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Comment by relyio | Hacker News Reader

I'll edit my post. I have donated what I could afford to donate at the time ($200). Thanks for the heads up.

I’m confused. When you say “donated”, what does that mean I’m this context? I thought ICOs are something you buy into to own the coins.

And as a follow up, why donate to an org that has $200M+?

In early July, the Tezos foundation ran a fundraiser to fund the project's development (R&D, Bizdev, etc.). At the time it did not have funding (or very little). Its current treasury comes from that fundraiser.

It is an "ICO" because in exchange of your donation, the foundation will recommend a token allocation for you in the genesis block. Nothing prevents anyone to create a "concurrent" genesis block with different allocations though. It's just that the chances are people are going to follow the one the foundation recommends.

So, in that sense... it's an ICO. Although not quite like an ERC20 token sale.

lol. I love how careful you are with your words. You know the SEC doesn't care how it's phrased, right? It's substance over form. Basically, "if it quacks like a duck, it's a duck".

I'm actually describing the process, which is what OP asked. I figured that the SEC doesn't seek legal advice from randos on HN.

That's true, that's true. However to other randos reading HN who may read your comment and take your word for how Tezos' ICO is different than the rest: it's not. Please do your due diligence and ask yourself if you actually want to send money to a couple that has no track record, no product, who is fighting with its development foundation, and whose plan is to re-implement an idea that isn't even proven to be useful yet ("decentralized turing-complete smart contracts").

Typically with securities, there is a bar of quality to meet before you are allowed to sell it, but in this case there is not. So we all need to be as honest and helpful as possible so that investors who don't know any better don't get scammed by those who are claiming to change the world.

They have $200M because people donated. The ICO is described as a fundraiser, not an investment, because it reduces liability and opportunity for government intervention. In exchange for "donation" you get XTZ. Presumably, you expect that XTZ to grow in value to make a net profit.

The upshot is that its a word that is synonymous with investment, but requires less responsibility. On the flipside, they could disappear and your are out of luck because the government won't regulate donations as carefully as securities.

So attempting to skirt and breaking the law is what is meant by 'donated?'

This is some weird kickstarter hybrid analogy... Basically you can fund a kickstarter for some reward (typically the product), say a sous vide machine or an oculus or a video game.. Maybe in the future these will be worth more than what you paid. Nominally if you et a sous vide machine for $50 but they sell for $200 later, then you could make $150. Now you could say here that you get a set of bits that might be useable in some network and might be worth more later? I dunno. Clearly the sous vide machine is not a security.. I guess b/c it has utility for heating water.. even if a limited amount of sous vide machines are ever made. The tokens have no utility until some other product/platform/network exists in which to use them? It is a weird argument.

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