[brndnmtthws]

This is a bit off topic, but bear with me: so far, nearly every comment in this thread has contained some degree cynicism toward cryptocurrency-related funding. Why does HN have such a distaste for cryptocurrencies? Why can't we just have an intelligent conversation about this new technology? Why do we have all the negativity and downvotes for any remotely positive comments related to cryptocurrencies?

This is super interesting technology, regardless of your prejudices, and just complaining about it being a "bubble" doesn't add any value to the conversation.

[psyc]

The cynicism isn't about the technology, or the possibilities that might emerge from the ashes after the mania and subsequent crypto-recession are over. The cynicism is about every charlatan who can fork a repo, put together a web page, a "whitepaper", and a bunch of dorky headshots, collecting millions of dollars for nothing more than a story.

That said, I'd like to invite you all to the ICO for my new coin, PNZ. The way it works is simple. I guarantee double your money for every 3 people you convince to invest. Stay tuned for the whitepaper explaining the math.

[proofofstake]

HackerNews used to be all about cryptocurrencies. I think the original Satoshi paper was posted here soon after it was released. But about your cynicism-remark, this never changed. People that jumped on the opportunity were too busy to post on HN. People that did not, well... this is the first ever comment on HN about Bitcoin, 3037 days ago:

Well this is an exceptionally cute idea, but there is absolutely no way that anyone is going to have any faith in this currency. [1]

> Why can't we just have an intelligent conversation about this new technology?

It is quite the same with HN and SEO: Because there are a few scumbags in the SEO space that are very obvious for HN readers, every thread about optimizing websites for search engines has a negative sentiment.

This technology has a lot of obvious scumbags too. Now the companies in the article did not get to a billion market cap by being scumware. Speculators just assume the value of the coin will rise (again) with increased adoption of the technology.

Then I think a lot of early HN posters moved elsewhere or just stick to read-only mode. Also, maybe, "me too hates this!" is more popular on HN than "I like this".

I agree it is a shame that there isn't a single comment about the technology of the two ICO unicorns in the article. About successfully skipping VC and crowdfunding your next startup by issuing a token.

Instead we get a thread that is pushed off the front page, due to more comments than upvotes, most of the comments talking about unrelated scams or conflating value of distributed tokens with business evaluation.

[1] https://news.ycombinator.com/item?id=599852

[will_brown]

>and just complaining about it being a "bubble" doesn't add any value to the conversation.

Yeah but that is the kind of thing they said during the housing bubble and the dotcom bubble before that, then after those bubbles all the media and experts had the same talking point...no one saw this coming

What more do you want added to the conversation? Bold predictions, that will inevitably be true? That is a little hard to do and actually detracts from the known truth, still I'll bite. As many of the experts who missed the other bubbles are pointing toward charts suggesting a market correction/crash, many are pointing to crypto as a way to protect their money, my guess is barriers to crypto ownership will continue to lower allowing early investors to cash out a little but control supply to raise the price, and then when enough of the crypto market is distributed across uneducated investors...boom the remainder of early investors and investor money pulls out and all that value created by nothing more than belief disappears and reality appears. It costs nothing to start a new blockchain with a new cryptocurrency, there is no real value in Bitcoin or even Ethereum/Ether, the idea of smart contracts as a tool to replace lawyers and courts was just marketing effort to keep the good times rolling with no basis in reality.

[mrep]

I agree with everything you said except "there is no real value in Bitcoin or even Ethereum/Ether".

Bitcoin does seem to be the best payment technology for online illegal transactions. Albeit, one could argue those shouldn't be 'real' in the first place.

[bsder]

> Why does HN have such a distaste for cryptocurrencies?

Most charitably, because blockchain currencies don't solve any useful problem.

As has been aptly demonstrated by the by the Vinnick arrest, they are far from anonymous. And, has been aptly demonstrated by the recent Bitcoin Cash fork, blockchain currencies don't have distributed, immutable trust. So, a bitcoin currency isn't anonymous and is subject to a central authority who has enough power. And, all the while, it has all the downsides of cash (non-repudiable, stealable, etc.)

Explain to me again what the advantage of a cryptocurrency is?

> Why can't we just have an intelligent conversation about this new technology?

