Good seeing you in Miami Josh. How's the preorder business?

Basically this is the fundamental problem with such a scheme. Even if one limited the per person investment, then large investments can be bundled amongst groups of people similar to how political fundraisers process large pools. There are few effective ways to limit the per person investment that seem to be practical in our case, but we still have some good ideas about equitability in certain respects and will be modeling them over the coming weeks.  

Cryptography background talking. Also I've written a lot of java code. There are some really amazing developers in the java community and their code provides a clear contrast to bad code. Nxt is a young project and they will likely clean things up a great deal over the coming months. Success breeds scrutiny, which in turn breeds quality. It's important to point out that Nxt is a fundamentally different technology than Ethereum. We can co-existed quite well. Nxt more challenges Bitcoin in certain respects.  

Java 8 is great; Nxt's java code not so much nor the design of the Proof of Stake. They seem to have a very active community and thus it will likely get better quickly.


We have two people on our team who started their financial careers- as many thousands have done- at Goldman Sachs. They have both since left and started other ventures. In both cases those were hedge funds. Joe retired and moved to Jamaica to be in the music industry and came out of retirement to join us. Costa went to university of Edinburgh to study LCS's relationship to finance for a PhD in Quantitative Finance. He is now running a hedge fund in Kyrgyzstan as well as building a full clearing house in etherscript.

We have no relationship with Goldman Sachs nor are they an investor. I wouldn't take their money if offered. I have great respect for their knowledge of the financial industry as well as quality of talent, but no respect for their business practices or questionable conduct.

We were never contacted by a regulatory body nor believe the models we have chosen are in any way in violation with relevant jurisdictions. This said, logistically and regulatorily, there are differences between raising 5,000 bitcoin and 30,000 in an equitable and fair way. We have a duty to those who trust us to do things the right way and have been in deep discussions for months about this topic with counsel from three different countries. I appreciate your concerns and they are indeed important to address and will be publicly once we announce the new fundraising date.

There are actually several models we could pursue if desired with some constituting a tax event without the need for any filing and others that could require one if we choose to accept certain jurisdictions. Ultimately, it comes down to what is best for everyone in the Ethereum community and what will allow for the best ROI for those who participate in the Ethereum Project. We are taking extra time to ensure this is answered in the most thorough way.

In the meantime, enjoy the testnet and all the other developments we will be launching in February and I'll see you guys soon in Zug.     

Also please be aware that LeoC sent this message to me via a PM:


Please ignore the FUD. We are going to make every attempt to address all concerns. In many cases, with Vitalik and Me directly.

I will try as hard as I can. Ethereum is not for everyone, but I think it brings both a wonderful set of innovations to this space and also a very attract value proposition to speculators. I hope you can enjoy one or both. Ultimately, we will be spending a lot of time communication our goals, vision and the core aspects of Ethereum to as many people as possible. The difficulty is that our infrastructure wasn't setup to receive 1,000s of emails, over a hundred pages of forum threads and all the other communications within a two week spread.

We were even in Wired http://www.wired.com/wiredenterprise/2014/01/ethereum/. I make a promise that we will work harder and hopefully get everything sorted out in a few weeks max. As for the fundraiser, innovation requires fuel and thus we'll make sure we get to it as soon as we can as well. Our goal is to be as fair and equitable as possible.

We've done two things. First, we have hired a director of communications to help address as many questions as possible and he will be coming online as soon as possible (most likely Friday). Second, we are going to hold some form of AMA and build a complete FAQ.

Vitalik and I will also be trying to do some sort of regular Q&A session to fully address everyone's concerns. I'm really sorry for the delays in communication. Most of the team was in Miami and we were hit so hard down there with work it was nearly impossible to regularly check things here.

The best part about the bitcoin community is that they are very smart and have great ideas. I really do value a lot of the feedback we've received here and I make a promise we'll answer as much as we can as soon as we can. This said, it will take some time as the queue is really long, but hopefully we can at least address a lot of the core questions within the next week or so.

We are also releasing the centralized proof of concept testnet on Feb 1st and making an announcement about how we plan to better engage the cryptocurrency community on Feb. 20th or so. Please check out the code, look at the protocol specs, the high level language and the compiler we have, and write some contracts. Costa and co are building a full clearinghouse on top of the testnet.

Anyway, thanks everyone for your enormous patience and I look forward to hearing from you all soon.  

Goldman Sachs is not involved in our venture. We did not solicit them for investment, the company is not assisting us in any way.

