So many funds will prove a big competitor though, and sequoia Investments is well known for its success with investing in the past. But who wouldn't invest at such a discount (read article: pre sale discount is massive)
I think even more than the benefit of money (to hire talent,) Filecoin is benefitting from the advice and connections from their investors!
That article sounds like mostly sour grapes. The whole thing can be summarised as "How dare they give early investors discounts, when I wasn't invited to invest at the same time!!" This is followed by "how dare they raise money, and then admit they don't actually need as much to run the business!!"
The guy just sounds pissed other people are making more off of this then he will.
Normally I would say, "No, that's really shady." In this case, it seems like the initial raise was almost a marketing ploy. "Look at us! We raised $50M from these big time VC firms! We must be awesome!"
In my mind, it's not especially different from an IPO where banks put their names on the line to build the book and then get a percentage of the offering for effectively being the marketer.
Not really, no. "Follow-on rounds" are a thing. Usually with rounds more like 2x the valuation than 8x, but still. The last company I was at went out and raised 3x as much at 2x the valuation Series B while the ink was drying on the Series A. There was demand, so why not?
Hell, if nothing else the company is cash rich after the first round and less desperate for funding. You need a better offer just to convince them to dilute themselves further when they don't really need to.
Wow. I was just looking at their sale document and while everyone seems to be using the word "vesting". I am unable to find what it means exactly specially if the coins are minted at genesis.
Just because someone else got the filecoins at a discount doesn't make it a bad investment. You are investing for future growth potential vs. what others have bought it for.
How does decentralized storage resist centralization? Backblaze B2 costs $0.005/GB/Mo (vs. $0.021/GB/Mo for S3). No reasonable person will have hardware at home that can compete with those prices.
All it takes is a single person with a few unmetered boxes and a proxy to B2/S3/etc to effectively pressure the price down to cloud storage levels.
As a user, how can I confirm that my data is being replicated properly if there are few big users? One of them might have multiple identities backed by a single cloud account, and if they stop paying their bill and run off with the coins all the data is lost. This will be those darknet market scams all over again.
Aside from the oodles of money that the early adopters will make, what am I missing?
Edit: Thought of another issue. The protocol replicates data, so if we assume a cloud provider does 3x replication, your data will be replicated again by the storage protocol. The extra overhead means that once the economies of scale kick in, only big players that can manage B2 style racks themselves will be able to host economically, just like how Bitcoin mining has consolidated on large mining operations.
> Backblaze B2 costs $0.005/GB/Mo (vs. $0.021/GB/Mo for S3). No reasonable person will have hardware at home that can compete with those prices.
I don't get this. Suppose I have 1TB of data that I want to back up. That's $5/mo with Backblaze. I can get an external 1TB drive for ~$60. Some even have 3-5 year warranties. $60 buys me one year with Backblaze. There's a good chance the hard drive will last much longer.
An external drive also gives me the benefit of higher data transfer rates. I could even splurge and for another $50-60 buy a small fireproof safe to store it in. Then I'm pushing two years with Backblaze. The external drive approach also has the side benefit of not having to trust a third party (yeah, I know, encryption). It seems like a much better deal to me. Does this mean that I am an unreasonable person?
Well, I did suggest a safe. But sure, there are other ways it could be destroyed. As for failure, presumably it's already a back up, so assuming the source didn't simultaneously fail, I can just replace the external drive.
If this makes you queasy, you could always buy a second drive. Two 1TB drives and a fireproof safe, that's equivalent to three years with Backblaze. Still seems pretty reasonable to me.
I'm not sure how you come up with $10. Drives regularly last 5+ years. A single 1TB drive at $60 saves me $240 over Backblaze if it lasts 5 years. Throw in the safe, and I still save $180. Two drives and a safe? Still saving $120. I have drives that have gone well beyond 5 years too - so the longer they last, the more you save.
And, what kind of connection do you have that allows you to upload 1TB in 5 minutes? That's spectacular. An ideal gigabit connection is going to take you a good two hours. Even that would be pretty amazing.
