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Previously, we had a filter screening new altcoins (expletive deleted) in that you had to know enough about bitcoin to at least fork the repo, build it and make

Previously, we had a filter screening new altcoins (expletive deleted) in that you had to know enough about bitcoin to at least fork the repo, build it and make some modest changes to create a new namespace. We could see whether those coins are worth anything by looking to see if there was a novel PoW or other network changes, premine, etc. Now, Counterparty and much moreso Ethereum have created an opportunity for anyone to mostly click through to a new asset/token and make claims about some abstract business idea. FOMO drives folks to invest in the pump-n-dump of the day. Very few of these have any real claim of value. Please, tell your friends not to invest in these ludicrous scams.

richardknop 9y ago
Exactly my thoughts. This is pure gambling. Lots of people will end up losing money while a small amount of people will make millions from these scams.
- sillysaurus3 9y ago
  True, though it's probably best to go further: Any money into any cyptocoin is pure gambling. Don't put any money in you can't afford to lose. If anyone is saying the word "investment" while talking about a cryptocoin, smile and nod while slowly receding in the other direction. As a gambling vehicle, cryptocoins are one of the finest ever created. But people should at least admit to themselves that it's not investing. That's a little bit of a No True Scotsman, but there's a grain of truth to it. Yes, abstractly cryptocoins are going to create a lot of value for the world. But that value is abstract, at least for now. It's different from the sort of value that a startup creates: at least a startup is trying to affect the world in a tangible way that can usually be explained in a couple of sentences. EDIT: I think it's possible to invest in cryptocoin, but you have to be willing to put money in and then not touch the coins for years. What bugs me about ICOs is that it's pandering solely to a get-rich-quick mindset. That's nearly the definition of any "initial X offering."
  - leovailati 9y ago
    > It's different from the sort of value that a startup creates: at least a startup is trying to affect the world in a tangible way that can usually be explained in a couple of sentences. I agree that it is different. Arguably, though, if Bitcoin gains enough traction, it would affect the world too.
    - sillysaurus3 9y ago
      I put in an edit to clarify some thoughts on investing in coins. Basically, if you put in money and then don't touch the coins for years, that's investing. It's just so hard to have that mindset in this particular medium.
    - lumberjack 9y ago
      >Arguably, though, if Bitcoin gains enough traction, it would affect the world too. But even then, the ways in which it would affect the world is unpredictable and any predictions are pure speculation. In 2011 people where thinking that when 1BTC reaches $1000 in value, there would be mass adoption and it will be used as a currency for mundane everyday purchases. Well that didn't happen and it doesn't seem like Bitcoin will ever be use in that way.
      - colecut 9y ago
        I bought OJ, milk, eggs, veggies yesterday with BTC via my Shift Card. This hasn't caught on mainstream yet but the infrastructure is there, and it's growing. https://www.shiftpayments.com/card https://www.shiftpayments.com/card
        richardknop 9y ago
        The fees are quite high for that card. And you are not paying with BTC. If it's a debit card then you have to have fiat in a bank account. I guess they exchange BTC to USD when you top up your shift card.
- empath75 9y ago
  It's not even gambling. If you're not the one creating the ico scam, you are flushing money down the toilet.
- sumoboy 9y ago
  How is investing in the stock market not a gamble? Potentially reduced risk with alot more rules and regulations it's not any different IMO.
  - ufo 9y ago
    A stock is an ownership share in a real (money-making) company. Criptocoins, on the other hand, have questionable intrinsic value.
    - logfromblammo 9y ago
      Whoa, whoa, whoa. Who told you that a company had to make money to issue stock?
      - beefield 9y ago
        the original question was > How is investing in the stock market not a gamble? The companies that make stock market in aggregate make money.
      - gus_massa 9y ago