Because nobody really cares about the technology. If they cared you would see discussion about more articles like these:

https://qz.com/1031861/blockchain-could-fix-a-key-problem-in... "Blockchain could fix a key problem in China’s food industry: the fear of food made in China"

https://www.reuters.com/article/us-usa-blockchain-ibm-idUSKB... "IBM, Maersk in blockchain tie-up for shipping industry"

Instead, you see crypto-currency speculation over ... and over ... and over.

[sayurichick]

decentralization _does_ solve useful problems. The hard part is how do you get rich off of keeping data out of centralized servers, or having financial privacy, or creating platforms for USERS to get rich.

I'm a bitcoin maximalist but there is an upcoming ICO that i have to plug. I bought some to use, not to speculate on, but in hindsight I didn't realize there was an opportunity to make some profit.

It's a lending platform. P2P lending w/o the need of banks. You don't need credit for a loan because you put up collateral in the form of Bitcoin (or probably Ethereum as well).

I've seen all the pump/dump tokens, and i'm not interested in those. I'd actually use and benefit from this platform. I hold a pretty significant amount of BTC and I learned after selling some btc to never sell again. However, If there is a time when I need $USD, I can put up my BTC as collateral, have USD deposited to my bank account, pay interest on it, and once I've paid it all I get my BTC back as well.

It's so easy to be cynical this early, and I don't blame you but we're still 3-8 years from the "Facebook" era of crypto... you're upset because we don't have the ecosystem now, but that's also because people are still coming out with use cases.

[Kalium]

A lot of people find the technologies incredibly interesting and potentially extremely useful. Similarly, a lot of people find the uses to which those extremely interesting technologies are being put to be at best questionable and of marginal utility.

Are blockchains cool? OH FUCK YES!

Is people raising a lot of cash from suckers in a bubble-y market that threatens to rebound on all of us cool? Some might opine that this is slightly less than maximally cool.

[ChrisClark]

And the technology is the exact reason the OMG token is worth what it is right now. It's to be used for Staking in the Plasma[1] technology sidechains. Plasma is interesting because it's created by two of some of the most influential people in blockchain tech, Butterin of Ethereum and Poon of the Lightning Network. So a new technology from the creators of two already really interesting technologies.

[1] http://plasma.io/

[brndnmtthws]

Are you suggesting investors in other startups are not also speculators? Do you think every silicon valley startup is destined to succeed and be the next Google/Apple/FB?

The tech is cool, and the new funding model is also fascinating. Never before has it been possible for everyone to participate in the early funding of startups.

Sure, most will fail, but that's not different from the old model. The biggest difference is that it's not based on cronyism anymore.

[simonebrunozzi]

Big difference: when you invest in a startup, you get equity and certain rights. The founders can't screw you too easily.

With an ICO, you don't get any equity - you only get to use a service, maybe, in the future. Most ICOs are therefore only a speculation.

[proofofstake]

From the article:

> The incentive for holding OMGs, is to take part in the network validation process. We also see a long term value/appreciation in the OMG price as more and more transactions take place on the network.

So you can stake your tokens for a cut of the transaction fees (much like miners do).

[Kalium]

I'm suggesting that, as a sibling pointed out, there are differences beyond purely who is speculating. Investing in the structure that ICOs are outside comes with a certain level of rights and protections.

Have you considered the possibility that there may potentially be good reasons for investor accreditation systems? That the reasons for such systems might not be solely to keep the highly profitable world of venture capital the exclusive preserve of the super-rich?

[taysic]

The main problem imo is the amount of money they are getting. You need to stay a little hungry to be motivated to build a great product. They basically have "FU" money off the bat and no legal obligation to the token buyers from what I understand. The human economics don't work out.

[kakarot]

This isn't directly about cryptocurrencies. I think it's more about, at least for me, the fact that a technology as promising, useful, and technically impressive as Bitcoin / the blockchain is being trivialized to such a high degree recently.

It's being exploited by capitalists who don't fully understand the tech or its implications but who see a way to make some quick cash.

Couple all of this with the fact that the market is becoming extremely saturated with various coins, and bad management / corruption leading to fracturing of the Bitcoin blockchain, and you may start to see a problem developing. Bitcoin needs public adoption in order to prevail. It needs cohesion. It is losing ground on both fronts every day.