A minor point: a fire-proof safe is not absolutely heat-proof. Put one in a fire, and it will heat up inside. Better ones also tend to release water vapour into the safe itself when heated (as a mechanism for keeping the internal temperature down and providing a positive pressure for keeping smoke, fire, and particulate out), which isn't great for hard drives either. I wouldn't rely on an on-premisis safe to prove any data integrity guarantees against anything but petty theft.
It's not just storage, but content distribution too. So, locality matters a lot, and it will be favorable to have storage close to users. Also, even if it was 'centralized' only to few players, the economics would be similar to the current situation; it's more profitable to keep the operation running than to close it.
I'm not even sure what you mean by 'run off with the coins', as the hosts don't really have any coin to run with. They should only earn when they fulfill the contracts. I'm not sure about Filecoin, but in Sia hosts are required to put up a 'collateral' which they lose if they don't fulfill the contract.
Edit: Running multiple accounts from a single datacenter will increase the hosts risk to lose the files and money.
From my reading of the whitepaper, the protocol forces the data to be replicated by scrambling it with the miner's public key. It's not possible to have two identities using the same backing storage. However, two identities could use the same account or even the same disk, in which case the data would be replicated on that disk, which is useless. At the same time, there is no benefit to the miner to doing things that way.
As far as "running away", the miner is paid by the network for proving they are storing some data at a certain time. It's not like a storage contract for someone's individual data paid up front.
They can, the idea is that they can mine more efficiently by storing the scrambled version rather than storing it unscrambled and re-scrambling when they need to generate a mining proof.
The miner has to serve the "scrambled" data (or derived proof). The "scrambling" is slow enough that the miner cannot do it in realtime. It's in the whitepaper.
> Aside from the oodles of money that the early adopters will make, what am I missing?
You're assuming that all the people selling storage will be buying hardware for that sole purpose. In reality, many regular people have some free space on their computer that costs them "nothing" and they can sell very cheaply.
I doubt hard numbers but Backblaze B2 is $0.005/mo so if it was that much that would be $5/mo for the storage 22c/hr for up/downloads. I guess filecoin would be much less as B2 had 24/7 availability etc. So 2-3 $/mo ?
There isn't really any incentive for these folks though, It's not worth the hassle, bandwidth, and electricity to give up remaining disk space for a couple of cents / month.
That's exactly what Filecoin / Sia etc are doing, no? It doesn't make it any more worthwhile for the individual participants providing the storage though
The first question (economics) is one we've thought a bit about. Not affiliated with Filecoin/IPFS/Protocol Labs, so these answers may be wrong:
Filecoin creates a market for storage. The price of B2 is an important variable in this market, because it creates an arbitrage opportunity where you can use B2 to mine Filecoin.
But why not just use B2 directly? Three reasons.
One, B2's replication isn't perfect (at least, not as perfect as S3), and both B2 and S3 have nonzero political risk (a sovereign could order them to destroy your data). B2 plus a layer of blockchainy replication could be quite attractive to some low-price-sensitivity customers.
Two, to work with B2, you need a business relationship with B2. This is obviously no big deal in the normal world of multiuser, single-server apps that we live in today.
However, if we can somehow migrate to a world in which users have their own servers, it's much easier for those personal servers to have simple, maintenance-free automated relationships with decentralized token-based services. Think about how many centralized service providers a typical startup has relationships with (and how much they cost). This design can't really be scaled down from industrial computing to personal computing.
Three, Filecoin has an interesting consensus design in which the word "miner" is used in two senses: "miners" participate in storage transactions, and also receive block rewards based on proof of stake, where stake is defined as the storage of the whole system. The effect of this on the economics of Filecoin is extremely hard to predict, but it can only be positive.
The one point that seems unresolved about the economics of Filecoin is this interesting interaction between FC as a cryptocurrency and FC as a payment mechanism in a storage market. It does seem that you could take FC's storage market and port it to an existing blockchain. But there may be more subtle technical requirements from a blockchain -- a storage market is certainly a demanding application.
