Behind the scenes with Tezos, a new blockchain upstart | Hacker News Reader

Behind the scenes with Tezos, a new blockchain upstart

techcrunch.com

87 pointsjanober40 comments

All the complaints about the uncapped ICO aside, the biggest concern for me is the compensation structure. Breitmans et al make out big immediately. So much so that they have relatively small incentive to ensure the success of their coin. They have also demonstrated that they are both toxic PR people and incapable of responding to even the most innocuous line of questioning without going into personal attacks or sarcasm.

Its too bad. I first heard about Tezos when one of their devs posted an amazing interview question here on ycombinator that spun up an enormous discussion that was being refreshed all day in my browser. But their leadership is suspect. Their statements regarding their employment timelines (fulltime vs parttime dev work, 1 year vs 4 years) doesn't really add up either.

Hopefully they prove the FUD wrong, but I avoided the ICO because I can't accept that kind of risk.

Do you have a link to the question?

Had the same question and did some digging. It appears to be this one by user murbard2: https://news.ycombinator.com/item?id=12940675

$200 million worth of cryptocurrency has been sent to the tax haven of Guernsey. A foundation set up in Switzerland manages the funds. Founders immediately take a cut of 8.5% of the donations received.

https://tezos.ch/pages/contribution-terms.html#contribution-...

I'm totally outside the cryptocurrency world. Can anyone explain to me why anyone would invest in an organization like this? If what you say is true then the thing is so clearly set up to just be a money grab and nothing else that I'm baffled it works.

I don't understand why scams seem to work better with cryptocurrencies than with "normal" money. A scam is still a scam right? What am I missing?

In practice, what kind of people invest in these kinds of things? Are they VCs? Pension funds? Mobsters who need to whitewash?

I think it might be because their are precendent for ICOs delivering amazing returns. Everyon wants to get in on "the next Ethereum", without realizing how rare opportunities like that are.

I think it's people who already made a bunch of money on crypto that can't easily liquidate and are looking to hedge their risk no matter how stupid the coin.

Chinese speculators. People in the anglosphere keep forgetting it, but almost all crypto action is in China. All western usage is a sideshow.

So basically, they're buying this stuff as pure speculation, of the sort indistinguishable from gambling.

That was before the PBoC jumped in and added heavy KYC.

Korea was/is big on the ETH/ETC/ICO bubble. But the true height of the bubble was caused by the west with all the Facebook/Youtube/Twitter shilling for big riches.

> Can anyone explain to me why anyone would invest in an organization like this?

In my case, because the "investment" is free and thus completely devoid of risk. I bought Tezos using unused Bitcoin I had laying around. Even if it turns out to be a total loss, all I lost was Bitcoin. I cannot lose "real" money because I have bought Bitcoin cheap enough and sold enough to get my Euro investment back.

The worst case that could happen would be Tezos completely tanking and Bitcoin skyrocketing, which would make me a multi-millionaire with one million Euros less than I could have had if I had not bought Tezos. I'm prepared to take that risk.

That's a loss of opportunity cost. It's not devoid of risk. Sell your btc now, that's the money you can lose.

> That's a loss of opportunity cost.

It's trading something I have for the possibility of gaining something back in the future, maybe less, maybe more, maybe nothing at all. Yes, it's a loss of opportunity cost, as is any other investment.

> It's not devoid of risk.

I know you won't find this in your economics textbook, but: The risk of losing something I don't need is not a risk.

if you don't need that money why are you betting it to get even more money you don't need? :)

It is risk, maybe not existential risk for you but risk. If you have a savings account, you don't need that money right now probably, still betting 30% of it in random horse in the races is risk, otherwise you are just working with a odd definition of risk.

> if you don't need that money why are you betting it to get even more money you don't need? :)

Why do rich people go to the casino? Why do rich people invest in risky projects? There is a thrill to gambling itself. There is a thrill to winning as well. Yes, even winning things you don't need. I think this is asymmetrical: When gambling with money you don't need otherwise, the joy derived from winning is greater than the loss of joy derived from losing. Especially if you win really really big :-)

There's another point, though. If Tezos really takes off, that could allow me to do things I can't currently do. The more it takes off, the more interesting projects would open up. So you could say that, in a sense, and until some point of saturation, I would start "needing" the money more and more as more and more of it accumulates.

If that seems like a paradox to you, that's fine with me.

I understand. You are saying an extra 30K won't make your life very different but an extra $3m would. And you have 30K lying around you can gamble for that chance. I get it. There's still opportunity cost lying around all over the place. You could invest in any number of highly leveraged assets or hedge funds or stocks (or go to the casino :). The fact that you have that money lying around doesn't automatically make anything you do with it devoid of risk. Arguably you could send it to some Nigerian prince and wait for payback, that sounds like a bad idea. There's a whole spectrum of risk even in your case. I'm not saying you are not doing the right thing, just that you are taking a decision that comes with a risk.

