14 ms·

Beyond the boring blockchain bubble

139 points by shanev 9y ago

sillysaurus3 9y ago
One interesting aspect of ICO's is that the owners don't necessarily need to build a business. It's far less work to skim the money and say the business failed. And until anyone goes to jail for doing that, it remains a lucrative opportunity. Raising $120M in an ICO isn't the same as raising $120M from a VC. In the latter case, you get nothing if the business fails. The big question is, why are people dumping so much more money into ICOs than into Kickstarter projects? Why does an ICO seem so much more legit? It's mostly the same thing. Yet ICOs are somehow raising 10x more than the most-funded Kickstarters without breaking a sweat.
- jeremyt 9y ago
  Because you can flip coins for a profit. Can't do that on kickstarter.
- fapjacks 9y ago
  Because it's actually pretty difficult to withdraw $40 million worth of Ethereum, and so people that are massively successful in BTC/ETH/LTC are able to just park some of their excess in these ICOs on the off-chance one of them is a hit.
  - hossbeast 9y ago
    This, exactly. Crypto Inception, as the piece puts it.
- anovikov 9y ago
  That is a gross understatement. Vast majority of ICOs are deliberate scams, not just they aren't building a business, they have no idea how to do it, have no relevant skills, and whole 'idea' is lunatic and would be laughed off by even a beginner angel investor if pitched to him. In many cases, an idea is also technically unworkable due to scaling limits of blockchains used. It is just that: a scam. Not a bubble as in: 1990s tech bubble, or subprime mortgage bubble. There, you got something which didn't follow the profit curve you predicted. Here, you get nothing for your money.
  - quickthrower2 9y ago
    A lot of the ICOs have similar looking web pages: modern bootstrap style, touting benefits which are generic benefits of any cryptocurrency, and a list of team members with PhDs and suchlike. You could write a playbook for this crap.
    - anovikov 9y ago
      I have been invited to act as a fake cofounder for an ICO several times...
      - otp124 9y ago
        What is the proposition you receive? What do they offer you?
        anovikov 9y ago
        A share of coins in exchange for be posing as a cofounder of their world-changing cryptocurrency, including my photos and a couple articles here and there. Told them to GTFO.
      - deleted 9y ago
        [deleted]
  - magnetic 9y ago
    How do they manage to con so many buyers?
    - robomc 9y ago
      People are greedy and credulous.
    - anovikov 9y ago
      Because it is a new kind of scam and it is in overhyped industry.
- vkou 9y ago
  > The big question is, why are people dumping so much more money into ICOs than into Kickstarter projects? Because an ICO gives you equity, which you can resell to a bigger fool. People buy into ponzi schemes, too, knowing full well that they are ponzi schemes.
  - abrookewood 9y ago
    ICOs do NOT give you equity ... that's what IPOs do. You get coins/tokens, not shares, and you have no ownership stake in the company. There's a big difference and it is exactly why they are running wild. If you got equity, then there would be huge amounts of regulation covering them.
  - fosk 9y ago
    > People buy into ponzi schemes, too, knowing full well that they are ponzi schemes. Ponzi schemes are only bad if you are in the last batch of investors. The first ones do get a nice return (otherwise the scheme itself would not last long). A smart investor could decide to put some money in a Ponzi scheme, as long as he knows what's his number in line, deciding to gradually disinvest some % as times goes on in order to collect the enormous gains.
    - grey-area 9y ago
      This is why Ponzi schemes work so well. Everyone thinks someone else will be the chump who loses their shirt and they will get out just in time. It doesn't usually work out that way.
- vit05 9y ago
  I do not understand your comparison with Kickstarter. You never invest in a company or project using Kickstarter, you will not earn anything in the future if the project succeeds. If you buy a shirt, you will only get that shirt, even if the company sells millions. You can not pass your position on to someone else. The comparison could be with stock exchanges. So the answer is simple. The barriers to starting an investment in ICO are minimal when compared to any IPO. And it is a global negotiation.
  - Kiro 9y ago
    > you will not earn anything in the future if the project succeeds Neither will you with ICOs. They normally don't give any ownership or the like.
    - vit05 9y ago
      How not? You get royalties from their project and, if they succeed, you will be able to negotiate that for more than you have paid. And there is a possibility to receive ownership, I do not know if any of the recent ICO has given that, but they could; future products or services for the Token that you have bought.
      - Kiro 9y ago
        No, that's not how the majority of ICOs work. You get no royalties. The tokens can be anything.
        vit05 9y ago
