Tangential to the tokens/securities issue: I’m surprised that any US exchange is allowed to list coins like Bitcoin Cash where their creators are clearly attempting to defraud people. It seems there should be some protection against that to be legally compliant.
Second tangent. I’m surprised they’re allowed to list coins which are insecure and vulnerable to attacks which could leave the exchange short. E.g. As recently discussed when https://www.crypto51.app was posted coins like Ethereum Classic and Bitcoin Cash etc. could all be very easily attacked. And it seems there is little an exchange could do to prevent themselves from losing a lot of money from such an attack if used against the exchange. This could make them unable to pay their customers what they’re owed. What protections do they have against this?
>I’m surprised that any US exchange is allowed to list coins like Bitcoin Cash
It's ironic you would single out Bitcoin Cash as an attempt by the software devs to defraud people.
Take a look at how Ethereum, Bitcoin Core, or any of the top 10, 50, or really any cryptocoin, DAG, or blockchain inspired project works in regards to defrauding new users by extracting their wealth to enrich the early adopters.
The very nature of Satoshi's Proof-of-Work protocol is to establish a new oligarchy which exploits anyone without access to surplus capital that can be wasted on expensive random number generators for the mining protocol.
One important point: if we actually include all 7 billion
people on the earth, most of whom have zero BTC or
Ethereum, the Gini coefficient is essentially 0.99+. And
if we just include all balances, we include many dust
balances which would again put the Gini coefficient at
0.99+. Thus, we need some kind of threshold here. The
imperfect threshold we picked was the Gini coefficient
among accounts with ≥185 BTC per address, and ≥2477 ETH
per address. So this is the distribution of ownership
among the Bitcoin and Ethereum rich with $500k as of July
2017.
In what kind of situation would a thresholded metric like
this be interesting? Perhaps in a scenario similar to the
ongoing IRS Coinbase issue, where the IRS is seeking
information on all holders with balances >$20,000.
Conceptualized in terms of an attack, a high Gini
coefficient would mean that a government would only need
to round up a few large holders in order to acquire a
large percentage of outstanding cryptocurrency — and with
it the ability to tank the price.
With that said, two points. First, while one would not
want a Gini coefficient of exactly 1.0 for BTC or ETH (as
then only one person would have all of the digital
currency, and no one would have an incentive to help boost
the network), in practice it appears that a very high
level of wealth centralization is still compatible with
the operation of a decentralized protocol. Second, as we
show below, we think the Nakamoto coefficient is a better
metric than the Gini coefficient for measuring holder
concentration in particular as it obviates the issue of
arbitrarily choosing a threshold.
...However, the maximum Gini coefficient has one obvious
issue: while a high value tracks with our intuitive notion
of a “more centralized” system, the fact that each Gini
coefficient is restricted to a 0–1 scale means that it
does not directly measure the number of individuals or
entities required to compromise a system.
Specifically, for a given blockchain suppose you have a
subsystem of exchanges with 1000 actors with a Gini
coefficient of 0.8, and another subsystem of 10 miners
with a Gini coefficient of 0.7. It may turn out that
compromising only 3 miners rather than 57 exchanges may be
sufficient to compromise this system, which would mean the
maximum Gini coefficient would have pointed to exchanges
rather than miners as the decentralization bottleneck.
Conversely, if one considers “number of distinct countries
with substantial mining capacity” an essential subsystem,
then the minimum Nakamoto coefficient for Bitcoin would
again be 1, as the compromise of China (in the sense of a
Chinese government crackdown on mining) would result in
>51% of mining being compromised.
also who would want to use Ethereum when 2/3's of the entire supply is owned by a few dozen anonymous oligarchs?
Presale ICO / Premine ( max cost $0.50 USD per ETH )
= 72,009,990 ETH
Total Supply today (Feb 23rd 2018)
= 97,800,000 ETH
Source:
https://etherscan.io/stat/supply
Not all the oligarchs are anonymous. Joe Lubin [1] made billions off of co-founding Ethereum and is now personally funding a group of companies (ConsenSys umbrella) with ~1000 employees and growing. All in an effort to do massive amounts of R&D in this space. Personally, I think that is pretty cool.
