Official Response to “Bancor Is Flawed”(blog.bancor.network)
blog.bancor.network
Official Response to “Bancor Is Flawed”
https://blog.bancor.network/this-analysis-of-bancor-is-flawed-18ab8a000d43
102 comments
When they started off by saying it was going to be a "line by line response" I knew they weren't going to be applying the principle of charity[0] and addressing the most persuasive form of Sirer's argument and would be dismissing and—as you say—nitpicing his argument or side stepping the real issues.
[0] http://philosophy.lander.edu/oriental/charity.html
[0] http://philosophy.lander.edu/oriental/charity.html
This is... not a good response. I've been reading Emin Gün Sirer for years, and his analyses have been very sharp. He's not always right, but he's right often enough that I take him seriously. I don't think it's reasonable for the Bancor people to ask the world for millions and millions of dollars and be sad that people are not always warm and fuzzy in their responses.
It reminds me of those people who ask for feedback on something they wrote and then get upset when you give it to them. They didn't actually want feedback; they wanted compliments and ego-boosting. That's also a valid thing to want and ask for from friends when you're struggling through the writing process. But once you publish, the warm fuzzies end. Critics are not there for authors; they're working for readers.
It reminds me of those people who ask for feedback on something they wrote and then get upset when you give it to them. They didn't actually want feedback; they wanted compliments and ego-boosting. That's also a valid thing to want and ask for from friends when you're struggling through the writing process. But once you publish, the warm fuzzies end. Critics are not there for authors; they're working for readers.
I can't see anything substantial in this official response.
I am mostly seeing a mild corporate language about how they want to build the future, how their team has credentials, how they opened up for feedback on many places (in the past, not now, convenient isn't it?), and there was zero substance on the article up until the first quotes, and it doesn't get better from there on as well.
I see nothing they defend their current business with. They mostly appeal to the past.
And not even that, they admit they've been doing other cryptocurrencies in the past. To me that doesn't you mean you're experienced in the area and you have what to offer. To me that means you're now a seasoned veteran who can swindle people with a smile while wearing a suit and using soft language.
Sorry, Bancor. You need to write a substantive article to be taken seriously.
I am mostly seeing a mild corporate language about how they want to build the future, how their team has credentials, how they opened up for feedback on many places (in the past, not now, convenient isn't it?), and there was zero substance on the article up until the first quotes, and it doesn't get better from there on as well.
I see nothing they defend their current business with. They mostly appeal to the past.
And not even that, they admit they've been doing other cryptocurrencies in the past. To me that doesn't you mean you're experienced in the area and you have what to offer. To me that means you're now a seasoned veteran who can swindle people with a smile while wearing a suit and using soft language.
Sorry, Bancor. You need to write a substantive article to be taken seriously.
If there was a bad response to a critic, this will be it. While Sirer's post was a bit terse, this response doesn't earn brownie points by going the same route.
First, they start off as many "responses" in crypto currency seem to start that is - saying this is all FUD and the critic should stop spreading FUD. They also take the Trump route, not a great choice of words - "fake news".
Where I lost them was when they equated themselves as being so important to crypto currency space that critiquing them can be used to tag the whole space as being a giant ponzi scheme.
On still persisting, I found their clarification on "asynchronous price discovery" very funny. The point of a market making algo is to "make the market" ie they have to act as counter parties to each trade irrespective of whether there is a buyer or a seller (ie not a price matching algo). The price discovery in that process happens on how the market making algo is written.
Though I guess being programmers and writing a document for programmers they had to go with a technical term. But with someone who understands economics on their team, they should have done away with it.
All said, the most important part of a market making algo is not to provide liquidity or smooth prices. As Sirer put it, smoothing prices is a bad idea. If something is volatile it is because the market deems it to be so. Going against the market is not good.
I hope these guys watch this video carefully to understand how trading works: https://www.youtube.com/watch?v=RLySXTIBS3c
First, they start off as many "responses" in crypto currency seem to start that is - saying this is all FUD and the critic should stop spreading FUD. They also take the Trump route, not a great choice of words - "fake news".
Where I lost them was when they equated themselves as being so important to crypto currency space that critiquing them can be used to tag the whole space as being a giant ponzi scheme.
On still persisting, I found their clarification on "asynchronous price discovery" very funny. The point of a market making algo is to "make the market" ie they have to act as counter parties to each trade irrespective of whether there is a buyer or a seller (ie not a price matching algo). The price discovery in that process happens on how the market making algo is written.
Though I guess being programmers and writing a document for programmers they had to go with a technical term. But with someone who understands economics on their team, they should have done away with it.
All said, the most important part of a market making algo is not to provide liquidity or smooth prices. As Sirer put it, smoothing prices is a bad idea. If something is volatile it is because the market deems it to be so. Going against the market is not good.
I hope these guys watch this video carefully to understand how trading works: https://www.youtube.com/watch?v=RLySXTIBS3c
> Where I lost them was when they equated themselves as being so important to crypto currency space that critiquing them can be used to tag the whole space as being a giant ponzi scheme.
To be fair, the whole ICO scene of the past few months largely is a bubble phenomenon: an incoherent idea, incompetent code, and really obviously just creators who see easy money selling to buyers who see easy money. The critique is widely applicable. There are non-bogus ICOs, but mostly it's complete air.
To be fair, the whole ICO scene of the past few months largely is a bubble phenomenon: an incoherent idea, incompetent code, and really obviously just creators who see easy money selling to buyers who see easy money. The critique is widely applicable. There are non-bogus ICOs, but mostly it's complete air.
Agreed but the same could be said about VC money and unicorns like Uber, Snap Inc. etc. It will be laughable if say Uber's CEO equates bashing of Uber's tech or business model as a threat to all unicorns.
One of the bigger problems I see with these ICOs is they that they don't offer much in terms of business viability other than maybe "cool" tech. I have been thinking of a purely profit focused contract(coin) on top of ethereum network. Something which provides value to people and the investors as well. Unfortunately not a programmer so it has to remain a plan forever.
One of the bigger problems I see with these ICOs is they that they don't offer much in terms of business viability other than maybe "cool" tech. I have been thinking of a purely profit focused contract(coin) on top of ethereum network. Something which provides value to people and the investors as well. Unfortunately not a programmer so it has to remain a plan forever.
Have you seen EOS.io? Here's what the white paper says it is:
> The EOS.IO software introduces a new blockchain architecture designed to enable vertical and horizontal scaling of decentralized applications. This is achieved by creating an operating system-like construct upon which applications can be built. The software provides accounts, authentication, databases, asynchronous communication and the scheduling of applications across hundreds of CPU cores or clusters. The resulting technology is a blockchain architecture that scales to millions of transactions per second, eliminates user fees, and allows for quick and easy deployment of decentralized applications.
No, that doesn’t end "and a pony."
Sounds great! So I buy some tokens, and I get ... from the FAQ:
> The EOS Tokens do not have any rights, uses, purpose, attributes, functionalities or features, express or implied, including, without limitation, any uses, purpose, attributes, functionalities or features on the EOS Platform.
