Ethereum pre-sale hits 12.7M$, still 27 days to go
blogs.wsj.com
blogs.wsj.com
Besides this there have been some doubts about the development and governance of Ethereum. Let's be clear. Bitcoin is mostly developed by developers funded by the foundation which has a total budget of about $1.5m a year for 2013 and has been doing this for half a decade. Ethereum has already raised as much money as the BF spends in a decade on development, legal, lobbying, evangelism etc. In short, they've got way more money than they need.
And then there have been some complaints about how the team handled things, e.g. an investment round they tried to do earlier but failed. And how there's no real reason to need such a large amount of expensive ethers for actual development purposes, particularly not a long time before actual development start.
Don't get me wrong, not trying to hate on the team. But I can't find a good reason why people buy ethers like they do. They're supposed to be for development, not as an investment, and we really don't need so many of them. It's the equivalent of Google selling developer Google Glasses for $10k a piece, and regular joes buy 10 of em 'just to hold as an investment, who knows it might take off.' It's ridiculous. Only then it was a pre-order, and there'd be no way to start developing for it, the team behind it is talented but unproven, and in a classic hype scheme the price goes UP over time, not down, despite it being already overpriced and sold as an investment instead of as a dev-resource.
This is vaporware for you? https://github.com/ethereum
You've got a 100% working testnet and hundreds of interesting apps/projects with released code in GitHub. Obviously the Ethereum team is not going to release "all the code" immediately if they want to keep the first-mover advantage. It's just about keeping a competitive advantage before clones start popping up like mushrooms. (common sense)
> But I can't find a good reason why people buy ethers like they do. They're supposed to be for development, not as an investment, and we really don't need so many of them.
I know a lot of people like me are buying ETH for time-to-market reasons. We already have toy-ether in the testnet, but this is a whole different thing. Believe it or not, there's a lot of people building things for ethereum. If you are serious about launching something on top of Ethereum, and like the idea, why not support the final stage of development? This is a crowdfunding campaign. That's all.
Obviously there's a bunch of other people just trying to get some ether for speculation. This is normal, and can't be prevented, just like in bitcoin (march'13 & november'13, remember?).
I'm not recommending to buy ether to anyone unless they believe in the project and want to see a team pushing the boundaries of cryptocurrencies development.
Are you sure it's ready? There seem to be critical pieces missing in the execution model. Specifically, arbitrary code execution by strangers.
From the white-paper: http://www.gavwood.com/Paper.pdf "the Ethereum Virtual Machine (EVM) is a quasi-Turing- complete machine; the quasi qualification comes from the fact that the computation is intrinsically bounded through a parameter, gas, which limits the total amount of com- putation done."
This all sounds very interesting and novel. You buy credits for hosting, this goes further then using Bitcoins to rent bare metal servers. It's integrated in the architecture.
Reading on in that whitepaper. "The machine does not follow the standard von Neumann architecture. Rather than storing program code in generally-accessible memory or storage, it is stored separately in a virtual ROM interactable only through a specialised instruction."
Quite exotic and no re-usage of existing code. What does that mean for IO and networking? Are you allowed to create TPC/IP listen sockets? This is undefined.
Moreover, "For the release series, we use a more complex proof-of-work. This has yet to be formally defined, but involves two components; firstly that it concerns the evaluation of programs on the EVM."
The developers aims for an ASIC-proof proof-of-work system and link it to their arbitrary code execution ability (EVM). However, they are still working on this.
Conclusion, it is an unproven research prototype.
If you're asking these kind of questions you're a few steps removed from appreciating the purpose and intent of ethereum... though you certainly are asking the right kinds of questions. I think this presentation would clear things up for you a bit more https://www.youtube.com/watch?v=GJGIeSCgskc
[1] http://bitslog.wordpress.com/2014/01/17/ethereum-dagger-pow-...
[2] https://bitslog.wordpress.com/2014/02/05/changes-in-ethereum...
No known defense against Sybil attacks exists, which does not rely on either a central authority or full access to a social network graph.
The network part of the stack doesn't really need anything new, and I don't think Bitcoin has had any trouble with it.
Someone is pre-selling a cryptocurrency in bitcoins at 2000 of our coins to 1 bitcoin. Stop! No-one same is converting hard cash to bitcoin in order to speculate on this. Their kick starter round is not x million in bitcoin it's "oh look I have some bitcoin that massively appreciated in value, but is painful to sell. How do I take my free money and grow it?"
