13 ms·

The Token Effect

247 points by rrecuero 9y ago

rrecuero 9y ago
I'm happy to answer any follow-up questions here.
- stephengillie 9y ago
  Are there any plans to incubate coin networks in the way startups are currently incubated?
  - rrecuero 9y ago
    Nothing concrete yet...
  - discombobulate 9y ago
    I think Science may be an incubator[0]. [0] https://science.tokenhub.com/2017/08/03/startup-incubator-science-could-raise-up-to-100-million-in-planned-token-sale/ https://science.tokenhub.com/2017/08/03/startup-incubator-sc... Edit: stephengillie, can't currently use reply. Think I'm being throttled b/c of my VPN. I guess Bing is your friend here! I've not been keeping an eye out for that particular type of thing (soz).
    - stephengillie 9y ago
      This is an incubator running an ICO to raise funds. Since blockchains appear to be the future of both transactions and applications, I was wondering if any incubators will offer advice, coaching, and support for a Blockchain-as-a-(Platform|Service) startup. Like the Lyft to Etherium's Uber-like presence.
- discombobulate 9y ago
  Will the crypto system look more biological over time as the loops bias toward certain characteristics & the information processing increases? What do you think will happen wrt token sales & US regulation, in the near term?
  - rrecuero 9y ago
    I think Coinlist and SEC approved token sales are the way to go, at least in the near term. Long term, there is the worry that excessive regulation would cripple innovation in these areas. Many companies in the space are already located in Singapore or in the Crypto Valley (Switzerland).
- zitterbewegung 9y ago
  Are there any concrete uses of a blockchain that have clear advantages than to using a standard database other than cryptocurrencies?
  - f00_ 9y ago
    "Factom technology secures data for private and public organizations by publishing encrypted data or a cryptographically unique fingerprint of the data to Factom’s immutable, distributed Blockchain" https://factom.com/ https://factom.com/ the immutability, is unique. "Harmony is a new blockchain base document technology that works with your existing imaging or document management solution to create a secure, transparent, unalterable record for the final loan documents." https://www.factom.com/products/harmony https://www.factom.com/products/harmony This still has a currency, Factoid or something. I don't know that anyone has created a consensus mechanism that doesn't use a coin
  - rrecuero 9y ago
    I think one of the clearer use cases is digital identity. uPort, Blockstack and Civic are some of the companies that are trying to address this need.
    - TheDong 9y ago
      Keybase is also addressing that need, but with a traditional database. gpg already solves that as well, again without blockchains. Blockchains do no more for identity gpg. Whether they're more or less usable is debatable.
      - discombobulate 9y ago
        Is Keybase resilient against the country's government in which it resides? How does it achieve this with a traditional database?
        TheDong 9y ago
        It is resilient to tampering as far as you trust gpg. It achieves this because cryptographic signatures exist fine without blockchains
- abtinf 9y ago
  What is your view of Hyperledger Fabric vs Ethereum in terms of their approach to smart contracts, networks, and trust?
  - CryptoPunk 9y ago
    Hyperledger is not designed to be a public ledger. It's comparable to private instances of Ethereum.
- joosters 9y ago
  Why do you think tokens make any sense? They seem like the equivalent of gift certificates for specific shops, and just as inconvenient. My money can buy everything, do you think that creating lots of different currencies for specific tasks is really a benefit?
  - beambot 9y ago
    Most countries also create their own currencies and monetary policies. It's worth asking, "Why do they do that?" I'm guessing the answer to that question probably has a lot of analogies relevant to cryptocurrencies.
    - nivertech 9y ago
      But some countries also unified their currencies: USD replaced state currencies and EUR replaced most European currencies.
- cynusx 9y ago
  Do you happen to know a startup working on making it easy to list securities as tokens?
- tardo99 9y ago
  Let's say a ton of people lose a bunch of money on highly speculative businesses that raise money using ICOs. What is the right response to this? "Tough luck"? Regulation? How is this any different than the wild west days of stock sales prior to the regulations that came about during the great depression in the US?
  - rrecuero 9y ago
    ICOs, in general, are really immature. The market is being exuberant and the majority of projects in the space may fail. Many people are taking advantage of the current status. The ecosystem will eventually mature and follow some guidelines learned in the past decades by angels and VCs i.e Doing a small seed round first, proving you are building something people want and then, if you achieve your milestones, you can get to a series A and so on. The ironic thing is that these milestones and progressive rounds are easier to achieve and track with tokens. If the milestone is not met, the smart contract automatically returns the funds to investors.
    - lambdadmitry 9y ago
      >If the milestone is not met, the smart contract automatically returns the funds to investors. That can't work that way. The only way the smart contract can return the funds is if they are locked somehow, but what's the point of raising money then? People raise money to spend them, so they by definition don't have that money and it can't be returned, much less "automatically".
mankash666 9y ago
Can you please comment on the criticisms levied against the filecoin ICO [1]. [1]: https://medium.com/token-economy/the-analysis-filecoin-doesnt-want-you-to-read-e60d5243f17c https://medium.com/token-economy/the-analysis-filecoin-doesn...
- beambot 9y ago
  TL;DR summary of that article: The price is too high for several reasons (pre-ICO investors, Filecoin creators' allocations, etc). My take: $200M worth of investors in the ICO disagree with that assessment.
pdog 9y ago
The ICO phenomenon is, in some sense, diametrically opposed to venture capital. Both are fundraising mechanisms: one sells liquid tokens on the open market, the other sells illiquid shares to VCs. Does YC plan to address competition from tokens, and if so, how?
- will_brown 9y ago
  YCoin
  - discombobulate 9y ago
    Yoken