If these coins are so straightforward to attack, then what's stopping people? What's defending rational actors from doing the rational thing and squeezing their networks for all the guaranteed real returns of real money they supposedly protect with such brittle defenses? Either the operative definition of attack is too rather shallow to explain this inexplicable lack of attacking (i.e. something other than hashrate/stake is a major factor in the defense of these coins), or the expectation of return from said attack is rather too high.
>What's defending rational actors from doing the rational thing and squeezing their networks for all the guaranteed real returns of real money they supposedly protect with such brittle defenses?
I guess by "Rational Actors" you mean sociopaths?
I'm not commenting on the underlying point. I don't know if these coins are vulnerable or not. But there seemed to be something very depraved about this sentiment in the quote above, and I couldn't leave it alone.
I understand that some people only care about gathering as much money as possible. But that is not to be called "rational." Rational people understand that going around and screwing people over for your own benefit has consequences for yourself and others that are not positive.
The discussion about Bitcoin Cash is slightly out of place here, but I think there are dozens of coins worse than it. I don't necessarily like Bitcoin Cash and their marketing shenanigans, but I think they represent a different take on Bitcoin scalability and definitely have a place in the crypto world.
You're a victim of social media propaganda. It's not your fault though. Most people have busy life and they don't have time to stay on top of all the drama so they only hear from "mainstream sources". The thing is, the original Bitcoin community leaders have control over the largest websites for Bitcoin related content (bitcointalk and /r/bitcoin subreddit and so on) and they control their message through their channels and censor anything about Bitcoin cash. So everything you hear about Bitcoin and Bitcoin cash is pretty much a result of censorship and propaganda, which is why you only hear about Bitcoin cash being a scam. But this is far from truth.
If you don't believe me, find the smartest people you know who are professional crypto investors, they will say they secretly hold bitcoin cash but never speak out because they will immediately be labeled as "scam investor", and nowadays character assassination is really scary on Twitter so most people who actually know stuff stay quiet.
The whole Bitcoin thing is meant to be forked, and that's the whole point--that's why Bitcoin as a whole is anti-fragile. If something doesn't work out with one approach, there will be another fork of Bitcoin that may succeed with a different approach, but the original Bitcoin holders--unless they're stupid enough to sell everything just because they want "the real bitcoin"--will keep holding the same amount of fork coins, so everybody wins.
As for the details on Bitcoin vs Bitcoin Cash, they just have different philosophies. Bitcoin wants to focus on stability whereas Bitcoin cash wants to focus on usability. None of them are "scams" and there's nothing wrong with each party. Some people have strong opinions towards either of the forks, but most old Bitcoin investors stay quiet and are just waiting out to see how it all ends, because they have nothing to lose. If Bitcoin wins, then good. If Bitcoin cash wins, that's also good because they have the same amount of coins.
Think about this for a moment. What would happen if Bitcoin Cash dies because "it's a scam", and the original Bitcoin is the only option left? And what if that approach doesn't work out? Then we are left with nothing. I think it's great that these two forks co-exist for now and have chance to prove themselves.
I don't believe, I know for a fact. Most early Bitcoin investors still hold Bitcoin Cash and never sold. And this is the majority of Bitcoin holders. Even the so called "BTC maximalists" still hold the bitcoin cash forks. If you're curious, go ask some of the "famous" BTC maximalists who are aggressively active on Twitter.
Also, if you got in last year, you're a small fish and doesn't really matter in the grand scheme of things, because in the end, it's the older investors who will move the needle. Right now they're just sitting this one out because nobody knows what will happen. But they will start moving their funds once it becomes apparent which one will have the future and which one won't. And when that happens, a "relative hyperbitconization" will happen, shrinking the other chain to irrelevance almost overnight. I'm not trying to say which chain it will be (again, i hold same amount of both so I win either way), I'm just saying, if you hold any type of Bitcoin and want to benefit from this scenario, it's best to do your own research and understand where both parties are coming from, instead of just following the mainstream narrative like a sheep.
i know what you mean, but traders do exist, and smart people exist. and sometimes there is an overlap no matter how small it is. Most traders are idiots though.
