13 ms·

The idea of the ICO is ridiculous to me. It's nothing but a scam: here's why. I think that there are three ways in which something can have some sort of "value

The idea of the ICO is ridiculous to me. It's nothing but a scam: here's why. I think that there are three ways in which something can have some sort of "value." (1) The object is scarce and has uses --- e.g., gold. No matter what, people are going to want gold. It's scarce (assume you can't just produce it) and is essential to modern electronic equipment (besides its appeal as THE famous precious metal). (2) The government backs it --- e.g., the U.S. dollar Techno-libertarians are going to lambast me for this one, but governmental backing actually means a lot to a currency. There is a reasonable expectation that the U.S. government, for example, be around tomorrow; if they aren't, we've got bigger problems than what we're going to do with our portraits of dead presidents. (3) Agreement within a community --- e.g., Chuck E. Cheese's tokens, bitcoins Now we've reached the most basic level of commerce. I'm not going to explain the social structures behind bartering and tokens, but essentially, everybody in the Chuck E. Cheese's agrees that a token is worth a game (or everybody involved in bitcoin transactions agrees a token has a certain worth). Being a computer geek, the idea of a digital transaction becomes obviously quite appealing. However, bitcoin (and ether et al.) seem to be a waste to me: just a token that a useless computation has been done on an abused piece of hardware. Perhaps it would be better to get token credit for contribution to medical research or the like. The altcoins and these bullshit "ICO"s are the next level of dumb. Now, not only do we not have any computing value (as they're 99% perfect clones of bitcoin or ether), we don't even have the ONE thing that bitcoin did right: recognition, which led to some insane valuations in those early, early days. Today's news story: Invest in our ICO: we're totally not a scam based around fake currency. People totally value what we sell. Yeah, right. People barely accept current coins.