        Somewhat related: "Blue Apron May Need to Raise More Money Soon After Shrunken IPO" https://www.bloomberg.com/news/articles/2017-06-29/blue-apron-may-need-to-raise-more-money-soon-after-shrunken-ipo https://www.bloomberg.com/news/articles/2017-06-29/blue-apro... HN discussion https://news.ycombinator.com/item?id=14667364 https://news.ycombinator.com/item?id=14667364 (144 points, 3 days ago, 152 comments)
    - endlessvoid94 9y ago
      False argument between gambling vs. investment. It's more of a continuum of risk. Gambling is seen as high risk, and long term investments are seen as low risk. There's a huge area in between, and where you place a particular activity on the continuum is largely a judgement call.
    - hoofish 9y ago
      not true if the token is an asset pegged token on future revenue.
bitxbitxbitcoin 9y ago
I wonder what percentage of ICO investors actually read through the corresponding whitepaper to try and discern the real claim of value... I truly do.
- omarchowdhury 9y ago
  They just scroll it. And do you know who they are? The Chinese. The Chinese are the ones fueling the ICO craze. How do I know? I'm hanging out in a Slack channel full of them. I asked them how did you get into crypto? Verbatim response was that "friend said it easy money". Then he said "China full of money." Full of money indeed. In fact the majority of ICOs are not even open to Americans.
  - jonstokes 9y ago
    Heh, my guess all along has been that the crpytocurrency story right now is about capital flight from China and India (i.e. the recent cash ban there), and possibly from some other destabilized regions like MENA.
  - marknyc 9y ago
    Can you tell me the slack channel and how to get invited? I'm located in the US but would love to hear and see what investors in China are thinking. Thanks.
erikb 9y ago
Ethereum has the right play here though. They go to where the gold rush is and sell the shovels.
- curiousgal 9y ago
  I think the exchanges are the ones selling shovels and am certain that they have a horse in that race; e.g. Kraken added support for trading EOS yesterday, started at $1 now it's at $4.16. With potential ROIs like that (all across the board) I am certain that Wall Street cowboys are all over this market. But at least we have the SEC to protec..oh we don't.
  - npongratz 9y ago
    I find EOS especially hilarious. Per their own FAQ[0]: "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." And: "We believe that EOS means different things to different people. We have received numerous amazing interpretations of what EOS stands for or what it should stand for so we have decided not to formally define it ourselves." [0] https://eos.io/faq.html https://eos.io/faq.html, last week's mirror: https://archive.fo/m3D1T https://archive.fo/m3D1T At least they're honest about it.
    - oelmekki 9y ago
      > At least they're honest about it. Or, they expect legal action and they see it as a possible disclaimer.
  - erikb 9y ago
    The thing about proverbs is that you shouldn't apply them literally. "selling shovels" here means: Instead of taking part in the hype something that is used by hype-seekers to fascilitate their yearning is sold. It's often very likely that there are a lot of different kinds of businesses who profit this way. Sure the exchanges are profiting, the hash-box-producers profit, the VCs profit. In the original sense there were also different businesses profiting from the gold rush. Besides shovels you also had to buy food, other tools, shelter, a claim to a piece of land, etc. The special thing about Ethereum here is that they act like a participant in the gold rush to some degree. I actually thought they produce coins and try to find a meaningful use for them, just like bitcoin. But in fact they provide an infrastructure for coin producers. That's really interesting, imo. Since no matter how it goes, they will profit from it, and can easily exit any time when they feel the profits are diminishing too much.
cslarson 9y ago
Back in the day there was a website where you could fill in a few details and it would create a bitcoin clone including downloadable source. What value do bitcoin alts offer? Hardly anything. Your position is just absurd to say that Ethereum and what is buildable on top of it are valueless. This comment, at the top of a hn thread is a great example of slashdoting of the hn community. It's both weird and educational to watch it happen.
- hudon 9y ago