Not quite. Yes they control the social media channels, but check any other crypto sub and you'll find some of the same articles and information. For what it's worth, I think forks are great because they allow people to try new things. However, Roger Ver and the Bitcoin Cash community have clearly taken steps to mislead the public into thinking that the original Bitcoin is "Bitcoin Core", and that Bitcoin Cash is "Bitcoin". When an outsider comes in and tries to buy "Bitcoin", but is misled into buying Bitcoin Cash, that's a genuine problem. Here is one example: https://www.wetalkcoins.com/news/quotbitcoin-cashquot-faces-...
> check any other crypto sub and you'll find some of the same articles and information
That's because no matter which coin they own, the main source of their information comes from the Bitcoin community. If Bitcoin dies, all other coins will be affected by it, so even the stupidest traders keep an eye on what happens to Bitcoin even if they didn't invest in Bitcoin itself.
I didn't sell my Bitcoins when the chain split happened so i own the same amount of BTC and BCH, but I still think this "Bitcoin brand is owned by the original Bitcoin chain" is ridiculous and ignorant idea. But that's just my opinion. You see, it's all about opinions and there is no such thing as "fact" in crypto because nobody knows the future. Anyone's free to have their opinion, just like you think Bitcoin cash is a scam. I'm just sharing my own opinion because I think it's as legitimate as the "bcash is scam" opinion yet doesn't get enough attention, mostly due to the unfortunate turnout of the market. Most people who bought into Bitcoin late last year bought BTC and not BCH, and these are the people who are most active on social media, and of course they want BTC to win and BCH to fail because otherwise it means they made a bad investment. In contrast, a lot of early investors (who have owned Bitcoin for a long time even before the fork) don't have any incentive to speak out because to them it doesn't really mater which side wins (unless they're just irrational people who don't understand the market). So we end up with a world where the loudest people are the ones who bought BTC, and the people on the BCH are automatically presented as frauds and scammers.
Out of all the scamcoins out there I wasn't aware that Bitcoin Cash had such a reputation, if anything it's one of the rare forks that actually seem to have a real technical reason behind it (the whole segwit vs. large block debate). Furthermore since it's a fork of the original Bitcoin chain the creators couldn't use the usual tricks to "pump and dump" where they pre-mine a ton of coins to prepare for the dump.
I mean I'm a cryptocurrency "hater" myself so as far as I'm concerned it's scams, greed, poor understanding of economics and technology all the way down but I'm surprised to see Bitcoin Cash singled out that way, it always seemed relatively reasonable to me (as far as cryptocurrencies can be at least). If anything the segwit/lightning network proponents did seem a bit disingenuous back then (pre-fork), presenting their technology as the panacea to Bitcoin's scaling problems while conveniently ignoring or hand waving practical issues with their proposed system (possible centralization, whether the system could genuinely remain usable at scale etc...). They also generally demonstrated the usefulness of the lightning network by always taking scenarios best suited to the system (recurrent coffee buys at starbucks for instance) instead of "worst case" situations where lightning made a whole lot less sense and had a ton more overhead. That's a common issue all over the cryptocurrency space however...
I don't believe the issue with BCH is the technology, although it's seen as more of a band-aid solution by detractors. I think the main issues are with the centralization aspect of Alibaba miners controlling 49% of nodes, Roger Ver not having a great reputation, and the "hostile takeover" attempts of the split.
SegWit created an entirely new class of Bitcoin address and also an entirely new type of transactions to "solve transaction malleability", which could have been solved in many different other ways. Now we have Bitcoin with two different address types. Imagine having a two different type of email addresses (for example you abc@example.com vs. example.com@abc), any competent engineer would recognize this is the beginning of a huge technical debt, even if we don't go as far to talk about the economic implication.
Compare that to Bitcoin cash where all it did was increase the block size limit and changed nothing when it comes to the way Bitcoin worked.
I'm not making some ridiculous statement such as "Bitcoin cash is the real bitcoin and Bitcoin core is scam", I'm just saying if we're talking about "band aid" technology, what Bitcoin core developers did to Bitcoin is an order of magnitude more of a "bandaid" than what Bitcoin cash did.