        https://omg.omise.co/ https://omg.omise.co/ OMG holders can use OMG to validate the network. If they validate a block correctly, they get paid the tx fees from that block https://blog.golemproject.net/golem-network-token-gnt-sale-220c2a732f9 https://blog.golemproject.net/golem-network-token-gnt-sale-2... All transactions in the Golem network will be subject to a fee, approximately 5% of the transaction value. This will include both transactions between the users — payments for computing power — and transactions between users and software developers. The latter will consist of payments for the software used on the Golem network in a SaaS model. Where applicable, a blend of both open source and proprietary software will be used.
- DennisP 9y ago
  Any decent ICO reserves a portion of the new tokens for the founders, vested for at least a year, so they have an incentive to build something that makes them valuable. A cap on the ETH to a level that's realistically usable for development can also be a good idea.
- xorcist 9y ago
  > why are people dumping so much more money into ICOs than into Kickstarter projects? Because most of it is "free" money. It's not a coincidence that the great altcoin explosion happened after Bitcoin value had increased by several orders of magnitude, and the ICO explosion happened after Ether had. Some people bought what they considered a lottery ticket for a few grand, found themselves with a jackpot, and decided to buy another lottery ticket with (parts of) the winnings. It doesn't feel like real money to them. I don't know if we should feel better about it because of that, but at least it explains why so many of the altcoins and ICOs which are so clearly scams/ponzis can attract so much capital.
  - nylonstrung 9y ago
    This is exactly why altcoins are popping now- investors are dumping their free Bitcoin Cash which materialized out of thin air into NEO and a bunch of other coins
throwaway6420 9y ago
This. So much. As a developer, I personally feel sick thinking about all the greed associated with cryptocurrency right now. I was an early adopter of both Bitcoin and Ethereum, but I only mined a bit or purchased enough to build little side projects for fun. Now I have non-technical friends and coworkers who are suddenly millionaires (literally, a friend bragged to me about having a few hundred BTC. He since quit his job) because they decided to dump their life savings into this stuff knowing nothing about it. It frustrates me to no end when I have family members ask, why didn't you buy or mine more? Why aren't you a millionaire? You were so into this stuff, weren't you? Yeah, I was. As a developer, not as a speculator. It's not just about the markets. But all of the exciting tech constantly gets drowned out by the noise of people going on about lucrative investments and comparing coins to gold. I'm so sick of the hype. I'm disappointed at the lack of millions I could have made (maybe, if I were a serious "hodlr"), but I do actually see value in the tech so it's extremely frustrating... Distributed ledgers and consensus algorithms are neat. Greed isn't.
- quickthrower2 9y ago
  I wonder how many of these instant millionaires are savvy enough financially and emotionally to handle the wealth. I could see it being easy to lose it all like many lottery winners, or lose friends or become depressed with nothing to do.
  - lz400 9y ago
    Occurrences of people getting hacked to the tune of 6 figures are common in bitcoin forums and subreddits. I think by now so many hackers must be rich out of this.
    - simonebrunozzi 9y ago
      Ah, I imagined this would be the case, but I actually never looked for details. Do you have anything in mind to share with us? Or simply just go search on Reddit and you find plenty?
deleted 9y ago
[deleted]
ploggingdev 9y ago
Regarding ICOs, I have noticed a fair number of submissions to HN titled something along the lines of "[Insert market] ICO : sale opens [date]". These submissions are from new accounts with newly created Github and other social media handles with an anonymous user behind the submissions. Most of the submissions get flagged and the ICO never happens. Do these people think they can raise hundreds of thousands or millions of dollars anonymously with newly created accounts? It just screams scam. All of the successful ICOs seem to have a team full of PHDs, investors, and seasoned entrepreneurs and they also have commitment from a few well known investors and entrepreneurs as social proof. Some even have "pre ICO sales" to reward their inner circle. For people in the know, I have a few questions: * Who invests in these ICOs apart from the "pre ICO investors" who are generally close friends of the founders? * How do ICOs reach these people (I'm guessing a subset are clueless retail investors and the average Joe who gets excited by the words blockchain, cryptocurrency and ICO)? * What is the legal status of ICOs? * Are there any case studies regarding how successful ICOs take place? (I have no plans of starting my own ICO, just want to understand how these ICOs work.)
- noddy1 9y ago
