Filecoin Breaks Record for ICO Funding
coindesk.com
coindesk.com
So many funds will prove a big competitor though, and sequoia Investments is well known for its success with investing in the past. But who wouldn't invest at such a discount (read article: pre sale discount is massive)
I think even more than the benefit of money (to hire talent,) Filecoin is benefitting from the advice and connections from their investors!
- https://medium.com/@twobitidiot/ico-ethics-filecoin-short-te...
- https://medium.com/@ryanshea/the-economics-of-filecoin-a8d82...
"..all our work has been funded by under $3.5M. We know how to deploy capital effectively."
Then don't raise capital like hell. Pure greed.
Money quote from your link:
"Call me old fashioned, but wanting to raise half a billion dollars for a pre-product endeavor is absolutely fucking insane."
Magic Leap ($1.4B), Theranos ($720M), Color ($41M), Clinkle ($25M)
That article sounds like mostly sour grapes. The whole thing can be summarised as "How dare they give early investors discounts, when I wasn't invited to invest at the same time!!" This is followed by "how dare they raise money, and then admit they don't actually need as much to run the business!!"
The guy just sounds pissed other people are making more off of this then he will.
Honest question?
In my mind, it's not especially different from an IPO where banks put their names on the line to build the book and then get a percentage of the offering for effectively being the marketer.
Why wouldn't they? It is pretty standard to raise different rounds at different valuations.
It's like a land was up for sale. You buy it at x, dig it a bit to see it's covered with gold then put it back on sale for 8x.
(Of course you may be fooling everyone that it's covered with gold but it's really not.)
so its an ok criticism in the token sale space, but it is a different and unnecessary standard
All it takes is a single person with a few unmetered boxes and a proxy to B2/S3/etc to effectively pressure the price down to cloud storage levels.
As a user, how can I confirm that my data is being replicated properly if there are few big users? One of them might have multiple identities backed by a single cloud account, and if they stop paying their bill and run off with the coins all the data is lost. This will be those darknet market scams all over again.
Aside from the oodles of money that the early adopters will make, what am I missing?
Edit: Thought of another issue. The protocol replicates data, so if we assume a cloud provider does 3x replication, your data will be replicated again by the storage protocol. The extra overhead means that once the economies of scale kick in, only big players that can manage B2 style racks themselves will be able to host economically, just like how Bitcoin mining has consolidated on large mining operations.
I don't get this. Suppose I have 1TB of data that I want to back up. That's $5/mo with Backblaze. I can get an external 1TB drive for ~$60. Some even have 3-5 year warranties. $60 buys me one year with Backblaze. There's a good chance the hard drive will last much longer.
An external drive also gives me the benefit of higher data transfer rates. I could even splurge and for another $50-60 buy a small fireproof safe to store it in. Then I'm pushing two years with Backblaze. The external drive approach also has the side benefit of not having to trust a third party (yeah, I know, encryption). It seems like a much better deal to me. Does this mean that I am an unreasonable person?
If this makes you queasy, you could always buy a second drive. Two 1TB drives and a fireproof safe, that's equivalent to three years with Backblaze. Still seems pretty reasonable to me.
This is such a ridiculous premise that wastes tens of hours (at least) just to save $10 that I'm pretty convinced you're trolling.
And, what kind of connection do you have that allows you to upload 1TB in 5 minutes? That's spectacular. An ideal gigabit connection is going to take you a good two hours. Even that would be pretty amazing.
I have 50tb of storage in my home server. The electricity cost for this box is about $35 a month.
In my case it is so much strorage that it saves money, but if you have less storage and still need a dedicated box, it would be less so.
1. In your setup, you don't have offsite backup which opens the door for all kinds of potential data loss scenarios.
2. Backblaze's software continuously backs up over the internet, which is not trivial to do with free software.
I'm not even sure what you mean by 'run off with the coins', as the hosts don't really have any coin to run with. They should only earn when they fulfill the contracts. I'm not sure about Filecoin, but in Sia hosts are required to put up a 'collateral' which they lose if they don't fulfill the contract.
Edit: Running multiple accounts from a single datacenter will increase the hosts risk to lose the files and money.
As far as "running away", the miner is paid by the network for proving they are storing some data at a certain time. It's not like a storage contract for someone's individual data paid up front.
You're assuming that all the people selling storage will be buying hardware for that sole purpose. In reality, many regular people have some free space on their computer that costs them "nothing" and they can sell very cheaply.
Is it possible right now to get some hard numbers on what a person would earn if they had say 1TB disk space and 25mbps available?
Filecoin creates a market for storage. The price of B2 is an important variable in this market, because it creates an arbitrage opportunity where you can use B2 to mine Filecoin.
But why not just use B2 directly? Three reasons.