>We introduce Proof-of-Replication(PoRep), a new kind of Proof-of-Storage, that can be used to prove that some data has been replicated to its own uniquely dedicated physical storage.
I'd be partial to a "proof of location" system myself. You know that two computers are physically far apart if they respond to pings in the right way, as limited by the speed of light.
> You know that two computers are physically far apart if they respond to pings in the right way, as limited by the speed of light.
This presupposes that there are no other obstacles like DPI as you'd expect in a place like China or capacity issues due to a broken undersea cable causing traffic to be re-routed to alternate routes.
Not really disagreeing with you, merely pointing out that "proof of location" isn't as easy to determine in the real world where packets are routinely routed through different jurisdictions.
You can delay a ping, but you can't ping faster. If you build a geometrically constrained network of servers pinging as low-latency as you can, then delaying a ping will change your position on the (x,y) plane, but you'll get pushed "up".
Due to the reality of internet-routing, everything is going to be a little bit "up", since we can't actually measure the distance between two points via speed of light.
Sort off. There are a lot of different ways people could cheat, but they all look "weird" one way or another. Weird in a way that a computer should be able to identify.
This is just insane. No code yet, closed to investors with at least 250k income or 1M in the bank (Per SEC rules), coins given to friends before investors could get in on it.
Whenever irrational or weird things like this happen, i always tell myself that maybe people aren't stupid, maybe i just miss a crucial piece of information.
For example, who are the poeple lending that much money ? Why are they doing it ? Is this whole thing some kind of money laundering or tax evading scheme ? Is it related to central banks having 0% interest rates, etc..
You only know what happens after some time, but you always end up knowing.
I see parallels to the 1810s in America where an explosion of banks needed virtually nothing to get chartered and issue unlimited amounts of their own currency. That went great, until it didn't.
That's an interesting link. What's particularly noteworthy is the mentioning of the inflationary spread of paper money that the banks issued which had no gold/silver etc backing...and the role of the government facilitating this to finance their war. Now, the crypto world was created as a direct response to that problem - nobody can issue fake bitcoins/file coins. You will have to have the cryptographic key to a public address. In that sense while we might be back in 1810 we seems to be branching off into an alternative reality where 'banks' can't produce more coin-notes than they have. I am also not sure anybody would accept a paper note as a substitute for a Bitcoin.
I think about it this way: if I get a 20 dollar paper note let's say in 1810 and believe it to represent 20 ounces of silver (simplified to make the point) but upon visiting my bank branch I only find 5 ounces - the bank is insolvent and the paper notes immediately near worthless. In the crypto world 5 filecoin will always be 5 filecoin- and I can see (and trade in and out of them) on a 24/7 basis. That's quite a different trust level to me. In fact I can 'shapeshift' them into hundreds of other coins that I deem more relevant or worthy as a value store at a moments notice. Does not that sound like a superior system, even when granted, it's not perfect (as long as we are dealing with imperfect knowledge of the future and human emotions)
This seems to reinforce the analogy rather than rebut it. Your coins can still very suddenly go from being worth X worth of goods or services to .01X. It's maybe even worse with crypto, since the only things you can currently buy are dollars or other coins.
The ability to "shape shift" your declining currency to better ones assumes you can out-speculate the market in knowing when to exit, and which coins to buy.
But it's still not backed by anything, it's still potentially worthless the moment you go to cash it in - you have a better idea of that potential, sure.
And maybe filecoin is an exception - most ICOs seem a little scammy at best, with value based purely on speculation and scarcity.
It doesn't matter whether "nobody" can issue fake coins on a particular blockchain. If anyone can issue their own ICO, that's like the banks issuing their own currency. The only difference is that, once issued, you can't stop people from transacting in it (i.e. you can't close their account, or confiscate their money).