The legal EOS Token Purchase Agreement is a frankly amazing document that you need to read all 15 pages of. US citizens or residents are not to buy the tokens (though EOS is sure they don’t constitute a security, honest SEC); the tokens are defined as not being useful in any manner; forty-eight hours after the end of the distribution period, the tokens will no longer be transferable; the buyer is not buying them for speculation or investment.
https://eos.io/purchaseagreement/EOS%20Token%20Purchase%20Ag...
They're doing one billion tokens, dribbled out slowly over a year, at a price of "how much money do you have to throw at us". Really, that's the price.
'Coiners are still lining up to buy them. "Whatever these people do, I'm going all in. Nuff said." https://bitcointalk.org/index.php?topic=1904415.0
> The EOS.IO software introduces a new blockchain architecture designed to enable vertical and horizontal scaling of decentralized applications. This is achieved by creating an operating system-like construct upon which applications can be built. The software provides accounts, authentication, databases, asynchronous communication and the scheduling of applications across hundreds of CPU cores or clusters. The resulting technology is a blockchain architecture that scales to millions of transactions per second, eliminates user fees, and allows for quick and easy deployment of decentralized applications.
No, that doesn’t end "and a pony."
Sounds great! So I buy some tokens, and I get ... from the FAQ:
> The EOS Tokens do not have any rights, uses, purpose, attributes, functionalities or features, express or implied, including, without limitation, any uses, purpose, attributes, functionalities or features on the EOS Platform.
The legal EOS Token Purchase Agreement is a frankly amazing document that you need to read all 15 pages of. US citizens or residents are not to buy the tokens (though EOS is sure they don’t constitute a security, honest SEC); the tokens are defined as not being useful in any manner; forty-eight hours after the end of the distribution period, the tokens will no longer be transferable; the buyer is not buying them for speculation or investment.
https://eos.io/purchaseagreement/EOS%20Token%20Purchase%20Ag...
They're doing one billion tokens, dribbled out slowly over a year, at a price of "how much money do you have to throw at us". Really, that's the price.
'Coiners are still lining up to buy them. "Whatever these people do, I'm going all in. Nuff said." https://bitcointalk.org/index.php?topic=1904415.0
> but the same could be said about VC money and unicorns like Uber, Snap
The same cannot be said about VC money going to unicorns. Those companies provide in-demand services that people use and enjoy, even if the business model is tenuous, there is clear value created by the services. Not true of ICOs which create no value.
The same cannot be said about VC money going to unicorns. Those companies provide in-demand services that people use and enjoy, even if the business model is tenuous, there is clear value created by the services. Not true of ICOs which create no value.
My bad. My phrasing should've been better. I am not implying anything on the value side of ICO vs VC backed real world companies.
I am just pointing out that - No company is an island. Criticizing one doesn't implicate the whole industry as the Bancor guys try to portray.
I am just pointing out that - No company is an island. Criticizing one doesn't implicate the whole industry as the Bancor guys try to portray.
> There are non-bogus ICOs
Where?
Where?
The Civic ICO struck me as a sincere attempt at using an ICO for actual not-intrinsically-fraudulent fundraising. Their product is still a weird misapplied but-with-blockchain idea that I can't see how it'll work, but the ICO itself didn't make me go "wtf".
Fraudulent doesn't mean there is no product. It means that the founders are well aware that the token is useless but sold it to the general public anyway, under some sort of pretense of an investment while at the same time it is clearly not a security.
I can not speak for every jurisdiction of the world, but I believe any lawyer would advise against marketing non-securities as investment if you want to stay out of jail.
Civic specifically has absolutely no use for a token. The service they offer would look completely identical without the token. I believe the official explanation why they did anyway it was to "harness the enthusiasm of the community" or something like it.
Since the Civic token is completely dysfunctional without Civic the company providing the underlying service, it is also unnecessarily expensive and complicated to use a blockchain for storage. That they have a procedure where they can restore your keys should you lose them should be enough to raise questions.
While the public blockchain is an innovation that I believe will have important use cases going forward, it is absolutely clear to me that this is a golddigger era for scams, and the shift from altcoins to tokens have lowered the signal-to-noise ratio even further. I have yet to see an ICO that was not useless, bordering on fraudulent (which is a word that should not get used too lightly), so I would be genuinely curious to see one that is not.
I can not speak for every jurisdiction of the world, but I believe any lawyer would advise against marketing non-securities as investment if you want to stay out of jail.
Civic specifically has absolutely no use for a token. The service they offer would look completely identical without the token. I believe the official explanation why they did anyway it was to "harness the enthusiasm of the community" or something like it.
Since the Civic token is completely dysfunctional without Civic the company providing the underlying service, it is also unnecessarily expensive and complicated to use a blockchain for storage. That they have a procedure where they can restore your keys should you lose them should be enough to raise questions.
While the public blockchain is an innovation that I believe will have important use cases going forward, it is absolutely clear to me that this is a golddigger era for scams, and the shift from altcoins to tokens have lowered the signal-to-noise ratio even further. I have yet to see an ICO that was not useless, bordering on fraudulent (which is a word that should not get used too lightly), so I would be genuinely curious to see one that is not.
> As Sirer put it, smoothing prices is a bad idea. If something is volatile it is because the market deems it to be so. Going against the market is not good.
Yeah, as somebody who used to work for market makers, the Bancor notion of markets struck me as... I guess "utopian" is the kindest word I can come up with.
The reason we as market makers got a special deal was that the market wanted us to provide liquidity, which sometimes can smooth prices a bit. But we personally didn't give a fuck about that. We were there to make money while avoiding getting crushed by market movements.
That was honestly a grim mindset, and I'm glad I don't do that anymore. But I appreciate the way a lot of individually self-serving actions can sometimes balance out to something socially useful. To make that work, though, I think requires you to be extraordinarily cynical. From what I've seen, utopians get eaten alive.
Yeah, as somebody who used to work for market makers, the Bancor notion of markets struck me as... I guess "utopian" is the kindest word I can come up with.
The reason we as market makers got a special deal was that the market wanted us to provide liquidity, which sometimes can smooth prices a bit. But we personally didn't give a fuck about that. We were there to make money while avoiding getting crushed by market movements.
That was honestly a grim mindset, and I'm glad I don't do that anymore. But I appreciate the way a lot of individually self-serving actions can sometimes balance out to something socially useful. To make that work, though, I think requires you to be extraordinarily cynical. From what I've seen, utopians get eaten alive.
> Our thinking here is that people invented money to solve the [Double coincidence of Wants] problem in barter, making trade asynchronous, more efficient and predictable.
Fun fact, that's not true! It's called "the barter myth", and was put forward by Adam Smith in The Wealth of Nations.
