There is no valid reason for the vast majority of what is supposedly a currency to be owned by the company that created it. Imagine if PayPal launched but required everyone to transact in fractional shares of PayPal to get anything done. Oh and by the way, those shares are majority owned by the founders, but they’ll sell you some so you can send them to your friends.
This is ridiculous.
So far this scheme has worked out fine for the original creators of Ripple-- who've extracted hundreds of million selling their massive premine to an ignorant public, then abandoned the original and did it again. What we're seeing from signal now is just a third generation of the same scheme, preempting the ripple founders from doing it again (or maybe they're involved behind the scenes, who knows?).
So long as there seems to be no consequence except a massive windfall (SEC fines against ICO/premines have tended to be a fraction of 1% of the funds raised), it's unsurprising to see them continue.
The fact that it may kill one of the more useful secure messaging apps as a side effect? Welp. This is why we can't have nice things: Collectively, we're better at funding borderline scams than public goods.
If one wishes to subject their wealth to the whims of a massively centralized cartel of "rationally self interested" HOLDers, maybe it's better to deal with the devil(s) one knows.
Problem solved.
Surveillance on daily spends is not valuable. What's valuable is things connected to your identity, specifically associations with other individuals and companies.
The vast majority of people simply don't care about this. I mean I have a hard enough of a time to get people to care about privacy-centered messaging apps. Getting them to even begin to comprehend the myriad of cryptocurrencies and the confusing space of DeFi is simply not going to catch on. To them, there's really no benefit outside of "number go up" and so-called store of values, which conveniently have the nasty side effect of requiring users to do their own OpSec. That's actually harder than you think.
And that's not even accounting for how scam-ridden the entire space is to begin with. Who can they even begin to trust? Seems like an oxymoron for a trustless system, when the fact is they aren't even sure if they can trust themselves.
I find it mildly hilarious too, that places like BNY Mellon and JP Morgan are exploring cryptocurrency storage options. Now we are back to "trusting" those darn evil banks everyone gets triggered about.
See how weird this rabbit hole gets?
If I created a coin today and sold 1% of the supply to you alone, on what basis would you want to store any value in that currency? Given constant buy demand, The currency's market value is defined by what I do. This is why organic price discovery for a currency is important.
That’s the problem.
If Signal was serious about this they would have launched their own fork instead of pitching a pre-mined coin to their users.
Agreed. They either would have launched their own fork and distributed the vast majority to their users, or at the very least chosen an existing project that was fairly well distributed.
This makes me believe they primarily did this in return for an incentive from Mobilecoin.
Marlinspike's been an advisor to MobileCoin from like... the beginning. The article also notes that neither he nor Signal own any actual MobileCoins.
> MobileCoin has not yet paid Signal anything for integrating MobileCoin. We intend to donate a great deal of money to Signal over the coming years.
I'm pretty sure more than one WikiCoin has been pitched too.
Also feel free to read anything by the Basecamp guys (yep, the guys behind Rails).
It won't get you or the investors (another) yacht, but there exist a number of companies that delight their customers and change history far more than many attempted unicorns.
This commingling of business interests means there's more angles of approach, and much more risk exposure.
For all the criticisms of cryptocurrency (and I have many...), I don't particularly see anything on MobileCoin's work that indicates the usual shady cryptocurrency stuff. I'm not sure it belongs in Signal, but I do think this stuff can be evaluated without people starting conspiracy theories.
A bunch of decently well of people decided to do a few handshake deals to make each other a whole bunch of money. That's how most of the world rolls so this is simply par for course.
This statement would work better if that's what I was doing, but I'm not.
You (and nobody else) on this thread knows for sure what's going on there, and if Moxie's been advising MobileCoin for years I don't see how it falls under a handshake deal.
There is nothing to indicate that he, or Signal, are directly profiting from this, other than some MobileCoin people saying they want to donate to Signal (which is a good thing - I'm really not bothered by that particular point).
> I love Signal and I started MobileCoin to help fund their work.
I don't see how it's a conspiracy theory that this is a backdoor way of funding Signal when the CEO literally says that MobileCoin was created as a way to fund Signal.
Is it potentially a bad business model? Yeah. Is it necessarily some backdoor funding deal? I dunno, I don't really buy it.
I find it conspiracy-theory in nature to assume otherwise; I think it could've been handled better from a server source code side but I don't really see why this has to be an assumed bad faith thing.
If Signal had built this themselves, in house, nobody would bat an eye.