It's another bitcoin like tulip mania. No matter how nice an idea a cryptocurrency is, it's not worth millions at pre-launch.
Caveat: I may be made to look a fool by the irrationality of crowds
So, high interest in the crowd sale likely derives not from speculation on the value of ether/USD exchange rates, but rather on the value of the cash flow across the many applications being developed on the protocol. As long as developers build these applications, people use them, and they facilitate money changing hands in the form of Ethers, then each Ether will have a set value. Unlike with Bitcoin, consumers will also have a reason to spend Ethers, as they will be the only accepted exchange mechanism of Ethereum applications.
Encouragingly, this will likely act as a self fulfilling prophecy. Investors in Ethereum are motivated to see the ecosystem of decentralized apps develop, so they will build them, and they will use their Ethers. The big problem I could foresee is that because the real value of an Ether will derive from the aggregate value of the Ether "app economy," investors may want to wait before spending their Ethers. But I suspect this will be mitigated by the fact that the apps will only accept Ether as payment.
Ethereum will be successful as a protocol once it gets its "killer app." At that point, there will be no turning back and the value will skyrocket. Surely the market cap will be more than $12.7mm. In fact, by writing this comment I've just convinced myself to invest.
So if it is successful, there will be an immense potential in cloning the applications and provide alternative means of payment overlaid on an "Ethereum2".
Marketing and mindshare do come into play, but Ethereum is facing different dynamics.
Payments is not the exclusive purpose of Bitcoin either. Bitcoin supports things like contracts (https://en.bitcoin.it/wiki/Contracts), via its transaction script.
Bitcoin is essentially a distributed timestamp database, where the storage cost is denominated in bitcoins. This has a tremendous amount of uses.
Granted, Ethereum can do a lot more via its "script", which makes it both more powerful and harder to implement.
The "fuel" used is going to be a fart in the wind, since it is setup like a bidding process so the transaction goes to miner willing to accept the least amount of ether per clock cycle to run the contract. Since these contracts are going to contain at most maybe thousands of instructions, the expense is going to be extremely small.
So at launch, unless there is some "killer app" from day one, or they are able to generate more hype then they are right now, there won't be any buyers (anyone who was interested in the protocol would probably have bought at the pre-sale) and some major selling pressure from the miners and the ether distributed to the development team.
i have no thoughts on etherium. i guess 12M is a lot of dollars, but it's within an order of magnitude of the daily BTC volume. maybe if one guy used 12M worth of BTC to buy this, i'd share your suspicion.
I guess my point is that a "normal" currency is used primarily within one country for all manner of "normal" transactions, and yet has a liquid exchange market where people want to trade with members of this currency.
Bitcoin has some issues in this regard - half of all BTC transactions in 2013 were on one gambling site, I honestly don't know what the total trade value is not the total exchange liquidity / value but my "feel" is people are either staying in currency or cashing out.
As for buying a new appreciation asset with the profits on my last appreciation asset - well, Ethereum feels like a bubble feeding another bubble, no matter what it's inherent properties might be.
But like I said I am getting upvotes and downvotes all Over this issue and should back out and go do more research
I've bought and sold more than $100k worth of bitcoin on two different exchanges, and at no point was it painful. It's infinitely easier than buying $100k worth of foreign currency, not to mention it's illegal to carry that much cash in most states.
(Not saying that it's a wise idea to start doing this, just that it is possible and easy to do).
Did you know the tulips in question were a fascinating breakthrough in genetic engineering? Just one of the many things you don't know about the myth called Tulipmania. I suggest reading the WP article, especially the parts about tulip-breaking virus and the latter half: https://en.wikipedia.org/wiki/Tulipomania
Ethereum has been described by core developers as oil to Bitcoin's gold. it is similar to other metacoins in that it acts as superlayer that empowers the blockchain, that is something like when Javascript was added onto HTML.
It empowers an immense number of custom applications on top of the blockchain, for purposes as diverse as contracts, derivatives, custom currencies, and filesharing. As Robert Ver said recently in Miami, if it works it is at least as innovative as Bitcoin itself.
Enthusiasm is high because, unlike Bitcoin, there is immediate use value for ether within the Ethereum network. All of the applications built in ethereum consume amounts of ether along with their computational cycles.
