Compared to volatility in fiat currencies? I (perhaps incorrectly) assume you live in a relatively stable and developed nation that hasn't seen hyperinflation?
Should I base my views of fiat currency from things like the 79.6 billion percent hyperinflation in Zimbabwe?
Neither is inherently volatile. Both can be, but it isn't a built-in trait of fiat or cryptocurrency.
3% of countries is a small minority. (6/195 countries, you missed Venezuela-now and Ecuador-1999)
Besides, these tend to happen infrequently (like once in a century per country), people underestimate risk, and blame politicians instead of the system. It would be beautiful if a critical mass of people would come to the conclusion that monetary system needs to change...
What? This is like every shit coin. Tons of them tank to near zero and deflate. Anyone who thinks these coins are legitimate are fooling themselves. They are built with one core requirement, do just enough to differentiate from other coins, pump it, get out.
The average person can't understand 99% of the specs of these coins, it's all speculation. The whole thing is a ponzi scheme.
Would love to hear more on legitimate use cases for blockchain (not being sarcastic) that cannot already be solved by centralized database, merkle trees and/or public key encryption.
Blockchain is just a distributed public ledger. That's it. There are very few applications that have properties that can be mapped into a distributed public ledger.
Not sure I'd equate online gambling with legitimate (legal) use case. Even still if legal for use in given location (territory) why not leverage credit card or paypal?
Unless you're doing some illegal (e.g. money laundering), there's no need and zero add for cryptocurrency for gambling. I don't need a distributed ledger with block consensus and wasting power computation to carry out a merchangt transaction.
think about poker use a centralized server with closed source code shuffle the deck or use code open for all to see on the ethereum blockchain. Also more fair and transparent for auctions.
Think about a smart contract that has immutable code in it that has a bug regarding shuffling of the deck or misuse/error on financial transfer. There's nothing to think about or do...it's immutable. Once released on ethereum you're out of luck.
it is common practice now to place a function that can self-destruct the contract and start a new one, selfdestruct() is a reserved global function in Solidity, instead of criticizing blindly maybe learn more about writing smart contracts, there are unforeseen flaws in a new open source development platform no surprise there...
Think about running an auction and placing bids, I can place a bid and not have the money which can only be resolved in an alley way or a court with us dollars or we can conduct a more open auction and even a blind auction with cryptography on the blockchain, it is also easier for everyone to participant globally without sacrificing the privacy of giving your card information, I don't have anything to hide but would you consider giving a financial company like Equifax your personal information a safe thing?
That's exactly the level of plausible deniability they need, so people like you come to the comments defending them. I promise you 0% of these coins will be a thing 10 years out. I'll put money on that.
Respectfully I think you are wrong, but not by much. I think there will be some unicorns and mostly failures. Maybe a lower percentage than investing in seed round startups(huge failure rate).
I'm not sure how you can say that in good conscience when people were saying (and still say) the same thing about Bitcoin. It seems as if anyone can say it'll be gone Real Soon Now® and never be conclusively wrong.
It's still reductive, bogus logic at the end of the day.
There are reasons to write off the entire concept, though. Tokens are a stupid idea - universality is the whole point of currency. And it's pretty obvious that everybody who is promoting an ICO is doing it cause it's easy money (compared to more traditional means of raising capital), even if they are actually planning to build the product that they say they are.
As a general rule of thumb, any Ethereum contract that doesn't use an oracle is probably stupid.
Yeah, universality is the whole point of currency. That's definitely why every holiday season, millions of people buy gift cards to people's favorite stores. Please.
I'm sure Bancor couldn't care less about their token price collapsing. They've already got all of the "investors'" money.
In fact, they could just walk away right now instead of carrying on developing the system. The brave new world of ICOs offers no protection against companies failing to follow through on their ICO roadmap. Maybe Bancor could use the token collapse as an excuse to quit now?
Israel recently banned offering binary options to foreigners because a lot of such companies were based in Israel and I guess a lot of people complained to Israeli authorities about being scammed, and impacted the country reputation.
Depending on the facts and circumstances of each individual ICO, the virtual coins or tokens that are offered or sold may be securities. If they are securities, the offer and sale of these virtual coins or tokens in an ICO are subject to the federal securities laws.
Ironically, it is the SEC and it's regulation that made Bancor structure their ICO the way they did. To escape being classified as a security, you have two options: either give the tokens away for free, or promise nothing. Most crypto startups do the latter.