You're stretching hard here.
What value do you provide? at least when I buy vbucks from Epic I know I'm getting fortnite skins with it.
Why should we run a node free of charge when you extract all the profits of our efforts?
When I see statements like "there's no economic incentive."
I read "I want all the profits, and screw everyone else".
If you genuinely wanted a decentralized network, then you would provide fair compensation for the added value the node provides against attacks on the network.
more of the same cryptocurrency themes:
1. decentralization for Thee and not for Me
2. regulated by math.... aaand the developers' / founders enormous, unaccountable and unilateral leverage over liquidity.
E.g. the only cryptos I've seen people accepting on dark web markets are Bitcoin and Monero.
I'm not a fan of PoS because it looks like a ponzie scheme (unless it's done like eth where initial distribution is done via mining)
This is actually worse than PoS, because PoS uses standard public key cryptographic to validate ownership of coin in the chain to stake, it at least in theory can achieve "trustless" validation.
This on the other hand is just a shitty attempt to outsource database maintenance to untrusted 3rd parties, using SGX, while forcing them to pay for S3 hosting because they can't implement a DHT to do proper decentralized file transfers.
[1] https://blog.dshr.org/2018/10/gini-coefficients-of-cryptocur...
But don’t the calculations equally assume coins spread out across multiple addresses aren’t owned by one person, when in fact they often are?
Yes, and I do say that. Decentralization is a lot less interesting if most people just end up centralizing anyway.
Almost every bitcoin exchange.
It's typical to pool user funds into a relatively small number of addresses.
That's definitely unfriendly tax treatment. Is it different from the tax treatment that applies to national currencies?
In fact, company stock is WAY worse, because the majority of people are legally prohibited from investing in private companies unless they're an accredited investor (already rich). So, only rich people (other than founders and early employees) are allowed to buy in at super low prices before handing off the bag to the public.
Cryptocurrency removes the underlying asset and simply sells shares of artificial scarcity. It’s only as valuable as what people decide to trade it at, because it doesn’t represent ownership of anything other than itself.
Is there a limit to how many shares a company can issue? No, a board can technically issue shares unto infinity. There is no guarantee of scarcity, no guarantee they will not raise more money.
That company would have value whether or not it was explicitly sold as a stock. The value doesn’t come from the stock.
So when a company has no profit but a high valuation, is this the market correctly discounting future predicted cashflows and giving a company fair value, or is it some sort of scam? Ex: Is NKLA actually a $5.2b electric vehicle company? How about the spade of Chinese IPOs that ended up being vaporware?
Cryptocurrency removes the underlying asset and simply sells shares of artificial scarcity.
The scarcity isn't artificial. It's mathematically provable, open source and auditable. If you think you can manufacture "fake" btc on the blockchain, feel free to try. If you think you can successfully fork and create a whole new chain, you're also welcome to try.
It’s only as valuable as what people decide to trade it at, because it doesn’t represent ownership of anything other than itself.
This is actually factual for anything in existence. A piece of bread. A $100m painting. You're starting to figure out what peculiar creatures humans are.
The scarce asset is the company, not the shares. Yes, they can issue more shares, but those shares still represent the same company plus the new investment money raised by raising the shares. They're not creating more company out of thin air when they issue more shares.
EDIT: To clarify some misconceptions in the comments below: When a company sells more shares into the market they are not simply diluting away existing shareholders. The keyword is that they are selling shares, meaning they take money in exchange for shares. The company's value increases by the amount of money they take in exchange for the sale.
Example: If a company is worth $1,000,000 and has 1,000,000 shares outstanding, each share is worth $1. If the company decides to sell another 100,000 shares and the market buys them at $1/each, there are now 1,100,000 shares outstanding and the company is now worth $1,100,000 because they took in $100,000 of cash via share sales. Existing shareholders have not lost any money or value.
No. Your shares were _diluted_ by the company issuing new shares. Now your 100 shares are worth half as much. Shares have predicted forward value embedded in their valuation. When you buy a share, you're betting that company will continue to grow. If it's having to raise money and issue new stock, odds are it's struggling with cash on hand. Maybe the bet will work out for you. Maybe not. Stocks are gambling, though, don't let yourself believe otherwise.
That's not correct. A company sells shares in exchange for cash. That cash is owned by the company, which is represented by the shares.
Companies can't simply dilute away their shareholders like you're suggesting. The money raised by selling shares doesn't simply disappear.
