4 ms·

I know the US Government oversaw the Google IPO and the stocks weren't printed out of thin air. In the Ether ICO, a big whale friend of Vitalik could have sent

by nope96 9y ago

I know the US Government oversaw the Google IPO and the stocks weren't printed out of thin air. In the Ether ICO, a big whale friend of Vitalik could have sent his Bitcoin in during the ICO sale, got Ether for it, then Vitalik sent him his Bitcoin back. Poof, Ether printed out of thin air - there is no way to prove this did not happen. That is the problem with these ICOs vs. using Proof of Work to fairly distribute the currency.

albertgoeswoof 9y ago
But couldn't exactly that have happened during Google's seed rounds? And even the Google IPO? There's no way to prove that didn't happen either?
- FreeRadical 9y ago
  They are audited
Erlich_Bachman 9y ago
Ethereum itself is not an ICO. ICO is something other projects can do on Ethereum (or on other platforms). There is actually some big differences and the rules are different. Bottomline: you are free to create your own cryptocurrency and pre-mine any large amount of it to yourself. Good luck making such a good one that other people will consider worth using and buying it, knowing about your premine. (And I even hope you succeed, because it will mean that you have created tremendous value for the world. But the chances are you won't.)
- FreeRadical 9y ago
  Ethereum had an ICO https://blog.ethereum.org/2014/07/22/launching-the-ether-sale/ https://blog.ethereum.org/2014/07/22/launching-the-ether-sal...
wslh 9y ago
I was following your point of view until you said "That is the problem with these ICOs vs. using Proof of Work to fairly distribute the currency". First, PoW can't be said to fairly distribute the currency but rather to secure the currency against double spend attacks. If it is a fair method or not is another discussion where many models are possible. On the other hand there are questions about who develops the currency and how the team is funded. In this case Ethereum, Zcash and others propose this model which is valid. Bitcoin development is not progressing from thin air and it is not funded by the PoW mechanism anyway so the consensus method and the development work are different problems.
reissbaker 9y ago
> I know the US Government oversaw the Google IPO and the stocks weren't printed out of thin air. But... the stock did get printed out of thin air. When Google was originally being started — like any startup — the founders could have, and regularly did, make stock appear out of thin air. For example, that's what dilution is. If you've ever worked at a pre-IPO company that's raised money from VCs, at some point your company likely printed stock out of nothing, diluting your share of the company however much they liked — and there's not much you can do about it. In fact, all of the stock sold in the Google IPO was at one time printed out of thin air. That's where stock comes from. When Larry and Sergei and their lawyers (and whoever) drew up the initial documents when they were incorporating Google, they decided there would be X shares, and then over the course of many years increased that number semi-arbitrarily as they saw fit to sell to VCs, and eventually to sell to the public. All of the stock was made up, and it was distributed mostly to the founders and the early investors, just like any startup. They weren't being particularly evil or unfair, that's just how startups work. In fact, the Google board could, today, legally decide to invent more Google stock out of nothing and sell it, or give it away. Here's some good reading on Investopedia about dilution and stock issuance, along with a recent example of a company legally creating stock out of thin air and giving it to their new CEO, diluting existing shareholders: https://www.investopedia.com/terms/d/dilution.asp https://www.investopedia.com/terms/d/dilution.asp Ether had a one-time initial sale, and everything since is Proof of Work. In terms of being certain that Ether isn't being printed out of thin air, it's IMO quite a bit more trustworthy. (And if you want to really get down into the details, printing money out of thin air is a daily occurrence with the US government: that's how inflation works. We make dollars out of nothing. For good reason, but still!)
cryptodogemoon 9y ago
Proof of Work simply facilitates existing capital to proportionately take over the network and supply. It becomes notibly problematic if the total distribution is produced within a small window of time, locking out entire swaths of the population to be at the whim of horders (assuming there would be a genuine demand for the supply).

by nope96 9y ago

albertgoeswoof 9y ago

But couldn't exactly that have happened during Google's seed rounds? And even the Google IPO? There's no way to prove that didn't happen either?

FreeRadical 9y ago
They are audited

Erlich_Bachman 9y ago

Ethereum itself is not an ICO. ICO is something other projects can do on Ethereum (or on other platforms). There is actually some big differences and the rules are different. Bottomline: you are free to create your own cryptocurrency and pre-mine any large amount of it to yourself. Good luck making such a good one that other people will consider worth using and buying it, knowing about your premine. (And I even hope you succeed, because it will mean that you have created tremendous value for the world. But the chances are you won't.)

FreeRadical 9y ago
Ethereum had an ICO https://blog.ethereum.org/2014/07/22/launching-the-ether-sale/ https://blog.ethereum.org/2014/07/22/launching-the-ether-sal...

wslh 9y ago

I was following your point of view until you said "That is the problem with these ICOs vs. using Proof of Work to fairly distribute the currency". First, PoW can't be said to fairly distribute the currency but rather to secure the currency against double spend attacks. If it is a fair method or not is another discussion where many models are possible. On the other hand there are questions about who develops the currency and how the team is funded. In this case Ethereum, Zcash and others propose this model which is valid. Bitcoin development is not progressing from thin air and it is not funded by the PoW mechanism anyway so the consensus method and the development work are different problems.

reissbaker 9y ago

> I know the US Government oversaw the Google IPO and the stocks weren't printed out of thin air. But... the stock did get printed out of thin air. When Google was originally being started — like any startup — the founders could have, and regularly did, make stock appear out of thin air. For example, that's what dilution is. If you've ever worked at a pre-IPO company that's raised money from VCs, at some point your company likely printed stock out of nothing, diluting your share of the company however much they liked — and there's not much you can do about it. In fact, all of the stock sold in the Google IPO was at one time printed out of thin air. That's where stock comes from. When Larry and Sergei and their lawyers (and whoever) drew up the initial documents when they were incorporating Google, they decided there would be X shares, and then over the course of many years increased that number semi-arbitrarily as they saw fit to sell to VCs, and eventually to sell to the public. All of the stock was made up, and it was distributed mostly to the founders and the early investors, just like any startup. They weren't being particularly evil or unfair, that's just how startups work. In fact, the Google board could, today, legally decide to invent more Google stock out of nothing and sell it, or give it away. Here's some good reading on Investopedia about dilution and stock issuance, along with a recent example of a company legally creating stock out of thin air and giving it to their new CEO, diluting existing shareholders: https://www.investopedia.com/terms/d/dilution.asp https://www.investopedia.com/terms/d/dilution.asp Ether had a one-time initial sale, and everything since is Proof of Work. In terms of being certain that Ether isn't being printed out of thin air, it's IMO quite a bit more trustworthy. (And if you want to really get down into the details, printing money out of thin air is a daily occurrence with the US government: that's how inflation works. We make dollars out of nothing. For good reason, but still!)

cryptodogemoon 9y ago

Proof of Work simply facilitates existing capital to proportionately take over the network and supply. It becomes notibly problematic if the total distribution is produced within a small window of time, locking out entire swaths of the population to be at the whim of horders (assuming there would be a genuine demand for the supply).