Libertarians should be thrilled. Fractional Reserve Banking represents millions of individual decisions around the world to lend money, which does not require the Federal Government. Anarcho-Capitalists should be pressing for zero regulation and allowing anyone and their mom to issue any amount of credit money.
In the age of technology, this doesn't sound as scary as it would have been in the past, when you had to keep the relative credit of 100000 currencies in your head. For example, the Trustlines network, or Interledger protocol, or Lightning network, will allow people to transact using Trustlines between each other. VISA and other financial merchants may use Trustlines as well.
Think about VISA issuing banks, etc. They give you a credit card and they don't know how much you're going to spend on a given day. That credit line is yours. That card is not fiat so the stores don't have to accept it. But now, many do, because they believe the VISA system and the issuing bank will make good on the purchase and exchange their "VISA currency" for money. Same with PayPal, WeChat, AliPay, Venmo, etc. They all have fiat reserves.
I personally think regulation is a welcome response to the Free Banking Era and wildcat money, but either way, many communities would benefit from issuing their own currency: Detroit, Greece, etc. Bristol Dollars have Pound reserves and Bristol issues its own currency.
I think that it would be really cool if communities could issue their own currencies. Read this: https://qbix.com/blog/
Can you expand on how alternative currencies can help economically depressed communities? I can see the use case of getting money out of poorly managed fiat currencies, as with Greece or Venezuela, but I don't think Detroit's economic problems have anything to do with the dollar itself.
The linked blog mentions Detroit, but doesn't go into much detail.
> Now, the crypto world was created as a direct response to that problem - nobody can issue fake bitcoins/file coins
Depends on your definition of "fake"? Anyone can ICO a new "real" crypto coin, but what gives those coins value beyond speculation?
If I make "klipt-coin" (which would cost me nothing but a little time) will you buy it just because it uses cryptography? If so, I have a crypto-bridge to sell you.
I have a similar feeling. Banking explosion of mid nineties Russia. My mom was a de-facto CTO of a bank back then. What got her that job was the simple fact that she was the only person that bank found competent enough to just code basic things in C, Fox Pro and Basic (back then, those were virtually unknown in Russia. The only popular "Western" programming language was Pascal).
Back then, solely founding a bank to 'jump on the bandwagon' earlier than others was seen as something much much more important than to have that bank functioning properly. Now, none of those first wave banks remain prominent. Out of roughly 2000, only 20 function today.
Sorry disagree.... C and Fox Pro were known and used in Russia at least end of 80s when I started to look.for gigs. Pascal I used last time at 1990 as my first contract as a student. Then switched to C. Then added Ada. Clipper/FoxPro/dbase were de facto tools to develop any db backed apps beginning of 90s. When I came to one of the major banks in 1994 and said I'm using oracle they stumbled and said "we are not there yet... dbase ... sorry" lol
I'm extremely bearish on ICOs. I almost never seen any real-life use case in the wild. There was some push a couple of years back when some retailers started accepting Bitcoin, but I almost never see this thing now.
It's absolutely dead in India, for instance, a market of 1.4B people who would, presumably, be Bitcoin's target customers
Use language correctly. If you want to say Bitcoin is not used for purchases, then write that. Even if people were only speculators, it would be incorrect for you to say "Bitcoin is absolutely dead".
«I can't recall the last time I saw an Indian website accept Bitcoin»
One of the best use case of Bitcoin is for informal person-to-person payments, eg. sending money to friend/family. No merchants involved.
People who want to get in early and grab as much share of blockchain crypto-assets that have Ponzi-like scheme built into them early on - the global, decentralized Ponzi-like schemes. They understand that the wealth will be unreasonably (insanely) re-distributed to early adopters if these take off and if society is tricked and manipulated into adopting it. And as I feel I always need to include - I'm not putting down the value of blockchain as a utility.
stupidity doesn't explain it all, because people are also naturally reluctant to give their own money.
Either they are stupid and abused , in such a large number that you can witness million dollars ICO every week (which means a really large scam is actually being organized), or there's another fact we're not aware of.
