24 ms·

Bankers Ditch Fat Salaries to Chase Digital Currency Riches

96 points by champagnepapi 9y ago

golergka 9y ago
Can someone here please be a devil's advocate and convince me to invest in ICOs?
- philbarr 9y ago
  Buy into my ICO. I don't know what it is yet but it's going to be awesome. You can give me the money now if you like - you want to get in early after all if you're going to make the big bucks off it.
- softawre 9y ago
  If you like ultra high risk/reward investments and can afford to lose your money why not? It's like a much bigger roulette wheel where 90% of the slots are green but one of the slots gives you FU money.
- bitesports 9y ago
  I'll have a crack at it. ICO's like with most new tech are going to be plagued with get rich quick schemes, and there's a lot of FUD going on, but the concept it's great. When you have a token, in a given platform, you align the incentives of the people using that. It encourages people that are part of the network to create value for it, since it also impacts positively on their money. Take decentralized storage platforms for example, Storj, FileCoin, Swarm, IPFS. It's a software that you install in your computer, you asign how much disk space you are willing to contribute, and in return it pays you in that network token. People that wants to save their info on the platform, have to use the same token. I've been part of the bitcoin economy since 2013 and i've seen a lot of shitty and awesome projects alike. Right now is the wild west, because since there is no legal framework, the regulation has to be as well self created by the ecosystem. So , I think in around a year or two, we'll start seeing a much better ecosystem, with more knowledge, and less scams. It just takes time.
rwmj 9y ago
I wonder if this will end with people going to prison for securities fraud?
- deleted 9y ago
  [deleted]
- lolfuckno 9y ago
  lol
- beepboopbeep 9y ago
  It's all fun and games until (take your pick from financial history)
- dvcc 9y ago
  Just release the token under some other name, not like anyone can track it afterward anyway. What then?
- jondubois 9y ago
  I don't think so. All the information is out there in the public domain; in fact, most cryptocurrencies are entirely open source so it couldn't be any more transparent than that. Everyone should be aware of the risk and the reward potential. If ICOs are a fraud, then surely our entire financial system is a fraud because there is much less transparency there. Right now a lot of people are making the mistake of investing in an ICO that they don't understand. Like with any kind of investing; it's their responsibility to do their research. What will happen at the end of this is what happens normally in the financial world; smart people who understand each currency are going to make money at the expense of wealthy but poorly informed people who are randomly pouring their money all over the place trying to make a quick buck. Moreover, a lot of the money that goes into these ICOs ends up funding open source projects that are either directly or indirectly related to the cryptocurrency itself (and this helps the entire industry as a side-effect). Sure, there might be some black market money involved but I think that at least much of that money will be put to good use. It's the government's job to track people who are using the platform for illegal means. If somebody buys chemicals to make illegal drugs, it doesn't make sense to arrest the chemists for manufacturing the chemicals. The chemicals can be used for good and bad; if you sum everything up and the net result is a positive change for society, then overall it is a good thing.
dustingetz 9y ago
Who are these people spending real money in all these ICOs? Is this all just money made from bitcoin speculation being thrown around? Or is this real people spending real cash money?
- philbarr 9y ago
  And more importantly, how do I create an ICO and get these people to buy into it?
  - VMG 9y ago
    Copy an existing ICO website, change the name, the color scheme and the deposit address.
  - fokinsean 9y ago
    Do something like this guy: https://uetoken.com/ https://uetoken.com/ Raised something like $50k
- hendzen 9y ago
  Money laundering.
  - repomies691 9y ago
    Well, didn't realize it previously, but the following might work: 1. Earn bitcoins with some serious crime (ransomware, drugs or something) 2. Organize ICO and invest the criminal proceeds to your ICO anonymously. 3. "Clean" funds as investments to your somewhat legit-looking company.
- lambdadmitry 9y ago
  So this is 2-tier: - "whales" (early adopters with tons of BTC) spend their BTC; - common folks believe in BTC hype, "invest" real dollars in the market and provide liquidity for ICOers. In the end the bubble bursts, "whales" don't loose much (only their BTC) and the common folks loose their "investments".
