Swapping deposit-like liabilities for equity and then encouraging the secondary trading of that debt is banned in the United States for good reason. Bitfinex’s actions do not seem like either a debt-for-equity swap nor a Ponzi scheme, but plain and simple fraud.

IOTA actually seems pretty revolutionary. I don't think it's a finished product yet but if you want some info then it's a DAG ("tangle")[1] instead of a blockchain and offers 0 fees and possibly huge scalability. There are some products already using it: RuuviTag[2], Bosh XDK Iot[3], PoC ElaadNL charging station[4], Modum[5]. Once they prove they can go without the "Coordinator"[6] I'm going to be completely sold on the project.

[1] https://iota.org/IOTA_Whitepaper.pdf

[2] https://lab.ruuvi.com/iota/

[3] https://xdk.bosch-connectivity.com/

[4] https://medium.com/@harmvandenbrink/how-elaadnl-built-a-poc-...

[5] https://www.reddit.com/r/Iota/comments/6vl57m/iota_modum_ask...

[6] https://domschiener.gitbooks.io/iota-guide/content/chapter1/...

The principles could be relevant (although I haven't verified (or read an independent review of) the proofs).

However, at least the execution is dubious: not only was a major cryptographic vulnerability found a few months ago[0], it highlighted that

1. they made their own unproven crypto hash, which is a red flag, (in production, you should always prefer crypto that has survived many years of cryptanalysis) and

2. they were really not up-to-date on cryptanalysis techniques, as being vulnerable to differential cryptanalysis is, as Bruce Schneier puts it, "a rookie mistake".

Worse than that, they seem to rely on security through obscurity, purposefully making it hard to analyse their systems by making it base 3 (instead of the obvious base 2 that all of practical computer science relies on).

Finally, their justification for the coordinator is also a red flag[1].

[0] https://medium.com/@neha/cryptographic-vulnerabilities-in-io...

[1] https://medium.com/@ercwl/iota-is-centralized-6289246e7b4d

The coordinator will be open-sourced and in all seriousness, even bitcoin had a sort of coordinator in the beginning, people aren't even forced to use it/can bypass it, but it's recommended to use it for now. So your statement isn't 100% valid.

Regarding crypto, you can read their response & reasoning here: https://blog.iota.org/curl-disclosure-beyond-the-headline-18...

"The replacement Kerl hash function is unmodified KECCAK-384 that only converts its input and output from/to 243 trits to 48 bytes using basic two’s complement. KECCAK-384 is well vetted and researched."

Just to clarify, since I misread your quote and think others might as well:

> "The replacement Kerl hash function is unmodified KECCAK-384 that only converts its input and output from/to 243 trits to 48 bytes using basic two’s complement. KECCAK-384 is well vetted and researched."

"Replacement" really does mean replacement, i.e. what they substituted in after the researchers successfully attacked their original hash function. (The new one is called "Kerl" and the old one is called "Curl", which seems confusing.)

I'm not sure how asserting that the replacement is well-researched addresses the OP's point that their history of (a) rolling their own hash function, and (b) not adequately considering differential cryptanalysis, is a red flag. True, that specific vulnerability can now be considered fixed, which might not be clear from the OP's post - but it's still evidence of incompetence, which doesn't bode well for the quality of the rest of their design.

This is a common misunderstanding. IOTA never deployed a vulnerable hashfunction. They had precautionary measures in place and thus had Curl there to test it out, which worked out brilliantly. Keep in mind that IOTA asked the team to attack Curl, not the other way around. This was planned.

Curl is meant to be a lightweight crypto for IOT, a field of very active research. None of this is controversial to anyone that isn't looking for things to latch negativity onto.

> Keep in mind that IOTA asked the team to attack Curl, not the other way around. This was planned.

This seems to contradict the researcher's own post [1]:

> We discovered a vulnerability in IOTA after reviewing their code on GitHub in July. We disclosed what we found to the IOTA team on July 14th, and have been in contact with them since then as we discovered new issues and exploits.