  > Who invests: - Some of the hundreds of thousands of people who have made big $ in crypto - especially ether > How do ICOs reach these people: - There are numerous forums/chatrooms/reddits/twitter posters etc etc. One of the common tricks is for ICOs to reward 2-3% of tokens in "bounty programs" which basically rewards participants for facebook/forum/blog/youtube posts/spam. Very large ICOs like bancor have done this > Legal status of ICO's - Unclear, but they are global and switzerland - where many of them are based out of seem to have liberal laws. For the SEC they seem to have indicated that you are likely to get in trouble if ICO's are more equity based, whereas "token" based network payment stuff is less clear. The high early liquidity of ICO's basically mean that if an ICO has capped investment and has any sort of credibility, the ICO will reach its cap rapidly and when it opens on the exchanges it'll be up 3-10x and you can dump it and make a fortune, regardless of whether it is actually vaporware or a ponzi. This does not really happen in the past 3 months as the high demand ICO's generally take as much money as possible and don't cap it. I think its sad that this business is going the way of the venture capital biz where well connected people get early/cheap dibs and average joes only get in once all the potential gains have been sucked out. Compare this to the ethereum ICO where everyone really got a fair short. I also think that if these have ponzi elements, being a preferred/connected/private investor in a ponzi makes you complicit in the ponzi scheme, whereas being an average joe just means you're playing the game.
aqsheehy 9y ago
Blockchains are for dark net markets. Everything else is Ponzi pumping.
- antonvs 9y ago
  Don't tell that to the global enterprise whose blockchain projects I'm working on.
  - foepys 9y ago
    What general problem does your company want to solve that is not possible (or harder) with a traditional system like a central database?
    - taejo 9y ago
      Buzzword compliance.
    - antonvs 9y ago
      Managing supply chains and value chains distributed among many companies in a global industry.
  - burger_moon 9y ago
    It's kind of funny seeing the development of large companies on blockchain tech. If they don't invest in researching the potential they can be left behind and everyone will criticize them for being against new tech, but if they do invest into researching it, then they're just chasing buzzwords. It's incredibly frustrating to read some of these comments when people speak up about their companies investing in new tech and being shunned for it.
- tradersam 9y ago
  I work for a huge company where a mouse is the boss. We are looking into blockchains very seriously. (Obviously not speaking for them, just saying.) Since that is the case, I don't think your assessment is correct.
known 9y ago
Decentralized + Private + Cloud + Immutable + AUDIT TRAIL https://science.slashdot.org/story/16/11/21/0622255/walmart-tests-blockchain-for-use-in-food-recalls https://science.slashdot.org/story/16/11/21/0622255/walmart-...
- BLanen 9y ago
  There is no reason that can't be done with a traditional database.
  - deleted 9y ago
    [deleted]
gpvos 9y ago
Dumb question maybe, but if you bought bitcoin at the right time and now have $ 1 million worth of them, is it actually possible to convert such a large amount to dollars right now, and where would you do that? What if it were 10 million, 100 million, a billion?
- pmorici 9y ago
  Yes, but why would you? If you understand it well enough to have hung on that long you understand that the full potential is a lot higher than where it is now.
  - gpvos 9y ago
    Maybe you want to buy a nice house or yacht, because you think those are more practical and/or fun than a number in a database/blockchain. Obviously, you'll leave as much as possible in bitcoin.
- dharma1 9y ago
  A couple of million - on most large exchanges. Prob don't want to sell it all at once
- aedron 9y ago
  The daily volume is something like 20 million dollars. So yeah, a million will be moved quite easily.
- runeks 9y ago
  You can see the depth of the various exchange’s order books on bitcoincharts.com. For example, if you sold 4000 BTC on Bitstamp right now, the price would fall from ~$3250 to $2300, and you would earn ~$11m: https://bitcoincharts.com/markets/bitstampUSD_depth.html https://bitcoincharts.com/markets/bitstampUSD_depth.html Selling ten times that (40.000 BTC) would only net you ~$26.5m so, to answer your question: selling just $10m worth of BTC on a single exchange will move the price significantly. For $1m worth of BTC you’d move the price very little.
  - 9y ago
proofofstake 9y ago