    - hossbeast 9y ago
      ComboToken
- rrecuero 9y ago
  1 - In the short term, I don't think ICOs are a solution for every kind of company. Just for protocols and networks. 2 - Great investors provide more than just access to capital. My point of view is similar to Fred Wilson's. More here http://avc.com/2017/06/icos-and-vcs/ http://avc.com/2017/06/icos-and-vcs/
  - discombobulate 9y ago
    Tokens will allow for increased liquidy. However, the greater liquidy comes @ a premium, & will increase the price of the asset.
  - dsacco 9y ago
    > Great investors provide more than just access to capital. Like what?
    - SkyMarshal 9y ago
deleted 9y ago
[deleted]
the_stc 9y ago
Can you explain exactly what you mean by TCP/IP is underfunded, with examples? And how are tokens on the Ethereum network capturing value in other networks? How is Filecoin better off with its own money versus people bidding for storage in Bitcoin, Monero, or Ethereum directly? And why should the value of Filecoin tokens spike up? How is having a speculative token beneficial for accurately pricing storage? The liquidity aspects are just companies jumping around regulations. Nothing stops startups from listing all their shares on a website and letting anyone buy/sell/trade them. Well except for the legality aspect! I say this as someone about to do a cryptocurrency fundraiser in the adult services space. Though we aren't issuing tokens, but shares - we take payment in cash or other cryptocoins. The main benefit is easily being able to crowdfund and return dividends while avoiding legal hurdles.
- rrecuero 9y ago
  There are many points there: 1 - Regulation. You can do ICOs and Token Sales legally. If your tokens are not securities, you can do ICOs open to everyone. If your tokens are considered securities, you can do so on Coinlist. 2 - Tokens natively track the value of the network. For these networks, its value is not tracked by company shares. Ethereum is a good example of this. Ethereum Foundation is a non-profit and all the value accrues to the token. You can also do a hybrid system or none. Depends on your specific use case. 3 - Funding. Internet Bug Bounty is a good example of this https://internetbugbounty.org/ https://internetbugbounty.org/. If TCP/IP would have been able to capture a billionth of a cent for every request things it wouldn;t be needed. Maybe, our infrastructure would be really different today.
  - joosters 9y ago
    If TCP/IP would have been able to capture a billionth of a cent for every request Cryptocurrencies haven't been able to do micropayments, this kind of system just isn't possible. Proponents will go on about payment channels such as lightning, but these have been 'just around the corner' for several years now and their effectiveness/practicality is highly debatable.
    - 9y ago
hopfog 9y ago
I've been toying with the idea of using tokens as an in-game currency in my MMORPG. The problem is that the normal currency is inflationary due to monsters dropping it as loot. I do have sinks to control inflation but I'm thinking that the tokens should be tied to a fix value. What is fixed and scarce however is land (you can claim plots and build houses, shops etc). Would having a server with land tied to a token make sense or is it a bad idea?
- rrecuero 9y ago
  Take a look at https://decentraland.org/ https://decentraland.org/ ;)
  - hopfog 9y ago
    Thank you! The site is down but I read a blog post and it sounds a lot like what I have in mind.
- Retric 9y ago
  In a game ideally you want money sinks that scale such as auction transaction costs. If A is worth 10x in an auction you pay 10x as much in fees. This works best if players buying and selling is a regular part of game play such as a complex crafting system where sub components are traded and someone can focus on making them. Alternatively, professions can have some useful waste for another profession. ie: Making an epic sword needs 10 blue and makes 5 green, an epic boot needs 10 green and makes 5 blue. Meanwhile you get 1 red and 1 blues per ore. So, now your weapon makers and your armor makers will be trading their waste. Downside is guilds can become self sufficient. PS: As an analogy, the USD has value because people must pay taxes on value created in USD. This instantly creates trillions of dollars worth of demand each and every year and continues to scale with the economy.
- neuralzen 9y ago
  I think it's a cool idea, though I'd be worried about exploits finding a way to game things, and effectively drain the cryptocurrency coffers. Do you think this can be prevented? - I was thinking it would be cool to see a roguelike where each life is purchased with crypto, and perhaps the more you put into your character's life (0.1 eth vs 1.0 eth, for example) the greater the loot drops, which include crypto currencies.
stri8ed 9y ago
"It is a decentralized network of millions of computers" Really now?
- rrecuero 9y ago
  Figure of speech. The number of nodes right now is closer to 25K https://www.ethernodes.org/network/1 https://www.ethernodes.org/network/1
  - deleted 9y ago
    [deleted]
  - paulddraper 9y ago
    Ah. Well then, I am a millionare (in a manner of speaking).
jashmenn 9y ago
It's really exciting to see the different components for decentralized apps come together. Bitcoin promised programmable money, and it sort of is, but Ethereum is so much more accessible (for better or for worse). With Ethereum we have decentralized compute. With IPFS we get decentralized storage. Cryptographic keys give us self-sovereign identity. Build tools like Truffle make it easy to get started (think create-react-app for Ethereum). And libraries like Zepplin are helping standardize secure patterns. And, to top it off, using web3.js we can write UIs _in the browser_ using JavaScript and the libraries we're already familiar with (Angular, React, Vue). By the way, [shameless plug], if you're a web developer and you're looking to get started programming cryptocurrency and distributed apps, I have some introductory tutorials here => https://newline.co/ https://newline.co/
- csomar 9y ago
  May I ask why you are asking for my email address. My first impression when someone is asking for my email to download something for "free" is that he is a lying piece of cr*p and he just wants to spam me later on.
  - goodroot 9y ago