SEC covers securities which are defined in the US as meeting all four properties of the Howey test.
Bancor has a stable coin framework which means they create currencies and have an automated market making algorithm.
Currencies are classed as commodities in the US.
The people downvoting my comments without volunteering a counterargument could probably use some time doing a bit of reading on the topic.
Most alts are traded in terms of BTC. Bancor's dollar value has only ever gone up because increases in the price of bitcoin have occasionally offset Bancor's losses relative to BTC. Bancor's value relative to BTC has been monotonically decreasing since its ICO, which is a feat unto itself.
Ehh, my 3d printing stock fell to about 10% of its value. It happens in every market - just make sure you are diversified... especially if you are investing in high risk markets.
Edit: I'm probably getting downvoted because I'm comparing IPOs to ICOs. They are significantly different and everyone should beware of scams.
More like the model you seem to explain is too naive and exploitative by people just snake-oiling thousands of things, since by diversification you sell all of them.
Because that's where the money will be. Being a piece of the infrastructure means you don't have to care about how particular coins are behaving, as long as the market as a whole is moving up so are you.
Easier to sell to people trying to make a quick buck than doing something concrete that is directly useful. Why sell even shovels directly at the goldrush when you can manufacture the shovels...
Or building GPU chips that accelerate deep learning algorithms that write white papers about how you will build a factory that will build factories to manufacture shovels.
This is accurate. My startup is blockchain funded, but we have a serious money-making business model. But some people still want the sexy smart contract tech decentralized sound clips to get really hyped.
People give us a hard time because our core team is anonymous (key part of being an extrajurisdictional company). It's a fair criticism! And the most obvious.
Bancor had a bunch of smiling faces making up their top team. Does not help investors at all.
> This is accurate. My startup is blockchain funded, but we have a serious money-making business model. But some people still want the sexy smart contract tech decentralized sound clips to get really hyped.
Attracting people to invest in your venture who don't actually have a reasonable capability to determine whether it's a good idea is unethical.
If the "sexy smart contract tech" is a compromise to convince your investors to invest in your startup which they would already have been interested in that's one thing.
But it's unethical to convince them to invest solely on the basis of an aspect of your business plan which you yourself do not believe in.
Because when you think hard enough about it, you can basically only build 'derivative' projects unless you want to use oracles/third party data. Smart contracts are a meme.
ICOs are more akin to angel/VC rounds than IPOs - you often invest in a idea thats still not fully developed and might need 1-2 years to come out on the market. The huge difference to traditional investing is that shares/tokens are immediately tradable and small(ish) crypto investors have 0 patience to wait those 1-2 years so they often sell early and crash the price to go looking for another get-rich scheme.
Thats a curse of the ICOs - but also a benefit. As an investor you get to assign value to something immediately and have the freedom to terminate your investment (something very difficult with traditional angel/VC rounds) and sell the tokens. Its also a fascinating marketing strategy - some of your crypto "investors" are early adopters, promoters and users of your tech - even more so because they're vested in it.
I'm not defending the ICOs (especially the over the top ones) - but lately there are so many articles that don't really try to understand the concept. And so many people automatically equating temporary loss of value with scams. Internet and cryptos are moving at the speed of thought - but the rules are still the same - startups need time.
Very few ICOs do right by investors. We're one of the few offering equity positions and dividends. The law conveniently provides an excuse to them, see Tezos even outright calling it a donation! As an EJC the laws don't apply in the same way, so we directly offer shares in our startup.
Few ICOs are willing to do the ethical thing because they're just cash grabs. Hire a small team to try to make your whitepaper vision into code. If it fails and you were not too far fetch in using company funds, nothing bad will happen to you. It's disgusting.
You could say the same thing about "traditional" startups though - investors often invest just based on the combination of the idea, founders/team and maybe an early prototype. If the startup fails - nothing "bad" will happen to you either. Shares in a startup thats not publicly tradable don't really offer you that much security.
Unless you've committed fraud - but - I've been following the ICO market closely for the past 6 months and I can't remember any of the larger ICOs that were outright scams. Many people and smaller projects/websites will of course try to scam you online - but you should always do your own research and due diligence still applies.
I'm not sure I'd agree that "very few ICOs do right by their investors". It depends what you mean - there have been many successful projects out there that made people money. But if you mean "flipping" i.e. buying into a ICO just to try and sell it quickly for profit - that seems more difficult these days. But it might also be due to the current BTC rally.