But anthropologists everywhere have looked for 'pre-money' societies in their field research and haven't really found any. Bartering today happens in systems like prison where people are used to using money, but they aren't allowed to have (or there isn't) any. Everywhere we've looked, we find complex systems of credit, debt and/or quid pro quo.
Read it in a book called "Debt: The first 5000 years".
Fun fact, that's not true! It's called "the barter myth", and was put forward by Adam Smith in The Wealth of Nations.
But anthropologists everywhere have looked for 'pre-money' societies in their field research and haven't really found any. Bartering today happens in systems like prison where people are used to using money, but they aren't allowed to have (or there isn't) any. Everywhere we've looked, we find complex systems of credit, debt and/or quid pro quo.
Read it in a book called "Debt: The first 5000 years".
Wasn't the whole Incan Empire money-free?
Yep. I think the point that Graeber made in his "Debt" book was that non-monetary debt came first, before money or even barter.
The Inca system of communal labour could be seen as being based on a debt of work owed to the community.
The Inca system of communal labour could be seen as being based on a debt of work owed to the community.
In that case, could one not also argue that the pope shitting in the woods is simply the pope repaying the food debt he took on by nature?
Not everything is debt. I mean, debt may be the cornerstone of our current financial system, but that doesn't mean it always was so. This just seems like grasping at straws to fit the argument.
Not everything is debt. I mean, debt may be the cornerstone of our current financial system, but that doesn't mean it always was so. This just seems like grasping at straws to fit the argument.
> In that case, could one not also argue that the pope shitting in the woods is simply the pope repaying the food debt he took on by nature?
Well the validity of that comparison would be whether the woods would be annoyed if the pope shat somewhere else.
Well the validity of that comparison would be whether the woods would be annoyed if the pope shat somewhere else.
Lots of social animals demonstrate some form of credit/debt accounting in their relationships. I think this is an almost inseparable part of our mind-body systems (a sort of limbic balance sheet) and does not depend on abstract concepts nor symbolic tools like money to still apply an economy to social groups.
[deleted]
I wouldn't entirely trust that book - I've heard that Graeber plays fast and loose with the facts.
(I have no expertise on the economics side of things, but I did notice that his quotation of Tyndale's translation of the lord's prayer does not match what I've seen elsewhere)
(I have no expertise on the economics side of things, but I did notice that his quotation of Tyndale's translation of the lord's prayer does not match what I've seen elsewhere)
The details are notoriously weak[1] and it doesn't entirely shy away from imposing Graeber's view that debt is always and everywhere a bad thing, but the actual core argument that money tended to arise as a means of recording debt settlements rather than a veil over barter is a reasonably well supported one.
[1]There are long lists of mostly-trivial stuff various bloggers have pointed out Graeber got obviously wrong, which afaik don't include the apparent Tyndale translation error you've spotted or the claim that Keynes' Treatise on Money was his most famous work that stuck out like a sore thumb to me...
[1]There are long lists of mostly-trivial stuff various bloggers have pointed out Graeber got obviously wrong, which afaik don't include the apparent Tyndale translation error you've spotted or the claim that Keynes' Treatise on Money was his most famous work that stuck out like a sore thumb to me...
Not sure about the book, but Adam Smith's barter hypothesis is largely debunked [1].
[1] https://www.theatlantic.com/business/archive/2016/02/barter-...
[1] https://www.theatlantic.com/business/archive/2016/02/barter-...
I've read that book - I highly recommend it.
The "barter myth" isn't really considered valid economic history anymore--and I'm not sure to what extent it ever was--but it's useful to explain the purpose of money in a society that cannot reasonably keep track of informal debt. When modern people in modern economies no longer have access to money (from economic collapse, or being imprisoned, among other things) they often resort to barter. So the barter myth may not explain the economic behavior of primitive tribes, but it might explain us.
As for Graeber's book, I'll excerpt from a comment I made a while ago: he is frequently wrong about easily verifiable facts in such a way that it supports his world view. There's no reason to trust a liar when he tries to tell you something you don't know about. One particularly remarkable Graeberism is where he describes the founding of Apple:
> Apple Computers is a famous example: it was founded by (mostly Republican) computer engineers who broke from IBM in Silicon Valley in the 1980s, forming little democratic circles of twenty to forty people with their laptops in each other's garages
but there are plenty others, an exhaustive list of which would be too long for this comment. He's also a somewhat unhinged and deeply horrible person. All this is discussed here by leftist economist Brad DeLong: http://delong.typepad.com/sdj/2013/04/david-graeber-april-fo....
As for Graeber's book, I'll excerpt from a comment I made a while ago: he is frequently wrong about easily verifiable facts in such a way that it supports his world view. There's no reason to trust a liar when he tries to tell you something you don't know about. One particularly remarkable Graeberism is where he describes the founding of Apple:
> Apple Computers is a famous example: it was founded by (mostly Republican) computer engineers who broke from IBM in Silicon Valley in the 1980s, forming little democratic circles of twenty to forty people with their laptops in each other's garages
but there are plenty others, an exhaustive list of which would be too long for this comment. He's also a somewhat unhinged and deeply horrible person. All this is discussed here by leftist economist Brad DeLong: http://delong.typepad.com/sdj/2013/04/david-graeber-april-fo....
> Apple Computers is a famous example: it was founded by (mostly Republican) computer engineers who broke from IBM in Silicon Valley in the 1980s, forming little democratic circles of twenty to forty people with their laptops in each other's garages
Umm...Apple was found in '77. Laptops didn't exist then. Steve Wozniak worked for HP and Steve Jobs worked for Atari when Apple was founded. And IBM didn't even have a facility in Silicon Valley back then. Am I missing something?
Umm...Apple was found in '77. Laptops didn't exist then. Steve Wozniak worked for HP and Steve Jobs worked for Atari when Apple was founded. And IBM didn't even have a facility in Silicon Valley back then. Am I missing something?
Too late to edit, but the link at the end got cut off. The whole link is: http://delong.typepad.com/sdj/2013/04/david-graeber-april-fo...
Well they should learn though:
- Their clients tell them the message is not clear so they make a video.
- "Bancor is Flawed" says too many buzzwords make it unclear and fluffy.
- You have to Google to understand the words according to Bancor themselves.
- They even have to add parenthesis in this article to explain some words!
But they still think their message is clear. While I have no idea about this world, I do care about communicating my products/ideas. So just simplify the message, make it so people can just understand it.
The only place where an over-engineered message works IMO is with hyped products as everyone puts a lot of effort to understand it.
PS, I got lost in the article mid-way with so many acronyms while I could read "Bancor is Flawed" perfectly...
- Their clients tell them the message is not clear so they make a video.
- "Bancor is Flawed" says too many buzzwords make it unclear and fluffy.
- You have to Google to understand the words according to Bancor themselves.
- They even have to add parenthesis in this article to explain some words!
But they still think their message is clear. While I have no idea about this world, I do care about communicating my products/ideas. So just simplify the message, make it so people can just understand it.
The only place where an over-engineered message works IMO is with hyped products as everyone puts a lot of effort to understand it.