I stay on top of both BTC and BCH because I care about both chains, and I can tell you for sure while Roger Ver is indeed an famous figure in BCH, he really has no influence over the direction of BCH. All he has is his website bitcoin.com and related businesses and the subreddit in which he's a mod, but other than that, none of his businesses have anything to do with dealing directly with the protocol. He's just simply a passionate libertarian guy who wants to use Bitcoin as a transaction method while BTC developers are now starting to spin the narrative that Bitcoin is not meant to be used for transaction but supposed to be hoarded like gold. I understand where both sides are coming from, but neither of the philosophies are absolutely correct or incorrect, we will have to see how it plays out.
We're not talking about ETH; we're talking about new tokens that are explicitly marketed as securities so there's no need to debate whether they're securities or not.
This needs to be higher. Most of the comments appear to assume that this clears to way to everyone buying, holding, and selling these tokenized securities.
If it's limited to qualified investors, which appears to be the case, then while it's a nice little achievement for Coinbase, it's not even close to the groundbreaking change most comments seem to imply.
Tokenized securities are private securities that comply with securities laws using Reg D, specifically Rule 506(c). In some cases they are Reg A+ (that come with JOBS act provisions used for crowdfunding). They are very important for the ecosystem for two reasons:
1) because ICOs are very important way of fundraising and they need to become compliant
2) they make illiquid assets like private real estate RIETs more liquid
Since KYC/AML is enforced and investor accreditation is key to buying these securities, this will reduce scam and legitimize ICOs and security tokens overall.
I can’t wait to see all the interesting possibilities with making illiquid assets more liquid using tokens to represent shares. This is an exciting development. Congrats to Coinbase.
I can also imagine startup equity being tokenized. Where an exchange like Coinbase acts like SecondMarket (now called Nasdaq Private Market). This might be a great way for early employees and founders to get liquidity before the company IPOs. It would change the startup game completely. A lot of things to look forward to here.
I difinitely hope it's going in this direction, but this space needs to mature a little bit, and perception needs to change. Currently ICOs are viewed as scams and some of them are still insanely overvalued.
The way to overcome this is to write milestones into the smart contract that unlock additional funding after the milestone is hit in a given time period.
The issue with today's ICO is that the market demand is so high it would be silly for groups to leave money on the table. Just like bands leave money on the table because the value of their tickets > the price they sell them at.
Many people on the buy side who get in early to ICOs are essentially scalpers whereas the people who run the project usually have no business raising the funds they do in their first round.
Milestone funding would solve both of these issues.
Token is like a bearer share which can be transfered digitally from person to person. Bearer shares are not that common nowadays but I understand that in the past they were quite popular.
I assume that bearer shares fell out of favor for a number of the same reasons as bearer bonds. On the one hand, the average person doesn't really want to hold a lot of money in paper assets that they're responsible for the physical security of. On the other hand, governments don't like untraceable paper assets that can be used to transfer a lot of value because of money laundering etc.
Are Tokenized Securities like lending? Are there any sort of borrowing interests?
Cause I haven't read the Bible (neither I'm religious), just googled it. But, isn't this like the beginning of a new economy? Are you a_d like the bad guys in the Bible fiction?
Is 2000 years some universal cycle period time?
Tokenized securities are like a record of ownership, written and maintained on a ledger. They are like normal shares, governed by securities laws of the land. They could have dividends and could trade between two parties. Not sure what exactly you are asking?
But motivated by the fact that I always thought Bitcoin being so scarce, if mass adopted, some sort of Bitcoin lending scheme named as some new thing, would be created
Are you talking about Cardano, Basic Attention Token, Stellar Lumens, Zcash and 0x mentioned in the article? These are not supposedly assets. These were added prior to this announcement and don't really have any relationship to this. AFAIK CB hasn't announced any particular security tokens for listing.
When anyone has access to the securities and derivatives markers, that is what will end society, that will be the bubble everyone has been saying Bitcoin was, that will be "the last bubble".
43 comments
[ 3.2 ms ] story [ 88.4 ms ] threadSecond tangent. I’m surprised they’re allowed to list coins which are insecure and vulnerable to attacks which could leave the exchange short. E.g. As recently discussed when https://www.crypto51.app was posted coins like Ethereum Classic and Bitcoin Cash etc. could all be very easily attacked. And it seems there is little an exchange could do to prevent themselves from losing a lot of money from such an attack if used against the exchange. This could make them unable to pay their customers what they’re owed. What protections do they have against this?