"Many individuals grew suddenly rich. A golden bait hung temptingly out before the people, and, one after the other, they rushed to the tulip marts, like flies around a honey-pot. Every one imagined that the passion for tulips would last for ever, and that the wealthy from every part of the world would send to Holland, and pay whatever prices were asked for them. The riches of Europe would be concentrated on the shores of the Zuyder Zee, and poverty banished from the favoured clime of Holland. Nobles, citizens, farmers, mechanics, seamen, footmen, maidservants, even chimney sweeps and old clotheswomen, dabbled in tulips."
A rather important bit from the Wikipedia page to keep in mind when reading that quote:
"His account was largely sourced from a 1797 work by Johann Beckmann titled A History of Inventions, Discoveries, and Origins.[11] In fact, Beckmann's account, and thus Mackay's by derivation, was primarily sourced to three anonymous pamphlets published in 1637 with an anti-speculative agenda.[36] Mackay's vivid book was popular among generations of economists and stock market participants. His popular but flawed description of tulip mania as a speculative bubble remains prominent, even though since the 1980s economists have debunked many aspects of his account."
Also see the "Modern views" section. Basically, as far as anyone can tell Mackay's account of tulip mania is mostly bullshit.
I picked that phrase for its narrative effect, not its literal truth, but if you need more authoritatively documented example of mass stupidity and greed leading to a speculative bubble we don't have to look back 400 years...
as opposed to regular shares that will at least bring dividends every year ?
The only person i know that trades crypto currencies do it with pocket money. But the sums we're talking about here are about something a bit different (i suppose).
well, people buy out of the money options on all sorts of stuff, like oil and other things. It;s a bet that has small limited downside and large upside, so not completely nonsensical. I invested in filecoin. I figured, hell, if I lose 1-2k no big deal, but if this thing takes off, I could make a lot more
Protocol Labs is a Y-Combinator company with investors such as Naval and USV. They have already built out IPFS -- a popular decentralized file sharing protocol. If there is any team you want to bet on making decentralized storage possible, Protocol Labs is on the top of that list.
IPFS is cool tech but "popular" might be overselling it a bit. Furthermore it's still unclear why they would ever need more than a quarter billion dollar to build their products when they managed to build IPFS with a tiny fraction of that.
I'm not saying they're necessarily dishonest but it shows that the current ICO system is rather broken. Instead of slowly building up investments in rounds as your technology proves itself ICOs incentivize you to raise ridiculous amounts of money right at the start.
Popular when seen in relation to other options for decentralized storage perhaps. It might be a small group at the moment but they can still be large in a small space.
I star everything I find interesting so I may find it later, but in reality I did this maybe a handful of times which makes my stars ~99% meaningless.
Not saying everyone does this, but I doubt my behaviour is rare and I wouldn't read too much into github stars as they are too cheap to create. Look for actual use.
The most stared project I helped create has +5k stars from hitting the HN frontpage a few times, and there are very few actual users (by now probably none).
IPFS has compared to that much healthier growth, and for the number of stars they have a pretty decent userbase from what I can gather.
Ironic how the decentralized economy is increasing social inequality more than ever before. "Fight the power man!" yeah, ok, more like "shift the power to just me and my 17 friends-- we're cool, I promise!"
They are probably betting on the low probability event that this becomes THE crypto currency. I can buy a hard drive with more space than I ever need for 40 dollars. A storage service could get it cheaper, so I doubt that they are betting on cheaper file storage aspect of this. That is just a way to get the value of their currency off the ground. That may also be why they need so much money: to initially guarantee an exchange rate to other currencies.
This is why people are putting as much money as they can. The total crypto market cap is 160B, which is basically nothing. There are now future Apple, Google and Microsoft stocks in crypto traded for pennies.
In the investor groups I am in totally anonymous strangers are pooling multiple hundreds of thousands of dollars for ICO funds, all based on trust. The idea is to send as much money as possible as a single transaction with insanely high transaction fees to get ahead of everyone else before the hard cap is reached.