It's becoming clear that Bitcoin itself will not survive if Bitcoin Core continues to mix up their priorities and support / engage in vitriolic public discourse with those who think differently. But cryptocurrency tech itself is such a powerful idea, it really has the chance to revolutionize how we think about and use money.

Yet that won't happen as long as the general public, whose support is needed, is distracted and scared away by all of the different coins on the market, the controversy around Core / SegWit, or even worse, they see it as something completely trivial and useless thanks to the myriad of pointless coins being passed around to idiots who want to get in on the tulip mania. [0]

It's hard not to notice the bubble if you're paying attention. My hope is just that, after the bubble pops, something is left. Something that can evolve into a dependable, ubiquitous, cohesive technology that improves ours lives in the ways we dream it can.

[0] https://en.wikipedia.org/wiki/Tulip_mania

[brndnmtthws]

I'm not very concerned about the 99% of these startups/cryptocurrencies that will inevitably fail. It's a given that most of them will not be successful.

It would be foolish, however, to assume that there won't be a handful of these startups that go on to actually change the world in a big way. Bitcoin, arguably, is already quite far along in that regard.

[kakarot]

I think it's foolish to assume anything right now, one way or the other. If you desire a particular outcome, the best thing you could do right now would be to figure out how you can help make it so.

[HuginnMuninn]

I have a distaste for exploiting the vulnerable, which is most certainly what's occurring here.

ICO's offer people investment opportunities to people who for numerous reasons couldn't invest in anything before.

That's a wonderful thing with educated investors prepared for the risk, but what some of these companies are pulling is modern day snake oil.

I'm not just talking about shady types, plenty of respectable people acting poorly for quick money. YC is in on it too with filecoin, history will be the judge and I hope all involved are remembered.

Go read some of the ico forums, ask yourself whether these people are stealing from underage children. Please.

[brndnmtthws]

You're assuming that everyone investing is an idiot. I doubt that's the case. Sure, some people might make poor decisions, but I think that's the minority. Most people are doing their research, and even if they aren't, they would learn quickly that you should never invest more than you're willing to lose.

As an aside, I wouldn't touch Filecoin (due to the VC taint), but Sia looks promising.

[hndamien]

They are also assuming everybody is losing. I'd be willing to bet that this value creation and investing accessibility has lifted more people than it has hurt.

[HuginnMuninn]

What would you call research? Reading the whitepaper?

I've hung around crypto for a bit, vast majority neither read the technicals nor actually use the technology.

Have you used Sia? I certainly have.

How would say it stacks up compared to S3? Both on price and speed?

[roywiggins]

The Internet is a great technology but the dot com bubble still burst.

[brndnmtthws]

Indeed, and we will probably have another bubble or two. Or perhaps an infinite number, if society lasts forever.

Does that mean we should shun and shame this new technology? Doing so would seem—to me at least—to be something that's really not in the spirit of HN.

[adventured]

> Does that mean we should shun and shame this new technology?

You're inventing a straw-man. It's not the technology that is being primarily shunned or shamed in this thread. It wasn't the technology being shamed during the most extreme quarters of the dotcom bubble either.

It's the extreme valuations, backed with no products at all, that is being ridiculed. Properly so.

[brndnmtthws]

Those valuations don't really mean that much. It's simply number_of_coins * price. Saying it's worth $1bn does not mean you can take all of those coins and turn them in for $1bn. If you owned a large portion of the coins and tried to liquidate them at that price, the price would quickly drop.

The ICO funding model is new technology.

[taysic]

When the users buy into the ICOs don't they send ETH or Bitcoin thus giving the founders a currency which is far more stable and less likely to tank?

[JamesLeonis]

I'm an active Ether developer working on several independent projects. I also have some investment coins in Ethereum and Bitcoin.

Here are my concerns:

* These ICOs are raising Series D level capital from investors at Seed Round risks. So while we can expect that most of these will fail, it's tens of billions of value erased. The market cap for Ethereum (and their ICO tokens) is close to $100bn[1], largely in the last 3 months. It's one thing when 90 startups at $1M in investments fail. Not when they're a billion a pop. The total market cap for Cryptocurrencies nearly doubled in the last month.