Finally, even if Curl is meant as a new, lightweight hash function, it was broken by differential cryptanalysis, not some novel, exotic attack vector. Sounds like it needs a lot of work before it's fit for purpose.

[1] https://medium.com/@neha/cryptographic-vulnerabilities-in-io...

Yes, Ethan was then forced to admit that the IOTA team actually approached him in May.

Can you provide a link please? All I see in the comments to the researcher's piece is an IOTA advisor threatening a libel suit - a really good sign that they "really care" about their technical issues.

I highly suggest you read

https://blog.iota.org/curl-disclosure-beyond-the-headline-18...

Ok. I've read it. Nowhere does it mention IOTA contacting the researchers in question in May.

This article also answers the wrong question. If the crytocurrency is not cryptographically secure all that stands between an attacker and a victim is a piece of malware or social engineering. The fact that the researchers didn't go all the way and document a specific attack that could be performed tomorrow does not mean that Curl was secure in practice.

Finally this continues to fail to address many salient points. Like why use trits? Why wasn't kekkac used from day one?

1. It doesn’t matter whether the software that implements the central coordinator is open source, because the entire challenge of creating digital money is decentralized trust. Chaumian Cash solved digital money with a central issuer long ago.

2. Bitcoin had no privileged nodes, nor does it now. All miners compete on the same terms. A central coordinator by definiton does not, or it wouldn’t be centralized.

IOTA, and others, were not analyzed from adversarial known/expert researchers yet. Period. For more serious DAG oriented research you can check SPECTRE and the papers in this list [1].

[1] https://docs.google.com/document/d/1J8hehbnZWzcIUMQcxMiGbjz8...

Show me the references...

> […] offers 0 fees […]

I’m highly skeptical of this claim since there’s a cost to running any system. It seems more likely that they just made fees implicit rather than explicit (as in Bitcoin) but, regardless, someone needs to be paid to keep servers running.

In bitcoin you don't get paid to run full nodes. Only the miners get paid for verifying transactions. Verifying transactions is done by the users themselves with iota, so there is no need for miners and no need for fees.

> Verifying transactions is done by the users themselves with iota [...]

Unless the cost of verifying transactions is zero, this just means that the cost is now measured in CPU cycles at the client. In the end, this may be higher than whatever you pay with Bitcoin, depending on how much work you need to do. This is what I mean by "making fees implicit" - there's still work to be done, but not putting a price on this work doesn't mean it's free.

Their claim of 0 fees will not last. It means DDOSing will be trivial, and their network will be crippled.

You have to do PoW when submitting a transaction. So DDOSing will not be trivial.

But the PoW is for small IOT devices right? Or at any case it is for regular users, and does not take them minutes to compute. I cannot see how that is resistant to an adversary with dedicated hardware.

> You have to do PoW when submitting a transaction.

Then there is a price; it's just measured in watt-hours of energy spent instead of denominated in cryptocurrency.

> Debt to Equity swap is a real thing and not a Ponzi scheme

Is it when your equity's value does not match the face value

If you disagree I'll sell you 1% of equity in my lemonade stand for $1000

Hence, the caveat:

> Though whether the equity shares are worth as much as Bitfinex is claiming them to be is an another question.

I am not sure but they might be restricting the IOUs or shares to trade on their platform. So they are raking in commissions on the shares being traded. In which case it is surely a scam. But to be pedantic it is not a Ponzi scheme.

As the author has made a strong argument that the equity shares are in fact worthless, the caveat is not much of one.

To be precise, it is not the debt-to-equity swap that the author is comparing to a Ponzi scheme, but the part where it is suggested they get their money back by selling on to a second round of 'investors' - but pedantic arguments over what to call it can only distract from the central issue of fraud.

Not entirely sure. But a friend and I have day traded IOTA as an example quite a bit. We have no illusions (well I don't) about how potentially shady this all is. People start talking in crypto circles. IOTA goes up double digits that says. Then usually just goes back to where it was a few days later.