  Your comment is just one big ad hominem so I'm going to guess what your position is: tokens on the blockchain are great to bootstrap users. (correct me if I'm wrong) Given my assumption, can you explain why I can't do this: 1- Have a great idea for a decentralized marketplace app (think OpenBazaar) 2- Store 21 million BazaarCoin in a MySQL database and give these coins some purpose in my app (eg. used to buy stuff) 3- Setup APIs so people can easily trade them (use public-key crypto to track ownership) 4- Make all my code open source and also provide read-only APIs so anyone anywhere can quickly audit the database of coins. 5- Have various exchanges setup USD/BazaarCoin trading pairs 6- Explain all this in a white paper and organize an initial-bazaarcoin-offering to "bootstrap the network" Where does the blockchain fit in to add value?
  - avsa 9y ago
    Your site can be taken offline either because it can't handle too much traffic, because authorities seized your servers or simply because you decided you didn't want to play anymore. If that doesn't happen and your site becomes very popular, you might be tempted to create a bunch of coins on your own mysql database to pay yourself. Blockchain prevents all that: your code is committed and public
    - hudon 9y ago
      > because it can't handle too much traffic The two most popular blockchains, Ethereum and Bitcoin, can't "handle too much traffic". They both suffer from severe congestion the moment people start using them actively. Distributed databases that have existed for a while scale much more efficiently. Blockchains do not prevent this. > you decided you didn't want to play anymore If the coins have value, users are incentivized to keep the app running to preserve their wealth and to preserve the value of having a network of users participating in the decentralized app. Because all the code is open source and all the data is readily available, I can easily sell off the write keys to the highest bidder. There will be bidders because the BazaarCoins and userbase has value. If it does not have value, then there is nothing lost in me burning the write keys. The blockchain does not add value here. > you might be tempted to create a bunch of coins on your own mysql database to pay yourself I cannot do this without hurting the network. The data is all readable so people will know. If I'm lying about the data being available, I will be sued or worse: arrested for fraud (because I'm selling something that is not in the contract). The blockchain does not prevent this either, by the way. If anything, it is worse: for example, the Ethereum Foundation broke their promise of honoring "code is law" by reverting transactions on the blockchain and paying people who should not have been paid. In the real world, this is fraud. > because authorities seized your servers Bingo! I agree with this argument. The blockchain allows anyone to use the app and disregard authority.
hoofish 9y ago
Not necessarily true at all. ICOs can offer revenue pegged tokens against company future revenue - which is then used to buy back the tokens from the investors.
- coolspot 9y ago
  But there is nothing that forces such company to actually share the revenue. Tokens are not legally enforcable.
  - wyldfire 9y ago
    > Tokens are not legally enforcable I think this is not accurate. It's more likely accurate to state that their use is not tested in courts. But if you could show corporate communications indicating "such and such mechanism will be how we track obligations to shareholders or creditors" and establish that the tokens were not paid back per the operations of the token mechanism, then in all likelihood a court would agree and find evidence of damages and/or criminal wrongdoing. Lawyers strike me as a particularly pedantic crowd (similar to programmers) and I would suppose if pressed about such tokens they'd say "this is a grey area because there's no precedent here yet." But AFAICT intent trumps everything else. If you make a new contract that's not called a contract but smells like a contract and get everyone to agree to it but not write their signature on paper, you have not dodged responsibility. OTOH regulators like SEC might balk and throw their hands up at things like this and claim that they're not securities or that it's out of their scope. But district attorneys, attorneys general -- they probably wouldn't back down from a case like this if it happened to constituents that they think are important enough to stand up for.
    - acdha 9y ago
      At that point, what value is all of this infrastructure adding? It seems like the real guarantees come from having access to a stable court system, well-defined contracts, trusted third parties, etc.
      - 9y ago
stefek99 9y ago
> Please, tell your friends not to invest in these ludicrous scams. Psychology? Telling about something increases interest... I have a website https://icofomo.com https://icofomo.com