gaetanrickter 9y ago
...Aaaaaaand this is exactly why you're going to miss the boat here on new forms of innovative currency that represents a flight to quality from more corrupt financial markets. In a year or so you'll be buying cryptocurrency, especially when the Yield Curve starts dropping and we enter another downturn in the Market. There is a generation of kids who will only know electronic gold aka cryptocurrency. See: https://www.mixcloud.com/TheTimFerrissShow/244-the-quiet-master-of-cryptocurrency-nick-szabo/ https://www.mixcloud.com/TheTimFerrissShow/244-the-quiet-mas...
- hendzen 9y ago
  How exactly are cryptocurrency markets less "corrupt" than our current capital markets?
  - gaetanrickter 9y ago
    To start, ever heard of Quantitative Easing or bailing out banks with billions over consumers?
    - tuxxy 9y ago
      To add, I love Bitcoin, but this is why Proof of Stake/Ethereum is also not that great in my opinion. The DAO hardfork was nothing but a bailout.
      - deleted 9y ago
        [deleted]
      - oh_sigh 9y ago
        That's a somewhat scary problem for cryptocurrencies. Basically if 51% of the network decides that they don't like you then they can essentially take all of your currency(or, rather, make it worthless)
        gruez 9y ago
        That's false. The most that can happen in a 50% attack is that transactions are rolled backs.
        oh_sigh 9y ago
        Look at what happened in the etherium hard fork because of the dao shenanigans. That's why there are two etheriums now...etherium and etherium classic
        9y ago
programmarchy 9y ago
> a token that a useless computation has been done You don't understand the fundamentals of Bitcoin. The computation isn't useless. Go find out why, and perhaps things will make a little more sense.
- miketery 9y ago
  Brute forcing a nonce value is most certainly a waste of computing power.
  - jstanley 9y ago
    You, too, don't understand the fundamentals of Bitcoin. The nonce must be brute-forced to prove that the computing power was expended. It is precisely this expenditure of computing power that makes it expensive to cheat.
    - mod50ack 9y ago
      > You, too, don't understand the fundamentals of Bitcoin. > The nonce must be brute-forced to prove that the computing power was expended. It is precisely this expenditure of computing power that makes it expensive to cheat. No, I understand why it's done. But it has no practical use outside of Bitcoin.
      - mod50ack 9y ago
        I'll elaborate: to me, it's akin to this: In the real world, we pay people money for useful work (a gross oversimplification, but let's keep going). Imagine a world where it's impossible to print money, and the only way to create money is by drawing dollar bills by hand, which is a very difficult task. Surely, people are being paid for their work here? Well, yes, but if the work is going only into the creation of the tokens, then it's useless. Why would you want an economy that revolves around the value of having wasted computing power on a nonce value? Maybe if we assigned tokens to those who expend computing power on medical research or the like, that's more useful. But Bitcoin is a waste of resources to generate.
virtuexru 9y ago
I don't think #3 is spot on. Bitcoin solves the double spend problem does it not?
- discodave 9y ago
  Banks and other settlement systems also solve that problem.... but cheaper than bitcoin. So, what advantages does bitcoins more expensive solution to this problem give us?
  - femwarrior 9y ago
    Google for "Paypal froze my account" or similar things. Nobody can prevent you from getting a "Bitcoin account" and from spending your coins.
  - programmarchy 9y ago
    Cheaper than bitcoin? I'd love to see your calculations of how Bitcoin is more expensive than the existing banking structure, including the cost of staff, buildings, etc. The banking bureaucracy is massive. Furthermore, there is plenty of criticism that could be levied upon central banking, financing wars between nation states being chief among them. There's an enormous social cost to central banking.
    - mrep 9y ago
      $5 transaction fee for bitcoin versus [1] free (cash/checks), 30 cents + 3% for most credit cards. Unless you are sending huge amounts of money, bitcoin is more expensive. [1]: https://www.reddit.com/r/btc/comments/6gek0z/average_bitcoin_transaction_fee_is_now_above_five/ https://www.reddit.com/r/btc/comments/6gek0z/average_bitcoin...
      - Frogolocalypse 9y ago
        > [1] free (cash/checks), You realize there's no such thing as 'free' right? What's the saying? "If you don't know who is paying for a product you're using that's free, you're the product."
xutopia 9y ago
"No wireless. Less space than a nomad. Lame." You don't have to be excited about this but if enough people are you'll just have to follow. I was at a pot luck just a few weeks ago and people were gathering money for pizza. One person paid and the others just sent bitcoins to the one paying. This wasn't even a tech-related event.
- dgacmu 9y ago
  Really? With a roughly $2 per transaction fee, they sent Bitcoin, suffering 50% overhead on their pizza share? I send Bitcoin. Sometimes a lot. But Bitcoin of 2017 and small transactions do not make sense.
Gys 9y ago
I do not immediately see the difference between (2) and (3). In what way supports a government a currency ? A government controls more or less the quantity but in the end a currency's value is just supply and demand. If the public does not trust a currency anymore then it looses its value. E.g. its also a community agreed value ?
- mod50ack 9y ago
  Because the government compels users to use things in transactions. Actually, I should have chosen Chuck E. Cheese's in (2), as there is indeed in that case as well a more powerful entity that forces people to use that currency for the purpose (albeit tokens for games and not money for taxes). Bitcoin has no power that promotes its use in a backed sense, so it's not that kind of currency.

gaetanrickter 9y ago

...Aaaaaaand this is exactly why you're going to miss the boat here on new forms of innovative currency that represents a flight to quality from more corrupt financial markets. In a year or so you'll be buying cryptocurrency, especially when the Yield Curve starts dropping and we enter another downturn in the Market. There is a generation of kids who will only know electronic gold aka cryptocurrency. See: https://www.mixcloud.com/TheTimFerrissShow/244-the-quiet-master-of-cryptocurrency-nick-szabo/ https://www.mixcloud.com/TheTimFerrissShow/244-the-quiet-mas...

hendzen 9y ago
How exactly are cryptocurrency markets less "corrupt" than our current capital markets?
- gaetanrickter 9y ago
  To start, ever heard of Quantitative Easing or bailing out banks with billions over consumers?
  - tuxxy 9y ago
    To add, I love Bitcoin, but this is why Proof of Stake/Ethereum is also not that great in my opinion. The DAO hardfork was nothing but a bailout.
    - deleted 9y ago
      [deleted]
    - oh_sigh 9y ago
      That's a somewhat scary problem for cryptocurrencies. Basically if 51% of the network decides that they don't like you then they can essentially take all of your currency(or, rather, make it worthless)
      - gruez 9y ago
        That's false. The most that can happen in a 50% attack is that transactions are rolled backs.
        oh_sigh 9y ago
        Look at what happened in the etherium hard fork because of the dao shenanigans. That's why there are two etheriums now...etherium and etherium classic
        9y ago

programmarchy 9y ago

> a token that a useless computation has been done You don't understand the fundamentals of Bitcoin. The computation isn't useless. Go find out why, and perhaps things will make a little more sense.