I assume none have any real value. Though IOTA seems like it has different spins on what it is doing and is trying to do real things with the coin. I've heard positives and negatives. I'm not entirely familiar with the details. Regardless for that reason and in general risk reasons, i wouldn't stake a claim in IOTA or almost small altcoins like the ones you mentioned for long.

The FUD against EOS is really strong. It is interesting that despite the FUD, its valuation is very big too. The FUD is mostly about the business behind EOS, as a technical project is solid C++ code with well thought out architecture. In fact this is the kind of project where as I got deeper into it I believe that it can work. In case of most other projects when I dig deeper, I become more and more sceptic. The reason is probably that the CTO makes this project based on his experiences in Bitshares and Steemit, so the decisions in EOS are relatively mature compared to most crypto projects. Also I find the CTO one of the most talented and most practical developer/architect in the space. (Maybe I am biased as I am a performance optimization geek, and EOS is mostly about high performance) With EOS I regret one thing: that its valuation is so high already. I still invested into it, but I would have invested much more if its valuation would be lower.

TLDR: as an investment, it is not my biggest investment, but as a technology it is my favourite in the crypto space.

Multiple downvotes on my comment proves my point. There is serious hate on the EOS project. No matter how much you downvote me, EOS is still doing one of the most promising research and development on how to improve crpyto network throughput and latency. Ethereum research on sharding is also interesting, but seemingly there are extremely hard problems to be solveed there with way more complex software than EOS.

I didn't downvote or upvote you. I had no idea what EOS is until I googled it. I have zero bitcoins (and some token gridcoins from the last month, but in donating CPU time since it started as SETI).

The above being said, it looks like you are in your own EOS bubble.

You should zoom out of it, and I'd suggest further zoom out of the crypto coin hype, look at the digital coins objectively and decide if you want to lose your money, or risk increasing it.

That being said, some starting points for you:

Coins are trying to become money. We have tons of money, in fact we never had more historically.

After the last few crashes, the CBs dumped primes near zero (to avoid Max style of societial developments), and we even have more money around (cheap debts etc).

But, now we are doing fine.

BIS had a report weeks ago, outlining money contractions, salaries going up, cheap workforce from China+India joining the global economy 20 years ago stabilizing, and all that.

Cheap money, on this planet (so , not in the crypto world, or USA, or Luxemburg, but on this planet) will start contracting.

Crypto valuations, TAM and market caps are as high because people have a lot of extra fiat to dump into it (or in real estate, iPhones, high margin cars, etc).

As money becomes less obtainable, take a guess where they'll be drawn out from (well, Canadian real estate, but other stuff too).

So, after all of the above being said; I'm really glad you have a job as a c++ optimization expert in coin attempt number 3 by your CTO, but I suggest you remain sceptical about it success prospects.

Bitcoin is (or aims to become) digital gold. It is a possibility to store 'gold' in a way that you don't have to trust anyone to store it for you, and can only be stealed from you if somebody knows your private key. Even if you are skeptical about the whole crypto industry, I suggest you to consider that at least the above alone have tremendous value.

EOS is not a money though. It is a trustless high-throughput decentralized execution environment or 'decentralized trustless cloud' so to say. It is an amazing project from technical point of view, (when your cloud application runs, it is run on 21 block producer clusters independently which are voted by stakeholders). And I find it antiintellectual to downvote somebody that speaks positively about this project, while serious and honest debate about it is very rare on the net. (I understand you did not downvote me). Whether it is a good investment, is a tougher question that is why it is not my biggest investment as I mentioned.

As for digital money: Do we need a decentralized trustless money and payment network? There can be a debate about it, but I think, yes. There is a lot of competition in this space, and there is a possibility that because of network effects only one of them will become mainstream. I think DASH is the one that has the biggest potential to achieve this.

All of those are legit cryptocurrencies.