[Cryptography] Altcoin volume

[iang]

On 25/09/2017 19:50, James A. Donald wrote:

> The way it should work is that an angel investor funds development to 
> the point where he actually has a working proof of stake blockchain, 
> then issues stake to himself, and to people working on the project, 
> and to people promoting the use of the crypto coins, and proceeds to 
> sell some of his stake to first round investors. That would be a 
> genuine initial coin offering. But this is not what EOS is doing.  All 
> it has is a white paper.  If you buy into the EOS ICO, you are paying 
> a mighty large amount of money for a white paper.

Or, if you are in FOSS the way it should work is that someone who has a 
bright idea should work on a new system in their own time. When it is 
getting somewhere they should get enlightened, steal time from the day 
job and their family life, hole up in a cave and make it so.  As they're 
now unemployed and single their code moves fast. When the first 
prototype is released, the whole world collectively goes WOW and 
everyone starts to contribute, because that's what FOSS does.  A team 
built, versions come out, people are very happy.  Then a corporation 
comes along and hires the original author (who's very thin by now) just 
to only work on the product.  Life is good.  An economy emerges.

Or, if you're a financier, you take your hot slide deck to Sand Hill 
Road and trawl around trying to fight this month's meme because you 
actually developed a meme that isn't current for this month, so you have 
a *lot* of explaining to do.  Eventually you find a VC who cuts you a 
little check for a huge piece and you spend the lot on hired programmers 
(lots nearby in the valley) and also replacing them as they seem to pop 
in and out of all the hot startups.  Finally you put out a demo and your 
Series A investor convinces you why it is in your best interest to start 
the whole process again for your Series B round.  Etc...

Or, maybe you're a traditionalist and you live in ma&pa's garage and 
program away with a little money from family.  Eventually you get enough 
servers up to get going and bring in customers.  It's all friends & 
family funded, no debt, no outside equity.  But it grows slowly so there 
is frustration.

Or........

Then there is ICOs.

Without commenting on EOS for the moment, the ICO market seems to have 
boomed because of several factors:  the shortage of "I get it" 
investors, the ocean of "I've a bright idea" kids, the compliance 
nightmare, the FOSS absence of a way to pay for people to do the right 
thing, the rise of the Ethereum price to the point where sudden new 
wealth had to diversify because it knew it was crazy, the shocking price 
of garages today, and the humongous promise of Ethereum versus the 
equally enourmous shortage of actual real measurable results.

Within that context, the EOS auction process (not ICO) was designed to 
solve some issues experienced in the past - primarily to neuter the pump 
& dump, and the recognition that some fair distribution over time is 
required in order to build a community.  EOS auction process was also 
heavily informed by what went wrong (and right) with Bitshares (not 
enough money, pump & dump) and Steemit (too much concentration, pump & 
dump).

It is recognised, or should be recognised, that there is no one true way 
to do this.  Apologies to all.  Cryptography has created a chaotic 
market, and those who have read the old cypherpunk material should not 
be surprised that it's noisy and opinionated and still experimental :-)

iang



ps; cryptography didn't really create this market.  People created the 
market, and crypto just provided some essential components...