Topic: rpietila Altcoin Observer - page 236. (Read 387556 times)

It's one of the reasons I dropped the IPO model for MC2. I kind of wonder if it has ramifications for spinoffs too, because with a spinoff of Bitcoin you could buy bitcoins now and get coins for them later.

Someone at the company I work for is talking to some corporate lawyers right now about the legality of these IPOs in general.

Note that a lot of banking for other IPOs seems to be done offshore, too (not naming names), and that they're going so far as to avoid the term "IPO" lately.

It looks like you created a new account specifically to respond to my post questioning the legality of the Nxt IPO.  I think I struck a nerve somehow.  

If any of the founders sold shares to US residents, then I believe SEC registration would have been required.  How is this different than Satoshi Dice?  But SEC registration most certainly did not happen (please correct me if I'm wrong), so I believe the SEC would have a case against any of the 47 initial founders should any of them financially profit by selling their stake to US residents.


EDIT: This is interesting.  Perhaps the Eric Voorhees / Satoshi Dice precedent just killed the IPO model for launching cryptocurrencies.    

In the Bitcoin Cooperative Proof-of-Stake project I founded, I am listening for ideas regarding the proof-of-stake policy. I believe that all I need is to assure that stake is not double-voted. I believe that could be accomplished with a 30 minute hold time for the to-myself transaction. Less hold time would be better, because if my project achieves wide approval and is actually launched in January 2016, then once a week when the stakes are recorded, worldwide transactions would be greatly diminished.

Note that CPoS does not need proof-of-stake to secure the blockchain. There is a single non-forking blockchain appended to by a single nomadic mint agent that makes double-spending impossible. Tens of thousands of paid full nodes merely replicate the blockchain - and verify the behavior of the trustless mint agent via tamper-evident logs as suggested by Nick Szabo years ago. Distributed consensus is easier to solve when full nodes identify themselves with public keys, sign all messages, and justify their behavior.

I have shared ideas with three altcoin developer communities so far. If they pioneer some elements of CPoS, then that will help me convince the Bitcoin community during the year of public system testing in 2015. Currently the Bitcoin core developers believe that there is no good alternative to proof-of-work.

Were any initial investors from the U.S.? If not, then this is void anyway, right?

Also, to make a blanket statement that IPOed coins can't be currencies makes no sense to me. If a coin is accepted and used for purchases it is a currency. NXT has integration with major payment processors supposedly in the works and may become one of the few cryptos accepted for non-gambling related purchases in the near future.

I think most people that criticize NXT are making emotional arguments or have not used the client.

Meanwhile the OP is correct re: XMR (no longer MRO). It will be big one day.

I'm not sure the IPO model is even legal (in the US) unless the developers register with the SEC.  How is selling shares in Nxt different than selling shares in Satoshi Dice?  We know Mr. Voorhees recently got nailed for this: https://bitcointalksearch.org/topic/2014-06-03-marketwatch-sec-charges-bitcoin-entrepreneur-for-share-offering-637435

I was thinking the other day (a dangerous pastime, I know...) and I think I've come up with a way to address cryptocurrency volatility.

1. The hashing power allocated to producing a block in any proof-of-work altcoin, as a proportion of total hashing power available, is approximately proportional to the market value of the coins awarded for hashing, as a proportion of total cryptocurrency value that can be produced by that hash power.

2.  Because the hash rate is visible in the block chain (via difficulty and timestamps) and the total applicable hashing power changes only fairly gradually, that means the block chain has a fairly strong indication of the current value of the cryptocurrency relative to the basket of other cryptocurrencies that could be mined using the same hashing infrastructure.  That is, if the hashing power is spiking much faster than new hashing power is being manufactured, it means the market value of the coins a block produces is spiking, and if the hashing power is dropping, it means the market value of coins you'd produce per block is dropping.

3.  So it should be possible to use this information to stabilize the value of a cryptocurrency, preventing giant spikes and troughs by adjusting "interest rates" paid on short-term securities.  These short-term securities can amount to just spending your 'stake' input to an output that is time locked a few thousand blocks in the future, and getting paid a small amount of "interest" for doing so.

This wouldn't get any blocks made without a proof-of-work component, but it could be a good way to split coin rewards between proof-of-work and proof-of-stake, while stabilizing the value of the cryptocurrency. 

One caution about this idea; I haven't worked it out fully yet, and this is kind of circular in that you'd be relying on observations of miner's behavior to set a rate which miners could profit from.  So you'd have to be very careful to avoid creating perverse incentives for someone to manipulate short-term interest rates by reallocating hashing power in a way that destabilizes the system.

It will be interesting to see what happens to Bitcoin once it actually becomes deflationary and there are no more mined coins. Something important to note is that if Bitcoin is on average increasing in value all members benefit every moment they hold Bitcoin. With PPC you need to wait 30 days, with Bitcoin you are gaining the second you hold Bitcoin. (assuming both coins have exhausted all PoW minting.)

My criticism was that it takes 30 days to start staking. If PPC made it 12 hours until being allowed to stake then I would have no criticism.

The 30 day wait is unjust.

Bring it down and my criticism of PPC disappears completely.

The same criticism could be applied to any cryptocurrency. You could say that with Bitcoin, the rich get richer because they are the one who can keep coins in the wallets long enough for them to grow in value (much more than the 1%/year POS reward of Peercoin), while those who live paycheck-to-paycheck don't realise profits from the deflatory aspect of their currency.