If you have some amount of money you don't mind losing just buy some BTC, ETH, LTC, NEO, GAS, OMG, PAY, XMR, BAT, LSK, ARK and forget about them for a few years. November will be a good time to buy in because the uncertainty about the BTC hard fork will make people exit to fiat.
Thank me later.
As for Filecoin - their ICO cap is unreasonable, this is too much money, as soon as their tokens hit the markets the price will drop to nothing.
Honest question: So the tokens would be used to operate on the "filecoin blockchain" as a fee to store files. A.) Why would I be interested in buying that if I don't want to store a file in a decentralized system. B.) Why would I want to buy it if it will cost 1000$/coin to operate in their blockhain?
The huge valuation is almost surely just speculation. I believe it has value in many uses cases but as you point out with point "A" not most use cases.
For "B", the coins are highly divisible and the costs of usage will be driven the market. You probably won't need $1k to use the network, the same way you don't need ~$4500 to use Bitcoin.
We're building OpenBazaar on top of IPFS to distribute user's stores. But that relies on people visiting and seeding each others stores. With Filecoin, vendors will be able to pay other users to seed with reliability.
Disclosure: We work closely with Protocol Labs but I do not own any Filecoin and don't plan to until it can used for applications like ours.
First of all, is CoinList a registered broker-dealer with the SEC?
The SAFT can take advantage of the 506(c) rule which the JOBS act introduced, allowing you to raise unlimited amounts from accredited investors, and do general solicitation. But I believe it requires the securities to be issued through a registered broker-dealer.
This guy seems to believe that the token issuance itself is not covered by 506(c) if the token is a security. Where does his reasoning come from?
But even when the next security is issued to these investors, will they be able to trade them? The Exchange Act regulates the sale and interstate (electronic certainly would be) exchange of securities.
If the tokens are later considered securities, then they may not be tradeable. However, I doubt that, in practice the SEC will go after anyone in particular on the exchanges, since there will be tons of participants by that time, and especially since the project has taken the most amount of effort to comply with the regulations, and many others didn't. All it might do is halt the trading, and confiscate the tokens of whoever is trading at that time. And the exchanges have already been trading all sorts of tokens, so they are more likely to take this one.
So Filecoin is intended to create a marketplace for the world's unused storage capacity. Is there a corresponding coin for the world's unused computation capacity? If there isn't, should someone create one? Probably using "deep learning" and "big data" as buzzwords, and somehow tie in with adtech / analytics / surveillance. I wouldn't buy it, but it seems like the kind of idea that investors would throw billions at!
Computation is much harder because it's not possible to do it in private and secure way. You could only compute public datasets. Even in 3D rendering this is the limiting factor. Still, I think such a network would be necessary for the creation of autonomous AIs.
I don't get it. This could work if we have a shortage of storage or limited amount of storage, but that's not the case here. Storage is as ubiquitous as air. These coins are not going to be worth much. This is a belly flop waiting to happen.
No, the Ethereum Virtual Machine (while Turing complete) is intended to run smart contracts. These are conceptually simple programs for moving around ETH (or other tokens). To execute a program on the EVM, storing the result in the blockchain, you must pay a fee proportional to the length of the program and required storage. So even though the EVM is capable of general computation, complex programs are prohibitively expensive.
Distributed computation and storage can be made more reasonably priced by doing the work off-chain (that is, not on the EVM) and then putting some sort of proof that the work was done on-chain.
ICOs are fraud IMHO. I want to ask why this is even legal, but then I think - why shouldn't it be? And then how can people be so stupid? There is no legally recognized thing as ICO is there?
No, an "ICO" is not a legal term. Filecoin, however, is one of the few folks that tried to comply with US law. They limited their sale to accredited investors and user a new legal document referred to as a SAFT (Simple Agreement for Future Token), analogous to the SAFE documents popular in startup land.
Most ICOs are unregistered securities offering that are violating US law by going public without an effective registration statement in place with the SEC, or an exemption therefrom.