PS, I got lost in the article mid-way with so many acronyms while I could read "Bancor is Flawed" perfectly...
[deleted]
The best book for explaining your product idea is "Made to Stick" [1]. It has a great process for breaking your idea down in the most concrete terms and has some useful tools such as analogy to a similar product ("like dropbox for x").
The cliche adage here is that "if you can't explain your product in one or two sentences then I'm not interested". This is why the "Hollywood pitch" developed organically because people love to overcomplicate everything. VCs look for this as well.
This is why PhDs such as the author make bad people for communicating products. They love abstract terms and advanced hand wavy generalizations. Same with how corporate marketing people are similarily bad because they love buzz words and trends.
Ethereum is full of these companies that are hyper complex and I'm convinced that it's correlated to the number of academics behind all of them. They all have great website designs, they should spend similar time and money on good copywriting - which starts with the founders understanding their own product/service.
They all have a problem with communicating anything of substance. Ethereum has the same problem.
[1] https://www.amazon.com/gp/aw/d/1400064287/
The cliche adage here is that "if you can't explain your product in one or two sentences then I'm not interested". This is why the "Hollywood pitch" developed organically because people love to overcomplicate everything. VCs look for this as well.
This is why PhDs such as the author make bad people for communicating products. They love abstract terms and advanced hand wavy generalizations. Same with how corporate marketing people are similarily bad because they love buzz words and trends.
Ethereum is full of these companies that are hyper complex and I'm convinced that it's correlated to the number of academics behind all of them. They all have great website designs, they should spend similar time and money on good copywriting - which starts with the founders understanding their own product/service.
They all have a problem with communicating anything of substance. Ethereum has the same problem.
[1] https://www.amazon.com/gp/aw/d/1400064287/
So simplest way to explain Bancor is to call them a Bank? Has reserves, liquidates over the counter & centralized control (for better or worse).
The analogy to banks is helpful but products should:
A) explain what problem they are solving (what pain point they address)
B) have an obvious target user.
In this case: Why do I need a bank when using Ethereum? Is it a bank in the context of retail bank consumers as a storage/transfer mechanism or a bank for businesses? If I'm a business building a decentralized service building on top of Ethereum can I use Bancor to address a set of particular problems that are common among decentralized services?
There's more to this than choosing a generic analogy.
A) explain what problem they are solving (what pain point they address)
B) have an obvious target user.
In this case: Why do I need a bank when using Ethereum? Is it a bank in the context of retail bank consumers as a storage/transfer mechanism or a bank for businesses? If I'm a business building a decentralized service building on top of Ethereum can I use Bancor to address a set of particular problems that are common among decentralized services?
There's more to this than choosing a generic analogy.
How do you think it came to be called Bancor? It's a smart contract banker.
Nice analysis. True in a majority of the cases.
I'm always surprised when companies use "you misunderstood us" as a defense. It's a reasonable point in personal communications, but when you're a business and virtually everyone misunderstands you the same way, that's your fault. Failing to explain better (even after you're misunderstood) is a hint that you're either bad at your job, or don't have an idea you'd be willing to explain more clearly.
Disclaimer: I'm not well-versed in these things. Maybe I'm totally misreading the situation.
Their response to the "BNT is pointless" thing seems to say that BNT has a point because... they made the service require it. I still don't understand why, apart from the founders wanting something to sell to investors.
My understanding is that the main things one looks for in a reserve currency are liquidity in the international market and (relative) stability of value, hence the popularity of the US Dollar and Euro as reserve currencies as opposed to, say, the Zimbabwe Dollar. If that's true, it seems deeply counterintuitive to create a new currency to use as a reserve currency. This sparks a suspicion that the point is not for BNT to add value to Bancor, but rather the reverse.
Am I just misunderstanding something here?
Their response to the "BNT is pointless" thing seems to say that BNT has a point because... they made the service require it. I still don't understand why, apart from the founders wanting something to sell to investors.
My understanding is that the main things one looks for in a reserve currency are liquidity in the international market and (relative) stability of value, hence the popularity of the US Dollar and Euro as reserve currencies as opposed to, say, the Zimbabwe Dollar. If that's true, it seems deeply counterintuitive to create a new currency to use as a reserve currency. This sparks a suspicion that the point is not for BNT to add value to Bancor, but rather the reverse.
Am I just misunderstanding something here?
If you are missing something it's because it wasn't present.
Thanks for confirming that the original article was correct in its analysis and that you have no substantial rebuttal other than nitpicking. Aside from the awful usage of "fake news" (almost as though you think it makes you sound more credible), your first rebuttal is this:
> At time of raise its was $153M within 2:25, this has been covered widely including a formal statement on our blog.
I think you missed the point the article was making.
As someone who isn't very familiar with economics, the original article was clear and concise with very clear Gedankenerfahrung which encapsulated individual problems with the Bancor protocol. While writing technical pieces like that is difficult, this reads more like a bad teacher trying to save face when a clever student shows them up. You're just hurting your own credibility.
> At time of raise its was $153M within 2:25, this has been covered widely including a formal statement on our blog.
I think you missed the point the article was making.
As someone who isn't very familiar with economics, the original article was clear and concise with very clear Gedankenerfahrung which encapsulated individual problems with the Bancor protocol. While writing technical pieces like that is difficult, this reads more like a bad teacher trying to save face when a clever student shows them up. You're just hurting your own credibility.
TBH this response IMHO confirms most of the findings of the criticised article. So thanks for the clarification, dear Bancor people. I still fail to see how your system in any way implements the BANCOR plan that Keynes had.
> Every buy and sell order is an (arguably superior) source of knowledge as to what is happening in the real world.
If they replaced (arguably superior) with (real if possibly flawed) I might be tempted to take them seriously. But this belief in perfectly efficient market is hilarious, especially in the face of all the people getting rich out of market inefficiencies...
If they replaced (arguably superior) with (real if possibly flawed) I might be tempted to take them seriously. But this belief in perfectly efficient market is hilarious, especially in the face of all the people getting rich out of market inefficiencies...
Definitely.
I think of markets as a technology. You have problem X, you can solve it with a market structured with A, B, and C. So it's really weird to me the extent to which markets have become a religion. In some quarters, a fundamentalist one.
I have similar concerns with Bitcoin. The technology is really neat. But it doesn't have users so much as it has adherent, devotees, and apostles.
I think of markets as a technology. You have problem X, you can solve it with a market structured with A, B, and C. So it's really weird to me the extent to which markets have become a religion. In some quarters, a fundamentalist one.
I have similar concerns with Bitcoin. The technology is really neat. But it doesn't have users so much as it has adherent, devotees, and apostles.
> It is hard to reconcile claims like “mumbo jumbo” and “blah blah blah” with legitimate critique
I just watched one of their intro videos[1] and can confirm "mumbo jumbo".
[1] https://youtu.be/P8EoAvWfFnY
I just watched one of their intro videos[1] and can confirm "mumbo jumbo".