And anyone that is, at worse, in the lower middle class can have at least a modest saving account, which with PPC would allow him to get as much interests as those richer than them. I find nothing unjust in that concept.

It's probably impossible to make any predictions.

I think rpietila invested in Monero on principle, that it was a fair launch, was a different technology to Bitcoin and has an active community.

rpietila is probably not the sort of person to hype alt coins for pumping reasons, the return on his time invested is probably not worth it. He's far better using that time to trade into the next Bitcoin bubble correctly and make an order of magnitude more money than all of Monero is even worth...

I'm not really informed about MON but this thread might just be for rpietila to spread some hype on his last investment (given the reputation he has on this forum).
I think it's really hard for anyone to make predictions for the mid-long term  on the altcoin market.

What do you think about the PPC "rich get richer" issue?

Now this concern of mine might be outdated as it was only an issue when you had to leave coin sitting for 30 days before being allowed to stake.

Assuming that restriction is still in place, here is my concern with PPC:

If the currency PPC takes off, only the wealthy in society would earn the 1% per year as they would have the privilege of leaving their coin sitting around for the required amount of time. Less fortunate people that live paycheck to paycheck would never be able to leave coin sitting long enough to be able to stake. Obviously right now there are probably no people that are living paycheck to paycheck in PPC and very few live paycheck to paycheck in BTC.

However, if PPC were to take off without modification to the 30 day rule, it would be a tragedy of the most severe proportion furthering the divide between the rich and the poor.

The 1% would almost certainly only apply to those wealthy enough to leave untouched coin sitting in their wallets.

Until the stake time is brought down to a maximum of 12 hours, PPC can be considered a fraud upon society, lets be thankful it remains a niche crypto-currency.

This presentation gives a good introduction to Peercoin: http://imgur.com/a/dG66c

I'm not very familiar with Peercoin. Can you give me a rundown regarding what it offers?

It's funny how peercoin isn't mentioned once in this thread.

Peercoin is certainly one to watch out for over the next few months. Development surrounding ppc has been growing at an outstanding rate. The peercoin community is more mature than most, which translates to less cheerleaders, less hype and less noise from the community.

However, with PPC, the community doesn't need to shout to be heard. We know the technology and development will speak for itself. Watch this space.

Looks like there is no intention for NXT to become a real currency for circulation, but more like an asset backing other currencies running on top of it:

https://nxtforum.org/asset-exchange-general/different-currencies-in-ae/msg35419/#msg35419

which shouldn't hurt its price

Your last point is something I've really been wondering about and I think I've posted it before. Something to consider - We could probably use IBM stock, etc. like a currency (theoretically) and if you remember, look at some of the older notes before central banks got involved. They were stock issued by companies (or something akin to that). There were a variety of them. Even Bitcoin is considered a property by the IRS (so far).

Anyway, this is an interesting unknown and even though I'm leaning (barely) towards what you are saying, the conundrum is we can't know as we will decide. Hope that made sense.  

People inherently like to barter and trade things. Kids "due" it with their Pokemon cards and such. And it never really stops, though we seem "forced" to use State controlled fiat money.
So, I am very open to the possibility of NXT, Ether, etc. also being used as a money. There are an awful lot of them - perhaps they will replace Doge. LOL
And bigger yet, this is going to further change our understanding of what money is.
Let the disruptions begin...

Its about sharing


edit - Anyone notice this? Negative Interest Rates in EU? http://www.cnbc.com/id/101723127
Oh boy...

Selling shares of a new tech to the market at whatever price the market will bear, is not scamming. I don't have any evidence that NXT is scamming anyone. I have also sold shares of my companies to the public.

What I don't believe is that these things will become currency. At least my shares have never succeeded on that

Have you had chance to look at CryptCoin yet ? Another X11 algo coin claiming anon tech. Supposedly releasing their white paper in the coming days. Will have a better opinion once the white paper is out but as of now not much to be said about it although they do claim to be using a setup thats different to DRK's masternode setup.

Nekomata - I don't think NXT is a scam coin, as I trust the guys over at Let's Talk Bitcoin (podcast) to have caught that and not allowed them on their podcast. I mean money doesn't seem like it will buy Andreas Antonopolis and company there. The technology appears solid. I do see the coin as more of an IPO coin than a typical Crypto and perhaps that is where the "problems" start.

Now, that IPO type model (which will also be Etherium I believe) isn't necessarily a scam just because it breaks accepted "rules". We will see in the end, but it is a difficult thing bringing coins to market that don't just have settings changed and are actually Scripting language based Cryptos that takes months of development (and eventually years) to have on the market.

I think to call a coin a scam without looking at the actual technical merit, is a bit like saying "Drugs are bad." and not differentiating them into subcategories, effects, legality, etc.
Lets not trivialize something that we are just beginning to understand by labeling and flattening it into something much less than it is.
If you want to talk about the distrubution, then fine. But that is one aspect of it. If broken it will fail, but if it is just different, you may
miss the boat due to preconceptions.

IAS

NXT was IPO'ed, which is the same as 100% premine. It is not, and cannot be a currency. It is a share of the company. Shares are rather liquid instruments whose value may go up and down, but they are still not money. There are other threads that concentrate on this rather contested topic.

It is centralized, because the IPO was conducted in haste with <100 participants owning the whole stock.

Forging may be == PoS, but in my understanding PoS itself is a faulty concept.