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Comment by 45h34jh53k4j | Hacker News Reader

I think turning your back on BTC is the worst mistake you could make. Enjoy your ride down with ETH, as it struggles under the weight of (scam) ICOs.

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I'm quite certain that BTC/ETH/SHM-TC fundamentalism and bigotry has no place here. Try Reddit bro.

Regardless of fundamentalism/bigotry, doesn't Ethereum have a centralization "problem" as evinced by their public ctrl-Z/fork?

That's like arguing the US dollar "struggles under the weight" of failed crowdfunded startups, ICOs being almost perfect analogues to them financially.

The only "sufferers" are the investors too dumb to do their homework. Thousands of failed real-world startups haven't killed SV's lustful search for the next big unicorn either; in both cases you have what's essentially a lottery and new suckers along every minute thinking they're going to make it big.

Crowdfunding (kickstarters, etc.) is an expendable income.

ICOs are investments and speculation, sometimes on margin.

What's an ICO and why is ETH going to struggle under their weight?

ICO = Initial Coin Offering

The rest of that comment in nonsensical. No one can know for sure the fate of either currency- the speculative component is too large.

Initial coin offering.

https://qz.com/1004892/the-bancor-ico-just-raised-153-millio...

Think crowd funding meets IPO with digital contracts.

Which, to me, is just begging for another DAO fiasco... I know I have my popcorn ready!

Maybe you could clear up something I've been wondering as someone new to cryptocurrencies. In the ICO, Bancor exchanges their own, newly created coins for Ethereum and the 'investors' are hoping that the new Bancor coins value will go up? So the Bancor team raised ~150 million dollars (in Ethereum) with no strings attached -- ie, no investors, debt, etc? Do I have this right?

This is accurate, all of the ether that bancor owns it can do whatever it wants with - the investors get nothing except a centralized token (BNT) that Bancor can control completely (create, delete, etc, see https://medium.com/unchained-reports/bancor-unchained-all-yo... ), the investors do not get equity or insurance or any other similar guarantees.

Wow that is truly unbelievable. Thanks for the clarification and the link (reading now).

To add to the other reply, here's my analysis:

Well, Bancor itself is... interesting. The background section of the whitepaper provides the motivation:

https://www.bancor.network/static/Bancor_Protocol_Whitepaper...

So, unless I'm grossly misunderstanding things, during the ICO, Bancor BNT tokens were purchased representing some fraction of the 150M contributed. Those tokens can now be exchanged by participants in Bancor's exchange, and purchased or liquidated freely to the underlying held cryptocurrency.

The ether raised during the ICO are used 1) fund various Bancor operations, and 2) fund an ether reserve to support liquidity.

But note, that reserve is just a fractional reserve. If there's a run on BNT, some people will lose if the reserve dries up! In their whitepaper example, of 200k ether raised, they mention a 30% fractional reserve.

You might ask yourself, why not just buy/sell ether directly? Well, the novelty, here, is that Bancor tokens could represent other cryptocurrencies or even baskets of currencies (though how the subsequent transactions on those other blockchains are handled, I have no idea, and their whitepaper doesn't go into it).

So yeah, I'd say your general description is accurate. If things go bad for Bancor, there's gonna be a lot of people losing out.

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