[1] https://youtu.be/P8EoAvWfFnY
For reference: https://news.ycombinator.com/item?id=14591454
I'm a fan of Emin Gün Sirer and I don't like Bancor's approach in this response, especially in criticizing his informal tone (who cares?), but it does seem that they're right that he's misunderstood two main points: (1) Bancor tokens are automatically created and destroyed as needed and (2) the pool is collectively owned by all the token holders and not the issuing company.
Disclaimer: I don't know whether this makes Bancor great.
Disclaimer: I don't know whether this makes Bancor great.
Another very interesting response to another critique they received: https://blog.bancor.network/response-to-bancor-unchained-cdb...
The Double coincidence of Wants is solved by any Medium of Exchange (MoE). The bigger issue in my opinion is how to manage the creation of new MoE. The current system "solves" this by empowering a group (banks) to issue new MoE via loans. We have a significant body of history on the "efficacy" of this approach.
How does Crypto currency, Bancor or other, improve the management/new creation issues?
How does Crypto currency, Bancor or other, improve the management/new creation issues?
You would get absolutely slaughtered in a public market setting if this happened -- I love the idea of ICOs giving non-accredited investors the ability to invest in risky ventures, but you have to wonder about the diligence layer that comes with it, especially as organizations like Bancor do not have nearly the legal requirements for transparency.
Meh, I say let the fools spend their money however they want. Soon they'll understand why there are restrictions on investing in areas like this
Nope. It's like feeding pigeons. Pigeon-feeding is illegal because doing it results in an exploding pigeon population and pigeon shit everywhere. It becomes everybody's problem.
We want to keep the number of scam artists to a minimum, and especially to reduce the number of training grounds where novice would-be scammers become practiced experts.
Even if we have zero compassion for people who get rooked, there are a bunch of negative externalities to scams. A giant one is that trust is the lubricant of the machinery of the marketplace. The busiest and most efficient financial marketplaces are the ones that are the most effectively regulated. E.g., many foreign companies list in the US because people trust US regulators better than the home-country regulators, meaning they can raise money more effectively here.
A good analogy is restaurant health and safety inspections. If they didn't happen, more people would get sick. If people were often getting sick at restaurants, they'd go out to eat a lot less. That harms the whole industry, resulting in sub-optimal outcomes for both businesses and consumers.
We want to keep the number of scam artists to a minimum, and especially to reduce the number of training grounds where novice would-be scammers become practiced experts.
Even if we have zero compassion for people who get rooked, there are a bunch of negative externalities to scams. A giant one is that trust is the lubricant of the machinery of the marketplace. The busiest and most efficient financial marketplaces are the ones that are the most effectively regulated. E.g., many foreign companies list in the US because people trust US regulators better than the home-country regulators, meaning they can raise money more effectively here.
A good analogy is restaurant health and safety inspections. If they didn't happen, more people would get sick. If people were often getting sick at restaurants, they'd go out to eat a lot less. That harms the whole industry, resulting in sub-optimal outcomes for both businesses and consumers.
If they live in a civilized country and they end up going bankrupt it's the state welfare system that's going to have to pay to fix up that mess. Meanwhile the scammers will be busy swimming in money.
I know that it isn't very popular in the cryptocurrency world but I really don't think all regulations are absolutely evil. Unfortunately I think some of them are going to figure it out the hard way.
I know that it isn't very popular in the cryptocurrency world but I really don't think all regulations are absolutely evil. Unfortunately I think some of them are going to figure it out the hard way.
> With Bancor, there is no need for two opposite wants to exist at the same time in order for the price discovery (through actual trading) to function
I don't understand. If everyone wants to buy, nobody will trade and price discovery will not occur. Can someone please help me understand this?
I don't understand. If everyone wants to buy, nobody will trade and price discovery will not occur. Can someone please help me understand this?
That "at the same time" is the important piece. It means there's an speculator in the middle that will guess a price it can buy to sell later and make some money out of the transaction.
My guess is you talking about arbitrage[1]. As Sirer pointed out tokens on Bancor present a huge opportunity for arbitragers and it is bad. As time is an unknown risk factor, the speculator will simply buy on Bancor, take the token out and sell it on exchange immediately to make a profit.
[1]http://www.investopedia.com/terms/a/arbitrage.asp
[1]http://www.investopedia.com/terms/a/arbitrage.asp
Arbitrage transports price information between places, e.g if a stock is trading for 360 in Chicago and 370 in New York (after accounting for transportation ). Market making transports price information across time, i.e. I buy a sheep at 9am and sell it at Noon. Arbitrage is classically riskless while market making involves significant risk.
Not really. The word you are looking for your second example about sheep is simply - speculator. Not market maker and not even arbitrage.
From [1]:The most common type of market maker is a brokerage house that provides purchase and sale solutions for investors in order to keep the financial markets liquid. A market maker can also be an individual intermediary, but due to the size of securities needed to facilitate the volume of purchases and sales, almost all market makers are large institutions.
The keywords being "provides purchase and sale solution". So a better example will be you staying at the same place buying and selling sheep as they come about, specially if there is no one to take up a buyer or seller on their offers or bids.
[1]:http://www.investopedia.com/terms/m/marketmaker.asp
From [1]:The most common type of market maker is a brokerage house that provides purchase and sale solutions for investors in order to keep the financial markets liquid. A market maker can also be an individual intermediary, but due to the size of securities needed to facilitate the volume of purchases and sales, almost all market makers are large institutions.
The keywords being "provides purchase and sale solution". So a better example will be you staying at the same place buying and selling sheep as they come about, specially if there is no one to take up a buyer or seller on their offers or bids.
[1]:http://www.investopedia.com/terms/m/marketmaker.asp
> Not really. The word you are looking for...is simply - speculator
Market making necessarily involves speculating. They're one and the same.
Modern market making has many conventions extraneous to the definition, but there are still markets where market makers only quote one side of the market at a time. For over-the-counter stocks in the United States, you are even allowed to offer soft quotes, i.e. the market maker can renege on a posted quote if they want.
The sheep example is resolutely a market maker. Just in an illiquid market.
Source: I used to be a designated market maker.
Market making necessarily involves speculating. They're one and the same.
Modern market making has many conventions extraneous to the definition, but there are still markets where market makers only quote one side of the market at a time. For over-the-counter stocks in the United States, you are even allowed to offer soft quotes, i.e. the market maker can renege on a posted quote if they want.
The sheep example is resolutely a market maker. Just in an illiquid market.
Source: I used to be a designated market maker.
Yeah - in theory Bancor is market making. In practice, I'm not so sure. They don't seem to have answer the 'market trailing' claim, and if they (for instance) trail during crashes, they offer arbitrage to everyone else, paid out of the reserve.
I think "is it arbitrage" is a major part of the issue.
Bancor is claiming to be a market maker offering a spread (basically, taking a cut for insuring liquidity). Sirer is suggesting that without being able to react to real-world changes, Bancor will burn reserves to offer up something like arbitrage whenever the market changes. Well, arbitrage or "just giving away money", depending on how you count it.