    That's cynical. If someone spent their time making quality things people enjoy, they can charge whatever currency they'd like. If that currency is an email address so that you can be contacted later in hopes of selling you paid products or earning through referrals, then that's their prerogative. It doesn't make them a _lying piece of crap_. If you use a catchall, create an address for that service. It it does something you don't like, cancel later.
    - csomar 9y ago
      I'm not disagreeing with that but a clean disclosure is missing. It's like paying for an item that you don't know the price of by putting your credit card details. I don't think you'd do that.
      - deleted 9y ago
fenollp 9y ago
> Ethereum took the Bitcoin concept one step further. Smart contracts, escrow and dispute mediation ARE already possible with Bitcoin with CHECKMULTISIGVERIFY. And there haven't been has many issues in Bitcoin core than in Ethereum.
- rrecuero 9y ago
  You are right. They are indeed possible. It's a question of how appropriate it is for every use case. This must be addressed on an use case basis. You can probably write Facebook in a low-level language but it may not be the best choice...
  - CryptoPunk 9y ago
    Bitcoin's script is not turing-complete so there are smart contracts that are definitely not possible to do with it.
- lossolo 9y ago
  Last time I've checked you couldn't write applications on bitcoin blockchain and mostly that's why Ethereum is so popular.
- ojr 9y ago
  so what can Bitcoin do that Ethereum can't? I feel it must be able to do something better to justify a higher market cap than ethereum, when Ethereum adds more features faster and the marketcap reacts, past flaws would not matter too much
  - AgentME 9y ago
    >when Ethereum adds more features faster Bitcoin's conservative rate of change is one of its big features, plus the network effects of its existing userbase. Bitcoin users are less likely to lose money because of an issue in Bitcoin or because of reliance on a fragile contract encouraged by the Bitcoin software. The Bitcoin network is less likely to have its transaction history rolled back, or have significant changes made to its money supply which could strongly affect the value of present bitcoins.
csomar 9y ago
> It is a decentralized network of millions of computers that execute code at the same time. There are currently less than 30k ethereum nodes. And it is not clear if they are all "full nodes" (ie: verify the transactions). Millions is two orders of magnitude exaggeration.
- Taek 9y ago
  There are an estimated 3,000,000 gpus performing Etherum mining today. Most of those aren't verifying any smart contracts, but they are running code for Etherum nonetheless
  - csomar 9y ago
    The number of mining equipment doesn't translate to a number of nodes. It could be a single person and as we seen in bitcoin mining turned out to be "very" (like in a few hands) centralized.
nhaehnle 9y ago
> These communities are built on strong network effects – where, according to Metcalfe’s law, the value of the network is exponentially increased by the number of users who participate. It's not exponential! Heck, the footnote is citing an article which correctly says the effect is quadratic in the first sentence. I know this may be a lost cause in the general media, but to see this misuse of terms in this context is really frustrating.
- kmill 9y ago
  Yeah, that bugged me, too. I wonder if it would be better if Metcalfe's law were stated "the value of a network is proportional to the number of links." (At least this isn't a case of talking about the "knee" of an exponential curve! When I taught calculus, I tried demonstrating how rescaling the y-axis shifts the curve horizontally, moving the "knee".)
- jvandonsel 9y ago
  Yeah, a lot of otherwise intelligent people are tripped up by the term "exponential, as in "Hey, the 2 is an exponent, so it must be exponential, right?"
  - nhaehnle 9y ago
    That's actually a cool explanation for why some people might think this is correct. Let's teach them that 1 is an exponent, too ;)
MBCook 9y ago
Thanks to the orange-on-tan color and the extremely thing font the footnote marks are nearly invisible
deleted 9y ago
[deleted]
blastpaat-p 9y ago
Bitcoins = Tulips. Blockchain has a future though.
carapace 9y ago
(Thin sans-serif grey body font means you hate your reader's eyes.)
lifeisstillgood 9y ago
I want to believe. It looks so attractive. And is right up my "theory of the firm" alleyway. But there are two issues kind of intertwined. The current crop of businesses - both coin based and normal, are about allocation of scarce resource (bedrooms, taxis, hard drive space) Now that is really all about ownership of scarce resource. The fact that Airbnb users make money by selling rooms they don't actually have ownership of (i.e. They don't have full rights to sell, either cos it's their rented apartment or cos local law says hotel rooms need fire extinguishers) is kind of glossed over in this egalitarian rush. If the "real" owners got their full allocation this would be a boring story of more efficient returns to capital. Almost all of the internet is like this - YouTube does not pay IP owners, Google does not pay me for my blog writing. Perhaps coins will more accurately reward the owners of these resources - paid to blog, paid to drive taxis, paid to own IP rights - but this is just solidifying the status quo. This leads to my second point - that those with nothing cannot grow in a world where rewards are efficiently returned to owners. Filecoin rewards those who are already rich enough to own a hard drive and electricity. And if the economics work those who own a data centre. Without some egalitarian system built in, yes even government redistribution, then I can't see how tokens and coins can do anything but make Pikkety more right - more returns to the owners of capital. If coins are just another currency, then they are just another way to measure capital - and I can't see how that is going to make the world into my utopia But I do want to believe. My fear I suppose is that for all their libertarian roots, coins are traceable and vastly favour the top billion humans right now - and we are solidifying the status quo - it's not as bad a world as it has been, but I don't want to be stuck with it.
- xamuel 9y ago
  >vastly favour the top billion humans right now I see it more as favouring the most intelligent. The real $$$ isn't in day-trading, it's in figuring out which cryptos have future merit. That means reading white-papers and distinguishing good ideas from hype. It's a return to what investment is supposed to be: figuring out which ideas are worth capital.
