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They horrify me too. Some are plain fraud. Investors will lose, scammers will profit and/or go to jail. Some are promising startups, that will raise far more

by tlb 9y ago

They horrify me too. Some are plain fraud. Investors will lose, scammers will profit and/or go to jail. Some are promising startups, that will raise far more money than is healthy for their stage, and will die from too much money. If you don't have enough money (true for nearly everyone) it might be hard to imagine, but I've seen it when VCs give a startup too much. It makes them grow before they've found product-market fit, and when they realize their fit isn't quite right they're too large to change course quickly. The second is more sad, because not only will investors lose their money but the world will lose an otherwise promising startup.

ataturk 9y ago
The only thing that horrifies me about them is that the US and the UK both went through these kinds of stock swindles at the turn of the 20th century and on into the 1920s and the run up to the Great Depression and yet since nobody reads history anymore they are completely unaware of the lessons brought forward.
jririri82838 9y ago
I know you didn’t mean it this way, but that sounds like the economy as a whole Just replace “investors” with workers, and scammers with “moneyed special interests.” Some go to jail to satisfy the proles, but otherwise nothing really changes to help the workers And we keep talking about the pattern within itself, at a lower abstraction, ignoring the level where it matters to most
Alex3917 9y ago
The key difference is that the companies raising money via ICOs are co-ops, not startups. The reason startups go bankrupt when they have too much money though is because they're forced to spend money before they have product-market fit. And in the same way that the value created by good software scales exponentially as more dollars are invested, the costs of bad software scale exponentially as more dollars are invested. Whereas money raised by co-ops is more akin to having money in your personal bank account, and it's not often that individuals go bankrupt as the direct result of having too much money. Sometimes they do, like with lottery winners, and I suspect we'll see that a bunch in the short term. But once we have better rules and norms, I think it's going to be less often that we see excess money killing co-ops.
- nostrademons 9y ago
  Co-ops disintegrate when the people involved can't agree on the way to spend the money. Fights break out, trust declines, and eventually the co-op breaks up in a series of acrimonious disputes (oftentimes including lawsuits and/or shady behavior). So far, this seems a common failure mode for ICOs as well. So yeah, like co-ops.
  - Alex3917 9y ago
    > Co-ops disintegrate when the people involved can't agree on the way to spend the money. That's because currently most co-ops are either run by hippies, or else exist only as tax dodges. But there's no reason they can't be run as dictatorships, the only real requirement is that the majority of the wealth generated gets captured by the people creating it. As the tools for running co-ops get better, we'll see more examples of ones that are better run.
    - nostrademons 9y ago
      Isn't a co-op that's run as a dictatorship basically a corporation? The whole point of having wealth is that you can choose how you spend it. If one person chooses how to spend it, you don't actually have the wealth, they do, and it's not much of a co-op. If multiple people choose how to spend it, then you run into all the coordination-of-disparate-interest problems common to co-ops, communes, clubs, and other social ventures.
      - Alex3917 9y ago
        > Isn't a co-op that's run as a dictatorship basically a corporation? In double-entry land, the ownership of labor is diluted every time new capital is contributed. Obviously people contributing capital should get rewarded, but the fact that causality only runs in this direction is super broken. Whereas in triple-entry land, capital can get diluted every time you add new labor. This works because the technology allows labor to be viewed as an asset rather than as an expense. Accounting innovations like this are kind of boring, but economically it's probably still the most important invention since double-entry was popularized in 1494.
LeoPanthera 9y ago
"Some" - Most, surely.

by tlb 9y ago

ataturk 9y ago

The only thing that horrifies me about them is that the US and the UK both went through these kinds of stock swindles at the turn of the 20th century and on into the 1920s and the run up to the Great Depression and yet since nobody reads history anymore they are completely unaware of the lessons brought forward.

jririri82838 9y ago

I know you didn’t mean it this way, but that sounds like the economy as a whole Just replace “investors” with workers, and scammers with “moneyed special interests.” Some go to jail to satisfy the proles, but otherwise nothing really changes to help the workers And we keep talking about the pattern within itself, at a lower abstraction, ignoring the level where it matters to most

Alex3917 9y ago

The key difference is that the companies raising money via ICOs are co-ops, not startups. The reason startups go bankrupt when they have too much money though is because they're forced to spend money before they have product-market fit. And in the same way that the value created by good software scales exponentially as more dollars are invested, the costs of bad software scale exponentially as more dollars are invested. Whereas money raised by co-ops is more akin to having money in your personal bank account, and it's not often that individuals go bankrupt as the direct result of having too much money. Sometimes they do, like with lottery winners, and I suspect we'll see that a bunch in the short term. But once we have better rules and norms, I think it's going to be less often that we see excess money killing co-ops.

nostrademons 9y ago
Co-ops disintegrate when the people involved can't agree on the way to spend the money. Fights break out, trust declines, and eventually the co-op breaks up in a series of acrimonious disputes (oftentimes including lawsuits and/or shady behavior). So far, this seems a common failure mode for ICOs as well. So yeah, like co-ops.
- Alex3917 9y ago
  > Co-ops disintegrate when the people involved can't agree on the way to spend the money. That's because currently most co-ops are either run by hippies, or else exist only as tax dodges. But there's no reason they can't be run as dictatorships, the only real requirement is that the majority of the wealth generated gets captured by the people creating it. As the tools for running co-ops get better, we'll see more examples of ones that are better run.
  - nostrademons 9y ago
    Isn't a co-op that's run as a dictatorship basically a corporation? The whole point of having wealth is that you can choose how you spend it. If one person chooses how to spend it, you don't actually have the wealth, they do, and it's not much of a co-op. If multiple people choose how to spend it, then you run into all the coordination-of-disparate-interest problems common to co-ops, communes, clubs, and other social ventures.
    - Alex3917 9y ago
      > Isn't a co-op that's run as a dictatorship basically a corporation? In double-entry land, the ownership of labor is diluted every time new capital is contributed. Obviously people contributing capital should get rewarded, but the fact that causality only runs in this direction is super broken. Whereas in triple-entry land, capital can get diluted every time you add new labor. This works because the technology allows labor to be viewed as an asset rather than as an expense. Accounting innovations like this are kind of boring, but economically it's probably still the most important invention since double-entry was popularized in 1494.

LeoPanthera 9y ago

"Some" - Most, surely.