Every time Bitcoin hits an all-time-high, these news articles get posted. "Oh, it's all a bubble! Surely, it will all come crashing down.". But now you also see analysis posted like: http://fortune.com/2017/07/03/goldman-sachs-bitcoin-price/ http://fortune.com/2017/07/03/goldman-sachs-bitcoin-price/ Anecdotally, but you can also see the trends in wallet increases, nearly everybody I know under 30 owns crypto. Will there be a bubble bursting? Sure, much like the dotcom bubble, crypto will see its downtrend too. But look where we are now. Businesses like pets.com could thrive. Not all early internet developers got rich. People who bought domains like pets.com and pizza.com got rich, and they did not need a lot of technical know-how. If they did, the internet would have always been the playground of highly technical people, and would not have seen wide adoption or eternal Septembers. I first got into Bitcoin around 2013 after lots of articles were posted about it on Hackernews. Second stint in 2015. Finally started again two months back. There is still (a lot of) money to be made. Some people say I missed the boat by not buying the outlier BTC when it was 1$, but I could have also bought it at 50$ or 200$. Heck, you think Bitcoin is going to stay at 3300$ forever? Ethereum was 1$ 2 years back. That's a 200x-300x ROI there. I have no doubt some newer coins will do an easy 5x in 12 months. Past two months for me have been life-changing (possibly life-changing for my family too). Some of these crypto companies are going to be the next Google's. Or they will use their winnings (or ICO) to bootstrap a competitor. Are there scammers, hackers, hoaxers? Yes, it is still very much the wild west. Compare your email box around 2000, and the amounts of spam you had to sift through. Some less tech savy and/or naive people will get suckered in and some people will invest more than they can stand to lose. This is unfortunate, but beyond my control. I may even make some money of their irrational behavior. But people who read HackerNews? I've no doubt they can sift through the crap to find the diamond mines in the making. To spot if a team is technically advanced or just faking their marketing and headcount. About the blockchain. To me it is like the early days of the internet ~1997, but for the financial world. It has the potential to disrupt Central Banks, FinTech, Money Transfer, Micropayments, Identity & Privacy, Money lending, Smart Contracts, Provenance, IOT, ... Far from boring, far from bubble. This month will see the third wave of large-scale Bitcoin interest. I've spoken to web developers that are learning blockchain and smart contracts to prepare 3-5 years out. People are actually betting their livelihood on this technology. Is that a guarantee that the crypto market cap will increase? No, but it is a sign of the times we live in and the sweet spot that Bitcoin hit this month.
roberdam 9y ago
The point with cryptocurrencies is that it's a coin with two faces, the technical side and the speculative side, and most of the time one is not related with the other, and makes no sense for us technical guys because the tech is not related to the valuation. BUT if you understand that there are two (non related) faces of the same "coin" (pun intended) , you can use your technical expertise to have an edge on the speculative side, why all the craziness with crypto? check out this stats: https://icostats.com/roi-since-ico https://icostats.com/roi-since-ico Where in the world you can bet 1000$ and earn 1.000.000$ ? , Are all ponzi schemes? Definitely many are totally scams but many of them are here to stay as a part of the future. Now do this exercise, pick a number from 1 to 100, done?, go to this link and check your crypto with the number you pick searching it by the first column. https://coinmarketcap.com/historical/20170101/ https://coinmarketcap.com/historical/20170101/ Write the coin the price on January 2017, now go to : https://coinmarketcap.com/ https://coinmarketcap.com/ And check If you had bought 1000$ at the first price how much did you win or lose today, you can answer this exercise if you want here!. My point is, why not use our technical expertise to separate the wheat from the chaff?, understanding that you are playing on the speculative side with the help of your tech expertise the odds are in your favor. What do you think?
codingmyway 9y ago
I take heart in knowing that most of the people who made money were developers, especially from ethereum which I bought to play with. Be careful of getting emotional about it. It could well be techies and goldbugs who knew about it early on and regret not buying earlier that succumb to fomo last after stewing over it too long. It's best to buy just enough to assuage your feelings so that you're comfortable with whatever happens and then forget about it. With so many being created, cryptocurrencies will come and go so speculating on which will become the winner is a time consuming obession. As dev Andreas Antonopolous says the best investment you can make is in learning the tech. Solidity and other smart contract developers are in serious demand, paying stupid salaries as every finance company plows money into them. The space is still full of opportunities for developers if you look forward and around and not back.
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IanDrake 9y ago
>the value of which is then inevitably measured in… US dollars, which says something. Which says a lot. These are crypto commodities at best. The real currency is the US dollar. I really wanted crypto currencies to work, instead they've made me see the value in the Federal Reserve System even though I don't like the way it's run. The promise of a systematic currency supply growth was enticing, but now I see what spiking demand can do with a fixed supply. Perhaps this is a problem that could be solved via a new supply algorithm.