  - lifeisstillgood 9y ago
    VCs are, or at least hire, some of the most intelligent people, and the best in the world have a hit rate barely in double percentage digits. Saying that the poorest billion in the world just need to be more intelligent and suddenly will be crypto-rich is ... well actually quite offensive. The real and genuine divides between the richest and poorest in the world will not be bridged by coins, no matter their other benefits.
thinbeige 9y ago
Bit late to the game but better now than never.
rubatuga 9y ago
Can someone convince me that this article isn’t hype? What’s so good about ethereum that it can be compared to the internet? Is the shift from centralized to decentralized going to bring me tangible benefits?
Lon7 9y ago
The fact the Securities and Exchange Commission is seriously looking at ICO tokens is, to me at least, additional proof that this technology is here to stay. That said, the SEC has also said that in many cases these ICO tokens can be classified as securities, and therefor going forward, could be subject to all the same laws and regulations [0]. This turns ICO's from something a startup can offer fairly easily, to something that requires a team of expensive lawyers to do properly. Maybe Lawyers should take note that this could be a promising opportunity for future business? [0] https://www.sec.gov/news/press-release/2017-131 https://www.sec.gov/news/press-release/2017-131
Siecje 9y ago
The article says that email doesn't receive much funding but many companies have invested a lot in email.
jgord 9y ago
yes .. but! we also simply need a better form of currency. While bitcoin has its implementation issues and politics, it solves that problem in a way that wasn't solved before. A better token for Cash is incredibly valuable in and of itself.. dare I say it revolutionary. [ I say "largely solves", because a) small blocksize and data management issues are preventing it from scaling now and in the medium term and b) a linear blockchain might not scale beyond every user on the planet buying coffee... or it might, we haven't really begun to optimize it, imo ]
- jcfrei 9y ago
  I still don't get why people consider bitcoin a suitable form of currency. It has a fixed supply, so its value is going to vary wildly - depending on demand. That's the opposite of what you want from a currency (where your main goal is price stability).
  - jgord 9y ago
    Some people see that as a feature - a deflationary rare resource, which a government can't simply print more of. If I just want to send funds from A to B, the current value of bitcoin in fiat [ USD / GBP / JPY ] is less important than being able to exchange it for the local fiat at each end. If I hold those funds for a while at B - your absolutely right, extreme volatility is a concern. I would argue that as more people use bitcoin the volatility will go down [ large trades will be able to move the market far less, as the market will be so much larger ]
    - jcfrei 9y ago
      > If I just want to send funds from A to B, the current value of bitcoin in fiat [ USD / GBP / JPY ] is less important than being able to exchange it for the local fiat at each end. Do you mean using bitcoin as an intermediary to send value across the globe; Ie. by exchanging your local currency to bitcoin and then sending it to the receiver (who might exchange it again)? I think for such a use case the traditional banking systems are superior. > Some people see that as a feature - a deflationary rare resource, which a government can't simply print more of. The problem with deflationary resources is that most people will never want to spend them - making them unusable as a medium of exchange. If you look at bitcoin forums, they are full of posts cautioning other users to hodl (hold on to their coins and not sell them). But if bitcoin is not used as a medium of exchange then what is it used for? Other blockchains (like ethereum described in the blog) imho offer much more interesting features.
deleted 9y ago
[deleted]
AndrewKemendo 9y ago
For example, in Filecoin you earn tokens by lending your unused hard drive space. In summary, tokens coordinate efforts in the network and motivate responsible participation. Why not just earn dollars? Theory of pricing arbitrage already takes into account coordination irrespective of the currency. What is the distinct advantage of earning Filecoin tokens over dollars? Ok so lets just say I bought Filecoin (I didn't). How do I liquidate my position? Do I just need to find a buyer like every other security or can Filecoin buy it back? In other words, is it currency or a bond? These ICOs provide a sizable improvement in terms of liquidity. Unlike traditional companies, you can represent the value of your assets in terms of tokens that are liquid and tradeable from day one. Apparently not, I looked through this filecoin sale file [1] and it has a vesting period for investors! Now don't that beat all? So it's an asset of some kind, it doesn't make clear in what class of asset it is. That looks suuuuper fishy to me but maybe I'm missing something. When I got into Bitcoin when it first came out I thought it was a great concept, but had no future as a legitimate international currency because of politics. This crypto currency wave takes that into overdrive and I'm not exactly sure where the value is behind it. Or maybe I'm just totally missing the value here, I would love to see it explained better than this article does. [1]https://coinlist.co/static/media/Filecoin-Sale-Economics.0ae9a53f.pdf https://coinlist.co/static/media/Filecoin-Sale-Economics.0ae...
- ojr 9y ago
  I can see the value, it is a peer to peer dropbox that pays you in a token that can be used for speculation and immediate liquidity, think about this to sell a US stock to usd takes 7 business days, to sell a crpytocurrency to usd takes up to 3 business days on coinbase, sometimes same day or you can trade the token and hold in a bitcoin or ether within minutes
  - AndrewKemendo 9y ago
    it is a peer to peer dropbox that pays you in a token that can be used for speculation and immediate liquidity Ok, but dollars can also be used for speculation and immediate liquidity. Why is a corporate run token system better than the cash coming from the US Banking system? I mean practically, not philosophically. sell a US stock to usd takes 7 business days T+3 is usually just 3. So I don't know what second tier brokerage you're using but I can ACH stock liquidation cash from a vanguard account in 3 days.