One, B2's replication isn't perfect (at least, not as perfect as S3), and both B2 and S3 have nonzero political risk (a sovereign could order them to destroy your data). B2 plus a layer of blockchainy replication could be quite attractive to some low-price-sensitivity customers.
Two, to work with B2, you need a business relationship with B2. This is obviously no big deal in the normal world of multiuser, single-server apps that we live in today.
However, if we can somehow migrate to a world in which users have their own servers, it's much easier for those personal servers to have simple, maintenance-free automated relationships with decentralized token-based services. Think about how many centralized service providers a typical startup has relationships with (and how much they cost). This design can't really be scaled down from industrial computing to personal computing.
Three, Filecoin has an interesting consensus design in which the word "miner" is used in two senses: "miners" participate in storage transactions, and also receive block rewards based on proof of stake, where stake is defined as the storage of the whole system. The effect of this on the economics of Filecoin is extremely hard to predict, but it can only be positive.
The one point that seems unresolved about the economics of Filecoin is this interesting interaction between FC as a cryptocurrency and FC as a payment mechanism in a storage market. It does seem that you could take FC's storage market and port it to an existing blockchain. But there may be more subtle technical requirements from a blockchain -- a storage market is certainly a demanding application.
>We introduce Proof-of-Replication(PoRep), a new kind of Proof-of-Storage, that can be used to prove that some data has been replicated to its own uniquely dedicated physical storage.
I'd be partial to a "proof of location" system myself. You know that two computers are physically far apart if they respond to pings in the right way, as limited by the speed of light.
This presupposes that there are no other obstacles like DPI as you'd expect in a place like China or capacity issues due to a broken undersea cable causing traffic to be re-routed to alternate routes.
Not really disagreeing with you, merely pointing out that "proof of location" isn't as easy to determine in the real world where packets are routinely routed through different jurisdictions.
Due to the reality of internet-routing, everything is going to be a little bit "up", since we can't actually measure the distance between two points via speed of light.
Probably also useful for routing things.
And what do you need this much money for?
For example, who are the poeple lending that much money ? Why are they doing it ? Is this whole thing some kind of money laundering or tax evading scheme ? Is it related to central banks having 0% interest rates, etc..
You only know what happens after some time, but you always end up knowing.
Bitcoin and other crypto-coins are also created without the gold or silver backing of course... they just aren't issued in quite the same way.
The ability to "shape shift" your declining currency to better ones assumes you can out-speculate the market in knowing when to exit, and which coins to buy.
And maybe filecoin is an exception - most ICOs seem a little scammy at best, with value based purely on speculation and scarcity.
Libertarians should be thrilled. Fractional Reserve Banking represents millions of individual decisions around the world to lend money, which does not require the Federal Government. Anarcho-Capitalists should be pressing for zero regulation and allowing anyone and their mom to issue any amount of credit money.
In the age of technology, this doesn't sound as scary as it would have been in the past, when you had to keep the relative credit of 100000 currencies in your head. For example, the Trustlines network, or Interledger protocol, or Lightning network, will allow people to transact using Trustlines between each other. VISA and other financial merchants may use Trustlines as well.
Think about VISA issuing banks, etc. They give you a credit card and they don't know how much you're going to spend on a given day. That credit line is yours. That card is not fiat so the stores don't have to accept it. But now, many do, because they believe the VISA system and the issuing bank will make good on the purchase and exchange their "VISA currency" for money. Same with PayPal, WeChat, AliPay, Venmo, etc. They all have fiat reserves.
I personally think regulation is a welcome response to the Free Banking Era and wildcat money, but either way, many communities would benefit from issuing their own currency: Detroit, Greece, etc. Bristol Dollars have Pound reserves and Bristol issues its own currency.
I think that it would be really cool if communities could issue their own currencies. Read this: https://qbix.com/blog/
The linked blog mentions Detroit, but doesn't go into much detail.
Depends on your definition of "fake"? Anyone can ICO a new "real" crypto coin, but what gives those coins value beyond speculation?
If I make "klipt-coin" (which would cost me nothing but a little time) will you buy it just because it uses cryptography? If so, I have a crypto-bridge to sell you.
Back then, solely founding a bank to 'jump on the bandwagon' earlier than others was seen as something much much more important than to have that bank functioning properly. Now, none of those first wave banks remain prominent. Out of roughly 2000, only 20 function today.
It's absolutely dead in India, for instance, a market of 1.4B people who would, presumably, be Bitcoin's target customers
Localbitcoin volume in India is sharply increasing: https://coin.dance/volume/localbitcoins/INR
Other "trading platforms are witnessing unexpectedly high traffic and seem to be growing at an exponential rate" http://www.dqindia.com/growth-and-future-of-bitcoin-in-india...
Activity is such that the Indian government is looking into (finally!) regulating it: https://cointelegraph.com/news/suddenly-bitcoin-to-be-offici...