139 points by shanev 9y ago

One interesting aspect of ICO's is that the owners don't necessarily need to build a business. It's far less work to skim the money and say the business failed. And until anyone goes to jail for doing that, it remains a lucrative opportunity. Raising $120M in an ICO isn't the same as raising $120M from a VC. In the latter case, you get nothing if the business fails. The big question is, why are people dumping so much more money into ICOs than into Kickstarter projects? Why does an ICO seem so much more legit? It's mostly the same thing. Yet ICOs are somehow raising 10x more than the most-funded Kickstarters without breaking a sweat.

jeremyt 9y ago
Because you can flip coins for a profit. Can't do that on kickstarter.
fapjacks 9y ago
Because it's actually pretty difficult to withdraw $40 million worth of Ethereum, and so people that are massively successful in BTC/ETH/LTC are able to just park some of their excess in these ICOs on the off-chance one of them is a hit.
- hossbeast 9y ago
  This, exactly. Crypto Inception, as the piece puts it.
anovikov 9y ago
That is a gross understatement. Vast majority of ICOs are deliberate scams, not just they aren't building a business, they have no idea how to do it, have no relevant skills, and whole 'idea' is lunatic and would be laughed off by even a beginner angel investor if pitched to him. In many cases, an idea is also technically unworkable due to scaling limits of blockchains used. It is just that: a scam. Not a bubble as in: 1990s tech bubble, or subprime mortgage bubble. There, you got something which didn't follow the profit curve you predicted. Here, you get nothing for your money.
- quickthrower2 9y ago
  A lot of the ICOs have similar looking web pages: modern bootstrap style, touting benefits which are generic benefits of any cryptocurrency, and a list of team members with PhDs and suchlike. You could write a playbook for this crap.
  - anovikov 9y ago
    I have been invited to act as a fake cofounder for an ICO several times...
    - otp124 9y ago
      What is the proposition you receive? What do they offer you?
      - anovikov 9y ago
        A share of coins in exchange for be posing as a cofounder of their world-changing cryptocurrency, including my photos and a couple articles here and there. Told them to GTFO.
    - deleted 9y ago
      [deleted]
- magnetic 9y ago
  How do they manage to con so many buyers?
  - robomc 9y ago
    People are greedy and credulous.
  - anovikov 9y ago
    Because it is a new kind of scam and it is in overhyped industry.
vkou 9y ago
> The big question is, why are people dumping so much more money into ICOs than into Kickstarter projects? Because an ICO gives you equity, which you can resell to a bigger fool. People buy into ponzi schemes, too, knowing full well that they are ponzi schemes.
- abrookewood 9y ago
  ICOs do NOT give you equity ... that's what IPOs do. You get coins/tokens, not shares, and you have no ownership stake in the company. There's a big difference and it is exactly why they are running wild. If you got equity, then there would be huge amounts of regulation covering them.
- fosk 9y ago
  > People buy into ponzi schemes, too, knowing full well that they are ponzi schemes. Ponzi schemes are only bad if you are in the last batch of investors. The first ones do get a nice return (otherwise the scheme itself would not last long). A smart investor could decide to put some money in a Ponzi scheme, as long as he knows what's his number in line, deciding to gradually disinvest some % as times goes on in order to collect the enormous gains.
  - grey-area 9y ago
    This is why Ponzi schemes work so well. Everyone thinks someone else will be the chump who loses their shirt and they will get out just in time. It doesn't usually work out that way.
vit05 9y ago
I do not understand your comparison with Kickstarter. You never invest in a company or project using Kickstarter, you will not earn anything in the future if the project succeeds. If you buy a shirt, you will only get that shirt, even if the company sells millions. You can not pass your position on to someone else. The comparison could be with stock exchanges. So the answer is simple. The barriers to starting an investment in ICO are minimal when compared to any IPO. And it is a global negotiation.
- Kiro 9y ago
  > you will not earn anything in the future if the project succeeds Neither will you with ICOs. They normally don't give any ownership or the like.
  - vit05 9y ago
    How not? You get royalties from their project and, if they succeed, you will be able to negotiate that for more than you have paid. And there is a possibility to receive ownership, I do not know if any of the recent ICO has given that, but they could; future products or services for the Token that you have bought.
    - Kiro 9y ago
      No, that's not how the majority of ICOs work. You get no royalties. The tokens can be anything.
      - vit05 9y ago
        https://omg.omise.co/ https://omg.omise.co/ OMG holders can use OMG to validate the network. If they validate a block correctly, they get paid the tx fees from that block https://blog.golemproject.net/golem-network-token-gnt-sale-220c2a732f9 https://blog.golemproject.net/golem-network-token-gnt-sale-2... All transactions in the Golem network will be subject to a fee, approximately 5% of the transaction value. This will include both transactions between the users — payments for computing power — and transactions between users and software developers. The latter will consist of payments for the software used on the Golem network in a SaaS model. Where applicable, a blend of both open source and proprietary software will be used.
DennisP 9y ago
Any decent ICO reserves a portion of the new tokens for the founders, vested for at least a year, so they have an incentive to build something that makes them valuable. A cap on the ETH to a level that's realistically usable for development can also be a good idea.
xorcist 9y ago
> why are people dumping so much more money into ICOs than into Kickstarter projects? Because most of it is "free" money. It's not a coincidence that the great altcoin explosion happened after Bitcoin value had increased by several orders of magnitude, and the ICO explosion happened after Ether had. Some people bought what they considered a lottery ticket for a few grand, found themselves with a jackpot, and decided to buy another lottery ticket with (parts of) the winnings. It doesn't feel like real money to them. I don't know if we should feel better about it because of that, but at least it explains why so many of the altcoins and ICOs which are so clearly scams/ponzis can attract so much capital.
- nylonstrung 9y ago
  This is exactly why altcoins are popping now- investors are dumping their free Bitcoin Cash which materialized out of thin air into NEO and a bunch of other coins