The Token Effect

247 points by rrecuero 9y ago

rrecuero 9y ago

I'm happy to answer any follow-up questions here.

stephengillie 9y ago
Are there any plans to incubate coin networks in the way startups are currently incubated?
- rrecuero 9y ago
  Nothing concrete yet...
- discombobulate 9y ago
  I think Science may be an incubator[0]. [0] https://science.tokenhub.com/2017/08/03/startup-incubator-science-could-raise-up-to-100-million-in-planned-token-sale/ https://science.tokenhub.com/2017/08/03/startup-incubator-sc... Edit: stephengillie, can't currently use reply. Think I'm being throttled b/c of my VPN. I guess Bing is your friend here! I've not been keeping an eye out for that particular type of thing (soz).
  - stephengillie 9y ago
    This is an incubator running an ICO to raise funds. Since blockchains appear to be the future of both transactions and applications, I was wondering if any incubators will offer advice, coaching, and support for a Blockchain-as-a-(Platform|Service) startup. Like the Lyft to Etherium's Uber-like presence.
discombobulate 9y ago
Will the crypto system look more biological over time as the loops bias toward certain characteristics & the information processing increases? What do you think will happen wrt token sales & US regulation, in the near term?
- rrecuero 9y ago
  I think Coinlist and SEC approved token sales are the way to go, at least in the near term. Long term, there is the worry that excessive regulation would cripple innovation in these areas. Many companies in the space are already located in Singapore or in the Crypto Valley (Switzerland).
zitterbewegung 9y ago
Are there any concrete uses of a blockchain that have clear advantages than to using a standard database other than cryptocurrencies?
- f00_ 9y ago
  "Factom technology secures data for private and public organizations by publishing encrypted data or a cryptographically unique fingerprint of the data to Factom’s immutable, distributed Blockchain" https://factom.com/ https://factom.com/ the immutability, is unique. "Harmony is a new blockchain base document technology that works with your existing imaging or document management solution to create a secure, transparent, unalterable record for the final loan documents." https://www.factom.com/products/harmony https://www.factom.com/products/harmony This still has a currency, Factoid or something. I don't know that anyone has created a consensus mechanism that doesn't use a coin
- rrecuero 9y ago
  I think one of the clearer use cases is digital identity. uPort, Blockstack and Civic are some of the companies that are trying to address this need.
  - TheDong 9y ago
    Keybase is also addressing that need, but with a traditional database. gpg already solves that as well, again without blockchains. Blockchains do no more for identity gpg. Whether they're more or less usable is debatable.
    - discombobulate 9y ago
      Is Keybase resilient against the country's government in which it resides? How does it achieve this with a traditional database?
      - TheDong 9y ago
        It is resilient to tampering as far as you trust gpg. It achieves this because cryptographic signatures exist fine without blockchains
abtinf 9y ago
What is your view of Hyperledger Fabric vs Ethereum in terms of their approach to smart contracts, networks, and trust?
- CryptoPunk 9y ago
  Hyperledger is not designed to be a public ledger. It's comparable to private instances of Ethereum.
joosters 9y ago
Why do you think tokens make any sense? They seem like the equivalent of gift certificates for specific shops, and just as inconvenient. My money can buy everything, do you think that creating lots of different currencies for specific tasks is really a benefit?
- beambot 9y ago
  Most countries also create their own currencies and monetary policies. It's worth asking, "Why do they do that?" I'm guessing the answer to that question probably has a lot of analogies relevant to cryptocurrencies.
  - nivertech 9y ago
    But some countries also unified their currencies: USD replaced state currencies and EUR replaced most European currencies.
cynusx 9y ago
Do you happen to know a startup working on making it easy to list securities as tokens?
tardo99 9y ago
Let's say a ton of people lose a bunch of money on highly speculative businesses that raise money using ICOs. What is the right response to this? "Tough luck"? Regulation? How is this any different than the wild west days of stock sales prior to the regulations that came about during the great depression in the US?
- rrecuero 9y ago
  ICOs, in general, are really immature. The market is being exuberant and the majority of projects in the space may fail. Many people are taking advantage of the current status. The ecosystem will eventually mature and follow some guidelines learned in the past decades by angels and VCs i.e Doing a small seed round first, proving you are building something people want and then, if you achieve your milestones, you can get to a series A and so on. The ironic thing is that these milestones and progressive rounds are easier to achieve and track with tokens. If the milestone is not met, the smart contract automatically returns the funds to investors.
  - lambdadmitry 9y ago
    >If the milestone is not met, the smart contract automatically returns the funds to investors. That can't work that way. The only way the smart contract can return the funds is if they are locked somehow, but what's the point of raising money then? People raise money to spend them, so they by definition don't have that money and it can't be returned, much less "automatically".

mankash666 9y ago

Can you please comment on the criticisms levied against the filecoin ICO [1]. [1]: https://medium.com/token-economy/the-analysis-filecoin-doesnt-want-you-to-read-e60d5243f17c https://medium.com/token-economy/the-analysis-filecoin-doesn...

beambot 9y ago
TL;DR summary of that article: The price is too high for several reasons (pre-ICO investors, Filecoin creators' allocations, etc). My take: $200M worth of investors in the ICO disagree with that assessment.

pdog 9y ago

The ICO phenomenon is, in some sense, diametrically opposed to venture capital. Both are fundraising mechanisms: one sells liquid tokens on the open market, the other sells illiquid shares to VCs. Does YC plan to address competition from tokens, and if so, how?