It's ironic you would single out Bitcoin Cash as an attempt by the software devs to defraud people.
Take a look at how Ethereum, Bitcoin Core, or any of the top 10, 50, or really any cryptocoin, DAG, or blockchain inspired project works in regards to defrauding new users by extracting their wealth to enrich the early adopters.
The very nature of Satoshi's Proof-of-Work protocol is to establish a new oligarchy which exploits anyone without access to surplus capital that can be wasted on expensive random number generators for the mining protocol.
also who would want to use Ethereum when 2/3's of the entire supply is owned by a few dozen anonymous oligarchs?[1] https://en.wikipedia.org/wiki/Joseph_Lubin_(entrepreneur)
I guess by "Rational Actors" you mean sociopaths?
I'm not commenting on the underlying point. I don't know if these coins are vulnerable or not. But there seemed to be something very depraved about this sentiment in the quote above, and I couldn't leave it alone.
I understand that some people only care about gathering as much money as possible. But that is not to be called "rational." Rational people understand that going around and screwing people over for your own benefit has consequences for yourself and others that are not positive.
If you don't believe me, find the smartest people you know who are professional crypto investors, they will say they secretly hold bitcoin cash but never speak out because they will immediately be labeled as "scam investor", and nowadays character assassination is really scary on Twitter so most people who actually know stuff stay quiet.
The whole Bitcoin thing is meant to be forked, and that's the whole point--that's why Bitcoin as a whole is anti-fragile. If something doesn't work out with one approach, there will be another fork of Bitcoin that may succeed with a different approach, but the original Bitcoin holders--unless they're stupid enough to sell everything just because they want "the real bitcoin"--will keep holding the same amount of fork coins, so everybody wins.
As for the details on Bitcoin vs Bitcoin Cash, they just have different philosophies. Bitcoin wants to focus on stability whereas Bitcoin cash wants to focus on usability. None of them are "scams" and there's nothing wrong with each party. Some people have strong opinions towards either of the forks, but most old Bitcoin investors stay quiet and are just waiting out to see how it all ends, because they have nothing to lose. If Bitcoin wins, then good. If Bitcoin cash wins, that's also good because they have the same amount of coins.
Think about this for a moment. What would happen if Bitcoin Cash dies because "it's a scam", and the original Bitcoin is the only option left? And what if that approach doesn't work out? Then we are left with nothing. I think it's great that these two forks co-exist for now and have chance to prove themselves.
you genuinely believe yourself?
Also, if you got in last year, you're a small fish and doesn't really matter in the grand scheme of things, because in the end, it's the older investors who will move the needle. Right now they're just sitting this one out because nobody knows what will happen. But they will start moving their funds once it becomes apparent which one will have the future and which one won't. And when that happens, a "relative hyperbitconization" will happen, shrinking the other chain to irrelevance almost overnight. I'm not trying to say which chain it will be (again, i hold same amount of both so I win either way), I'm just saying, if you hold any type of Bitcoin and want to benefit from this scenario, it's best to do your own research and understand where both parties are coming from, instead of just following the mainstream narrative like a sheep.
This is genuinely, if inadvertently, hilarious.
That's because no matter which coin they own, the main source of their information comes from the Bitcoin community. If Bitcoin dies, all other coins will be affected by it, so even the stupidest traders keep an eye on what happens to Bitcoin even if they didn't invest in Bitcoin itself.
I didn't sell my Bitcoins when the chain split happened so i own the same amount of BTC and BCH, but I still think this "Bitcoin brand is owned by the original Bitcoin chain" is ridiculous and ignorant idea. But that's just my opinion. You see, it's all about opinions and there is no such thing as "fact" in crypto because nobody knows the future. Anyone's free to have their opinion, just like you think Bitcoin cash is a scam. I'm just sharing my own opinion because I think it's as legitimate as the "bcash is scam" opinion yet doesn't get enough attention, mostly due to the unfortunate turnout of the market. Most people who bought into Bitcoin late last year bought BTC and not BCH, and these are the people who are most active on social media, and of course they want BTC to win and BCH to fail because otherwise it means they made a bad investment. In contrast, a lot of early investors (who have owned Bitcoin for a long time even before the fork) don't have any incentive to speak out because to them it doesn't really mater which side wins (unless they're just irrational people who don't understand the market). So we end up with a world where the loudest people are the ones who bought BTC, and the people on the BCH are automatically presented as frauds and scammers.
