I believe will have important use cases going forward, it is absolutely clear to me that this is a golddigger era for scams, and the shift from altcoins to tokens have lowered the signal-to-noise ratio even further. I have yet to see an ICO that was not useless, bordering on fraudulent (which is a word that should not get used too lightly), so I would be genuinely curious to see one that is not.

wpietri 9y ago

> As Sirer put it, smoothing prices is a bad idea. If something is volatile it is because the market deems it to be so. Going against the market is not good. Yeah, as somebody who used to work for market makers, the Bancor notion of markets struck me as... I guess "utopian" is the kindest word I can come up with. The reason we as market makers got a special deal was that the market wanted us to provide liquidity, which sometimes can smooth prices a bit. But we personally didn't give a fuck about that. We were there to make money while avoiding getting crushed by market movements. That was honestly a grim mindset, and I'm glad I don't do that anymore. But I appreciate the way a lot of individually self-serving actions can sometimes balance out to something socially useful. To make that work, though, I think requires you to be extraordinarily cynical. From what I've seen, utopians get eaten alive.