will_brown 9y ago
YCoin
- discombobulate 9y ago
  Yoken
  - hossbeast 9y ago
    ComboToken
rrecuero 9y ago
1 - In the short term, I don't think ICOs are a solution for every kind of company. Just for protocols and networks. 2 - Great investors provide more than just access to capital. My point of view is similar to Fred Wilson's. More here http://avc.com/2017/06/icos-and-vcs/ http://avc.com/2017/06/icos-and-vcs/
- discombobulate 9y ago
  Tokens will allow for increased liquidy. However, the greater liquidy comes @ a premium, & will increase the price of the asset.
- dsacco 9y ago
  > Great investors provide more than just access to capital. Like what?
  - SkyMarshal 9y ago

deleted 9y ago

[deleted]

the_stc 9y ago

Can you explain exactly what you mean by TCP/IP is underfunded, with examples? And how are tokens on the Ethereum network capturing value in other networks? How is Filecoin better off with its own money versus people bidding for storage in Bitcoin, Monero, or Ethereum directly? And why should the value of Filecoin tokens spike up? How is having a speculative token beneficial for accurately pricing storage? The liquidity aspects are just companies jumping around regulations. Nothing stops startups from listing all their shares on a website and letting anyone buy/sell/trade them. Well except for the legality aspect! I say this as someone about to do a cryptocurrency fundraiser in the adult services space. Though we aren't issuing tokens, but shares - we take payment in cash or other cryptocoins. The main benefit is easily being able to crowdfund and return dividends while avoiding legal hurdles.

rrecuero 9y ago
There are many points there: 1 - Regulation. You can do ICOs and Token Sales legally. If your tokens are not securities, you can do ICOs open to everyone. If your tokens are considered securities, you can do so on Coinlist. 2 - Tokens natively track the value of the network. For these networks, its value is not tracked by company shares. Ethereum is a good example of this. Ethereum Foundation is a non-profit and all the value accrues to the token. You can also do a hybrid system or none. Depends on your specific use case. 3 - Funding. Internet Bug Bounty is a good example of this https://internetbugbounty.org/ https://internetbugbounty.org/. If TCP/IP would have been able to capture a billionth of a cent for every request things it wouldn;t be needed. Maybe, our infrastructure would be really different today.
- joosters 9y ago
  If TCP/IP would have been able to capture a billionth of a cent for every request Cryptocurrencies haven't been able to do micropayments, this kind of system just isn't possible. Proponents will go on about payment channels such as lightning, but these have been 'just around the corner' for several years now and their effectiveness/practicality is highly debatable.
  - 9y ago

hopfog 9y ago

I've been toying with the idea of using tokens as an in-game currency in my MMORPG. The problem is that the normal currency is inflationary due to monsters dropping it as loot. I do have sinks to control inflation but I'm thinking that the tokens should be tied to a fix value. What is fixed and scarce however is land (you can claim plots and build houses, shops etc). Would having a server with land tied to a token make sense or is it a bad idea?

rrecuero 9y ago
Take a look at https://decentraland.org/ https://decentraland.org/ ;)
- hopfog 9y ago
  Thank you! The site is down but I read a blog post and it sounds a lot like what I have in mind.
Retric 9y ago
In a game ideally you want money sinks that scale such as auction transaction costs. If A is worth 10x in an auction you pay 10x as much in fees. This works best if players buying and selling is a regular part of game play such as a complex crafting system where sub components are traded and someone can focus on making them. Alternatively, professions can have some useful waste for another profession. ie: Making an epic sword needs 10 blue and makes 5 green, an epic boot needs 10 green and makes 5 blue. Meanwhile you get 1 red and 1 blues per ore. So, now your weapon makers and your armor makers will be trading their waste. Downside is guilds can become self sufficient. PS: As an analogy, the USD has value because people must pay taxes on value created in USD. This instantly creates trillions of dollars worth of demand each and every year and continues to scale with the economy.
neuralzen 9y ago
I think it's a cool idea, though I'd be worried about exploits finding a way to game things, and effectively drain the cryptocurrency coffers. Do you think this can be prevented? - I was thinking it would be cool to see a roguelike where each life is purchased with crypto, and perhaps the more you put into your character's life (0.1 eth vs 1.0 eth, for example) the greater the loot drops, which include crypto currencies.

stri8ed 9y ago

"It is a decentralized network of millions of computers" Really now?

rrecuero 9y ago
Figure of speech. The number of nodes right now is closer to 25K https://www.ethernodes.org/network/1 https://www.ethernodes.org/network/1
- deleted 9y ago
  [deleted]
- paulddraper 9y ago
  Ah. Well then, I am a millionare (in a manner of speaking).

jashmenn 9y ago

It's really exciting to see the different components for decentralized apps come together. Bitcoin promised programmable money, and it sort of is, but Ethereum is so much more accessible (for better or for worse). With Ethereum we have decentralized compute. With IPFS we get decentralized storage. Cryptographic keys give us self-sovereign identity. Build tools like Truffle make it easy to get started (think create-react-app for Ethereum). And libraries like Zepplin are helping standardize secure patterns. And, to top it off, using web3.js we can write UIs _in the browser_ using JavaScript and the libraries we're already familiar with (Angular, React, Vue). By the way, [shameless plug], if you're a web developer and you're looking to get started programming cryptocurrency and distributed apps, I have some introductory tutorials here => https://newline.co/ https://newline.co/

