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It ultimately comes down to what flavour of politics you subscribe to. The key question is whether you think that the public should be protected against the abu

by cyphar 9y ago

It ultimately comes down to what flavour of politics you subscribe to. The key question is whether you think that the public should be protected against the abuses of the free market, or if the free market should be a complete free-for-all. For example, Dodd-Frank solved a concrete problem, and there have been countless studies that show it it responsible for stabilizing the US economy. But ultimately, wanting to die on the ICO hill is a bit odd. I thought it was fairly clear (at least, it was fairly clear to me) that the whole "industry" is mostly powered by hype -- which leads to people being swindled out of their money. Wanting to protect a completely unregulated industry's ability to fool people into wasting their money doesn't seem like a sane or sustainable position (that's how economic crashes happen). > Keeping me out of Uber's seed round is a violation of my rights. First of all, this is a story about China. Second of all, it's a story about ICOs and not non-ICO startups. Third of all, is it also a violation of your rights to not be able to fund companies in countries that are at war with your country (which I assume is the US)? Is it a violation of your rights to not be able to fund illegal activity? I'm just trying to gauge at which point does your view on "the inalienable right to invest in anything" stop short? I would expect that China is trying to come to a decision about whether ICOs should be made illegal or more regulated.

Zarath 9y ago
It isn't the public, it's the public not in the 1%.
rothbardrand 9y ago
Those "studies" are self serving. That is the political propaganda keeping you feeling safe in having your rights violated. This isn't a question of flavor of politics- but fundamental rights. Do you have freedom of association or not? Secondly, you think its "fairly clear to [you]" that these ICOs are scams. I am sure some are, but I know for a fact that many are not. I am quite capable of telling the difference (as a blockchain engineer.) The presumption that every startup failing is "people being swindled out of their money" is very odd one for a discussion forum run by y-combinator. Is y-combinator being swindled when an investment fails? And you're still sidestepping the point: It's my right to apply my own discernment to what are good and what are bad investments. Not people who don't know the difference between SHA1 and SHA2.
- chinathrow 9y ago
  > Secondly, you think its "fairly clear to [you]" that these ICOs are scams. I am sure some are, but I know for a fact that many are not. I am quite capable of telling the difference (as a blockchain engineer.) The average Joe and Jane on Instagram/Twitter/FB can simply not tell if it's a scam or not what e.g. Paris Hilton is advertising. Heck, I'm a sw dev too - and I have a hard time figuring out why some of the ICOs need their own token at all. Simple offer what you sell (e.g. legal services for a certain market) directly and let them pay as they wish. Absolutely no need for a blockchain to achieve things.
  - Tepix 9y ago
    Exactly. Being a blockchain engineer may allow you to judge their code. But the business behind it is a different matter altogether.
- cyphar 9y ago
  > Those "studies" are self serving. That is the political propaganda keeping you feeling safe in having your rights violated. Ah, so you're the only source of truth that I can trust in this discussion, since no study can be trusted? Awesome. Can you answer my question about at which point do you think "freedom to invest in an enterprise" should not be allowed? I'll quote my question again: > Third of all, is it also a violation of your rights to not be able to fund companies in countries that are at war with your country (which I assume is the US)? Is it a violation of your rights to not be able to fund illegal activity? I'm just trying to gauge at which point does your view on "the inalienable right to invest in anything" stop short?
- elefanten 9y ago
