[seibelj]

Ethereum is a blockchain for general purpose computing. It’s not a scam, it delivered what it promised. MakerDAO, mentioned in the post, is a cool and useful project running on Ethereum.

I agree with you about the core use case for Bitcoin currently being an escape from the government-forced financial system. It pierced the monopoly successfully. But the Ethereum screed is just lies at this point, Ethereum is one of the good ones.

[jkhdigital]

"a blockchain for general purpose computing" is precisely the problem. Nobody wanted or needed that. Bitcoin was created as digital money. A bunch of people mistakenly thought that the best "feature" of Bitcoin was its programmability, and doubled down on that by allowing arbitrary computations in transactions, which just opened up the Pandora's Box of attack vectors.

And you can't really say "Ethereum is one of the good ones" if it literally enabled the wholesale defrauding of billions of dollars from ill-informed speculators by providing the platform for those fraudulent ICOs.

[orbital-decay]

>Nobody wanted or needed that.

I'm sure everybody just wanted a faster horse, but I certainly do have some good uses for distributed computing (with a larger bandwidth than Ethereum can provide, though). And any new tech can be seen as the "Pandora's Box of attack vectors" and a fraud platform, including the internet itself.

Not every experiment is a scam.

[snitko]

What has it delivered exactly? Where is it being used that's not itself a scam? MakerDAO - which seems to be some sort of token issuance thing - has no real world mechanism for enforcement. That is, if an autonomous decentralized organization issues a token, who's to make it pay you dividends or enforce your rights for whatever this token represents? This is the thing that ETH fanboys are completely delusional about. Securities only work because state regulators enforce the laws guaranteeing their value.

[lostmsu]

> That is, if an autonomous decentralized organization issues a token, who's to make it pay you dividends or enforce your rights for whatever this token represents? This is the thing that ETH fanboys are completely delusional about. Securities only work because state regulators enforce the laws guaranteeing their value.

I thought the point of this would be that the contract code, that defines organization would automatically pay you back in whatever. No need in regulators with laws, that random judge can overturn any day. And that is the whole point of it...

[EGreg]

How about being able to raise money for a project, and whitelist investors, without people having to trust you to send them the securities after they send you the money, and them seeing exactly what is being done with dilution or whatever instead of having to trust?

Or having a fair pricing model as investors buy in using a bonding curve, eliminating priced rounds and other crap, pg said that’s the “future” - Ethereum makes it possible.

All this is only possible because enough gateways trade ETH that it can now be considered money. And it can be used as an input to tons of cool smart contract things. You couldn’t do this stuff 10 years ago, at best you’d have some sorta hookup to Stripe API and banks.

[snitko]

Explain the mechanism by which people who invest can exercise their rights as stakeholders, receive dividends etc? Who's to enforce they actually own anything? What's stopping this project from taking all the money and producing nothing (which is exactly what happened with pretty much every ICO out there)?

[camdenlock]

As far as I understand it, all that matters is the logic of the smart contract code, and possession of private keys. Humans are removed completely from the process. If you own the private key involved in a transaction, then that is the guarantee you’re looking for. All that’s left is to examine the smart contract code in order to figure out what sort of contract to which you’re now a cryptographically-guaranteed party.

No person enforces anything. Only the math does. And I think that’s entirely the point.

[buboard]

> Humans are removed completely from the process

Do you have an example of an organization that works this way, 100% automated? It's hard to think of a system that can be 100% foolproof, there is always someone somewhere that has to trigger something manually, and that 's the weak spot.

[camdenlock]

Nope, I don’t. And I’m not a particular proponent of this approach. This is just how I understand it.

I think the ultimate goal is to have smart contracts which don’t require any of the human intervention you’re mentioning. How that’ll be possible remains to be seen...

[EGreg]

What’s stopping a YC startup from going bankrupt after having disclosed tons of risks in a PPM? At least here we know exactly how much was invested.

Why does everything have to be about voting and receiving dividends?

Amazon’s shareholders don’t do either one but value the shares greatly.

And dividends can be programmed into the smart contracts too. Want them in DAI, USDT, ETH? You can! One way would be for the company to put them into a new smart contract that refers to the other smart contract which stores who owns what share, at that particular time. You could also program tons of fancy rules like a UBI from the company or whatever. They would also be distributed fairly.

[snitko]

Explain the mechanism. How do I know this organization made this much money and that the amount I'm being paid is fair in regards to their profits? How can this code track all the money the company is making? It's not like they're being paid with their tokens.

And for minority of projects where indeed they're expected to be paid using their own token, how do I know the company owners don't run away with all the money they raised? Because this is exactly what happened with 99.99% of ICOs created on Ethereum. Now, of course scams happen in the traditional financial system too, but not to the same extent, because there's an enforcement mechanism in place. So, following your example, what stops a YC company from declaring bankruptcy and spending all the money on things founders want for themselves? Well, an investigation may be launched: founders are known, they can be found, prosecuted and sentenced. With tokens issued online, where you may not even have a company registered or have a company registered in some obscure jurisdiction, there is very little incentive NOT to steal the money. And, once again, that's exactly what happened during the ICO craze, which Ethereum is directly responsible for. A lot of people lost a lot of money funding scammers - and nobody blinks an eye!

I don't argue that everything has to exist within the traditional financial system. On the contrary. But in order to provide real value and allow investors to have some level of certainty that at least their money won't be outright stolen, the solution MUST include an enforcement or incentive mechanism strong enough to deter scammers.

[buboard]

valid points, however, do you think it's impossible to have such a 100% on-chain business ?

[Acrobatic_Road]

>That is, if an autonomous decentralized organization issues a token, who's to make it pay you dividends or enforce your rights for whatever this token represents?

...the smart contract? Maker pays interest (via buy and burn). It's really not that different than a corporate board agreeing to pay dividends. We don't need a state regulator to pay ourselves, do we?

[seibelj]

USDC is not a scam, and it’s on Ethereum. You are too biased, it’s off putting.