Bitcoin in India is in no way "absolutely dead."
I can't recall the last time I saw an Indian website accept Bitcoin
«I can't recall the last time I saw an Indian website accept Bitcoin»
One of the best use case of Bitcoin is for informal person-to-person payments, eg. sending money to friend/family. No merchants involved.
Here is an attempt at the payment side of things: https://coinjournal.net/ripple-opens-new-office-india-eyes-m...
Either they are stupid and abused , in such a large number that you can witness million dollars ICO every week (which means a really large scam is actually being organized), or there's another fact we're not aware of.
"Many individuals grew suddenly rich. A golden bait hung temptingly out before the people, and, one after the other, they rushed to the tulip marts, like flies around a honey-pot. Every one imagined that the passion for tulips would last for ever, and that the wealthy from every part of the world would send to Holland, and pay whatever prices were asked for them. The riches of Europe would be concentrated on the shores of the Zuyder Zee, and poverty banished from the favoured clime of Holland. Nobles, citizens, farmers, mechanics, seamen, footmen, maidservants, even chimney sweeps and old clotheswomen, dabbled in tulips."
[1] https://en.wikipedia.org/wiki/Tulip_mania#Mackay.27s_Madness...
"His account was largely sourced from a 1797 work by Johann Beckmann titled A History of Inventions, Discoveries, and Origins.[11] In fact, Beckmann's account, and thus Mackay's by derivation, was primarily sourced to three anonymous pamphlets published in 1637 with an anti-speculative agenda.[36] Mackay's vivid book was popular among generations of economists and stock market participants. His popular but flawed description of tulip mania as a speculative bubble remains prominent, even though since the 1980s economists have debunked many aspects of his account."
Also see the "Modern views" section. Basically, as far as anyone can tell Mackay's account of tulip mania is mostly bullshit.
https://qz.com/114753/meet-the-family-who-lost-100000-when-t...
The only person i know that trades crypto currencies do it with pocket money. But the sums we're talking about here are about something a bit different (i suppose).
Yes, money is very cheap right now which creates a rush to invest in anything - see for example [1].
[1] http://alphahistory.com/weimarrepublic/1923-hyperinflation/
I'm not saying they're necessarily dishonest but it shows that the current ICO system is rather broken. Instead of slowly building up investments in rounds as your technology proves itself ICOs incentivize you to raise ridiculous amounts of money right at the start.
How popular? Who uses it?
Not saying everyone does this, but I doubt my behaviour is rare and I wouldn't read too much into github stars as they are too cheap to create. Look for actual use.
The most stared project I helped create has +5k stars from hitting the HN frontpage a few times, and there are very few actual users (by now probably none).
IPFS has compared to that much healthier growth, and for the number of stars they have a pretty decent userbase from what I can gather.
My biggest client at the minute is dtube.video but there are audio "clones" and document based clones in development that I'm aware of too.
Especially for a new a fairly new protocol, I'd say IPFS is popular.
Instead of proof of work mining that burns tons of electricity, storing and distributing files will become a new kind of useful mining.
That's a big deal.
There seems to be zero interest in creating something new and open like bitcoin but instead make as much money as possible.
Functionally it's basically BitTorrent with magnet links.
Also, it's not actually finished or production quality yet.
This is why people are putting as much money as they can. The total crypto market cap is 160B, which is basically nothing. There are now future Apple, Google and Microsoft stocks in crypto traded for pennies.
In the investor groups I am in totally anonymous strangers are pooling multiple hundreds of thousands of dollars for ICO funds, all based on trust. The idea is to send as much money as possible as a single transaction with insanely high transaction fees to get ahead of everyone else before the hard cap is reached.
If you have some amount of money you don't mind losing just buy some BTC, ETH, LTC, NEO, GAS, OMG, PAY, XMR, BAT, LSK, ARK and forget about them for a few years. November will be a good time to buy in because the uncertainty about the BTC hard fork will make people exit to fiat.
Thank me later.
As for Filecoin - their ICO cap is unreasonable, this is too much money, as soon as their tokens hit the markets the price will drop to nothing.
Is this just purely speculation?
For "B", the coins are highly divisible and the costs of usage will be driven the market. You probably won't need $1k to use the network, the same way you don't need ~$4500 to use Bitcoin.
We're building OpenBazaar on top of IPFS to distribute user's stores. But that relies on people visiting and seeding each others stores. With Filecoin, vendors will be able to pay other users to seed with reliability.
Disclosure: We work closely with Protocol Labs but I do not own any Filecoin and don't plan to until it can used for applications like ours.
First of all, is CoinList a registered broker-dealer with the SEC?
The SAFT can take advantage of the 506(c) rule which the JOBS act introduced, allowing you to raise unlimited amounts from accredited investors, and do general solicitation. But I believe it requires the securities to be issued through a registered broker-dealer.