gizmo 9y ago
If this isn't a clear sign of a bubble I don't know what is.
philbarr 9y ago
So cryptocurrency is the new Gold Rush. As the story goes, the only people who reliably made money during the original gold rush was the people who sold the spades. What are the "spades" here?
- zajd 9y ago
  Mining rigs
  - philbarr 9y ago
    The people buying the ICO coins don't have mining rigs?
- repomies691 9y ago
  > What are the "spades" here? At least quite many companies seem to be offering this kind of "ICO service" products - essentially they setup the ICO tools etc for you, help with converting the collected funds to dollars, etc.
- Anderkent 9y ago
  ICO tokens. You describe an idea, provide no technical way forward, publish a token, and if you're lucky people start speculating on that token and you get crazy amounts of funding. Then just live on that money for a couple months before announcing that the project has failed, the tokens crash, if you feel nice you can buy them back at that point. I.e. the spades are the ICO scams.
  - mpeg 9y ago
    It's actually scary how calmly ICO founders announce theft of millions of dollars worth of coins (like with the Parity multisig bug).
    - jboles 9y ago
      You forgot the "oops we got hacked" announcement
davidgrenier 9y ago
Thankfully, Urbit isn't on that list... avoid success at all costs.
asselinpaul 9y ago
Most ICOs are worthless. Premature nature of funding and a lack of accountability = no attractive return.
lambdadmitry 9y ago
Above all, I feel sorry for the small guy. Sure, ICOers are raising money for their dreams. And the "whales" "investing" in those ICOs are mostly lucky tech-ish folks who behave irrationally (like investing-1/4th-of-Whatsapp-in-a-service-with-a-few-hundred-users-irrationally). Whales will not suffer much in the end and ICOers will drive their Ferraris. It's those who believed in "invest in cryptocurrencies" hype in mainstream media who will loose the most. After all, if we treat the whole cryptocurrency ecosystem as a blackbox, dollars come from those humble folks to ICOers. Just with an extra twist of BTC on their way.
- FLUX-YOU 9y ago
  That's pretty much what banks were doing with tech IPOs anyway (maybe other IPOs?).
  - mannykannot 9y ago
    IPOs have at least three pesky features that an ICO lets you avoid: 1) A functioning business. 2) Actual investors - i.e. people who own a portion of your enterprise, with all the obligations and expectations that go with that. 3) Regulation and oversight. I suppose an IPO without 1) is possible in principle, but then it is hard to get 2) and you have to be careful of 3).
    - JetSpiegel 9y ago
      https://en.wikipedia.org/wiki/Pets.com https://en.wikipedia.org/wiki/Pets.com
  - lambdadmitry 9y ago
    Banks usually don't go underwater. If you "invest" in your savings account, you will never loose your money, whatever the bank does with their shares portfolio (save the total system collapse). BTC:USD doesn't work like that.
chvid 9y ago
I remember the .com-bubble; it kind of made sense that companies like Amazon were very valuable as they had the promise to transform whole industries. But this one; it is just stupid. Massive amounts of electricity and hardware wasted to keep a distributed ledger safe; an army of computer nerds facilitating fraud, narcotics sale and money laundry; and finally the bankers sensing bucks to be made on a large number of idiots.
- repomies691 9y ago
  "Massive amounts of electricity and hardware wasted to keep a distributed ledger safe; an army of computer nerds facilitating fraud, narcotics sale and money laundry; and finally the bankers sensing bucks to be made on a large number of idiots." Well to me that sounds just like business as usual... Except now transactions are stored in a permanent decentralized ledger, unlike before. And also previously there less computer nerds and more bankers.
  - epicide 9y ago
    Computer nerds, finance nerds... what's the difference when they're resting on their (others') laurels?
- zapt02 9y ago
  That's a very one-dimensional view of things. Blockchain technology carries with it the possibility to change how we think about and use money. Bitcoin is a zero-trust system that still manages to hold $41 billion dollar in value. However, I agree that almost all ICOs are cash-grabs. In my opinion we already have coins for all verticals that matter.
  - simias 9y ago