  One of your key premises, that investing in startups is a key / good path to getting rich, is flawed. Investing in startups is notoriously NOT that stable of an investment vehicle. If you're a small-scale enough investor to not meet accreditation rules, why would you WANT to throw 10k at a startup? You speak in terms of rights and that's one debate to have. But evaluating the material harm in this situation, the notion that this denies upward economic mobility in a significant way seems overstated.
smokeyj 9y ago
> It ultimately comes down to what flavour of politics you subscribe to If you were to tell any of your progressive friends about Reg-D, but framed it as written by "the 1%" - they'll naturally think the law is unjust and shouldn't exist. I think this has less to do with political flavor and more to do with critical thinking skills. Unless Reg-D also bans gambling at Vegas and throwing your money down a well - then it comes up short of it's protectionist goals. But it definitely succeeds in protecting qualified investors from "unqualified" investors.
- cyphar 9y ago
  > If you were to tell any of your progressive friends about Reg-D, but framed it as written by "the 1%" - they'll naturally think the law is unjust and shouldn't exist. I agree that there is a lot of collectivism in politics, and that "the 1%" rallying cries are mostly a way of controlling a group of people into opposing things they are uninformed about. So discussing anything as being written by "the 1%" is never going to lead to useful discourse. But I don't see why any of that matters. Also "any of [my] progressive friends"? I don't understand why you're being hostile. I don't really associate with people based on their politics, it makes it too easy to have an echo chamber (or a shouting match). Not to mention that wasn't the point of my comment, it was to ask GGP to expand on their views. > I think this has less to do with political flavor and more to do with critical thinking skills. Then why mention (what you assume are) my politics at all? > Unless Reg-D also bans gambling at Vegas and throwing your money down a well - then it comes up short of it's protectionist goals. I think gambling should be better regulated, and I think that defrauding people to "throw money down a well" shouldn't be legal. I don't care if you, of your own volition, decide to throw your money down a well (though it actually does cost your country money to re-print said currency). What I do care about is someone trying to defraud you. But this is a complete straw-man, securities laws are about fraud not about being stupid with your money. I'm not authoritarian, but pretending like regulation over speculative investments are not going to help any unexperienced investors is just ridiculous.
- bryananderson 9y ago
  I think the issue with these regulations is that they use net worth as a proxy for an investor's qualifications. I'm not convinced that this is a good proxy. Any grandma or grandpa who's been putting a decent amount from each paycheck into US equities for 50 years is going to be very wealthy today - but is probably not truly a "sophisticated investor". They're a prime target to get ripped off. By contrast, a bright young software engineer a few years ago who picked up early on Airbnb or Uber could potentially be a "sophisticated investor", but would be excluded because of his or her net worth. I really am not sure what an ideal proxy would be. I used "grandma/grandpa" and "bright young software engineer" in my example, but I don't think age or occupation would be good proxies either. Perhaps some sort of investor qualification exam? Regardless, the completely-unregulated ICO market is a separate issue from private equity more generally. We should be careful conflating the two.
kabbalf 9y ago
Time will tell whether the system is more or less robust with Dodd Frank. Also the previous system seemed robust until the crash happened. An argument could be made that more legislation and onerous regulation pushes smaller actors out of the game. Then you end up with a bunch of too-big-to-fail corporations that take the whole system down if they fail. Regulatory capture is also a major issue with too big entities. Reading tip: Antifragile by Nassim Nicholas Taleb