ICOs are of course still in wild west territory as far as regulations go - there is a reason why Tezos calls it a donation. They don't want the regulatory hurdle. In fact almost all ICOs these days force you to accept that tokens are not shares in the company and don't "officially" entitle you to anything.
No. I was doing a lot of research into ICOs over the summer, but its incredibly time consuming and there are so many now. I spend too much time behind the screen as it - need to live in the "real" world every once in a while - I'm trying to quit :) Will try putting my money on autopilot/fund for a while.
Note that this is a database of fake phishing websites that impersonate legit projects (and try to steal your money) - its not a database of scamy ICOs. As mentioned - there are certainly those too - but I don't remember any with bigger/reputable projects lately.
I did quite a lot of research into Bancor from a non-cryptocurrency-developer perspective a few months ago (when looking at possible ways to launch a token for Matrix - c.f. https://matrix.org/blog/2017/08/22/thoughts-on-cryptocurrenc...) - and concluded that it's actually quite an interesting idea (once it finally 'clicked').
From the normal dev perspective: the idea is that it removes the concept of using a marketplace to exchange between currencies entirely; instead it replaces the exchanges with an algorithm which gives a consistent global way to calculate the FX rate at any given point. The formula used is mathematically very simple: you allocate a 'reserve' of your currency to be backed by a 'base' currency (by default, their BNT); and as folks buy and sell your currency it algorithmically defines the exchange rate relative to the base currency based on the total supply of your currency in circulation. So rather than the exchange rate being determined by the human interactions of traders, instead it's determined by a function of the current market cap - and everyone is held true to using the same function because it's part of the codebase that defines how the currency operates, running as a smart contract on the Ethereum VM. From memory, the function itself defines the FX as being proportional to the amount of token supply relative to the reserve, after applying a selectable exponential damping factor.
The code is kinda interesting, as it ends up implementing some fairly scary fixed-point exponentiation in such a way that it can run on the EVM with the reversibility and predictable rounding errors which are required for small transactions to cause tiny but 'correct' changes in the FX rate for that currency. https://github.com/bancorprotocol/contracts/blob/master/soli... has the gory details.
Now, the idea certainly does have some controversies, including:
* It requires some kind of common currency to be able to work, and Bancor positioned themselves as the common currency for that purpose (hence their ICO). That said, you could also chain together separate 'common' currencies though, or just access a Bancorified network of currencies via an old-style exchange.
* Whilst the formula used to calculate the FX seems sensible enough, it's not obvious it's the only (or optimal) solution, but it's very baked into the system. (Although the contract does have a backdoor to let it be upgraded in case of bugs or problems, which is a bit controversial in and of itself).
* It's an interesting question whether it's a feature or a bug that markets have a human function which can act emotionally/irrationally - rather than behaving 'perfectly' through the magic of a shared smart contract.
On balance, it feels like a very interesting system for managing small-scale tokens - especially ones which need liquidity and stability beyond their natural market cap. However, this is a slightly niche market which is still evolving (relative to everyone who's running around trying to do as large an ICO as possible), so it's perhaps not surprising that it's yet to take off.
(Disclaimer: I'm not working with/for Bancor, although have chatted to them a few times.)
> Bancor Chief Executive Officer Guy Benartzi said Sirer is making his claims because he is advising another company.
That really says it all. The CEO prefers to attack ad hominem instead of responding to his very well substantiated arguments. Bancor is BS and a perfect example of the whole ICO scam thing.
Most people in the scene were warning people away from Bancor due to the large amount of money being raised. Generally large raises will result in a massive fall regardless of the teams performance short term.
Also it was never clear how their token fit into the future of the CryptoCurrency ecosystem.
It always seemed like an ICO-token without a purpose, looking to invent one.
Thing is most of these dapp ideas would gain a larger network effect and be more efficient just by using ETH.
Bancor's been plagued with some technical problems that have been exploited by miners and hackers to front-run their algorithm.
The explanation for the losses are related to the price stabilisation / automated market making algorithm being exploited while in its early infancy.
I'm really sad at the reactions people on HN have to Blockchain businesses and topics, but I am confident this is a case of horse-traders dissing on Ford Model T. It's like the SV crowd is finding it hard to believe no one wants another social media uber for X whatever now that the money and the spotlight are shining on communities very far from your own.
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[ 0.24 ms ] story [ 34.0 ms ] threadShould I base my views of fiat currency from things like the 79.6 billion percent hyperinflation in Zimbabwe?