throwaway6420 9y ago

This. So much. As a developer, I personally feel sick thinking about all the greed associated with cryptocurrency right now. I was an early adopter of both Bitcoin and Ethereum, but I only mined a bit or purchased enough to build little side projects for fun. Now I have non-technical friends and coworkers who are suddenly millionaires (literally, a friend bragged to me about having a few hundred BTC. He since quit his job) because they decided to dump their life savings into this stuff knowing nothing about it. It frustrates me to no end when I have family members ask, why didn't you buy or mine more? Why aren't you a millionaire? You were so into this stuff, weren't you? Yeah, I was. As a developer, not as a speculator. It's not just about the markets. But all of the exciting tech constantly gets drowned out by the noise of people going on about lucrative investments and comparing coins to gold. I'm so sick of the hype. I'm disappointed at the lack of millions I could have made (maybe, if I were a serious "hodlr"), but I do actually see value in the tech so it's extremely frustrating... Distributed ledgers and consensus algorithms are neat. Greed isn't.

quickthrower2 9y ago
I wonder how many of these instant millionaires are savvy enough financially and emotionally to handle the wealth. I could see it being easy to lose it all like many lottery winners, or lose friends or become depressed with nothing to do.
- lz400 9y ago
  Occurrences of people getting hacked to the tune of 6 figures are common in bitcoin forums and subreddits. I think by now so many hackers must be rich out of this.
  - simonebrunozzi 9y ago
    Ah, I imagined this would be the case, but I actually never looked for details. Do you have anything in mind to share with us? Or simply just go search on Reddit and you find plenty?

deleted 9y ago

[deleted]

ploggingdev 9y ago

Regarding ICOs, I have noticed a fair number of submissions to HN titled something along the lines of "[Insert market] ICO : sale opens [date]". These submissions are from new accounts with newly created Github and other social media handles with an anonymous user behind the submissions. Most of the submissions get flagged and the ICO never happens. Do these people think they can raise hundreds of thousands or millions of dollars anonymously with newly created accounts? It just screams scam. All of the successful ICOs seem to have a team full of PHDs, investors, and seasoned entrepreneurs and they also have commitment from a few well known investors and entrepreneurs as social proof. Some even have "pre ICO sales" to reward their inner circle. For people in the know, I have a few questions: * Who invests in these ICOs apart from the "pre ICO investors" who are generally close friends of the founders? * How do ICOs reach these people (I'm guessing a subset are clueless retail investors and the average Joe who gets excited by the words blockchain, cryptocurrency and ICO)? * What is the legal status of ICOs? * Are there any case studies regarding how successful ICOs take place? (I have no plans of starting my own ICO, just want to understand how these ICOs work.)

