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Comment by the_stc | Hacker News Reader

Can you explain exactly what you mean by TCP/IP is underfunded, with examples?

And how are tokens on the Ethereum network capturing value in other networks? How is Filecoin better off with its own money versus people bidding for storage in Bitcoin, Monero, or Ethereum directly? And why should the value of Filecoin tokens spike up? How is having a speculative token beneficial for accurately pricing storage?

The liquidity aspects are just companies jumping around regulations. Nothing stops startups from listing all their shares on a website and letting anyone buy/sell/trade them. Well except for the legality aspect!

I say this as someone about to do a cryptocurrency fundraiser in the adult services space. Though we aren't issuing tokens, but shares - we take payment in cash or other cryptocoins. The main benefit is easily being able to crowdfund and return dividends while avoiding legal hurdles.

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There are many points there:

1 - Regulation. You can do ICOs and Token Sales legally. If your tokens are not securities, you can do ICOs open to everyone. If your tokens are considered securities, you can do so on Coinlist.

2 - Tokens natively track the value of the network. For these networks, its value is not tracked by company shares. Ethereum is a good example of this. Ethereum Foundation is a non-profit and all the value accrues to the token. You can also do a hybrid system or none. Depends on your specific use case.

3 - Funding. Internet Bug Bounty is a good example of this https://internetbugbounty.org/. If TCP/IP would have been able to capture a billionth of a cent for every request things it wouldn;t be needed. Maybe, our infrastructure would be really different today.

If TCP/IP would have been able to capture a billionth of a cent for every request

Cryptocurrencies haven't been able to do micropayments, this kind of system just isn't possible. Proponents will go on about payment channels such as lightning, but these have been 'just around the corner' for several years now and their effectiveness/practicality is highly debatable.

>but these have been 'just around the corner' for several years now

That's because it took the Bitcoin community several years to agree to activate SegWit, which is required for the lightning network to work. SegWit is finally locked in and will be activated on August 23.

The important point isn't the micropayments, it's providing some sort of funding channel for an important piece of infrastructure that otherwise languishes.

but the micropayments point still stands.

In practice the model proposed for TCP/IP would not work because it's a decentralized crypto-currency.

In which case you're talking about consumables that have a high enough unit cost to "pay the price" of a single crypto txn.

Turns out we have this already! It's called bitcoin. Maybe you don't want to change your prices all the time so a new coin could be good on that end (letting markets manage the service cost). But that's just mental gymnastic, especially since ultimately everyone is pooling from fiat for a while (who's getting their salary in BTC or ETH?)

If you work for Coinbase, you can collect your salary in BTC

Can you negotiate that your salary be denominated in BTC though? So that even if the value of BTC goes up you get the same BTC in the account every month?

I think it never works like that, pricing is done in other currencies. Also in webshops that accept btc as payment the prices are never in btc.

If you use a token for the protocol, and the value goes up, and the developers have token holdings- they've made money. No micropayments necessary to use tokens to fund development.

Also, plenty of companies in the space pay salaries in BTC and ETH. Check out BitWage for a provider.

The Sia network has been happily doing micropayments (covering 4mb of storage at a time) for over a year. At times, the total number of micropayments on the network has been estimated to eclipse 100 transactions per second (all off-chain via payment channels).

This technology is deployed if you know where to look for it.

I didn't know about this important feature in Sia. I'd appreciate if you expanded on this somewhere; in your blog or documentation.

1. You've always been able to crowdsource if you want to go through legal hoops.

2. I'm not sure how you can say Filecoin's token is tracking the non-existent network. Even Ethereum is a bad example. All the Enterprise Ether announcements will use a private implementation of Ethereum. So how is that value accruing in ETH, other than people getting confused by misleading PR and thinking banks are actually going to be transacting on the public Ethereum chain so they should buy ETH?

3. What do you mean if "TCP/IP" would capture money for every request? Why not UTF-8 or ASCII capturing value for every character written? InternetBugBounty seems like a very bad example. Their examples of "The Internet" bugs are issues in Bash, TLS, and ImageMagick -- all very much not TCP/IP. That's like saying BTC's market cap should have prevented Ethereum's DAO bug.

Not trying to be mean, I just don't see how this makes any sense.

To expand on point 3- I think finding a "natural" business model for protocol development is pretty fantastic. HTTP needs work, and we've known it for years. But when we tried to fix it... well, mostly large corporations with skewed incentives are driving the effort, so what you'd expect happens.

Tokens offer a different path to funding important infrastructure.

Right now, tokens clearly aren't doing a great job tracking underlying utility, so I won't make that claim. I do think that will improve as the space matures though.

What incentive did Google have that skewed HTTP2 vs smaller sites?

Again, if TCP/IP captured money, how would that fund HTTP - they are not related (ETH doesn't fund random tokens on top of the Ethereum blockchain, so why would the TCP/IP people getting money give it to other protocols?). There is already enough lock-in with protocols due to inertia and politics. Adding money to it seems like it wouldn't improve things. If anything, it seems like it'd only make things worse. BitTorrent got money and that didn't seem to help them very much.

Tokens offer a different path, mostly because you can buy and sell them so freely. It's link pink sheets on steroids.

I wasn't suggesting TCP/IP funding should be used to fund HTTP, I was just using HTTP as an example.

Though there is something interesting there- protocols with funding sharing with others built atop to increase network effects.

I doubt protocol development is hampered by funding. The real impediment is adoption, and you can't escape the large corporations there: if Chrome and Edge and Safari don't accept your HTTP changes, what's the point?

Your point 2 is very nicely worded, and maybe a fundamental concept of tokens, but one I had not heard marketed as such up until now...the token is a method of tracking the value of the network.

Interestingly enough I had always considered the token concept similar to the corporate structure of a non-profit, that is there are: incorporators (the ico/smart contract authors); members that usually buy into the non profit (token holders); but there is otherwise no ownership of a nonprofit entity. Though I have never seen nonprofit membership artificially limited in the hopes of the membership rate increasing and for purposes of reselling the membership in secondary markets. It does begin to muddy the waters, but the framing of network value is a very interesting concept.

> And how are tokens on the Ethereum network capturing value in other networks? How is Filecoin better off with its own money versus people bidding for storage in Bitcoin, Monero, or Ethereum directly

Filecoin is to be a purpose-built tool which will provide a distributed way to make the guarantees rather than paying a single provider or using an expensive and still trust-requiring escrow service.

Things like proof of storage, refunds with an extra payment for failing to prove storage and a completely distributed storage pricing model will be built in with Filecoin in a way that could only be done by a single provider using another cryptocurrency.

On the TCP/IP analogy: it seems wrong to me. The people producing the bitcoin protocol and the ethereum protocol aren't making money from the value that they are creating. It's the miners (people running nodes) who get value from the value created, right? So in this case, no one developing the protocol is getting value directly from the value created still, just like with TCP/IP.

Unless the creators premine (and many do)

The creators also reserve some % of the tokens. This is desired because it aligns the incentives of all the participants: speculators, network participants, employees, and users.

I think the TCP/IP analogy is fuzzy at best. As for why these projects need their own currencies, it's not really that weird, it's just another way of thinking about it all. They're called Local Currencies and are pretty common. They definitely help to create strongly knit communities in particular when the communities revolve around certain ideals or requirement. https://en.wikipedia.org/wiki/Local_currency

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