I'm hardly qualified to judge the question, but it's disturbing that Bancor basically dodged the main complaint in this response.
Bancor is claiming to be a market maker offering a spread (basically, taking a cut for insuring liquidity). Sirer is suggesting that without being able to react to real-world changes, Bancor will burn reserves to offer up something like arbitrage whenever the market changes. Well, arbitrage or "just giving away money", depending on how you count it.
I'm hardly qualified to judge the question, but it's disturbing that Bancor basically dodged the main complaint in this response.
> an [sic] speculator in the middle that will guess a price it can buy to sell later and make some money out of the transaction
That's called market making [1]. The money made is the spread [2]. People have been doing this for centuries.
[1] https://www.sec.gov/fast-answers/answersmktmakerhtm.html
[2] http://www.investopedia.com/terms/m/marketmakerspread.asp
That's called market making [1]. The money made is the spread [2]. People have been doing this for centuries.
[1] https://www.sec.gov/fast-answers/answersmktmakerhtm.html
[2] http://www.investopedia.com/terms/m/marketmakerspread.asp
The person that guess a price anticipating the market valuation is called speculator. This same person may have other names because of related or unrelated actions, but they are speculators.
This is the very basic function of a market maker. They offer to "make" a market even when none exists. So if everyone wants to buy they will keep offering until their inventory runs out.
I haven't read the Bancor paper or code so I am not sure if this is implemented but every market maker's another objective is to make money. So they normally don't trade on a fair price, rather fair price - x/2 to buy and fair price + x/2 to sell where x is the spread to collect money. So effectively they buy low and sell high for a minute difference.
As for a scenario where they have only buyers, the algos or people on the floor tend to take stock of the existing orders and start moving the ask higher to compensate. This happens until it becomes untenable to buy and some sellers start entering the market to make a quick buck.
A good video on how trading works from Trading Places: https://www.youtube.com/watch?v=RLySXTIBS3c
I haven't read the Bancor paper or code so I am not sure if this is implemented but every market maker's another objective is to make money. So they normally don't trade on a fair price, rather fair price - x/2 to buy and fair price + x/2 to sell where x is the spread to collect money. So effectively they buy low and sell high for a minute difference.
As for a scenario where they have only buyers, the algos or people on the floor tend to take stock of the existing orders and start moving the ask higher to compensate. This happens until it becomes untenable to buy and some sellers start entering the market to make a quick buck.
A good video on how trading works from Trading Places: https://www.youtube.com/watch?v=RLySXTIBS3c
I was expecting something different given the novelty of the term "asymmetric price discovery" to this former equity derivatives market maker.
Also, nitpick, a market maker has to actually trade for price discovery to have occurred. I can run around quoting "bid AAPL 2 at 10 billion" all day long, if nobody bites I didn't promote price discovery.
TL; DR You can't asymmetrically discover prices.
Also, nitpick, a market maker has to actually trade for price discovery to have occurred. I can run around quoting "bid AAPL 2 at 10 billion" all day long, if nobody bites I didn't promote price discovery.
TL; DR You can't asymmetrically discover prices.
One of the points Sirer brought up was exactly this - without an external feed, the Bancor network will never know if things are working correctly. A malicious party could very use the public nature of the transactions and manipulate prices such that they get cheaper coins or ensure the "asymmetrically price discovery" end up marking coins for hundreds of ETH.
OT - Thanks for your illuminating posts. I am a software engineer by profession so most of my learning have been from trying to trade stocks at my country's local exchange so it is interesting to learn things from someone who worked in that field. I was checking your profile and had a question - What is a PE/VC trader? We can talk offline if you want :)
OT - Thanks for your illuminating posts. I am a software engineer by profession so most of my learning have been from trying to trade stocks at my country's local exchange so it is interesting to learn things from someone who worked in that field. I was checking your profile and had a question - What is a PE/VC trader? We can talk offline if you want :)
This response boils down to a combination of ignoring critical parts of the original post and repeatedly arguing that "yes, we're a ponzi scheme, that's why you want to get in early!"
Their response to the front-running issues is great. "B-b-but miners will behave!" and "Hey, ya ok, so that's bad but like, someone will fix it so whatever".
yeah, not taking Emin Gün Sirer critiques seriously is not the sort of thing that works out well in cryptos.
He's often wrong on the market (infamously told people to sell Bitcoin at like $100), but that mostly seems to be about underestimating optimism. On tech critiques like this... well, he predicted the DAO attack in such detail that people accused him of being the one behind it. Seeing a non-response to Sirer here seems very, very bad for Bancor.
yeah, when a computer science professor calls you out for rolling your own math routines ...
Yeah... they had a partial defense there - the simple functions like add and subtract called existing functions with some wrappers for overflow issues, which they claim is standard practice for Ether (I wouldn't know). But the defense of exponentiation was just "there isn't a good one yet, so we built our own, and according to some tests we didn't show anyone it looks fine".
The first-up response was on Twitter: https://twitter.com/BancorNetwork/status/876934646344404992 http://archive.is/75Gqk
"This hack job, like the FUD you intentionally spread right before the fundraiser with NO ATTEMPT to contact the team will not age well Emin"
(the responses go into his attempts to contact them ahead of time)
"This hack job, like the FUD you intentionally spread right before the fundraiser with NO ATTEMPT to contact the team will not age well Emin"
(the responses go into his attempts to contact them ahead of time)
After reading the comments on HN, this response is so flawed and disliked that the next post may be:
'Offical Response to the flawed "Bancor Is Flawed" Official Response'
'Offical Response to the flawed "Bancor Is Flawed" Official Response'
I'm flabbergasted by these ICOs and the monetary values associated to them. But that's just the tip of the iceberg really.
Then I think "well, let's see what this startup getting founded wants to produce". And then invariably it's some super "high concept" ultra-virtual "product" that is directly related to ethereum itself.
It's not a new google, facebook, uber or dyson. No it's a protocol that "enables built-in price discovery and a liquidity mechanism for tokens on smart contract blockchains" or sometimes "an open source messaging platform and mobile browser to interact with decentralized applications that run on the Ethereum Network" or even "a new exchange that facilitates secure trades between people from bank accounts to CryptoCurrency".
I'm a coder, I think I have a good general knowledge of how a blockchain works, I even have a passing knowledge of what those smart contracts are and how they're implemented (not enough to, say, implement them correctly myself but definitely more than 99.99% of the general population). Then I read about those innovative products and I'm simply drowning in a see of virtual concepts built on top of other virtual concepts. A concept of a concept of a concept.
See this for instance: https://www.youtube.com/watch?v=P8EoAvWfFnY (avoid the comments at all possible cost).
I've watched the video, perused their website and I'm still not clear at all about:
#1 who needs this? #2 why do they need it? #3 how will bancor make money from this? #4 why do they need $144M to do it? #5 what prevents anybody else from just using the same algorithm and providing the same service at a lower cost?