csomar 9y ago
May I ask why you are asking for my email address. My first impression when someone is asking for my email to download something for "free" is that he is a lying piece of cr*p and he just wants to spam me later on.
- goodroot 9y ago
  That's cynical. If someone spent their time making quality things people enjoy, they can charge whatever currency they'd like. If that currency is an email address so that you can be contacted later in hopes of selling you paid products or earning through referrals, then that's their prerogative. It doesn't make them a _lying piece of crap_. If you use a catchall, create an address for that service. It it does something you don't like, cancel later.
  - csomar 9y ago
    I'm not disagreeing with that but a clean disclosure is missing. It's like paying for an item that you don't know the price of by putting your credit card details. I don't think you'd do that.
    - deleted 9y ago

fenollp 9y ago

> Ethereum took the Bitcoin concept one step further. Smart contracts, escrow and dispute mediation ARE already possible with Bitcoin with CHECKMULTISIGVERIFY. And there haven't been has many issues in Bitcoin core than in Ethereum.

rrecuero 9y ago
You are right. They are indeed possible. It's a question of how appropriate it is for every use case. This must be addressed on an use case basis. You can probably write Facebook in a low-level language but it may not be the best choice...
- CryptoPunk 9y ago
  Bitcoin's script is not turing-complete so there are smart contracts that are definitely not possible to do with it.
lossolo 9y ago
Last time I've checked you couldn't write applications on bitcoin blockchain and mostly that's why Ethereum is so popular.
ojr 9y ago
so what can Bitcoin do that Ethereum can't? I feel it must be able to do something better to justify a higher market cap than ethereum, when Ethereum adds more features faster and the marketcap reacts, past flaws would not matter too much
- AgentME 9y ago
  >when Ethereum adds more features faster Bitcoin's conservative rate of change is one of its big features, plus the network effects of its existing userbase. Bitcoin users are less likely to lose money because of an issue in Bitcoin or because of reliance on a fragile contract encouraged by the Bitcoin software. The Bitcoin network is less likely to have its transaction history rolled back, or have significant changes made to its money supply which could strongly affect the value of present bitcoins.

csomar 9y ago

> It is a decentralized network of millions of computers that execute code at the same time. There are currently less than 30k ethereum nodes. And it is not clear if they are all "full nodes" (ie: verify the transactions). Millions is two orders of magnitude exaggeration.

Taek 9y ago
There are an estimated 3,000,000 gpus performing Etherum mining today. Most of those aren't verifying any smart contracts, but they are running code for Etherum nonetheless
- csomar 9y ago
  The number of mining equipment doesn't translate to a number of nodes. It could be a single person and as we seen in bitcoin mining turned out to be "very" (like in a few hands) centralized.

nhaehnle 9y ago

> These communities are built on strong network effects – where, according to Metcalfe’s law, the value of the network is exponentially increased by the number of users who participate. It's not exponential! Heck, the footnote is citing an article which correctly says the effect is quadratic in the first sentence. I know this may be a lost cause in the general media, but to see this misuse of terms in this context is really frustrating.

kmill 9y ago
Yeah, that bugged me, too. I wonder if it would be better if Metcalfe's law were stated "the value of a network is proportional to the number of links." (At least this isn't a case of talking about the "knee" of an exponential curve! When I taught calculus, I tried demonstrating how rescaling the y-axis shifts the curve horizontally, moving the "knee".)
jvandonsel 9y ago
Yeah, a lot of otherwise intelligent people are tripped up by the term "exponential, as in "Hey, the 2 is an exponent, so it must be exponential, right?"
- nhaehnle 9y ago
  That's actually a cool explanation for why some people might think this is correct. Let's teach them that 1 is an exponent, too ;)

MBCook 9y ago

Thanks to the orange-on-tan color and the extremely thing font the footnote marks are nearly invisible

deleted 9y ago

[deleted]

blastpaat-p 9y ago

Bitcoins = Tulips. Blockchain has a future though.

carapace 9y ago

(Thin sans-serif grey body font means you hate your reader's eyes.)

lifeisstillgood 9y ago

I want to believe. It looks so attractive. And is right up my "theory of the firm" alleyway. But there are two issues kind of intertwined. The current crop of businesses - both coin based and normal, are about allocation of scarce resource (bedrooms, taxis, hard drive space) Now that is really all about ownership of scarce resource. The fact that Airbnb users make money by selling rooms they don't actually have ownership of (i.e. They don't have full rights to sell, either cos it's their rented apartment or cos local law says hotel rooms need fire extinguishers) is kind of glossed over in this egalitarian rush. If the "real" owners got their full allocation this would be a boring story of more efficient returns to capital. Almost all of the internet is like this - YouTube does not pay IP owners, Google does not pay me for my blog writing. Perhaps coins will more accurately reward the owners of these resources - paid to blog, paid to drive taxis, paid to own IP rights - but this is just solidifying the status quo. This leads to my second point - that those with nothing cannot grow in a world where rewards are efficiently returned to owners. Filecoin rewards those who are already rich enough to own a hard drive and electricity. And if the economics work those who own a data centre. Without some egalitarian system built in, yes even government redistribution, then I can't see how tokens and coins can do anything but make Pikkety more right - more returns to the owners of capital. If coins are just another currency, then they are just another way to measure capital - and I can't see how that is going to make the world into my utopia But I do want to believe. My fear I suppose is that for all their libertarian roots, coins are traceable and vastly favour the top billion humans right now - and we are solidifying the status quo - it's not as bad a world as it has been, but I don't want to be stuck with it.

xamuel 9y ago
>vastly favour the top billion humans right now I see it more as favouring the most intelligent. The real $$$ isn't in day-trading, it's in figuring out which cryptos have future merit. That means reading white-papers and distinguishing good ideas from hype. It's a return to what investment is supposed to be: figuring out which ideas are worth capital.
- lifeisstillgood 9y ago
  VCs are, or at least hire, some of the most intelligent people, and the best in the world have a hit rate barely in double percentage digits. Saying that the poorest billion in the world just need to be more intelligent and suddenly will be crypto-rich is ... well actually quite offensive. The real and genuine divides between the richest and poorest in the world will not be bridged by coins, no matter their other benefits.

thinbeige 9y ago

Bit late to the game but better now than never.

rubatuga 9y ago

Can someone convince me that this article isn’t hype? What’s so good about ethereum that it can be compared to the internet? Is the shift from centralized to decentralized going to bring me tangible benefits?