Neither is inherently volatile. Both can be, but it isn't a built-in trait of fiat or cryptocurrency.
In any case, there is zero empirical evidence that they aren't, given that there has not once existed a stable cryptocurrency.
Besides, these tend to happen infrequently (like once in a century per country), people underestimate risk, and blame politicians instead of the system. It would be beautiful if a critical mass of people would come to the conclusion that monetary system needs to change...
The average person can't understand 99% of the specs of these coins, it's all speculation. The whole thing is a ponzi scheme.
Anyone and their dog can start an ICO with nothing but a website filled with fluff and bullcrap.
Unless you're doing some illegal (e.g. money laundering), there's no need and zero add for cryptocurrency for gambling. I don't need a distributed ledger with block consensus and wasting power computation to carry out a merchangt transaction.
Think about a smart contract that has immutable code in it that has a bug regarding shuffling of the deck or misuse/error on financial transfer. There's nothing to think about or do...it's immutable. Once released on ethereum you're out of luck.
Think about running an auction and placing bids, I can place a bid and not have the money which can only be resolved in an alley way or a court with us dollars or we can conduct a more open auction and even a blind auction with cryptography on the blockchain, it is also easier for everyone to participant globally without sacrificing the privacy of giving your card information, I don't have anything to hide but would you consider giving a financial company like Equifax your personal information a safe thing?
Online gambling sites can take card just fine using the same card processors as other companies.
It's still reductive, bogus logic at the end of the day.
As a general rule of thumb, any Ethereum contract that doesn't use an oracle is probably stupid.
2. If "the gift cards of the future" was the pitch for tokens, nobody would pay them any attention.
Then it's informative to readers who know what Bancor is and those who don't.
In fact, they could just walk away right now instead of carrying on developing the system. The brave new world of ICOs offers no protection against companies failing to follow through on their ICO roadmap. Maybe Bancor could use the token collapse as an excuse to quit now?
https://www.timesofisrael.com/the-wolves-of-tel-aviv-israels...
http://www.reuters.com/article/us-israel-fraud/israel-approv...
From https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_co...:
Depending on the facts and circumstances of each individual ICO, the virtual coins or tokens that are offered or sold may be securities. If they are securities, the offer and sale of these virtual coins or tokens in an ICO are subject to the federal securities laws.
The ICOs that it has charged so far didn't have an actual token associated with them so they were scams with a popular (edit: fashionable) name.
I really hate that people on HN will down vote comments based on misunderstanding of information freely available.
A security is:
1. An investment of money,
2. In a common enterprise,
3. With an expectation of profits,
4. Predominantly from the efforts of others.
Selling something without making any promises doesn't necessarily preclude expectation of profits.
Currencies are classed as commodities in the US.
The people downvoting my comments without volunteering a counterargument could probably use some time doing a bit of reading on the topic.
The brave new world of crowdfunding is not that new, but the allergic reactions to it seem odd.
There were plenty of warnings and research about how flawed their product is, including here. The lesson, as always, is caveat emptor.
Edit: I'm probably getting downvoted because I'm comparing IPOs to ICOs. They are significantly different and everyone should beware of scams.
Platforms for creating platforms, coins for creating coins.
The Bancor protocol enables built-in price discovery and a liquidity mechanism for tokens on smart contract blockchains
Talk about buzzwords and mumbo jumbo.
I'm, ah, seeking investors.
Investors: I’ll accept check, btc, or pepecoin.
People give us a hard time because our core team is anonymous (key part of being an extrajurisdictional company). It's a fair criticism! And the most obvious.
Bancor had a bunch of smiling faces making up their top team. Does not help investors at all.
Attracting people to invest in your venture who don't actually have a reasonable capability to determine whether it's a good idea is unethical.
If the "sexy smart contract tech" is a compromise to convince your investors to invest in your startup which they would already have been interested in that's one thing.
But it's unethical to convince them to invest solely on the basis of an aspect of your business plan which you yourself do not believe in.
Thats a curse of the ICOs - but also a benefit. As an investor you get to assign value to something immediately and have the freedom to terminate your investment (something very difficult with traditional angel/VC rounds) and sell the tokens. Its also a fascinating marketing strategy - some of your crypto "investors" are early adopters, promoters and users of your tech - even more so because they're vested in it.