We have two quantitative analysts on our team who both have a diverse background off and on wall street including both working for Goldman sachs at some point in their careers. Dr. Costa lives in Asia at the moment and runs an independent hedge fund and Joseph lupin has most recently been involved in the music industry in Jamaica. 

The blockchain is owned by those who participate in the fundraiser and those receiving the early stakeholders premine. Let me be clear: No Bank, No financial entity including Goldman Sachs has been allocated any amount of the premine. If they want a chunk then they have to buy it once the fundraiser starts like everyone else.

Good old 00:00 GMT

We will have a legally vetted prospectus available on the first day of the fundraiser that will contain our terms and conditions as well as the risks and uncertainties as we understand them in the ecosystem. Obviously no one has the ability to fully understand the long term uses and misuses of their systems; however, legally speaking, ownership of ether and use of the reference client itself should be classified the same as use of bitcoin and bittorrent. Thus you are liable for the things you do whereas the developers, speculators and general users in the ecosystem are not.

Distributive ownership of dubious things is another fascinating legal topic that is quite relevant to people in the bittorrent sync and tor communities as well. It is really unclear how the law addresses an actor that simply relays content without purpose or direct knowledge- especially if the content is encrypted for example. In a client server model, generally this concern is addressed by a central entity compelling the server to shutdown usually on a sliding scale. This course isn't possible in decentralized networks nor have campaigns to attack random nodes been terribly effective.

All this said, bad actors will quickly learn- as they are with bitcoin- that the transparency of a blockchain will remove any long term sense of anonymity from their activities. The blockchain is a perfect, honest accountant that will keep accurate books. The blockchain is considered an admissible ledger. Nodes can collect IP addresses of their peers in distributive networks. Yes there are defenses, yet in an age of prism, one must have considerable domain skills to keep everything hidden. Thus most won't and this is why law enforcement as a whole are warming up in certain respects to things like bitcoin and blockchain based ecosystems.

This is FUD and you know it. Stop spreading it. As clearly stated the founder ether is different from normal ether and the founders receive no bitcoins raised outside of a payroll that is pegged to a fair market rate by independent accounting.

How many coins we taking about here?

I have a lot of meetings and things to address today so sorry that I can't answer every question posted, but this one is important so I'll answer it now. The founders will not receive any share of the bitcoins raised outside of a transparent payroll from the holding entity.

The bitcoins raised will be used to develop the protocol and all other necessary expenses to ensure a positive ROI for investors and the long term health of the Ethereum ecosystem. We will have independent accounting as well as counsel and all expenditures will be disclosed publicly.

In terms of the founder pool, we will be releasing a document specifying the percentages, how it vests, who receives a share and the lock in times.  

Be sure to watch cointalk

We took this a step further and came up with some innovations in the trust model we think that the community will like. I won't spoil it yet

Services launched on ethereum are fee regulated and thus require Ether to function. More services, more fees, more need for ether to use them increasing demand. Ether like any other asset will only appreciate in value because of an increase in demand.

Consider ether like an ETF of everything done in the ethereum ecosystem. Applications would be specific companies in the portfolio. It's not a perfect analogue, but I hope it helps.

ROI is ultimately connected to the demand for coins and it is our belief long term that the utility presented will be significant thus driving demand. I suppose it will depend upon your time horizon and also market perception. Ethereum will not be transferable until mining begins and I would expect enormous volatility during the first few trading days; however, I reject the notion of immediate liquidation. Should the product be well formed it appears highly likely many people who missed or passed on the fundraiser will want to invest while prices are still low. My goal is not to make investors money immediately after mining begins. My goal is to offer a product that will have a healthy ROI over some reasonable period of time (say 6-12 months). The only way to accomplish this is to ensure the ecosystem is well developed and provides real value.


Website is still buggy. We didn't anticipate the public being aware until closer to Miami. Try again in a few days and sorry for the delay.


It's Charles and let's do these in order

We spent a great deal of time writing and testing PoC code and also examining the scripting language. As a cryptographer, my foremost concern is the security model behind our sandbox. There is risk in all technology, yet we are early enough in this process to change things in the event an unexpected failure of design occurs. GHOST is solid and we already have a spec for the high level language: http://wiki.ethereum.org/index.php/CLL. That said, long journey ahead.