noddy1 9y ago
> Who invests: - Some of the hundreds of thousands of people who have made big $ in crypto - especially ether > How do ICOs reach these people: - There are numerous forums/chatrooms/reddits/twitter posters etc etc. One of the common tricks is for ICOs to reward 2-3% of tokens in "bounty programs" which basically rewards participants for facebook/forum/blog/youtube posts/spam. Very large ICOs like bancor have done this > Legal status of ICO's - Unclear, but they are global and switzerland - where many of them are based out of seem to have liberal laws. For the SEC they seem to have indicated that you are likely to get in trouble if ICO's are more equity based, whereas "token" based network payment stuff is less clear. The high early liquidity of ICO's basically mean that if an ICO has capped investment and has any sort of credibility, the ICO will reach its cap rapidly and when it opens on the exchanges it'll be up 3-10x and you can dump it and make a fortune, regardless of whether it is actually vaporware or a ponzi. This does not really happen in the past 3 months as the high demand ICO's generally take as much money as possible and don't cap it. I think its sad that this business is going the way of the venture capital biz where well connected people get early/cheap dibs and average joes only get in once all the potential gains have been sucked out. Compare this to the ethereum ICO where everyone really got a fair short. I also think that if these have ponzi elements, being a preferred/connected/private investor in a ponzi makes you complicit in the ponzi scheme, whereas being an average joe just means you're playing the game.

aqsheehy 9y ago

Blockchains are for dark net markets. Everything else is Ponzi pumping.

antonvs 9y ago
Don't tell that to the global enterprise whose blockchain projects I'm working on.
- foepys 9y ago
  What general problem does your company want to solve that is not possible (or harder) with a traditional system like a central database?
  - taejo 9y ago
    Buzzword compliance.
  - antonvs 9y ago
    Managing supply chains and value chains distributed among many companies in a global industry.
- burger_moon 9y ago
  It's kind of funny seeing the development of large companies on blockchain tech. If they don't invest in researching the potential they can be left behind and everyone will criticize them for being against new tech, but if they do invest into researching it, then they're just chasing buzzwords. It's incredibly frustrating to read some of these comments when people speak up about their companies investing in new tech and being shunned for it.
tradersam 9y ago
I work for a huge company where a mouse is the boss. We are looking into blockchains very seriously. (Obviously not speaking for them, just saying.) Since that is the case, I don't think your assessment is correct.

known 9y ago

Decentralized + Private + Cloud + Immutable + AUDIT TRAIL https://science.slashdot.org/story/16/11/21/0622255/walmart-tests-blockchain-for-use-in-food-recalls https://science.slashdot.org/story/16/11/21/0622255/walmart-...

BLanen 9y ago
There is no reason that can't be done with a traditional database.
- deleted 9y ago
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gpvos 9y ago

Dumb question maybe, but if you bought bitcoin at the right time and now have $ 1 million worth of them, is it actually possible to convert such a large amount to dollars right now, and where would you do that? What if it were 10 million, 100 million, a billion?

pmorici 9y ago
Yes, but why would you? If you understand it well enough to have hung on that long you understand that the full potential is a lot higher than where it is now.
- gpvos 9y ago
  Maybe you want to buy a nice house or yacht, because you think those are more practical and/or fun than a number in a database/blockchain. Obviously, you'll leave as much as possible in bitcoin.
dharma1 9y ago
A couple of million - on most large exchanges. Prob don't want to sell it all at once
aedron 9y ago
The daily volume is something like 20 million dollars. So yeah, a million will be moved quite easily.
runeks 9y ago
You can see the depth of the various exchange’s order books on bitcoincharts.com. For example, if you sold 4000 BTC on Bitstamp right now, the price would fall from ~$3250 to $2300, and you would earn ~$11m: https://bitcoincharts.com/markets/bitstampUSD_depth.html https://bitcoincharts.com/markets/bitstampUSD_depth.html Selling ten times that (40.000 BTC) would only net you ~$26.5m so, to answer your question: selling just $10m worth of BTC on a single exchange will move the price significantly. For $1m worth of BTC you’d move the price very little.
- 9y ago