I'm not defending the ICOs (especially the over the top ones) - but lately there are so many articles that don't really try to understand the concept. And so many people automatically equating temporary loss of value with scams. Internet and cryptos are moving at the speed of thought - but the rules are still the same - startups need time.
In all fairness - Bancor is still a very young project. Also a fairly promising one - many projects already using it: https://www.reddit.com/r/Bancor/comments/75b7us/list_of_all_...
Few ICOs are willing to do the ethical thing because they're just cash grabs. Hire a small team to try to make your whitepaper vision into code. If it fails and you were not too far fetch in using company funds, nothing bad will happen to you. It's disgusting.
Unless you've committed fraud - but - I've been following the ICO market closely for the past 6 months and I can't remember any of the larger ICOs that were outright scams. Many people and smaller projects/websites will of course try to scam you online - but you should always do your own research and due diligence still applies.
I'm not sure I'd agree that "very few ICOs do right by their investors". It depends what you mean - there have been many successful projects out there that made people money. But if you mean "flipping" i.e. buying into a ICO just to try and sell it quickly for profit - that seems more difficult these days. But it might also be due to the current BTC rally.
ICOs are of course still in wild west territory as far as regulations go - there is a reason why Tezos calls it a donation. They don't want the regulatory hurdle. In fact almost all ICOs these days force you to accept that tokens are not shares in the company and don't "officially" entitle you to anything.
There seems to have been quite a few.
http://www.investopedia.com/terms/p/pinksheets.asp
From the normal dev perspective: the idea is that it removes the concept of using a marketplace to exchange between currencies entirely; instead it replaces the exchanges with an algorithm which gives a consistent global way to calculate the FX rate at any given point. The formula used is mathematically very simple: you allocate a 'reserve' of your currency to be backed by a 'base' currency (by default, their BNT); and as folks buy and sell your currency it algorithmically defines the exchange rate relative to the base currency based on the total supply of your currency in circulation. So rather than the exchange rate being determined by the human interactions of traders, instead it's determined by a function of the current market cap - and everyone is held true to using the same function because it's part of the codebase that defines how the currency operates, running as a smart contract on the Ethereum VM. From memory, the function itself defines the FX as being proportional to the amount of token supply relative to the reserve, after applying a selectable exponential damping factor.
The code is kinda interesting, as it ends up implementing some fairly scary fixed-point exponentiation in such a way that it can run on the EVM with the reversibility and predictable rounding errors which are required for small transactions to cause tiny but 'correct' changes in the FX rate for that currency. https://github.com/bancorprotocol/contracts/blob/master/soli... has the gory details.
Now, the idea certainly does have some controversies, including:
* It requires some kind of common currency to be able to work, and Bancor positioned themselves as the common currency for that purpose (hence their ICO). That said, you could also chain together separate 'common' currencies though, or just access a Bancorified network of currencies via an old-style exchange.
* Whilst the formula used to calculate the FX seems sensible enough, it's not obvious it's the only (or optimal) solution, but it's very baked into the system. (Although the contract does have a backdoor to let it be upgraded in case of bugs or problems, which is a bit controversial in and of itself).
* It's an interesting question whether it's a feature or a bug that markets have a human function which can act emotionally/irrationally - rather than behaving 'perfectly' through the magic of a shared smart contract.
On balance, it feels like a very interesting system for managing small-scale tokens - especially ones which need liquidity and stability beyond their natural market cap. However, this is a slightly niche market which is still evolving (relative to everyone who's running around trying to do as large an ICO as possible), so it's perhaps not surprising that it's yet to take off.
(Disclaimer: I'm not working with/for Bancor, although have chatted to them a few times.)
That really says it all. The CEO prefers to attack ad hominem instead of responding to his very well substantiated arguments. Bancor is BS and a perfect example of the whole ICO scam thing.
Also it was never clear how their token fit into the future of the CryptoCurrency ecosystem.
It always seemed like an ICO-token without a purpose, looking to invent one.
Thing is most of these dapp ideas would gain a larger network effect and be more efficient just by using ETH.
That might explain why Bancor, a cryptocurrency backed by traditional power brokers doesn't work as a cryptocurrency.
The explanation for the losses are related to the price stabilisation / automated market making algorithm being exploited while in its early infancy.
I'm really sad at the reactions people on HN have to Blockchain businesses and topics, but I am confident this is a case of horse-traders dissing on Ford Model T. It's like the SV crowd is finding it hard to believe no one wants another social media uber for X whatever now that the money and the spotlight are shining on communities very far from your own.