Some ICOs may be legal to the extent they are not 'securities', I.e. the argument that you are buying a useful network token, not a security. In my opinion, this argument is BS for the majority of ICOs.
Not every coin has to promise to appreciate in price. In fact, I'd argue that bitcoin and other deflationary currencies lead to hoarding behavior, and are not good as a medium of exchange. (However, they make an excellent store of value, and sending large amounts of money once in a while.)
Here's who I think should really be issuing securities: local communities. There's an exemption for municipal securities in the Exchange Act, although I think later it was plugged (lawyers anyone?)
That's what my company is building. A platform to help communities issue their own currency, like Bristol does. If Detroit had it, it probably wouldn't have gone bankrupt.
What we still haven't figured out is, why would investors buy the tokens if they not increase in value, but perhaps the opposite? It can't be because of any "over and above" value to the investor, in the form of capital gains, etc. But if the communities buy the tokens, then that's a product that they issue to their members. Like kickstarter, it becomes a product and not a security.
If you're interested in Filecoin, I suggest looking into Siacoin. It's been online for several months and actually works. Filecoin is literally vaporware at this point with just a whitepaper.
StorJ isn't really in this space as the entire system is centralized. You can't buy storage from anyone other than StorJ, nor can you sell storage to anyone other than StorJ. They don't have a free market like Sia (or even Filecoin). The protocol technically supports it but it's not implemented and doesn't seem to be high priority at all.
For what it's worth, I could not be more excited about Siacoin. I think both it and Filecoin are, along with the nascent self-sovereign identity providers, the most important projects in the tech industry right now.
On your second point self-sovereign IDPs are not going to become a thing, it's a huge chicken and egg problem, consumers don't care because there's no merchants on board and as a result merchants don't care.
The only real option is to extend out from something that already exists, has a large customer base, and that you true to be secure. That way you solve for the chicken and only need to make an egg. It could be social media (FB, LinkedIn, Insta, SNAP), private (teleco, bank, ISP) or gov but the point is ou already need that critical mass as identity is a secondary benefit to a consumer (at least right now).
I think we’re about to see a whole new class of browsers and app platforms emerge in order to exchange small amounts of cryptocurrencies for incremental services on the internet. It will start with ideologues who believe in a distributed internet or whatever, but what will quickly happen is people will learn the value of their personal digital output and monetizing ones own data will become the driving incentive for adoption.
Sorry, didn't mean it's pointless, I meant to say they have proved that this concept/idea can work. Siacoin has been up and running for a while now and works very well given how young the concept is. They have a great dev team backing them too.
People will only buy Filecoin because very well known VC firms are already backing it. And that creates trust somehow? I wonder how much it will hurt the reputations of these firms.
That's how raising VC money works too. You get a lead investor to do their diligence and set the terms. Other investors come in and go "So&So is leading this round, I trust they did their due diligence so I'll invest too"
IPFS will be powered by Filecoin in future. Filecoin will incentivize miners/users with redundant storage to be a part of the network thereby increasing the size of the network itself.
That's incorrect, the relationship between the two are the opposite. Filecoin will be powered by IPFS and not the other way around. IPFS will still be the same project it is today, and using Filecoin (if you're already using IPFS) will be optional.
IPFS has been a frustrating project to watch. It's felt like it was 6 months away from being amazing for... over two years now. Despite their writing it in Go explicitly so they could get something working and usable quickly, rather than C/C++ which would let other languages and platforms wrap their lib, which is what I'd have expected them to do if they were serious about becoming an infrastructure-level protocol. This ICO may explain some of those choices, and makes me more worried about the future of the project than ever, which sucks because I really want to use it and to be able to trust it'll still be around in 10 years.
From my perspective, they seem to focus to much on the technical side. E.g. they are working on P2P communications over the network formed between nodes and lots of libraries and features, but not much work in the way of making it user-accessible. People put all kinds content on IPFS, but the most common way to access it is through centrally run gateways, either the official ones or ones run by the individual project. No browser plugins that would upgrade sites from HTTP through gateways to using IPFS locally, no special IPFS-enabled browser (like e.g. dat has in beaker browser), no other applications accessing it directly...