proofofstake 9y ago

Every time Bitcoin hits an all-time-high, these news articles get posted. "Oh, it's all a bubble! Surely, it will all come crashing down.". But now you also see analysis posted like: http://fortune.com/2017/07/03/goldman-sachs-bitcoin-price/ http://fortune.com/2017/07/03/goldman-sachs-bitcoin-price/ Anecdotally, but you can also see the trends in wallet increases, nearly everybody I know under 30 owns crypto. Will there be a bubble bursting? Sure, much like the dotcom bubble, crypto will see its downtrend too. But look where we are now. Businesses like pets.com could thrive. Not all early internet developers got rich. People who bought domains like pets.com and pizza.com got rich, and they did not need a lot of technical know-how. If they did, the internet would have always been the playground of highly technical people, and would not have seen wide adoption or eternal Septembers. I first got into Bitcoin around 2013 after lots of articles were posted about it on Hackernews. Second stint in 2015. Finally started again two months back. There is still (a lot of) money to be made. Some people say I missed the boat by not buying the outlier BTC when it was 1$, but I could have also bought it at 50$ or 200$. Heck, you think Bitcoin is going to stay at 3300$ forever? Ethereum was 1$ 2 years back. That's a 200x-300x ROI there. I have no doubt some newer coins will do an easy 5x in 12 months. Past two months for me have been life-changing (possibly life-changing for my family too). Some of these crypto companies are going to be the next Google's. Or they will use their winnings (or ICO) to bootstrap a competitor. Are there scammers, hackers, hoaxers? Yes, it is still very much the wild west. Compare your email box around 2000, and the amounts of spam you had to sift through. Some less tech savy and/or naive people will get suckered in and some people will invest more than they can stand to lose. This is unfortunate, but beyond my control. I may even make some money of their irrational behavior. But people who read HackerNews? I've no doubt they can sift through the crap to find the diamond mines in the making. To spot if a team is technically advanced or just faking their marketing and headcount. About the blockchain. To me it is like the early days of the internet ~1997, but for the financial world. It has the potential to disrupt Central Banks, FinTech, Money Transfer, Micropayments, Identity & Privacy, Money lending, Smart Contracts, Provenance, IOT, ... Far from boring, far from bubble. This month will see the third wave of large-scale Bitcoin interest. I've spoken to web developers that are learning blockchain and smart contracts to prepare 3-5 years out. People are actually betting their livelihood on this technology. Is that a guarantee that the crypto market cap will increase? No, but it is a sign of the times we live in and the sweet spot that Bitcoin hit this month.

roberdam 9y ago

The point with cryptocurrencies is that it's a coin with two faces, the technical side and the speculative side, and most of the time one is not related with the other, and makes no sense for us technical guys because the tech is not related to the valuation. BUT if you understand that there are two (non related) faces of the same "coin" (pun intended) , you can use your technical expertise to have an edge on the speculative side, why all the craziness with crypto? check out this stats: https://icostats.com/roi-since-ico https://icostats.com/roi-since-ico Where in the world you can bet 1000$ and earn 1.000.000$ ? , Are all ponzi schemes? Definitely many are totally scams but many of them are here to stay as a part of the future. Now do this exercise, pick a number from 1 to 100, done?, go to this link and check your crypto with the number you pick searching it by the first column. https://coinmarketcap.com/historical/20170101/ https://coinmarketcap.com/historical/20170101/ Write the coin the price on January 2017, now go to : https://coinmarketcap.com/ https://coinmarketcap.com/ And check If you had bought 1000$ at the first price how much did you win or lose today, you can answer this exercise if you want here!. My point is, why not use our technical expertise to separate the wheat from the chaff?, understanding that you are playing on the speculative side with the help of your tech expertise the odds are in your favor. What do you think?

codingmyway 9y ago

I take heart in knowing that most of the people who made money were developers, especially from ethereum which I bought to play with. Be careful of getting emotional about it. It could well be techies and goldbugs who knew about it early on and regret not buying earlier that succumb to fomo last after stewing over it too long. It's best to buy just enough to assuage your feelings so that you're comfortable with whatever happens and then forget about it. With so many being created, cryptocurrencies will come and go so speculating on which will become the winner is a time consuming obession. As dev Andreas Antonopolous says the best investment you can make is in learning the tech. Solidity and other smart contract developers are in serious demand, paying stupid salaries as every finance company plows money into them. The space is still full of opportunities for developers if you look forward and around and not back.

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IanDrake 9y ago

>the value of which is then inevitably measured in… US dollars, which says something. Which says a lot. These are crypto commodities at best. The real currency is the US dollar. I really wanted crypto currencies to work, instead they've made me see the value in the Federal Reserve System even though I don't like the way it's run. The promise of a systematic currency supply growth was enticing, but now I see what spiking demand can do with a fixed supply. Perhaps this is a problem that could be solved via a new supply algorithm.