Yes, they can and yes they do, all the time. That's not only precisely how VC funding works in the early stages of a startup raising seed money and subsequently doing Series A, B, etc. that's also how public financing works via new share offerings on a public marketplace like NYSE or NASDAQ.
GameStop is about to do precisely this very thing: https://abcnews.go.com/Business/wireStory/gamestop-finally-a...
The cash they receive has no forward value. $1 will be worth $1 in 10 years. When you buy shares, you are betting on future value. When a company trades new shares for cash, it is trading some portion of its future value for cash today.
Not only that, but the cash on hand can disappear rather quickly (after all, they are raising it to spend it) depending on the company's expenditures, cost of new customer acquisition and whether its growth strategy is working or not.
Also, shareholders are the last to be compensated in the event of a bankruptcy or liquidation. Bondholders take preference.
The concept of "pre-money" and "post-money" valuations exist for precisely this reason. You can read more here: https://www.investopedia.com/ask/answers/difference-between-...
If a company raises $1mm on a $9mm pre-money valuation, the company is now worth $10mm ($9mm valuation + $1mm raised) and the extra shares correspond to the $1mm raised.
Onwership is diluted on a percentage basis, but the Series B and C investors didn't steal value from previous investors through dilution. There are more shares because there is more money in the company.
No, the company is worth it's last share price x number of shares outstanding. A company is worth what the market will pay for it, not for what some bean counter guesses is the value.
Yes, they didn't "steal" value, they traded cash for present and future potential value.
That cash doesn't just get parked in a bank account (it gets spent) and the company valuation isn't static, it changes based on market perception all the time.
You are thinking in snapshot accounting terms and not in real market valuation terms. Dilution typically causes price per share to fall unless growth is outpacing the dilution significantly.
Did I get diluted?
They absolutely can. When you buy shares, or exercise options, in an early stage company the documents clearly specify that the shares can be diluted, which is how it's on solid legal footing.
If a company sells 100,000 shares at a dollar each, the company is now worth $100,000 more because they now have another $100,000 on their balance sheet. No value is lost in this process.
> This is why a stock will tank when a company talks about diluting their existing shares by creating new shares out of thin air.
Companies can't just declare that more shares exist and dilute away shareholders like you said. They either issue them as stock based compensation, which is an expense, or they sell the shares to buyers, which means money goes toward their bottom line.
You're confusing percentage dilution with absolute diluation.
The shares represent the value of the company. The value of the company has increased by the amount of money raised. Each share represents a lower percentage of the company, but this is offset by the fact that the value of the company has increased by the amount of money raised. The shares have not been diluted on an absolute value scale.
Owning 10% of a company worth $1mm is the same value as owning 5% of a company worth $2mm.
If you own 10% of a $1mm company that raises another $1mm by selling more shares, you now own 5% of a 2mm company. Your percentage ownership is diluted, but your value has not been stolen.
This is basic pre- and post-investment math. Shareholders are diluted on a percentage basis, but not on an absolute basis.
I care how much of future profits will be returned to be, which does depends on the percentage I end up owning. A round needs to enable a bigger gain than the fraction it dilutes everyone.
Issuing new shares is not always a good move and sometimes it might cause investors to lose money and percentage ownership, but sometimes it might be a good move and result in investors gaining money (though still getting their ownership diluted).
HAHHAHHAHHHAHAAAA come on man.
Every Bitcoin represents 100,000,000 tradable assets. If there are 30,000,000 Bitcoin in circulation that means there are 100,000,000x30,000,000 individual assets available to hold and trade. Do the math, and then realize that we’ll arrive at the heat death of the universe before Bitcoin is ever actually scarce.
Bitcoin has a fixed supply, Bitcoin's daily rate of creation cannot be increased or decreased unless everyone agrees to it.
He's referring to the grandparent comment's definition, not yours. The GP's definition is:
>>Early adopters mine or buy large proportions at negligible prices while late adopters mine or buy negligible proportions at large prices.
By that definition, anything that goes up in value is a "multi-level marketing pyramid scheme".
Depending on the voting rights embedded in the share, your ownership is likely meaningless. It doesn't guarantee you rights to dividends necessarily and even if it does, the company can just choose to never issue a dividend (like Amazon). It doesn't necessarily grant you voting rights for the Board of Directors either. Worse, you have to go through a 3rd party broker to buy a share or trust a company like Robinhood to hold your shares for you. As we saw with GameStop, they can rug pull on you at any time. With decentralized cryptos like BTC & ETH, that can't happen from your own private wallet. You can always transact.