I mean I'm a cryptocurrency "hater" myself so as far as I'm concerned it's scams, greed, poor understanding of economics and technology all the way down but I'm surprised to see Bitcoin Cash singled out that way, it always seemed relatively reasonable to me (as far as cryptocurrencies can be at least). If anything the segwit/lightning network proponents did seem a bit disingenuous back then (pre-fork), presenting their technology as the panacea to Bitcoin's scaling problems while conveniently ignoring or hand waving practical issues with their proposed system (possible centralization, whether the system could genuinely remain usable at scale etc...). They also generally demonstrated the usefulness of the lightning network by always taking scenarios best suited to the system (recurrent coffee buys at starbucks for instance) instead of "worst case" situations where lightning made a whole lot less sense and had a ton more overhead. That's a common issue all over the cryptocurrency space however...
Compare that to Bitcoin cash where all it did was increase the block size limit and changed nothing when it comes to the way Bitcoin worked.
I'm not making some ridiculous statement such as "Bitcoin cash is the real bitcoin and Bitcoin core is scam", I'm just saying if we're talking about "band aid" technology, what Bitcoin core developers did to Bitcoin is an order of magnitude more of a "bandaid" than what Bitcoin cash did.
I stay on top of both BTC and BCH because I care about both chains, and I can tell you for sure while Roger Ver is indeed an famous figure in BCH, he really has no influence over the direction of BCH. All he has is his website bitcoin.com and related businesses and the subreddit in which he's a mod, but other than that, none of his businesses have anything to do with dealing directly with the protocol. He's just simply a passionate libertarian guy who wants to use Bitcoin as a transaction method while BTC developers are now starting to spin the narrative that Bitcoin is not meant to be used for transaction but supposed to be hoarded like gold. I understand where both sides are coming from, but neither of the philosophies are absolutely correct or incorrect, we will have to see how it plays out.
If it's limited to qualified investors, which appears to be the case, then while it's a nice little achievement for Coinbase, it's not even close to the groundbreaking change most comments seem to imply.
1) because ICOs are very important way of fundraising and they need to become compliant
2) they make illiquid assets like private real estate RIETs more liquid
Since KYC/AML is enforced and investor accreditation is key to buying these securities, this will reduce scam and legitimize ICOs and security tokens overall.
I can’t wait to see all the interesting possibilities with making illiquid assets more liquid using tokens to represent shares. This is an exciting development. Congrats to Coinbase.
The issue with today's ICO is that the market demand is so high it would be silly for groups to leave money on the table. Just like bands leave money on the table because the value of their tickets > the price they sell them at.
Many people on the buy side who get in early to ICOs are essentially scalpers whereas the people who run the project usually have no business raising the funds they do in their first round.
Milestone funding would solve both of these issues.
(Aside from the cryptocurrency hype-sauce)
I ask:
Are Tokenized Securities like lending? Are there any sort of borrowing interests?
Cause I haven't read the Bible (neither I'm religious), just googled it. But, isn't this like the beginning of a new economy? Are you a_d like the bad guys in the Bible fiction? Is 2000 years some universal cycle period time?
https://www.gotquestions.org/Bible-lending-money.html
A lot of people is going to lose a lot of money with this new betting game. Big Crypto holders will continue keeping their cryptos.
Well, it's going to be funny as hell to watch it.
But remember:
- Angry people might eventually go after yourselves, violently, once they lose all their savings.
Not me, I will be partying in Mallorca next week, with local friends. Spending money earned the classic way: WORKING.
But motivated by the fact that I always thought Bitcoin being so scarce, if mass adopted, some sort of Bitcoin lending scheme named as some new thing, would be created
https://www.theatlantic.com/magazine/archive/2017/05/frank-a...
https://www.bloomberg.com/news/articles/2018-07-16/coinbase-...
On the other hand you have companies like Liquifi who are tokenizing real private securities for any companies stock.
When anyone has access to the securities and derivatives markers, that is what will end society, that will be the bubble everyone has been saying Bitcoin was, that will be "the last bubble".