Lon7 9y ago

The fact the Securities and Exchange Commission is seriously looking at ICO tokens is, to me at least, additional proof that this technology is here to stay. That said, the SEC has also said that in many cases these ICO tokens can be classified as securities, and therefor going forward, could be subject to all the same laws and regulations [0]. This turns ICO's from something a startup can offer fairly easily, to something that requires a team of expensive lawyers to do properly. Maybe Lawyers should take note that this could be a promising opportunity for future business? [0] https://www.sec.gov/news/press-release/2017-131 https://www.sec.gov/news/press-release/2017-131

Siecje 9y ago

The article says that email doesn't receive much funding but many companies have invested a lot in email.

jgord 9y ago

yes .. but! we also simply need a better form of currency. While bitcoin has its implementation issues and politics, it solves that problem in a way that wasn't solved before. A better token for Cash is incredibly valuable in and of itself.. dare I say it revolutionary. [ I say "largely solves", because a) small blocksize and data management issues are preventing it from scaling now and in the medium term and b) a linear blockchain might not scale beyond every user on the planet buying coffee... or it might, we haven't really begun to optimize it, imo ]

jcfrei 9y ago
I still don't get why people consider bitcoin a suitable form of currency. It has a fixed supply, so its value is going to vary wildly - depending on demand. That's the opposite of what you want from a currency (where your main goal is price stability).
- jgord 9y ago
  Some people see that as a feature - a deflationary rare resource, which a government can't simply print more of. If I just want to send funds from A to B, the current value of bitcoin in fiat [ USD / GBP / JPY ] is less important than being able to exchange it for the local fiat at each end. If I hold those funds for a while at B - your absolutely right, extreme volatility is a concern. I would argue that as more people use bitcoin the volatility will go down [ large trades will be able to move the market far less, as the market will be so much larger ]
  - jcfrei 9y ago
    > If I just want to send funds from A to B, the current value of bitcoin in fiat [ USD / GBP / JPY ] is less important than being able to exchange it for the local fiat at each end. Do you mean using bitcoin as an intermediary to send value across the globe; Ie. by exchanging your local currency to bitcoin and then sending it to the receiver (who might exchange it again)? I think for such a use case the traditional banking systems are superior. > Some people see that as a feature - a deflationary rare resource, which a government can't simply print more of. The problem with deflationary resources is that most people will never want to spend them - making them unusable as a medium of exchange. If you look at bitcoin forums, they are full of posts cautioning other users to hodl (hold on to their coins and not sell them). But if bitcoin is not used as a medium of exchange then what is it used for? Other blockchains (like ethereum described in the blog) imho offer much more interesting features.

deleted 9y ago

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AndrewKemendo 9y ago

For example, in Filecoin you earn tokens by lending your unused hard drive space. In summary, tokens coordinate efforts in the network and motivate responsible participation. Why not just earn dollars? Theory of pricing arbitrage already takes into account coordination irrespective of the currency. What is the distinct advantage of earning Filecoin tokens over dollars? Ok so lets just say I bought Filecoin (I didn't). How do I liquidate my position? Do I just need to find a buyer like every other security or can Filecoin buy it back? In other words, is it currency or a bond? These ICOs provide a sizable improvement in terms of liquidity. Unlike traditional companies, you can represent the value of your assets in terms of tokens that are liquid and tradeable from day one. Apparently not, I looked through this filecoin sale file [1] and it has a vesting period for investors! Now don't that beat all? So it's an asset of some kind, it doesn't make clear in what class of asset it is. That looks suuuuper fishy to me but maybe I'm missing something. When I got into Bitcoin when it first came out I thought it was a great concept, but had no future as a legitimate international currency because of politics. This crypto currency wave takes that into overdrive and I'm not exactly sure where the value is behind it. Or maybe I'm just totally missing the value here, I would love to see it explained better than this article does. [1]https://coinlist.co/static/media/Filecoin-Sale-Economics.0ae9a53f.pdf https://coinlist.co/static/media/Filecoin-Sale-Economics.0ae...

ojr 9y ago
I can see the value, it is a peer to peer dropbox that pays you in a token that can be used for speculation and immediate liquidity, think about this to sell a US stock to usd takes 7 business days, to sell a crpytocurrency to usd takes up to 3 business days on coinbase, sometimes same day or you can trade the token and hold in a bitcoin or ether within minutes
- AndrewKemendo 9y ago
  it is a peer to peer dropbox that pays you in a token that can be used for speculation and immediate liquidity Ok, but dollars can also be used for speculation and immediate liquidity. Why is a corporate run token system better than the cash coming from the US Banking system? I mean practically, not philosophically. sell a US stock to usd takes 7 business days T+3 is usually just 3. So I don't know what second tier brokerage you're using but I can ACH stock liquidation cash from a vanguard account in 3 days.