The video even ends with the CEO admitting "we're only beginning to discover the different use cases". Well, looks like you have over a hundred million dollars to finish your homework now.
It's true for that bancor project, it's also true of https://status.im/ and a few other big ICOs I've seen in the past few weeks. Projects coming out of nowhere and raising a ridiculous amount of money. And then I google for those projects to see what others think about them and 99% of the hits are only talking about... the ridiculous amount of money they raised and nothing else.
I'm not saying that I'm certain that ethereum and those ICOs are scams but I think the ethereum community should work a lot harder to better explain what they're building exactly, because I'm pretentious enough to believe that I'm not dumber than all of those folks who've just collectively pumped millions in those ICOs. I'm willing to bet that many of those people are not betting on the products (or even that they understand those products), rather they see the insane valuations of cryptocurrencies and they want a piece of that.
Then I think "well, let's see what this startup getting founded wants to produce". And then invariably it's some super "high concept" ultra-virtual "product" that is directly related to ethereum itself.
It's not a new google, facebook, uber or dyson. No it's a protocol that "enables built-in price discovery and a liquidity mechanism for tokens on smart contract blockchains" or sometimes "an open source messaging platform and mobile browser to interact with decentralized applications that run on the Ethereum Network" or even "a new exchange that facilitates secure trades between people from bank accounts to CryptoCurrency".
I'm a coder, I think I have a good general knowledge of how a blockchain works, I even have a passing knowledge of what those smart contracts are and how they're implemented (not enough to, say, implement them correctly myself but definitely more than 99.99% of the general population). Then I read about those innovative products and I'm simply drowning in a see of virtual concepts built on top of other virtual concepts. A concept of a concept of a concept.
See this for instance: https://www.youtube.com/watch?v=P8EoAvWfFnY (avoid the comments at all possible cost).
I've watched the video, perused their website and I'm still not clear at all about:
#1 who needs this? #2 why do they need it? #3 how will bancor make money from this? #4 why do they need $144M to do it? #5 what prevents anybody else from just using the same algorithm and providing the same service at a lower cost?
The video even ends with the CEO admitting "we're only beginning to discover the different use cases". Well, looks like you have over a hundred million dollars to finish your homework now.
It's true for that bancor project, it's also true of https://status.im/ and a few other big ICOs I've seen in the past few weeks. Projects coming out of nowhere and raising a ridiculous amount of money. And then I google for those projects to see what others think about them and 99% of the hits are only talking about... the ridiculous amount of money they raised and nothing else.
I'm not saying that I'm certain that ethereum and those ICOs are scams but I think the ethereum community should work a lot harder to better explain what they're building exactly, because I'm pretentious enough to believe that I'm not dumber than all of those folks who've just collectively pumped millions in those ICOs. I'm willing to bet that many of those people are not betting on the products (or even that they understand those products), rather they see the insane valuations of cryptocurrencies and they want a piece of that.
There is a very simple way to settle this argument. Anyone want to break the Bancor and give Cyber Wednesday a new meaning?
> Should all token development stop now that we have ETH? Should ETH never have been created because we had BTC? Should BTC never have been created when the USD was already a liquid medium of exchange?
Bitcoin was created because it isn't possible to do Bitcoin with USD.
Ethereum was created because it isn't possible to do Ethereum with BTC.
Bancor was created because you want to make fat stacks of cash. It would work just as well (or better) if it was using ETH directly instead of having its own token.
Disclaimer: I am almost completely uninformed about Bancor.
Bitcoin was created because it isn't possible to do Bitcoin with USD.
Ethereum was created because it isn't possible to do Ethereum with BTC.
Bancor was created because you want to make fat stacks of cash. It would work just as well (or better) if it was using ETH directly instead of having its own token.
Disclaimer: I am almost completely uninformed about Bancor.
I must admit that my familiarity with the term "Bancor" was only from Yanis Varoufakis explaining about Keynes, Bretton Woods, the Nixon Shock as background explaining the current plight of the Euro and the Eurozone:
https://en.wikipedia.org/wiki/Bancor
https://en.wikipedia.org/wiki/Bancor
Me too. I got to know the Bancor via proxy (Varoufakis).
Te idea is more than intriguing, what I would like to know is if JMK expected the US to go with it or knew it was a dead-end but had to pursue it anyway.
I believe that it was one of the most obscure and important mewtings of post WWII.
Te idea is more than intriguing, what I would like to know is if JMK expected the US to go with it or knew it was a dead-end but had to pursue it anyway.
I believe that it was one of the most obscure and important mewtings of post WWII.
If you are referring to Bretton-Woods Conference, it is not obscure at all. It is probably the most important monetary event in modern history and probably everyone with economics background knows about it. Also it was during WWII. But you are right that parts of it (like the international clearing union and its implications) are just mentioned in passing in economic courses and rarely acknowledged nowadays.
It's only my faint impression, but I think there's some renewed interest in some sort of international financial / monetary framework similar to Bretton-Woods.
The governor of the Chinese central bank publicly expressed interest (and explicitly invoked Bretton-Woods) a few months ago. And other 'mainstream' central banking authorities seem to be acknowledging that there are big deficiencies with the current model (e.g http://www.bis.org/speeches/sp160210_slides.pdf)
I think the problem is that it's such a huge issue. It makes sense the original agreement was hammered out towards the end of WWII: people were 'thinking big' at the time. I worry that we are only capable of making such big and forward-thinking moves in the wake of some catastrophe or war...
EDIT: The 'renewed interest' is actually mentioned in the Wikipedia article on Keynes' Bancor proposal, and it looks like the governor of the Chinese central bank has been talking about this for some time now: https://en.wikipedia.org/wiki/Bancor#Proposed_revival
The governor of the Chinese central bank publicly expressed interest (and explicitly invoked Bretton-Woods) a few months ago. And other 'mainstream' central banking authorities seem to be acknowledging that there are big deficiencies with the current model (e.g http://www.bis.org/speeches/sp160210_slides.pdf)
I think the problem is that it's such a huge issue. It makes sense the original agreement was hammered out towards the end of WWII: people were 'thinking big' at the time. I worry that we are only capable of making such big and forward-thinking moves in the wake of some catastrophe or war...
EDIT: The 'renewed interest' is actually mentioned in the Wikipedia article on Keynes' Bancor proposal, and it looks like the governor of the Chinese central bank has been talking about this for some time now: https://en.wikipedia.org/wiki/Bancor#Proposed_revival
There was some noise about bringing about a world reserve currency in the years after 2008 but not much came of it. There was a big increase of the SDR allotments to handle the bailouts that were expected immediately after the crisis. And Chinese currency is now part of the SDR basket. But I don't think a world currency outside of US control will be allowed to exist.
Also Keynes' ideas on handling imbalances goes in the face of what politicians have been saying for decades: "Deficits are bad, and surpluses are good." So neither the public nor the politicians are ready to even acknowledge that there might be problems with this logic.