miketery 9y ago
Brute forcing a nonce value is most certainly a waste of computing power.
- jstanley 9y ago
  You, too, don't understand the fundamentals of Bitcoin. The nonce must be brute-forced to prove that the computing power was expended. It is precisely this expenditure of computing power that makes it expensive to cheat.
  - mod50ack 9y ago
    > You, too, don't understand the fundamentals of Bitcoin. > The nonce must be brute-forced to prove that the computing power was expended. It is precisely this expenditure of computing power that makes it expensive to cheat. No, I understand why it's done. But it has no practical use outside of Bitcoin.
    - mod50ack 9y ago
      I'll elaborate: to me, it's akin to this: In the real world, we pay people money for useful work (a gross oversimplification, but let's keep going). Imagine a world where it's impossible to print money, and the only way to create money is by drawing dollar bills by hand, which is a very difficult task. Surely, people are being paid for their work here? Well, yes, but if the work is going only into the creation of the tokens, then it's useless. Why would you want an economy that revolves around the value of having wasted computing power on a nonce value? Maybe if we assigned tokens to those who expend computing power on medical research or the like, that's more useful. But Bitcoin is a waste of resources to generate.

virtuexru 9y ago

I don't think #3 is spot on. Bitcoin solves the double spend problem does it not?

discodave 9y ago
Banks and other settlement systems also solve that problem.... but cheaper than bitcoin. So, what advantages does bitcoins more expensive solution to this problem give us?
- femwarrior 9y ago
  Google for "Paypal froze my account" or similar things. Nobody can prevent you from getting a "Bitcoin account" and from spending your coins.
- programmarchy 9y ago
  Cheaper than bitcoin? I'd love to see your calculations of how Bitcoin is more expensive than the existing banking structure, including the cost of staff, buildings, etc. The banking bureaucracy is massive. Furthermore, there is plenty of criticism that could be levied upon central banking, financing wars between nation states being chief among them. There's an enormous social cost to central banking.
  - mrep 9y ago
    $5 transaction fee for bitcoin versus [1] free (cash/checks), 30 cents + 3% for most credit cards. Unless you are sending huge amounts of money, bitcoin is more expensive. [1]: https://www.reddit.com/r/btc/comments/6gek0z/average_bitcoin_transaction_fee_is_now_above_five/ https://www.reddit.com/r/btc/comments/6gek0z/average_bitcoin...
    - Frogolocalypse 9y ago
      > [1] free (cash/checks), You realize there's no such thing as 'free' right? What's the saying? "If you don't know who is paying for a product you're using that's free, you're the product."

xutopia 9y ago

"No wireless. Less space than a nomad. Lame." You don't have to be excited about this but if enough people are you'll just have to follow. I was at a pot luck just a few weeks ago and people were gathering money for pizza. One person paid and the others just sent bitcoins to the one paying. This wasn't even a tech-related event.

dgacmu 9y ago
Really? With a roughly $2 per transaction fee, they sent Bitcoin, suffering 50% overhead on their pizza share? I send Bitcoin. Sometimes a lot. But Bitcoin of 2017 and small transactions do not make sense.

Gys 9y ago

I do not immediately see the difference between (2) and (3). In what way supports a government a currency ? A government controls more or less the quantity but in the end a currency's value is just supply and demand. If the public does not trust a currency anymore then it looses its value. E.g. its also a community agreed value ?

mod50ack 9y ago
Because the government compels users to use things in transactions. Actually, I should have chosen Chuck E. Cheese's in (2), as there is indeed in that case as well a more powerful entity that forces people to use that currency for the purpose (albeit tokens for games and not money for taxes). Bitcoin has no power that promotes its use in a backed sense, so it's not that kind of currency.