* September has over 100 additional ICOs slated[2].

* Most of these ICOs are a slick website and a PDF document. Take decentraland. It raised $25M in 35 seconds. Here's their website[3] and their PDF plan. It's a virtual reality game, and they spend twice as many pages talking about their token economy than the entire engine of their platform. Here's how they're going to "solve" their decentralized content distribution:

> The current solution uses the battle-tested BitTorrent and Kademlia DHT networks by storing a magnet link for each parcel. However, the Inter-Planetary File System (IPFS) provides a compelling alternative as its technology matures.

> However, hosting these files and the bandwidth required to serve this content has significant costs. Currently, users of the Decentraland P2P network are seeding the content without compensation and out of goodwill. However, in the future, this infrastructure cost can be covered by the use of protocols like Filecoin [...]

They similarly gloss over 3D meshes, sounds, scripting languages with payment (!!!), voice chat, etc. I could go on. Out of 7 people officially involved, only one is a self proclaimed tech. This is MOST ICO proposals. Remember that got $25M in 35 seconds. Does this look like a proposal for a serious investment? I'm shitting on Decentraland, but they are hardly alone in the lack of clarity or seriousness for such an ambitious project.

* On a pragmatic level, the constant shift in value of the various coins makes it nearly impossible to build stable marketplaces to actually USE the tokens. I have to shelve a bill-and-rent-splitting app for now because I can't trust the token not to drop/inflate in value over a day. The same thing with attempting to price a good or service over more than a week, as seen by the spread on Ethlance[5].

* Fraud, scams, phishing, hacks, it's all there. Half the time these ICOs have their websites and email lists hacked, and the hackers send out pre-ICO notices and pilfer coins. Happens all the time. Enigma, the security ICO, was comically hacked when the founder used the same password as Ashley Madison[6].

You might notice I haven't talked about the tech much. Honestly it's some of the coolest stuff I've seen ever. Or at least since BitTorrent. The concept of machine-managed economic transactions, housed in a distributed, secure, and consensus-based public ledger, has the power to disintermediate in ways not possible since the Internet first started. But god I wish people would stop setting money on fire.

[1]: https://coinmarketcap.com/charts/

[2]: https://www.coinschedule.com/

[3]: https://decentraland.org/

[4]: https://decentraland.org/whitepaper.pdf

[5]: https://ethlance.com/#/find/candidates?cat=10&o=0&xhr=10

[6]: https://techcrunch.com/2017/08/21/hack-enigma-500000-ico/

EDIT: I can't type grammar good.

[aqsheehy]

How positive are we meant to be about out right scams and Ponzi schemes?

[brndnmtthws]

By that logic, you can say the same thing about pretty much every single silicon valley startup.

[aqsheehy]

Yes, skepticism is healthy

[Ologn]

Some startups will grow very large and become very valuable and will stay around for a long time.

No cryptocoins will be around for a long time. They are all going to crash to near worthlessness, including Bitcoin and Ethereum.

Also the idea of Webvan was not a bad one, they were just too early. People put too much money in too early to a good idea.

Cryptocoins are not an idea before its time or of its time. It is inherently a worthless thing. Just like quack medicine was worthless a century ago and is worthless now.

[aqsheehy]

Bitcoin has value, you need it to buy drugs online.

[6nf]

> They are all going to crash to near worthlessness, including Bitcoin

Why?

> Cryptocoins are not an idea before its time or of its time. It is inherently a worthless thing

That's not true. Coins do things you can't do otherwise. Instant peer to peer value transfer over the internet for example.

[Ologn]

> Instant peer to peer value transfer over the internet for example.

You can't do a value transfer when there is no value.

[function_seven]

> You can't do a value transfer when there is no value.

Fortunately for Bitcoin, there is value. And as long as people continue to derive value from its function, it will continue to deliver it.

[hndamien]

It is a bank, so I will keep buying.

[mrep]

Are you suggesting cryptocurrencies are banks? Please explain that logic. I also suggest you read up on the tulip mania [1].

Note: I do think bitcoin has value for illegal transactions but that's the only place I see cryptocurrencies solving a problem more efficiently than current solutions.

[1]: https://en.wikipedia.org/wiki/Tulip_mania