Also Keynes' ideas on handling imbalances goes in the face of what politicians have been saying for decades: "Deficits are bad, and surpluses are good." So neither the public nor the politicians are ready to even acknowledge that there might be problems with this logic.
In a closed system your surplus is someone else's deficit, that's not a hard concept. The problem is seems to be cultural (some cultures consider debt a sin or a divine punishment) and educational (even renowned economists trying to explain macro-economics to the layman resort to false analogies e.g. Comparing the economy of a country with a household economy, when in reality the way these work is the exact opposite).
Similar to what was actually agreed at Bretton-Woods (which was effectively what the US dictated) or what Keynes proposed?
Do economists look at things like Bretton-Woods from a purely "theoretical" perspective (for lack of a better term) or do they also take into account the political and global power level tensions driving that kind of decision making?
As a general rule, economists tend to look at theoretical models of how systems are supposed to work and whether those assumptions fit the data and economic historians tend to look at why policies were introduced or recommended and what their proponents and detractors thought about then. They do tend to share departments, students and reading lists though.
That would appear to be like someone coming up with a theory of the movement of sailing boats without accounting for the weather! :-)
That's economics for you. That's why I switched fields some time ago. It is a "science" that consistently gives flawed predictions and it's is often used to provide cover for political ideologies.
Or evaluating code without intimate familiarity with the internal politics of the dev team that wrote it :-)
> Ethereum was created because it isn't possible to do Ethereum with BTC.
I don't think that is true. You can absolutely reuse BTC for your so called "smart contracts".
I don't think that is true. You can absolutely reuse BTC for your so called "smart contracts".
In theory, but in practice almost nobody did.
I've been looking into this question. Szabo first proposed "smart contracts" in 1994, but Ethereum is basically the first practical smart contracts platform ever - the first one that people actually use a whole lot.
(You can squint at things and say "well that's a bit like a smart contract", but that's retrospectively applying a label - like calling Git a "blockchain". I'm speaking of things that were expressly labeled "smart contracts".)
I've been looking into this question. Szabo first proposed "smart contracts" in 1994, but Ethereum is basically the first practical smart contracts platform ever - the first one that people actually use a whole lot.
(You can squint at things and say "well that's a bit like a smart contract", but that's retrospectively applying a label - like calling Git a "blockchain". I'm speaking of things that were expressly labeled "smart contracts".)
Too bad it's not the first secure smart-contract platform; that honor probably goes to the folks who developed Joule, E, etc. in the mid-90s. Szabo and his contemporaries were steeped in capability theory, but Ethereum glossed over all of that in favor of hype and cash.
Worse is better, yet again.
That's not entirely true. Bitcoin's scripting language is not Turing complete, among other limitations that Ethereum addresses.
https://github.com/ethereum/wiki/wiki/White-Paper#scripting
https://github.com/ethereum/wiki/wiki/White-Paper#scripting
It is true that Ethereum has a more powerful scripting language. The real question, however, is if that feature has practical value.
I think the jury is still out on that question but I personally lean towards no. If and when there are profitable applications of this technology, ones that wouldn't have been possible without ethereum scripts then I will be glad to change my mind.
I think the jury is still out on that question but I personally lean towards no. If and when there are profitable applications of this technology, ones that wouldn't have been possible without ethereum scripts then I will be glad to change my mind.
I agree that it is still an open question whether the EVM will have profitable applications. I lean towards yes.
It is (in my opinion) no question that the feature has theoretical value. I think the only question is whether that feature's value will outweigh the considerable costs of using a blockchain.
I think there are definitely cases where it will be profitable, but think blockchain tech in general is probably overhyped right now.
It is (in my opinion) no question that the feature has theoretical value. I think the only question is whether that feature's value will outweigh the considerable costs of using a blockchain.
I think there are definitely cases where it will be profitable, but think blockchain tech in general is probably overhyped right now.
I would lean towards no but perhaps I will be surprised.
We have had about a year of dapp development gone by so far and there isn't a single dapp with any meaningful userbase.
I think if another year goes by and we are 2 years in the dapp development cycle and there is no successful dapp that will probably mean it's not a successful model.
I am also concerned about these dapps having insane valuations and raising huge sums of money just by releasing a vague whitepaper, without having a working product with users.
Normal startups would usually start with a seed round of hundreds of thousands USD but raising 50 millions or more is just obscene, that's a series B or C round for a fast growing startup with tens of millions real users and hundreds of employees usually.
I am interested how this whole situation plays out but remain skeptical for now.
We have had about a year of dapp development gone by so far and there isn't a single dapp with any meaningful userbase.
I think if another year goes by and we are 2 years in the dapp development cycle and there is no successful dapp that will probably mean it's not a successful model.
I am also concerned about these dapps having insane valuations and raising huge sums of money just by releasing a vague whitepaper, without having a working product with users.
Normal startups would usually start with a seed round of hundreds of thousands USD but raising 50 millions or more is just obscene, that's a series B or C round for a fast growing startup with tens of millions real users and hundreds of employees usually.
I am interested how this whole situation plays out but remain skeptical for now.
I agree with you. I wonder if the best use case for ethereum scripts is actually with private block chains. For private chains the trust problem with external input to the scripts (which is needed for any serious dapp) would be minimized.
I've seen so many technologies hyped, fail to live up to expectations, and then disappear. Etheruem has some interesting ideas, I'm worried that they have grossly over-stated its potential and it will soon fall off the hype cliff.
I've seen so many technologies hyped, fail to live up to expectations, and then disappear. Etheruem has some interesting ideas, I'm worried that they have grossly over-stated its potential and it will soon fall off the hype cliff.
The ICO scene right now is insane. Definitely bubble-ish behavior.
For scammers and thieves, Ethereum is the place to be. Can't wait until Underhanded C Contest winners discover Solidity.
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You can build some smart contracts on Bitcoin, but it's not nearly as powerful as with Ethereum.
What is wrong with the Bancor team defending themselves from unjustified, and close to vulgar, criticism? They gave very clear arguments, and you try to turn it into an emotional fight.
As a professor you should use exclusively rational arguments, and under NO circumstances emotional manipulation. It seems you've been paid enough to do the opposite. Shame on you!
As a professor you should use exclusively rational arguments, and under NO circumstances emotional manipulation. It seems you've been paid enough to do the opposite. Shame on you!
It brushes over Sirer's points by making note of irrelevant 'achievements' they have managed. The format also reads like a high school teacher nitpicking your paper, where most of his arguments boil down to 'yeah but that doesn't really matter, because...'
I read the whitepaper (a cryptocurrency-fanatic friend pointed it out to me) just a few days before Sirer's post was published, and I noted a few of Sirer's main arguments immediately after reading it. It's not hard to understand the essential problems regarding limited reserves and market-trailing, and this response addresses nothing. It's wishy-washy investor-rubbing talk, not the legitimate debate and discourse they say the want.