For folks looking at things from a macroeconomic standpoint, this makes Ethereum perhaps the most interesting of the new cryptocurrencies, because among other things. there is immediate use value for ether outside of trading, mining, and the other standard features of the first generation of cryptocurrencies.
Is it Bitcoin 2.0? Time will tell.
ethereum running out? no worries! just create a new currency ethereum2, issue 100billion and use the blockchain to power more apps.
In fact you could just have several ethereum clones going at once.
Those stats determine where most of the resources have been focused on. Each coins have their own agenda, goal, and different group of community backing it.
i suppose the idea is that it 'burns' ethereum to run an app on top of it, so I can see a scenario where ethereum becomes too expensive and businesses that use decide to move to a different fork that is less expensive.
I guess the oil analogy works then -- it gets too expensive and alternatives are found. However, its just a matter of forking the codebase and starting another one...kind of like stellar did with ripple.
It's true that something similar could be implemented any time (at a cost). However, the same can be said for Twitter or Facebook.
The analogy to oil is not very useful, it seems.
But I also see it as a a problem that Ethereum presumably doesn't have a huge user base yet.
Atm Bitcoin still seems the only safe bet for the long run.
Ie. how much will selling/buying a certain amount of the currency affect the market price. This is what defines money: high liquidity (market depth). Something cannot be money without this property. It might have the potential to become money, though. But without liquidity it is as much money as baseball cards and wine.
They are also working on solutions for mirroring blockchain-based smart contracts with their counterparts in the offline legal system.
What is Ethereum useful for, solidly, that I cannot do today?
the biggest application I see for Ethereum is using it akin to the SETI project, but with a reward built in. Does the Ethereum VM support advanced math? Ie. complex numbers, high precision values? if so, I see a real use case there, or maybe in the form of some online games. but I'm skeptical of the "grand vision" a this point.
In every email you read, every website you visit, every purchase, some sort of social contract exists.
> Does the Ethereum VM support advanced math? Ie. complex numbers, high precision values?
No, ethereum will not be good at or used for any of those things (directly).
> of what use are smart contracts and organizations if they are not accepted by your local jurisdiction?
Ethereum contracts are PRECISELY for instances where they aren't accepted by local jurisdictions, that's what machine-based enforcement is all about.
Bottom line, you're thinking of ethereum as a "faster horse" whereas the ethereum team is trying to build a car- The use for ethereum is that it opens up new possibilities that never existed before. (not that I'm saying it's certain to succeed at this goal.)
You've clearly not used Counterparty yet. Give it a try, it's easy, offers a great featureset, and works 'today'.
(although original post on Quora was written pre-Swarm)
It's economically limited. Ignoring the implementation, we could conservatively say that some interesting web applications are convertible into the "Dapp" form. Right now, these applications are presented as free to the user(free sign-up, free service) and the cost burden lies almost entirely on the service provider, while on Ethereum the user must pay some of the computation cost of their own transactions.
Why is this a problem? Surely everyone can have their personal devices mine and produce ether and then the cost of everyday use is hopefully negligible. But even if that were plausible, there's enough of a power differential between personal devices and large server farms that the latter is going to have a huge cost advantage. From this advantage market forces will seek ways to leverage out a monopoly within the Ethereum platform - to enable spammers, extract tolls, mine for personal information, or any other conceivable mechanisms of earning a profit by crushing competition. It's the position Bitcoin is facing now with the mining pool monopoly. There will be a market and it will have a price, but it won't be a huge, global one, not if it's an essentially centralized system doing centralized things underneath an inefficient blockchain layer.
In summary, currency design is hard. Proof-of-work mining basically favors capital pooling by letting the richest buy their work - although they may add some measure of anonymity, the resulting power dynamics are identical to those of gold. Changing the proof metric to another computationally-focused one only changes the cost basis, not the bottom line. As such I'm very sour on proof-of-work today as a decentralization tool. I would consider proof-of-stake or other metrics to be in a fundamentally different category, although they also need answers for the distribution problem.
https://blog.ethereum.org/2014/07/05/stake/
https://blog.ethereum.org/2014/01/15/slasher-a-punitive-proo...
But I do like the concept of p2p distributed servers.
Inconceivable!
It's essentially free except for the encumbered funds being unusable for a short period.
What do you mean? Just look at the blockchain address where the funds are being deposited [0]. I've done several buys and all of them showed up instantly...