The buy in will be in the millions and the expected market cap is in the billions. And yes this is correct, the price per ether does need to grow for returns justifying the risks of investment. Supply increases linearly whereas demand during the initial few years should be non-linear as large amounts of actors enter the market and new applications are discovered. The applications in Wall Street alone are fairly remarkable and we already have two quants working on the project writing up reference financial contracts that work on Ethereum.


We have a few models for how to handle founder shares. The design principles are to both incentive founders to stay attached to the project long term and also to inhibit any notion of a pump and dumb. Thus shares need to be locked for some period of time sufficiently long to prove the utility of the network itself. Second, the network needs to evolve to the point that the founders are no longer necessary for the long term health of the ecosystem just value adders. We could stagger lock outs or do a gradual release. When the fundraiser begins, there will be full disclosure how and why we decided to do this process


No, one shot and done. The purpose of the 0.25x developer shares is to endow a DAC to maintain the network long term after ether has a respectable market value. The fundraiser covers expenses up to that point.


There are five founders and the other 3 will be announced when the website is launched prior to Miami. We'll be front and center with PGP keys and all. There are also a lot of volunteers, developers and others we've managed to pick up over the past month. Our forums will be the best place to get to know them.

There are been some interesting innovations in the proof of stake space with the introduction of Nxt and also BitShares adopting PoS. We feel that mining currently best meets the design decisions we've made for Ethereum, but this does need to be explained in depth and with context. There will be a lag between the fundraiser and the launch for mining thus in the gap, we are going to release an article explaining why we have chosen a mining versus a PoS security model. Should data from Nxt or Bitshares (if released within this timeframe) provide a more convincing counter-argument, we'll have the opportunity to switch.

Overall, designing a new cryptocurrency is a game of tradeoffs, economic philosophy and user experience. Ethereum is being developed with the notion of balance in all things from the method of distribution to the security model.

Current plans are for a 60 day fundraiser, starting from Miami on; however, we are still exploring this and thus will set something in stone closer to the conference.


1 bitcoin = 100000000 satoshi
1 ether = 1000000000000000000 Wei

The unit of account of the system will be ether like bitcoin is the unit of account for the bitcoin ecosystem.


Come visit us in Miami. We should have everything ready by then.



No, the rate of inflation is always decreasing and comparable with bitcoin. The Total supply formula is as follows TS(t) = 1.5x + 0.5x*t with x being the initial supply and t being time in years. At genesis block TS(0) = 1.5x. Year 1 TS = 2.0x. You'll notice rate of inflation slows over time and we even made this  graph to compare it to bitcoin:



The core idea is that the rate of inflation tends towards year and that supply is growing fastest while demand is scaling non-linearly. In terms of ROI, this should be reflected with a positive ROI.


No, the founder shares will be given only once like founder stock in a startup and the percentage  founder ownership of the total amount of ether in supply will be 6.25% in year 5, which is a little over half of what Satoshi has of bitcoin. We really wanted to model supply like a startup to big company. The benchmark I used was Bill Gate's holdings of Microsoft going from 64% initially (which is considerably larger than our holdings) to roughly 5 percent or so today. Overall, both gates and Satoshi percentagewise are doing better. Finally, founder shares cannot be spent for a locked period of time that's hard coded into Ethereum. Thus, we can't sell our Ether until long after the ecosystem is bootstrapped.


I'm not going to fully address Dan's concerns here. The questions he listed indicate they either didn't read or didn't comprehend the whitepaper. For example, the entire philosophy of Ethereum is to be a base layer for innovation thus the particular economic model of a DAC running on top of Ethereum is beyond the scope of our design. A person could indeed have dividends in a sub-currency, yet this point seems to have been missed or ignored.

As for P2P exchange, we have a close relationship with Open Transactions and combined with a namecoin style contract provided in the whitepaper and bitmessage makes a significantly more efficient distributive exchange than is possible with BitShares. Trust is not required as auditing can be done on Ethereum blockchain and we wouldn't suffer any bloat.  

Things like 7 again demonstrate either a lack of comprehension or ignorance of our design, contracts are more than robust enough to launch a proof of stake subcurrency. 6 seems to ignore ethereum script is turing complete and thus you can compile a language like c++ into it (anyone ever used coffeescript to write js)?

On a side note, I am honestly curious how Invictus intends on building DACs without a turing complete language? It seems like you would end in an infinite inductive process of having to build a bigger feature set for the next set of DACs. I guess they have a different philosophy and this is fine. I wish them well and hope they find success for the market's benefit.