    >Blockchain technology carries with it the possibility to change how we think about and use money. That's the type of fluff I keep hearing coming from the bitcoin enthusiasts but I have yet to read a compelling argument about what it'll enable and how exactly. "Bitcoin will kill the banks", "bitcoin will prevent the evil government from stealing your money", "bitcoin will cure cancer and polio". How it'll do any of that and why it's a good thing, that's left as an exercise to the reader. In effect if we look at how bitcoin is effectively used today then the parent is fairly objective I think. There's speculation, more speculation, money laundering, black market stuff, gambling. Oh and did I mention speculation? There aren't many legit use cases where bitcoin beats fiat nowadays, except maybe sending money to a foreign country (and even then it's not certain, what with the high fees and huge variation in the price of late). I still don't understand how people expect it to become maistream. "It's like Visa, but if you make a mistake you may lose all your money with no hope of ever getting it back, it's not accepted everywhere and you have to wait for about an hour to get a confirmation. But hey, you can send money to Burundi super easily with it!" I know, I know, there's SegWit coming, which might address some of these issues. In particular I hear that it'll cure the rabies too. To the moon!
cm2187 9y ago
It's hard not to think of tulips at this stage
- kbart 9y ago
  Heh, it would be a nice and symbolic name for the next cryptocurrency. "How much tulips goes for today?", "hackers stole $300m worth of tulips today, the biggest hack after yesterday's $100m heist!".
- mannykannot 9y ago
  Yes, but high-tech, virtual tulips, and we all know tech is where insane amounts of money can be made, right?
- jondubois 9y ago
  Maybe, but tulips still cost something these days. I think the same will apply to tokens. They will always be worth something so long as banks keep charging transaction fees for moving money around and so long as a reliable network exits to support the token. Even if you assume that nobody wanted to hold Bitcoin for longer than a few minutes (long enough to complete a transaction), it would still have value because it saves people lot of money on international transactions. The total amount of money saved would be reflected in the price of the token based on the real-time supply and demand in any given minute interval. The intrinsic value of a token is the total amount of money that it saves people from having to pay to bank fees for moving money around (with token price fluctuation risk factored in).
  - cm2187 9y ago
    Actually you can't create an unlimited of tulip. I can create an unlimited number of block chains.
    - jondubois 9y ago
      Maybe, but you can't create an unlimited amount of computers. That's why ICOs are valuable; they add transaction processing capacity to the overall network (which encompasses all cryptocurrencies) or at least shift transaction processing capacity away from Bitcoin (E.g. when bitcoin miners are re-purposed to mine other more efficient Altcoins). The limited supply of tokens doesn't matter. The real underlying value is driven by the limited supply of machines which process token transactions. If all machines and all consumer attention suddenly shifted to a different Altcoin, then Bitcoin's value would drop to zero and that other coin's value would skyrocket.
richardknop 9y ago
Investing in crypto is like a gambling addiction. I know some people who were paper millionaires based on their BTC during the days before Mt Gox collapse. They lost their entire savings once Mt Gox collapsed, since then they have spent years working hard to recover their savings and now they are investing all of it in ICOs. This won't end well. Seems to me like the story is repeating. On a side note, the brigading/shilling here on HN is becoming quite annoying. I suppose it's a lot of computer nerds who are heavily invested in these tokens who are trying to get more new people invest their real money into these tokens so: 1) they can get rich quick 2) or recover their losses (lots of people heavily invested in crypto are underwater)
- aaron-lebo 9y ago
  It's insidious. There are routinely four or five posts on the front page about cryptos and they usually lack substance. It seems like an entire industry with a lack of morals, ignorant about law and too often tech, but with the smug self-assuredness that they are on the verge of changing everything as only 20 somethings and extremists possess. It doesn't really bother me that people are dumb, but it's not cool when you see this constant shilling you speak of, looking to pull in another taker who doesn't understand the tech or the financial implications of what they are doing. I made and lost more money in a weekend than I'd ever made in a year speculating on cryptos, and this was 3 years ago, can't imagine the community or the possible winnings now. After my initial investment had been lost, I felt that very real pull of putting in just a little more from this paycheck because you know tomorrow you can win everything back. I've never gambled but I was certain that's the pull gamblers feel and I knew at least for me there was no difference. It's funny to watch friends repeat the cycle with Ethereum and ICOs. "Hey, ether is up, just made a profit :)". Of course that was a month ago at the peak, wonder how their investment is doing now? It's an industry full of bozos and con-artists. Something good might come out of it, but I'm not investing a dollar more into that when I know that same dollar is probably going to fuck somebody else over. Besides, what good is building a fortune out of something you didn't really earn? Cool, you won the lottery, anybody can do that.