by cyphar 9y ago

Zarath 9y ago

It isn't the public, it's the public not in the 1%.

rothbardrand 9y ago

Those "studies" are self serving. That is the political propaganda keeping you feeling safe in having your rights violated. This isn't a question of flavor of politics- but fundamental rights. Do you have freedom of association or not? Secondly, you think its "fairly clear to [you]" that these ICOs are scams. I am sure some are, but I know for a fact that many are not. I am quite capable of telling the difference (as a blockchain engineer.) The presumption that every startup failing is "people being swindled out of their money" is very odd one for a discussion forum run by y-combinator. Is y-combinator being swindled when an investment fails? And you're still sidestepping the point: It's my right to apply my own discernment to what are good and what are bad investments. Not people who don't know the difference between SHA1 and SHA2.

chinathrow 9y ago
> Secondly, you think its "fairly clear to [you]" that these ICOs are scams. I am sure some are, but I know for a fact that many are not. I am quite capable of telling the difference (as a blockchain engineer.) The average Joe and Jane on Instagram/Twitter/FB can simply not tell if it's a scam or not what e.g. Paris Hilton is advertising. Heck, I'm a sw dev too - and I have a hard time figuring out why some of the ICOs need their own token at all. Simple offer what you sell (e.g. legal services for a certain market) directly and let them pay as they wish. Absolutely no need for a blockchain to achieve things.
- Tepix 9y ago
  Exactly. Being a blockchain engineer may allow you to judge their code. But the business behind it is a different matter altogether.
cyphar 9y ago
> Those "studies" are self serving. That is the political propaganda keeping you feeling safe in having your rights violated. Ah, so you're the only source of truth that I can trust in this discussion, since no study can be trusted? Awesome. Can you answer my question about at which point do you think "freedom to invest in an enterprise" should not be allowed? I'll quote my question again: > Third of all, is it also a violation of your rights to not be able to fund companies in countries that are at war with your country (which I assume is the US)? Is it a violation of your rights to not be able to fund illegal activity? I'm just trying to gauge at which point does your view on "the inalienable right to invest in anything" stop short?
elefanten 9y ago
One of your key premises, that investing in startups is a key / good path to getting rich, is flawed. Investing in startups is notoriously NOT that stable of an investment vehicle. If you're a small-scale enough investor to not meet accreditation rules, why would you WANT to throw 10k at a startup? You speak in terms of rights and that's one debate to have. But evaluating the material harm in this situation, the notion that this denies upward economic mobility in a significant way seems overstated.

smokeyj 9y ago

> It ultimately comes down to what flavour of politics you subscribe to If you were to tell any of your progressive friends about Reg-D, but framed it as written by "the 1%" - they'll naturally think the law is unjust and shouldn't exist. I think this has less to do with political flavor and more to do with critical thinking skills. Unless Reg-D also bans gambling at Vegas and throwing your money down a well - then it comes up short of it's protectionist goals. But it definitely succeeds in protecting qualified investors from "unqualified" investors.

cyphar 9y ago
> If you were to tell any of your progressive friends about Reg-D, but framed it as written by "the 1%" - they'll naturally think the law is unjust and shouldn't exist. I agree that there is a lot of collectivism in politics, and that "the 1%" rallying cries are mostly a way of controlling a group of people into opposing things they are uninformed about. So discussing anything as being written by "the 1%" is never going to lead to useful discourse. But I don't see why any of that matters. Also "any of [my] progressive friends"? I don't understand why you're being hostile. I don't really associate with people based on their politics, it makes it too easy to have an echo chamber (or a shouting match). Not to mention that wasn't the point of my comment, it was to ask GGP to expand on their views. > I think this has less to do with political flavor and more to do with critical thinking skills. Then why mention (what you assume are) my politics at all? > Unless Reg-D also bans gambling at Vegas and throwing your money down a well - then it comes up short of it's protectionist goals. I think gambling should be better regulated, and I think that defrauding people to "throw money down a well" shouldn't be legal. I don't care if you, of your own volition, decide to throw your money down a well (though it actually does cost your country money to re-print said currency). What I do care about is someone trying to defraud you. But this is a complete straw-man, securities laws are about fraud not about being stupid with your money. I'm not authoritarian, but pretending like regulation over speculative investments are not going to help any unexperienced investors is just ridiculous.
bryananderson 9y ago
I think the issue with these regulations is that they use net worth as a proxy for an investor's qualifications. I'm not convinced that this is a good proxy. Any grandma or grandpa who's been putting a decent amount from each paycheck into US equities for 50 years is going to be very wealthy today - but is probably not truly a "sophisticated investor". They're a prime target to get ripped off. By contrast, a bright young software engineer a few years ago who picked up early on Airbnb or Uber could potentially be a "sophisticated investor", but would be excluded because of his or her net worth. I really am not sure what an ideal proxy would be. I used "grandma/grandpa" and "bright young software engineer" in my example, but I don't think age or occupation would be good proxies either. Perhaps some sort of investor qualification exam? Regardless, the completely-unregulated ICO market is a separate issue from private equity more generally. We should be careful conflating the two.

kabbalf 9y ago

Time will tell whether the system is more or less robust with Dodd Frank. Also the previous system seemed robust until the crash happened. An argument could be made that more legislation and onerous regulation pushes smaller actors out of the game. Then you end up with a bunch of too-big-to-fail corporations that take the whole system down if they fail. Regulatory capture is also a major issue with too big entities. Reading tip: Antifragile by Nassim Nicholas Taleb