Cryptos such as BTC & ETH are provably scarce, not artificially scarce. You can validate supply at any time by running your own node and joining the network. You don't need anyone's permission to do that. It's a public blockchain.
ETH is probably not the best example here because they have rug-pulled people with a hard fork.
"People" here being criminals that exploited a flaw in the DAO, yeah?
The code is the contract, enforced by a decentralized network of actors. Of course that network can at any point change the contract if the majority of them agree to do so – how else would it work? The key is that there is no way for individual actors to modify contracts at will – you need consensus. It's the difference between oligarchy and democracy.
What was forcibly altered? Perhaps the meaning of "force" is different for you than it is for me.
[1] Yes I know that wasn't the real reason why trading was halted
The sentencing of criminals in republics is very removed from democratic action (see drug criminalization).
Show us the votes, then. Did a majority of miners and/or coinholders vote to hard-fork?
Yup, and I don't want public votes to decide the amount of money I have.
Unfortunately, there is no alternative. The value of what you have is decided by what people are willing to pay for it in markets. If people decide that they value the forked ETH that doesn't provide the money to the people who stole from the DAO more than the version where those people have all of the money, then it is going to be more valuable. You don't escape this problem with fiat either.
Basic market mechanisms like this are pretty much inescapable.
As I said, there is no escaping market mechanisms, as value is market contextual. Certainly, there are assets with more or less stable value, but that is still due to the whims of what people (ie. the "public") are willing to pay.
If I'm, say, from a persecuted cultural group, I'll want to keep my wealth in an asset that has the same value whether I or someone else own it. Precious metals fit this bill better than both fiat and public-ledger cryptocurrencies.
That's not true. The shares still represent a claim on the underlying company.
If someone wants to acquire the company, they have to compensate you for the shares that you hold.
Companies can't simply wave a magic wand and steal value from shareholders. There's more to stock ownership than voting rights.
No because the company's income doesn't come from selling more stock, but from selling valuable products. (Companies that don't have actual revenue are indeed multi-level marketing pyramid schemes and there are some of them around, but they're the exception rather than the rule).
That kinda smells pump and dump like to me. Lest we forget, the end of the previous bull runs in 2013 and 2017 wiped out some people that made bad investment decisions (and there's no guarantee another black swan event won't happen again in the future). Not to mention, whenever there is news of someone losing their wallet keys, Bitcoiners breathe a sigh of relief, knowing that that's one more person that has to permanently HODL. Gross.
Yes agreed. Though I would add that this is a paradigm shifting technology, so there may be something substantive underlying all of this Bitcoin hype.
As for crypto as a whole, Ethereum has real world use cases, like stablecoins and NFTs, and an extensive multi-pronged development effort to expand its capabilities, in particular scalability, that cannot be dismissed as mere hype.
Just on the basis of fee revenue alone, and the assumption that this turns into income for ETH holders once the platform switches to Proof-of-Stake, Ethereum's current valuation can be justified with only the assumption that its price-earnings multiple will match that of relatively mature and low-growth industries like electronics.
Adding to this, unlike Satoshi Nakamoto, which I believe to be the alias for a team and not a single person, Vitalik Buterin at least is not shrouded in mystery and is out in the open. I'll give credit where credit's due. He's pretty upfront about his pet projects.
I don't share your enthusiasm for stablecoins and especially NFTs, though that's an entirely different can of worms.
For now, I'm happy to see where this all goes as I watch from the sidelines and not capitulate to FOMO. Yet so far, I can't help but feel that the market effects surrounding the ETH network is nothing but grifts and rich-on-paper showboating. Plus, my God those gas fees...
the integration with signal made the valuation of mobilecoint jump from around zero to 65$. I hope the signal team got some mobilecoins in return for the favor.
except for that giant cache of untouched (so far) bitcoins from the start.
> Blockchain analysts estimate that Nakamoto had mined about one million bitcoins before disappearing in 2010
Just in terms of avoiding confusion, you might want to reach out to mixin.one to try to replace that document with one that clarifies that the design outlined there was not used? Or publicise the actual design a bit better? (I couldn't find a link to this repo on the MobileCoin website, which is why I searched for the whitepaper elsewhere in the first place).
/me glances at the great big pile of Satoshi coins...
Except for that small initial 1 million that stayed with Adam