  - richardknop 9y ago
PeterStuer 9y ago
If you've made a 7 figure salary for a few years, you can afford to take a gamble on an ICO with your pocket money. Who needs a second yacht anyway?
- richardknop 9y ago
  If I earned 7 figure salary, I would do the job for about 5 years and then retire. With savings after 5 years of 7 figure salary you should be able create a comfortable passive income. Buy couple real estate properties and rent them out, invest remainder in blue chip equities and collect dividends. And you never need to work again.
  - softawre 9y ago
    I agree with you. However, wouldn't somebody who makes say 9$ an hour have the same thoughts about developer salaries? > If I made 200k a year, I would work for about 5 years and then retire. I mean it's possible if you save a ton and live very cheaply, like somebody who today makes 9$/hour might be used to doing. People always want more. Though, there is a sweet spot (~90k/year?) where more money means less and less to you.
    - richardknop 9y ago
      The issue with this is that the best IT jobs are in places like San Francisco / New York / London which are very expensive. So yes you make 200k (before taxes) but you spend 35-40k per year on rent plus bills (water, electricity, council tax, internet etc). Throw in some social life and drinks once or twice a week, car plus insurance, supporting family financially. So let's say after all that you end up saving 40k per year net. Times 5 is 200k. That is not enough to retire. Now do the math with 1 million salary (the lowest possible 7 figure). Same living standard. After 5 years you can save let's say 1.5-2 million (I didn't do the math so if I am way off please correct me). Now that is an amount you can retire on: 1) Buy two properties for 500k (live in one, rent the other one) 2) Invest 1 million in blue chip equities, this will pay you around 35k per year in dividends 3) You still have a nice sum of cash left on top of that So you can see that 90k per year is definitely not a sweet spot. There are still massive improvements if you can make 200k, 400k, 800k and so on. Yes perhaps going from 35k to 90k will improve your living standard much more drastically than going from 90k to 200k. So you could argue that there are diminishing returns. But you are ignoring the fact that the higher you go the sooner you gain complete financial freedom when you can retire and live completely free.
throwaway86328 9y ago
Uh, isn't it also illegal to buy unlicensed securities? Couldn't the SEC also prosecute individuals who bought into obvious scams as unaccredited investors? IANAL, but securities fraud is securities fraud. Why even take the risk? Why, especially now, announce to the world that you're taking the risk like in the article?
- JumpCrisscross 9y ago
  Disclaimer: I am not a lawyer and this is not legal advice. Don't take investment advice from my Internet comments. > isn't it also illegal to buy unlicensed securities There are "safe harbors" like Regulation D [1]. This is how private companies issue securities. There are still rules about to whom you can sell your securities and the minimum information you have to make available to them. Needless to say, I have not seen an ICO promoter make use of these safe harbours. [1] https://www.sec.gov/fast-answers/answers-regdhtm.html https://www.sec.gov/fast-answers/answers-regdhtm.html
  - throwaway86328 9y ago
    I highly doubt most ICOs qualify for exemptions, let alone notified the SEC of their intentions to make a public offering.
- Snackchez 9y ago
  https://www.sec.gov/news/press-release/2017-131 https://www.sec.gov/news/press-release/2017-131 They've been warned, but what does that even mean?
  - throwaway86328 9y ago
    IANAL, but I interpret it to mean that both buyers and sellers are responsible for understanding what they're transacting, which are likely securities. Unlicensed securities that are not exempt from the law are illegal to buy or sell. The implications seem clear to me. Again, IANAL, but a lot of people seem to be commiting felonies, even if they don't know it yet. These ICOs can ruin the lives of more than just the owners.