richardknop 9y ago

Exactly my thoughts. This is pure gambling. Lots of people will end up losing money while a small amount of people will make millions from these scams.

sillysaurus3 9y ago
True, though it's probably best to go further: Any money into any cyptocoin is pure gambling. Don't put any money in you can't afford to lose. If anyone is saying the word "investment" while talking about a cryptocoin, smile and nod while slowly receding in the other direction. As a gambling vehicle, cryptocoins are one of the finest ever created. But people should at least admit to themselves that it's not investing. That's a little bit of a No True Scotsman, but there's a grain of truth to it. Yes, abstractly cryptocoins are going to create a lot of value for the world. But that value is abstract, at least for now. It's different from the sort of value that a startup creates: at least a startup is trying to affect the world in a tangible way that can usually be explained in a couple of sentences. EDIT: I think it's possible to invest in cryptocoin, but you have to be willing to put money in and then not touch the coins for years. What bugs me about ICOs is that it's pandering solely to a get-rich-quick mindset. That's nearly the definition of any "initial X offering."
- leovailati 9y ago
  > It's different from the sort of value that a startup creates: at least a startup is trying to affect the world in a tangible way that can usually be explained in a couple of sentences. I agree that it is different. Arguably, though, if Bitcoin gains enough traction, it would affect the world too.
  - sillysaurus3 9y ago
    I put in an edit to clarify some thoughts on investing in coins. Basically, if you put in money and then don't touch the coins for years, that's investing. It's just so hard to have that mindset in this particular medium.
  - lumberjack 9y ago
    >Arguably, though, if Bitcoin gains enough traction, it would affect the world too. But even then, the ways in which it would affect the world is unpredictable and any predictions are pure speculation. In 2011 people where thinking that when 1BTC reaches $1000 in value, there would be mass adoption and it will be used as a currency for mundane everyday purchases. Well that didn't happen and it doesn't seem like Bitcoin will ever be use in that way.
    - colecut 9y ago
      I bought OJ, milk, eggs, veggies yesterday with BTC via my Shift Card. This hasn't caught on mainstream yet but the infrastructure is there, and it's growing. https://www.shiftpayments.com/card https://www.shiftpayments.com/card
      - richardknop 9y ago
        The fees are quite high for that card. And you are not paying with BTC. If it's a debit card then you have to have fiat in a bank account. I guess they exchange BTC to USD when you top up your shift card.
empath75 9y ago
It's not even gambling. If you're not the one creating the ico scam, you are flushing money down the toilet.
sumoboy 9y ago
How is investing in the stock market not a gamble? Potentially reduced risk with alot more rules and regulations it's not any different IMO.
- ufo 9y ago
  A stock is an ownership share in a real (money-making) company. Criptocoins, on the other hand, have questionable intrinsic value.
  - logfromblammo 9y ago
    Whoa, whoa, whoa. Who told you that a company had to make money to issue stock?
    - beefield 9y ago
      the original question was > How is investing in the stock market not a gamble? The companies that make stock market in aggregate make money.
    - gus_massa 9y ago
      Somewhat related: "Blue Apron May Need to Raise More Money Soon After Shrunken IPO" https://www.bloomberg.com/news/articles/2017-06-29/blue-apron-may-need-to-raise-more-money-soon-after-shrunken-ipo https://www.bloomberg.com/news/articles/2017-06-29/blue-apro... HN discussion https://news.ycombinator.com/item?id=14667364 https://news.ycombinator.com/item?id=14667364 (144 points, 3 days ago, 152 comments)
  - endlessvoid94 9y ago
    False argument between gambling vs. investment. It's more of a continuum of risk. Gambling is seen as high risk, and long term investments are seen as low risk. There's a huge area in between, and where you place a particular activity on the continuum is largely a judgement call.
  - hoofish 9y ago
    not true if the token is an asset pegged token on future revenue.

bitxbitxbitcoin 9y ago

I wonder what percentage of ICO investors actually read through the corresponding whitepaper to try and discern the real claim of value... I truly do.

omarchowdhury 9y ago
They just scroll it. And do you know who they are? The Chinese. The Chinese are the ones fueling the ICO craze. How do I know? I'm hanging out in a Slack channel full of them. I asked them how did you get into crypto? Verbatim response was that "friend said it easy money". Then he said "China full of money." Full of money indeed. In fact the majority of ICOs are not even open to Americans.
- jonstokes 9y ago
  Heh, my guess all along has been that the crpytocurrency story right now is about capital flight from China and India (i.e. the recent cash ban there), and possibly from some other destabilized regions like MENA.
- marknyc 9y ago
  Can you tell me the slack channel and how to get invited? I'm located in the US but would love to hear and see what investors in China are thinking. Thanks.

erikb 9y ago

Ethereum has the right play here though. They go to where the gold rush is and sell the shovels.

curiousgal 9y ago
I think the exchanges are the ones selling shovels and am certain that they have a horse in that race; e.g. Kraken added support for trading EOS yesterday, started at $1 now it's at $4.16. With potential ROIs like that (all across the board) I am certain that Wall Street cowboys are all over this market. But at least we have the SEC to protec..oh we don't.
- npongratz 9y ago
  I find EOS especially hilarious. Per their own FAQ[0]: "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." And: "We believe that EOS means different things to different people. We have received numerous amazing interpretations of what EOS stands for or what it should stand for so we have decided not to formally define it ourselves." [0] https://eos.io/faq.html https://eos.io/faq.html, last week's mirror: https://archive.fo/m3D1T https://archive.fo/m3D1T At least they're honest about it.
  - oelmekki 9y ago
    > At least they're honest about it. Or, they expect legal action and they see it as a possible disclaimer.
- erikb 9y ago
  The thing about proverbs is that you shouldn't apply them literally. "selling shovels" here means: Instead of taking part in the hype something that is used by hype-seekers to fascilitate their yearning is sold. It's often very likely that there are a lot of different kinds of businesses who profit this way. Sure the exchanges are profiting, the hash-box-producers profit, the VCs profit. In the original sense there were also different businesses profiting from the gold rush. Besides shovels you also had to buy food, other tools, shelter, a claim to a piece of land, etc. The special thing about Ethereum here is that they act like a participant in the gold rush to some degree. I actually thought they produce coins and try to find a meaningful use for them, just like bitcoin. But in fact they provide an infrastructure for coin producers. That's really interesting, imo. Since no matter how it goes, they will profit from it, and can easily exit any time when they feel the profits are diminishing too much.