> with one million Euros less

wow, you invested $1MM Euros worth of BTC into Tezos? is that right? did you make all your money via investing in BTC?

No, that part was prefixed with "if Bitcoin were to skyrocket". A million is an illustrative number I pulled out of my nose. I think the minimal investment in Tezos was 1 Bitcoin, which is what I put in. That's on the order of 2000 EUR now, so it would have to skyrocket quite a bit more to get to a literal million.

Also, I "made" my money the way most well-off people do: I inherited it.

OK, good for you. I hope my kids can say that someday.

I've invested some BTC, which I earn passively, and ETH, which I've held for some time and have seen enormous capital gains. It makes sense to me to invest to diversify my crypto holdings and try to catch a nice increase in another project.

> In practice, what kind of people invest in these kinds of things?

FOMO, pure and simple.

Investors are banking on the Tezos crew not being greedy, but being absurdly greedy. Investors are banking on these people's drive to become trillionaires, not just millionaires. But mostly it's just FOMO that drives investors methinks.

I for one believe that cryptocurrency is going to be a massive part of our future, but I am too dumb to know which one is going to win, so I am going to spread my money around a bit...

No, not "immediately", the chain has to launch and operate a correctly first, and I don't know where in your imagination Guernsey came from. Someone with your handle repeatedly posted a mix of accurate statements and completely made up one on our Reddit sub.

Tezos isn't even a tradeable altcoin yet.[1] Do they even have a public blockchain? Right now, it just seems to be a site where you send them money and they give you a receipt. What could possibly go wrong?

[1] https://coinmarketcap.com/

Lots could go wrong, but Ethereum launched the same way and it's now got a market cap of ~$20 billion.

Ethereum had multiple Proof of Concepts before their ICO.

Not advocating for either shitcoins, but Tezos has code and testnet https://github.com/tezos/tezos

"either shitcoins?"

Ethereum or Tezos

as much as im a bitcoiner, calling ethereum a shitcoin or even hit ing that its in the same ballpark as Texos is a gross injustice to ethereums accomplishments this far and a massive embellishment of what tezos currently is.

Not if you include all the puppeteering done by Joe Lubin and Consensys on Ethereum "Foundation" and organized bumping with ICOs coordination. Business aside, the tech is full of shortcuts and snakeoil. So far they haven't done anything that wasn't debated by the cypherpunks of the 90s and deemed insecure and irresponsible. Of course, many will claim that they did something, but with that mentality, Bitcoin wouldn't still be alive and running till now.

Interesting, so Tezos dev team is mostly based in France from OCaml PRO. Just going by the "signals", I think they have a SOLID dev team.

https://github.com/tezos/tezos/issues/46

An uncapped fundraiser for yet another cryptocurrency? This reminds me a lot of pump and dump penny stocks.

I have the same feeling.

However, keep in mind we're still far away from DotCom dimensions. NASDAQ back then was some 3 trillion around the top, all cryptocurrencies together are now 85 bn.

So if you ask me, there will be a ~50x increase and many more ridiculous ICOs until this thing comes crushing down.

Here's the ETH contract address: https://etherscan.io/address/0xb56d622ddf60ec532b5f43b4ff9b0... over 20,000 transactions in Ether alone.

Another related article was posted a while ago here on HN, but I wanted to re-share it here since it's relevant to the problem that this company tries to solve (and, in case someone missed it):

https://www.oii.ox.ac.uk/blog/the-blockchain-paradox-why-dis...

The governance paradox was something I was thinking about (after reading the article): though blockchain replaces these third-party enforces by decentralizing the process, it doesn't fully remove the human element.

I feel I must nitpick and point out something many don't understand about decentralization.

"...an event that would result in two separate bitcoins. The players in this drama all have incentives to reach a consensus" - Not true. Because of competition from OTHER blockchains two separate bitcoins can be an optimal play. The fact that bitcoin may NOT have consensus is a feature not a bug. This is similar to open source.

Original hn thread (2014)

https://news.ycombinator.com/item?id=8134182

Fixing the governance model is well and fine, but is the smart-contract language up to the task as well? We are mainly looking for fixes to the recursive-call plan interference bugs from Ethereum. It's not clear how to create closely-held values either.

https://www.tezos.com/static/papers/language.pdf

I wonder who will be the first to posess a computer with enough quibits to properly implement Shor's algorithm and steal all the bitcoin.

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