[0] https://blockchain.info/address/36PrZ1KHYMpqSyAQXSG8VwbUiq2E...
It could be that the team sells ethereum to itself with their own bitcoin. The transaction shows up on the blockchain but nothing happened. They both owned the ethereum and bitcoin before and after the transaction exactly the same.
I just wanted to say that the fact something is on the blockchain is meaningless in and of itself because at near zero-cost you can create trades with yourself. That doesn't mean I'm saying they do this or implying it. Again, no reason for me to suspect it, just arguing the point it's possible.
/s
Edit: I had no idea there were >150. That's astounding.
E.g. Look at "Bitshares" by some of the same people behind ethereum— raised money on a whitepaper. When its "investors" later needed liquidity to cash out their investments they did some search and replace on a a copy of Bitcoin to create a "cryptocurrency" which implemented none of their whitepaper features but which would be redeemable for shares in the future system (if it ever comes into existence)...
It's in some ways optimal to _not_ create a cryptocurrency for these investment stunts: if they create something then there is something concrete, something with flaws and limitations, something which (hopefully!) is constrained by internal consistency, security considerations, implementability, etc. But if it exists primarily as marketing then there is no limit to the qualities which it can be claimed to have...
Starting with three different languages, three different codebases is absolute madness.
"Many have tried such as bitcoin-ruby (ruby) and btcd (go), but they are plagued by almost constant issues of them having different states and getting forked off the network."
This is _exactly_ why you should have multiple, clean room implementation from the start.
Oh btw, we've already got consensus with 3 full nodes for quite a while.
You'll no doubt find that your daemons don't behave the way you'd expect cross platform, cross architecture.
Come back to this post when you fork, and tell me again that I'm talking nonsense.
One of the most important aspect of a crypto-currency is the establishment of trust in the distributed database, most commonly by a proof-of-work algorithm. One can estimate the cost of changing the transaction history. The hashrate devoted to the Bitcoin blockchain is 130 Peta-Hashes/second, so to execute a 51% attach you'd need a lot Hashes/second and a lot of money.
You can very easily clone Bitcoin, change the branding and start from scratch, but you'd have to either convince the miners who currently work on the Bitcoin proof-of-work to switch, or come up with a new proof-of-work system that is incompatible with the one used in Bitcoin. Unless you can convince all Bitcoin miners to switch at once, your alternative cryptocurrency will have less devoted hashing power and therefore a lower cost of attack.
So it's more than a branding problem.
Then you literally run the code on your computer and you've started your own cryptocurrency. No joke that's it.
It's the reason why people think crypto will be so resilient because it's just code anyone can run, distributed like torrent technology and hard to take down. What gives it value are network effects, mostly. If you created a superior facebook today, it just wouldn't take off. Look at Google+, perhaps not superior but, the network effects just aren't there even when they on-boarded hundreds of millions of users semi-automatically. There's just no reason to go to a platform where you have 0-3 friends and leave a platform where you have 250 friends. Similarly with currency, there's no reason to buy a currency that only 250 merchants accept worldwide (the closest one being 80 miles away), over e.g. the dollar. Bitcoin is the first big exception but it's clear it's struggling with adoption, there's maybe 2m users at most because there's only about 100k merchants taking it, less than 1%. But that's a million times better than any other cryptocurrency.
Here's a Python client: https://github.com/ethereum/pyethereum
(It also has link to the yellow paper.)
(Of course there were consensus protocols already in distributed systems research, but generally they've relied on having a known set of nodes.)
They are building a distributed file store system. They use consensus algorithms to ensure data integrity. There is a specification for a crypto-currency on top of that.
I do not believe the consensus algorithm has been fully implemented, but what they have looks promising. The documentation is not great, but here is a link to more technical detail about how data is stored in the system: https://github.com/maidsafe/MaidSafe-Vault/wiki/Documentatio...
In other words - nobody knows now how much ether will there be.
I haven't heard any mention of this and I'm wondering how this is structured? If the ethereum founders were able to fail spectacularly and still walk away as millionaires that'd be quite a perverse incentive structure!
It's a bad sign for the crypto community that the market doesn't demand better terms. You can debate price forever but nobody should argue for misaligned incentives.