This guy seems to believe that the token issuance itself is not covered by 506(c) if the token is a security. Where does his reasoning come from?
https://prestonbyrne.com/2017/08/04/thoughts-on-the-saft/
But even when the next security is issued to these investors, will they be able to trade them? The Exchange Act regulates the sale and interstate (electronic certainly would be) exchange of securities.
If the tokens are later considered securities, then they may not be tradeable. However, I doubt that, in practice the SEC will go after anyone in particular on the exchanges, since there will be tons of participants by that time, and especially since the project has taken the most amount of effort to comply with the regulations, and many others didn't. All it might do is halt the trading, and confiscate the tokens of whoever is trading at that time. And the exchanges have already been trading all sorts of tokens, so they are more likely to take this one.
https://www.crowdcheck.com/sites/default/files/CrowdCheck%20...
Where did you confirm they have to be one?
Distributed computation and storage can be made more reasonably priced by doing the work off-chain (that is, not on the EVM) and then putting some sort of proof that the work was done on-chain.
Most ICOs are unregistered securities offering that are violating US law by going public without an effective registration statement in place with the SEC, or an exemption therefrom.
Some ICOs may be legal to the extent they are not 'securities', I.e. the argument that you are buying a useful network token, not a security. In my opinion, this argument is BS for the majority of ICOs.
Here's who I think should really be issuing securities: local communities. There's an exemption for municipal securities in the Exchange Act, although I think later it was plugged (lawyers anyone?)
That's what my company is building. A platform to help communities issue their own currency, like Bristol does. If Detroit had it, it probably wouldn't have gone bankrupt.
Would like some feedback: https://qbix.com/blog
What we still haven't figured out is, why would investors buy the tokens if they not increase in value, but perhaps the opposite? It can't be because of any "over and above" value to the investor, in the form of capital gains, etc. But if the communities buy the tokens, then that's a product that they issue to their members. Like kickstarter, it becomes a product and not a security.
On your second point self-sovereign IDPs are not going to become a thing, it's a huge chicken and egg problem, consumers don't care because there's no merchants on board and as a result merchants don't care.
The only real option is to extend out from something that already exists, has a large customer base, and that you true to be secure. That way you solve for the chicken and only need to make an egg. It could be social media (FB, LinkedIn, Insta, SNAP), private (teleco, bank, ISP) or gov but the point is ou already need that critical mass as identity is a secondary benefit to a consumer (at least right now).
It's possible that I'm missing something or approached it with the wrong expectations, but I'm underwhelmed by that side of it. E.g. I looked into using it on my website, but can't find an actual benefit to doing so.
Sure they have a Javascript implementation they're developing in parallel, but in a world where most end user devices are battery powered what the hell good is that for anything serious or interesting? The requirement of a daemon to achieve reasonable network performance is already asking a lot of anything with a battery indicator. And at the same time the stability/reliability's still not there to use it for infrastructure, which is the other way they could have taken it (though they seem to stress that it's for end users).
Again, just a very frustrating project to follow. Oh so close to being awesome. Maybe in another 6 months...
Not every investment will succeed which is the point of risky startup investment. And USV has an incredible amount of success (Twitter, Kickstarter, Cloudflare etc)
SoundCloud? Just look at the recent downround.
The 'incredible auccess' is decades ago. USV had its best times.
1. It is as scam, why the regulators don't do anything!
2. Regulators added company to warnings list - people say it is not enough
3. Regulators launch formal investigation - people still say it is not enough but another group complains that government tries to interfere with entrepreneur
4. Some branches are closed shut down - people say it is regulators fault that caused massive withdraws.
5. Pyramid scheme company is dead, everyone complains that regulators didn't do enough and reacted too late.
also:
Not as well received though https://www.youtube.com/watch?v=Lrv8i2X3gnI
The credibility of the technology or adoption of it by users isn't really important at present.
So just a bunch of people holding BitCoin selling <1% of their holdings for diversity would cover it.
It is an error to compare it to an investment in a product. It isn't. ICOs are different.
I reckon it is a lot of rich early crypto investors who will happily throw $1 million into each of 20 different new cryptocurrencies that look the most plausible.
This one looks plausible, solves a real world problem, and covers a different set of use cases to Ethereum or BitCoin. It has VCs watching over it for management mentoring and control.
So worth the diversification of portfolio. Esp for someone whose crypto portfolio shot up a load this year.
Why are ICOs different? Because anyone (in this case, anyone acredited) can get in early. How many people in 2003 would have invested in 20 promising social networks if they could have?
No file storage startup with minimal operations needs or deserves this much money. They’re not in an industry with high initial fixed costs and they’re not labor-intensive like an Uber or Instacart.
If you watch closely, the increased prices payed by sports teams are calculated in such a way to lower operating profit for the "team" (i.e . company) to a tax friendly point.