It's possible that I'm missing something or approached it with the wrong expectations, but I'm underwhelmed by that side of it. E.g. I looked into using it on my website, but can't find an actual benefit to doing so.
That's where the choice of Go (which I like as a language, mind you) has hamstrung them. Anyone who wants to do anything with it must either 1) add an entire separate daemon as a requirement for their project/plugin/library/whatever, or 2) re-implement all of IPFS from scratch, and commit to tracking the reference Golang implementation forever.
Sure they have a Javascript implementation they're developing in parallel, but in a world where most end user devices are battery powered what the hell good is that for anything serious or interesting? The requirement of a daemon to achieve reasonable network performance is already asking a lot of anything with a battery indicator. And at the same time the stability/reliability's still not there to use it for infrastructure, which is the other way they could have taken it (though they seem to stress that it's for end users).
Again, just a very frustrating project to follow. Oh so close to being awesome. Maybe in another 6 months...
Not every investment will succeed which is the point of risky startup investment. And USV has an incredible amount of success (Twitter, Kickstarter, Cloudflare etc)
It will be too late when they act but I can't blame them - it is all about politics. With recent pyramid scheme it was something like:
1. It is as scam, why the regulators don't do anything!
2. Regulators added company to warnings list - people say it is not enough
3. Regulators launch formal investigation - people still say it is not enough but another group complains that government tries to interfere with entrepreneur
4. Some branches are closed shut down - people say it is regulators fault that caused massive withdraws.
5. Pyramid scheme company is dead, everyone complains that regulators didn't do enough and reacted too late.
The SEC issued a warning that many offerings labeled "ICO" are fraudulent. (This one may be different than the frauds, but the SEC's warning was to watch out if you see that initialism.)
ICO lunacy aside, did they break the funding record by virtue of holding a month-long ICO? How much has ETH gone up in the meantime? Do you value their funds at the start price, the day they got each coin, or the end of the sale?
I suppose the rest of the monies should be spend on advertising the service. At least, if you want to avoid people calling it a scam, Ponzi or pyramid scheme.
At a basic level, it is 1/280th the market cap of BitCoin.
So just a bunch of people holding BitCoin selling <1% of their holdings for diversity would cover it.
It is an error to compare it to an investment in a product. It isn't. ICOs are different.
I reckon it is a lot of rich early crypto investors who will happily throw $1 million into each of 20 different new cryptocurrencies that look the most plausible.
This one looks plausible, solves a real world problem, and covers a different set of use cases to Ethereum or BitCoin. It has VCs watching over it for management mentoring and control.
So worth the diversification of portfolio. Esp for someone whose crypto portfolio shot up a load this year.
Why are ICOs different? Because anyone (in this case, anyone acredited) can get in early. How many people in 2003 would have invested in 20 promising social networks if they could have?
Filecoin is VC money, it is a different type of coin because of it; after the first confidence crisis it might crash and never come back.
I think VCs are too fickle and not idealistic enough to support the value of a cryptocurrency in the long run.
This is an absurd comparison—major sports teams bid for extremely scarce talent, and they generally have the revenue to support large talent purchases (which have never been anywhere close to the price of Neymar).
No file storage startup with minimal operations needs or deserves this much money. They’re not in an industry with high initial fixed costs and they’re not labor-intensive like an Uber or Instacart.
> This is an absurd comparison—major sports teams bid for extremely scarce talent
If you watch closely, the increased prices payed by sports teams are calculated in such a way to lower operating profit for the "team" (i.e . company) to a tax friendly point.
So many funds will prove a big competitor though, and sequoia Investments is well known for its success with investing in the past. But who wouldn't invest at such a discount (read article: pre sale discount is massive)
I think even more than the benefit of money (to hire talent,) Filecoin is benefitting from the advice and connections from their investors!