cslarson 9y ago

Back in the day there was a website where you could fill in a few details and it would create a bitcoin clone including downloadable source. What value do bitcoin alts offer? Hardly anything. Your position is just absurd to say that Ethereum and what is buildable on top of it are valueless. This comment, at the top of a hn thread is a great example of slashdoting of the hn community. It's both weird and educational to watch it happen.

hudon 9y ago
Your comment is just one big ad hominem so I'm going to guess what your position is: tokens on the blockchain are great to bootstrap users. (correct me if I'm wrong) Given my assumption, can you explain why I can't do this: 1- Have a great idea for a decentralized marketplace app (think OpenBazaar) 2- Store 21 million BazaarCoin in a MySQL database and give these coins some purpose in my app (eg. used to buy stuff) 3- Setup APIs so people can easily trade them (use public-key crypto to track ownership) 4- Make all my code open source and also provide read-only APIs so anyone anywhere can quickly audit the database of coins. 5- Have various exchanges setup USD/BazaarCoin trading pairs 6- Explain all this in a white paper and organize an initial-bazaarcoin-offering to "bootstrap the network" Where does the blockchain fit in to add value?
- avsa 9y ago
  Your site can be taken offline either because it can't handle too much traffic, because authorities seized your servers or simply because you decided you didn't want to play anymore. If that doesn't happen and your site becomes very popular, you might be tempted to create a bunch of coins on your own mysql database to pay yourself. Blockchain prevents all that: your code is committed and public
  - hudon 9y ago
    > because it can't handle too much traffic The two most popular blockchains, Ethereum and Bitcoin, can't "handle too much traffic". They both suffer from severe congestion the moment people start using them actively. Distributed databases that have existed for a while scale much more efficiently. Blockchains do not prevent this. > you decided you didn't want to play anymore If the coins have value, users are incentivized to keep the app running to preserve their wealth and to preserve the value of having a network of users participating in the decentralized app. Because all the code is open source and all the data is readily available, I can easily sell off the write keys to the highest bidder. There will be bidders because the BazaarCoins and userbase has value. If it does not have value, then there is nothing lost in me burning the write keys. The blockchain does not add value here. > you might be tempted to create a bunch of coins on your own mysql database to pay yourself I cannot do this without hurting the network. The data is all readable so people will know. If I'm lying about the data being available, I will be sued or worse: arrested for fraud (because I'm selling something that is not in the contract). The blockchain does not prevent this either, by the way. If anything, it is worse: for example, the Ethereum Foundation broke their promise of honoring "code is law" by reverting transactions on the blockchain and paying people who should not have been paid. In the real world, this is fraud. > because authorities seized your servers Bingo! I agree with this argument. The blockchain allows anyone to use the app and disregard authority.

hoofish 9y ago

Not necessarily true at all. ICOs can offer revenue pegged tokens against company future revenue - which is then used to buy back the tokens from the investors.

coolspot 9y ago
But there is nothing that forces such company to actually share the revenue. Tokens are not legally enforcable.
- wyldfire 9y ago
  > Tokens are not legally enforcable I think this is not accurate. It's more likely accurate to state that their use is not tested in courts. But if you could show corporate communications indicating "such and such mechanism will be how we track obligations to shareholders or creditors" and establish that the tokens were not paid back per the operations of the token mechanism, then in all likelihood a court would agree and find evidence of damages and/or criminal wrongdoing. Lawyers strike me as a particularly pedantic crowd (similar to programmers) and I would suppose if pressed about such tokens they'd say "this is a grey area because there's no precedent here yet." But AFAICT intent trumps everything else. If you make a new contract that's not called a contract but smells like a contract and get everyone to agree to it but not write their signature on paper, you have not dodged responsibility. OTOH regulators like SEC might balk and throw their hands up at things like this and claim that they're not securities or that it's out of their scope. But district attorneys, attorneys general -- they probably wouldn't back down from a case like this if it happened to constituents that they think are important enough to stand up for.
  - acdha 9y ago
    At that point, what value is all of this infrastructure adding? It seems like the real guarantees come from having access to a stable court system, well-defined contracts, trusted third parties, etc.
    - 9y ago

stefek99 9y ago

> Please, tell your friends not to invest in these ludicrous scams. Psychology? Telling about something increases interest... I have a website https://icofomo.com https://icofomo.com