96 points by champagnepapi 9y ago

golergka 9y ago

Can someone here please be a devil's advocate and convince me to invest in ICOs?

philbarr 9y ago
Buy into my ICO. I don't know what it is yet but it's going to be awesome. You can give me the money now if you like - you want to get in early after all if you're going to make the big bucks off it.
softawre 9y ago
If you like ultra high risk/reward investments and can afford to lose your money why not? It's like a much bigger roulette wheel where 90% of the slots are green but one of the slots gives you FU money.
bitesports 9y ago
I'll have a crack at it. ICO's like with most new tech are going to be plagued with get rich quick schemes, and there's a lot of FUD going on, but the concept it's great. When you have a token, in a given platform, you align the incentives of the people using that. It encourages people that are part of the network to create value for it, since it also impacts positively on their money. Take decentralized storage platforms for example, Storj, FileCoin, Swarm, IPFS. It's a software that you install in your computer, you asign how much disk space you are willing to contribute, and in return it pays you in that network token. People that wants to save their info on the platform, have to use the same token. I've been part of the bitcoin economy since 2013 and i've seen a lot of shitty and awesome projects alike. Right now is the wild west, because since there is no legal framework, the regulation has to be as well self created by the ecosystem. So , I think in around a year or two, we'll start seeing a much better ecosystem, with more knowledge, and less scams. It just takes time.

rwmj 9y ago

I wonder if this will end with people going to prison for securities fraud?

deleted 9y ago
[deleted]
lolfuckno 9y ago
lol
beepboopbeep 9y ago
It's all fun and games until (take your pick from financial history)
dvcc 9y ago
Just release the token under some other name, not like anyone can track it afterward anyway. What then?
jondubois 9y ago
I don't think so. All the information is out there in the public domain; in fact, most cryptocurrencies are entirely open source so it couldn't be any more transparent than that. Everyone should be aware of the risk and the reward potential. If ICOs are a fraud, then surely our entire financial system is a fraud because there is much less transparency there. Right now a lot of people are making the mistake of investing in an ICO that they don't understand. Like with any kind of investing; it's their responsibility to do their research. What will happen at the end of this is what happens normally in the financial world; smart people who understand each currency are going to make money at the expense of wealthy but poorly informed people who are randomly pouring their money all over the place trying to make a quick buck. Moreover, a lot of the money that goes into these ICOs ends up funding open source projects that are either directly or indirectly related to the cryptocurrency itself (and this helps the entire industry as a side-effect). Sure, there might be some black market money involved but I think that at least much of that money will be put to good use. It's the government's job to track people who are using the platform for illegal means. If somebody buys chemicals to make illegal drugs, it doesn't make sense to arrest the chemists for manufacturing the chemicals. The chemicals can be used for good and bad; if you sum everything up and the net result is a positive change for society, then overall it is a good thing.

dustingetz 9y ago

Who are these people spending real money in all these ICOs? Is this all just money made from bitcoin speculation being thrown around? Or is this real people spending real cash money?

philbarr 9y ago
And more importantly, how do I create an ICO and get these people to buy into it?
- VMG 9y ago
  Copy an existing ICO website, change the name, the color scheme and the deposit address.
- fokinsean 9y ago
  Do something like this guy: https://uetoken.com/ https://uetoken.com/ Raised something like $50k
hendzen 9y ago
Money laundering.
- repomies691 9y ago
  Well, didn't realize it previously, but the following might work: 1. Earn bitcoins with some serious crime (ransomware, drugs or something) 2. Organize ICO and invest the criminal proceeds to your ICO anonymously. 3. "Clean" funds as investments to your somewhat legit-looking company.
lambdadmitry 9y ago
So this is 2-tier: - "whales" (early adopters with tons of BTC) spend their BTC; - common folks believe in BTC hype, "invest" real dollars in the market and provide liquidity for ICOers. In the end the bubble bursts, "whales" don't loose much (only their BTC) and the common folks loose their "investments".