I'd prefer projects like this go one step further and destroy the bitcoin invested up-front. It doesn't make sense to do ex post (now in this case), but ex ante it signals a commitment to the new coin and a genuine bet on its future value.
Full disclosure: I hold some bitcoin, so other people destroying theirs might benefit me ever so slightly :)
If the early technical backers succeed in getting the ethereum platform widely adopted, their fuel holdings will soar in value. They will also be in a terrific position to layer new businesses on top of their work.
Meanwhile, the rest of us get a very powerful new set of tools to build applications with.
As far as funding, mastercoin, counterparty, bitshares, and others have raised millions in pre-sale funding without a whole lot to show for it (some of them having already since abandoned their projects just to do the funding cycle again). While things being created would certantly be good, some skepticism is warranted.
Not every potential Bitcoin contributor, Vitalik included, is OK with pouring their heart out into furthering the cause of Bitcoin, while having a grotesquely small personal BTC stash compared to early adopters of Bitcoin who did relatively _nothing_ to earn theirs. Unfairness breeds unfairness, and hyped up Bitcoin IPOs are the natural result.
You don't need $20M to make a cryptocurrency. Case in point: Counterparty. I don't know why you brought them up seeing as they didn't do an IPO at all. Counterparty is actually an excellent counter to Ethereum's marketing. They've been around for roughly as long as Ethereum has been marketing itself as "Bitcoin Evolved", but as opposed to Ethereum, Counterparty has in that timeframe actually produced a working decentralized Bitcoin stock market and derivatives exchange with a marketing and development budget of roughly zero.
So because someone can't manage to get paid to do $arbitrary_thing and get their choice of $arbitrary_payment it's okay for them do do things that violate the normal bounds of good and honest conduct and run some sketchy investment scheme?
I don't buy it. If you need to get paid and can't get paid to do what you want to do, perhaps you should consider doing something else? We don't all get what we want at all times.
> compared to early adopters of Bitcoin
Vitalik was involved in Bitcoin as early as just about anyone else. His bitcointalk account predates mine— for example.
In the same way you wouldn't buy a developer-license for the new Google Android version, or a developer-license for Google Glass. Ethers are the de facto dev-license, they're what's necessary to actually utilize the ethereum network. You don't need one.
I love bitcoin and crypto can be a great investment, but ethereum isn't it. And I'm quoting the people trying to sell you this thing. They've said themselves it's not an investment.
> but speaking to core developers it turns out that this isn't really significant at all. I'm one of the 3 core developers and I'm pretty certain I've not met or talked to you, and I can't imagine the other two making such claims either.
> Ethereum has already raised as much money as the BF spends in a decade We are a different tech but so happen so share and exist in the same space. Comparing us to the BF or Bitcoin in general is just downright wrong. You're comparing apples to oranges.
> For one it's still pretty much vaporware, little has been released I've been relentlessly working on this for the past 7-8 months and so has Gav & Vitalik. All 3 of us have made remarkable progress if I may say so. Right now we have 3 clean room implementations with 99.99% consensus and operate on the same testnet blockchain. Vaporware? I beg the differ.
* Go - myself * C++ - Gavin * Python - Vitalik
The Go, C++ and Python implementations have full interoperability. A 4th, Java, implementation is being developed by Roman but hasn't got full consensus yet.
> Obviously the Ethereum team is not going to release "all the code" immediately All of our code is available on GH actually (https://github.com/ethereum)
> Are you allowed to create TPC/IP listen sockets? This is undefined. We have been _very_ explicit regarding I/O (in any form), it's simply not allowed, period.
> Specifically, arbitrary code execution by strangers. I'm not sure if you're familiar with the model we're using but arbitrary execution isn't a problem considering we do not allow any form of I/O.
The arbitrary code, or contracts, are "triggered" by sending it a transaction. Once triggered it will run according to a set of rules that have to be goverend at all time. It's part of the consensus engine; it's "all in or nothing". Once mined, the miner will announce the new block, node's will verify the transactions and execution and can accept or reject based on their findings.
> Obviously it's not vaporware but there are many discussions about their implementation behind the scenes such as "Ethereum “Dagger” PoW function is flawed" Vlad is currently working on the PoW. For code see https://github.com/ethereum/mining
I don't mind a good bit of scepticism but the amount of false claims and downright incorrect information that some of you have been posted really is below the HN standard. Most (if not all) of the answers are available online, just put a bit of research in to it.