Interesting article.

I'm not convinced transactions are so bad for utility token value. Token price is the token GDP (total value of goods exchanged for it) divided by velocity. If you double the number of payment transactions, you double the velocity but also the GDP, for a net zero effect on price.

But it's certainly true that a fee-earning token gives a stronger incentive to developers. Sia is its own network, right? Would it be fair to say that on a project implemented on top of a blockchain like Ethereum, you would dispense with the utility token and just use ETH, and apportion the fees to the "fund" holders?

I've seen a fair number of projects do this. Then people started thinking it'd be less likely to pass muster with the SEC, compared to a utility token. (But now it seems you can't avoid the SEC in any case.)

Disclaimer: Not too familiar with ICOs, and this might be ignorance on my part but genuinely interested in learning.

My understanding was that ICOs were basically a way to invest in companies/ideas smiliar to startups, and therefore reap the benefits if the project succeeds, ie upside.

Were the Siafunds given to investors as a way to reward them for investing in the company and therefore accruing in value as it grows and succeeds?

If so, is that a way to back out valuations for the company/product? (If that is the case, is it true that as more people use siacoins more revenue generated -> more profits -> value of Siafunds goes up)

author of a decentralized cryptographic system myself (we're ranked #2 in Blockchain on GitHub: https://github.com/topics/blockchain), and I have some concerns:

How do you prevent siacoin storage owners from forking the chain to reject the siafund storage fee? They have an incentive to do so, and technologically nothing stops them.

I love what sia is doing, however I was never clear why sia wouldn't have made siacoins inflate proportional to MB*seconds available?

It seems like producing some public dataset (the blockchain so far for instance) and some proof of work that is reasonable to do once and store, but unreasonable to produce for each proof of storage, make the proof of work tied to a private key and then give each user the ability to mint new coins at some discount rate for storing the blockchain.

There are a couple constants there (the cost of the proof of work, the discount rate for storing the public info as opposed to a file contract) that need to be set correctly, but for some values the cost of the token should be pushed down to the cost of storing a certain amount of data for a given time.

This would give a coin that is pegged to roughly what you want the contracts denominated in and would encourage network utilization.

Are the constants too hard to choose (you'd probably need to modify the proof of work and discount rate)?

What are y'alls thoughts?

EDIT: sorry this is not the best description, I can try and find some of my older better write ups of the idea if it's not clear what I am trying to say.

Do you think with the first TSO's starting to come out, will we ever see attempts to remove the flaws of a TSO (accredited investors) vs crowd funding positive, at-least at some sort of happy medium, were more people can have access to vc level returns but also can understand the risk? should there be a licence process for the average person to become an accredited early stage investor.

also how do you feel about the path to TSO if you wish not to ICO, build your MVP blockchain project, grow your project attempt to become profitable/ acquire further investors then go for the TSO ?

thanks for the great article though !

How does one execute an ICO that is compliant? Can you please point to specific details or methodology?

This is also what we did when designing Intercoin (intercoin.org)

In my opinion, it has just the right structure. The more communities install Intercoin's open source platform, the more ITC tokens would be worth. Thus our interest is to build the best open source software we can and literally give it away to as many organizations (colleges, cities etc.) that we can. We can even have Intercoin power other startups' business models, who would otherwise be competing with us - like Colu or Moocho.

A community might use ITC tokens to back their economy in all sorts of ways:

Micropayments

Raising money for an actual project by selling 100% of the tokens

And most of all - an internal currency and democratically controlling the monetary policy (to implement eg Unconditional Basic Income or loans).

In short - you need one main token network as a store of value, and sidechains for actual spending.

One coin can't be both.