gizmo 9y ago

If this isn't a clear sign of a bubble I don't know what is.

philbarr 9y ago

So cryptocurrency is the new Gold Rush. As the story goes, the only people who reliably made money during the original gold rush was the people who sold the spades. What are the "spades" here?

zajd 9y ago
Mining rigs
- philbarr 9y ago
  The people buying the ICO coins don't have mining rigs?
repomies691 9y ago
> What are the "spades" here? At least quite many companies seem to be offering this kind of "ICO service" products - essentially they setup the ICO tools etc for you, help with converting the collected funds to dollars, etc.
Anderkent 9y ago
ICO tokens. You describe an idea, provide no technical way forward, publish a token, and if you're lucky people start speculating on that token and you get crazy amounts of funding. Then just live on that money for a couple months before announcing that the project has failed, the tokens crash, if you feel nice you can buy them back at that point. I.e. the spades are the ICO scams.
- mpeg 9y ago
  It's actually scary how calmly ICO founders announce theft of millions of dollars worth of coins (like with the Parity multisig bug).
  - jboles 9y ago
    You forgot the "oops we got hacked" announcement

davidgrenier 9y ago

Thankfully, Urbit isn't on that list... avoid success at all costs.

asselinpaul 9y ago

Most ICOs are worthless. Premature nature of funding and a lack of accountability = no attractive return.

lambdadmitry 9y ago

Above all, I feel sorry for the small guy. Sure, ICOers are raising money for their dreams. And the "whales" "investing" in those ICOs are mostly lucky tech-ish folks who behave irrationally (like investing-1/4th-of-Whatsapp-in-a-service-with-a-few-hundred-users-irrationally). Whales will not suffer much in the end and ICOers will drive their Ferraris. It's those who believed in "invest in cryptocurrencies" hype in mainstream media who will loose the most. After all, if we treat the whole cryptocurrency ecosystem as a blackbox, dollars come from those humble folks to ICOers. Just with an extra twist of BTC on their way.

FLUX-YOU 9y ago
That's pretty much what banks were doing with tech IPOs anyway (maybe other IPOs?).
- mannykannot 9y ago
  IPOs have at least three pesky features that an ICO lets you avoid: 1) A functioning business. 2) Actual investors - i.e. people who own a portion of your enterprise, with all the obligations and expectations that go with that. 3) Regulation and oversight. I suppose an IPO without 1) is possible in principle, but then it is hard to get 2) and you have to be careful of 3).
  - JetSpiegel 9y ago
    https://en.wikipedia.org/wiki/Pets.com https://en.wikipedia.org/wiki/Pets.com
- lambdadmitry 9y ago
  Banks usually don't go underwater. If you "invest" in your savings account, you will never loose your money, whatever the bank does with their shares portfolio (save the total system collapse). BTC:USD doesn't work like that.

chvid 9y ago

I remember the .com-bubble; it kind of made sense that companies like Amazon were very valuable as they had the promise to transform whole industries. But this one; it is just stupid. Massive amounts of electricity and hardware wasted to keep a distributed ledger safe; an army of computer nerds facilitating fraud, narcotics sale and money laundry; and finally the bankers sensing bucks to be made on a large number of idiots.

repomies691 9y ago
"Massive amounts of electricity and hardware wasted to keep a distributed ledger safe; an army of computer nerds facilitating fraud, narcotics sale and money laundry; and finally the bankers sensing bucks to be made on a large number of idiots." Well to me that sounds just like business as usual... Except now transactions are stored in a permanent decentralized ledger, unlike before. And also previously there less computer nerds and more bankers.
- epicide 9y ago
  Computer nerds, finance nerds... what's the difference when they're resting on their (others') laurels?
zapt02 9y ago
That's a very one-dimensional view of things. Blockchain technology carries with it the possibility to change how we think about and use money. Bitcoin is a zero-trust system that still manages to hold $41 billion dollar in value. However, I agree that almost all ICOs are cash-grabs. In my opinion we already have coins for all verticals that matter.
- simias 9y ago
  >Blockchain technology carries with it the possibility to change how we think about and use money. That's the type of fluff I keep hearing coming from the bitcoin enthusiasts but I have yet to read a compelling argument about what it'll enable and how exactly. "Bitcoin will kill the banks", "bitcoin will prevent the evil government from stealing your money", "bitcoin will cure cancer and polio". How it'll do any of that and why it's a good thing, that's left as an exercise to the reader. In effect if we look at how bitcoin is effectively used today then the parent is fairly objective I think. There's speculation, more speculation, money laundering, black market stuff, gambling. Oh and did I mention speculation? There aren't many legit use cases where bitcoin beats fiat nowadays, except maybe sending money to a foreign country (and even then it's not certain, what with the high fees and huge variation in the price of late). I still don't understand how people expect it to become maistream. "It's like Visa, but if you make a mistake you may lose all your money with no hope of ever getting it back, it's not accepted everywhere and you have to wait for about an hour to get a confirmation. But hey, you can send money to Burundi super easily with it!" I know, I know, there's SegWit coming, which might address some of these issues. In particular I hear that it'll cure the rabies too. To the moon!

cm2187 9y ago

It's hard not to think of tulips at this stage

kbart 9y ago
Heh, it would be a nice and symbolic name for the next cryptocurrency. "How much tulips goes for today?", "hackers stole $300m worth of tulips today, the biggest hack after yesterday's $100m heist!".
mannykannot 9y ago
Yes, but high-tech, virtual tulips, and we all know tech is where insane amounts of money can be made, right?
jondubois 9y ago
Maybe, but tulips still cost something these days. I think the same will apply to tokens. They will always be worth something so long as banks keep charging transaction fees for moving money around and so long as a reliable network exits to support the token. Even if you assume that nobody wanted to hold Bitcoin for longer than a few minutes (long enough to complete a transaction), it would still have value because it saves people lot of money on international transactions. The total amount of money saved would be reflected in the price of the token based on the real-time supply and demand in any given minute interval. The intrinsic value of a token is the total amount of money that it saves people from having to pay to bank fees for moving money around (with token price fluctuation risk factored in).
- cm2187 9y ago
  Actually you can't create an unlimited of tulip. I can create an unlimited number of block chains.
  - jondubois 9y ago
    Maybe, but you can't create an unlimited amount of computers. That's why ICOs are valuable; they add transaction processing capacity to the overall network (which encompasses all cryptocurrencies) or at least shift transaction processing capacity away from Bitcoin (E.g. when bitcoin miners are re-purposed to mine other more efficient Altcoins). The limited supply of tokens doesn't matter. The real underlying value is driven by the limited supply of machines which process token transactions. If all machines and all consumer attention suddenly shifted to a different Altcoin, then Bitcoin's value would drop to zero and that other coin's value would skyrocket.

richardknop 9y ago

Investing in crypto is like a gambling addiction. I know some people who were paper millionaires based on their BTC during the days before Mt Gox collapse. They lost their entire savings once Mt Gox collapsed, since then they have spent years working hard to recover their savings and now they are investing all of it in ICOs. This won't end well. Seems to me like the story is repeating. On a side note, the brigading/shilling here on HN is becoming quite annoying. I suppose it's a lot of computer nerds who are heavily invested in these tokens who are trying to get more new people invest their real money into these tokens so: 1) they can get rich quick 2) or recover their losses (lots of people heavily invested in crypto are underwater)

aaron-lebo 9y ago
It's insidious. There are routinely four or five posts on the front page about cryptos and they usually lack substance. It seems like an entire industry with a lack of morals, ignorant about law and too often tech, but with the smug self-assuredness that they are on the verge of changing everything as only 20 somethings and extremists possess. It doesn't really bother me that people are dumb, but it's not cool when you see this constant shilling you speak of, looking to pull in another taker who doesn't understand the tech or the financial implications of what they are doing. I made and lost more money in a weekend than I'd ever made in a year speculating on cryptos, and this was 3 years ago, can't imagine the community or the possible winnings now. After my initial investment had been lost, I felt that very real pull of putting in just a little more from this paycheck because you know tomorrow you can win everything back. I've never gambled but I was certain that's the pull gamblers feel and I knew at least for me there was no difference. It's funny to watch friends repeat the cycle with Ethereum and ICOs. "Hey, ether is up, just made a profit :)". Of course that was a month ago at the peak, wonder how their investment is doing now? It's an industry full of bozos and con-artists. Something good might come out of it, but I'm not investing a dollar more into that when I know that same dollar is probably going to fuck somebody else over. Besides, what good is building a fortune out of something you didn't really earn? Cool, you won the lottery, anybody can do that.
- richardknop 9y ago

PeterStuer 9y ago

If you've made a 7 figure salary for a few years, you can afford to take a gamble on an ICO with your pocket money. Who needs a second yacht anyway?

richardknop 9y ago
If I earned 7 figure salary, I would do the job for about 5 years and then retire. With savings after 5 years of 7 figure salary you should be able create a comfortable passive income. Buy couple real estate properties and rent them out, invest remainder in blue chip equities and collect dividends. And you never need to work again.
- softawre 9y ago
  I agree with you. However, wouldn't somebody who makes say 9$ an hour have the same thoughts about developer salaries? > If I made 200k a year, I would work for about 5 years and then retire. I mean it's possible if you save a ton and live very cheaply, like somebody who today makes 9$/hour might be used to doing. People always want more. Though, there is a sweet spot (~90k/year?) where more money means less and less to you.
  - richardknop 9y ago
    The issue with this is that the best IT jobs are in places like San Francisco / New York / London which are very expensive. So yes you make 200k (before taxes) but you spend 35-40k per year on rent plus bills (water, electricity, council tax, internet etc). Throw in some social life and drinks once or twice a week, car plus insurance, supporting family financially. So let's say after all that you end up saving 40k per year net. Times 5 is 200k. That is not enough to retire. Now do the math with 1 million salary (the lowest possible 7 figure). Same living standard. After 5 years you can save let's say 1.5-2 million (I didn't do the math so if I am way off please correct me). Now that is an amount you can retire on: 1) Buy two properties for 500k (live in one, rent the other one) 2) Invest 1 million in blue chip equities, this will pay you around 35k per year in dividends 3) You still have a nice sum of cash left on top of that So you can see that 90k per year is definitely not a sweet spot. There are still massive improvements if you can make 200k, 400k, 800k and so on. Yes perhaps going from 35k to 90k will improve your living standard much more drastically than going from 90k to 200k. So you could argue that there are diminishing returns. But you are ignoring the fact that the higher you go the sooner you gain complete financial freedom when you can retire and live completely free.

throwaway86328 9y ago

Uh, isn't it also illegal to buy unlicensed securities? Couldn't the SEC also prosecute individuals who bought into obvious scams as unaccredited investors? IANAL, but securities fraud is securities fraud. Why even take the risk? Why, especially now, announce to the world that you're taking the risk like in the article?

JumpCrisscross 9y ago
Disclaimer: I am not a lawyer and this is not legal advice. Don't take investment advice from my Internet comments. > isn't it also illegal to buy unlicensed securities There are "safe harbors" like Regulation D [1]. This is how private companies issue securities. There are still rules about to whom you can sell your securities and the minimum information you have to make available to them. Needless to say, I have not seen an ICO promoter make use of these safe harbours. [1] https://www.sec.gov/fast-answers/answers-regdhtm.html https://www.sec.gov/fast-answers/answers-regdhtm.html
- throwaway86328 9y ago
  I highly doubt most ICOs qualify for exemptions, let alone notified the SEC of their intentions to make a public offering.
Snackchez 9y ago
https://www.sec.gov/news/press-release/2017-131 https://www.sec.gov/news/press-release/2017-131 They've been warned, but what does that even mean?
- throwaway86328 9y ago
  IANAL, but I interpret it to mean that both buyers and sellers are responsible for understanding what they're transacting, which are likely securities. Unlicensed securities that are not exempt from the law are illegal to buy or sell. The implications seem clear to me. Again, IANAL, but a lot of people seem to be commiting felonies, even if they don't know it yet. These ICOs can ruin the lives of more than just the owners.